Document:

Exhibit 10.3

 

CHANGE IN CONTROL AGREEMENT

THIS
AGREEMENT, dated as of September 20, 2006, is made by and between Biomet, Inc.,
an Indiana corporation (the “Company”), and Charles E. Niemier (the “Executive”).

Recitals

A.            The Company
considers it essential to the best interests of its shareholders to foster the
continuous employment of certain key management personnel, including the
Executive who is currently serving as Senior Vice President, Biomet, Inc.,
President EBI, L.P., Biomet Spine and Biomet Trauma.

B.            The Board recognizes
that, as is the case with many publicly-held corporations, the possibility of a
Change in Control exists and that such a possibility, and the uncertainty and
questions that it may raise among management, may result in the departure or
distraction of certain key management personnel to the detriment of the Company
and its shareholders.

C.            The Board has
determined that appropriate steps should be taken to reinforce and encourage
the continued attention and dedication of members of the Company’s management,
including the Executive, to their assigned duties without distraction in the
face of potentially disturbing circumstances arising from, among other things,
the possibility of a Change in Control.

D.            The parties intend
that no amount or benefit will be payable under this Agreement unless both of
the following events occur: (i) a Change in Control occurs; and (ii) the
Executive’s employment with the Company is terminated as provided in this
Agreement.

AGREEMENT

In
consideration of the premises and the mutual covenants and agreements set forth
below, the Company and the Executive agree as follows:

ARTICLE I

Term of Agreement

Section 1.01   Term.  The “Term” of this Agreement is the
period commencing on the date hereof and ending on the second anniversary of
the date hereof; provided, however, that commencing on the date one year after
the date hereof, and on each annual anniversary of such date (such date and
each annual anniversary thereof shall be hereinafter referred to as the “Renewal
Date”), unless previously terminated, the Term shall be automatically
extended so as to terminate two years from such Renewal Date, unless at least
60 days prior to the Renewal Date the Board shall give notice to the Executive
that the Term not be so extended. 
Notwithstanding any notice to the Executive that the Term shall not be
extended, if a Change in Control occurs prior to the expiration of the Term,
then the Term shall be automatically extended so as to expire two years from
the date of such Change in Control.

Section 1.02   Post-Change
in Control Employment Period. 
Subject to the terms and conditions of this Agreement, the Company
hereby agrees to continue the Executive in its employ, and the Executive hereby
agrees to remain in the employ of the Company for the period commencing on the
first date on which a Change in Control occurs during the Term and ending on
the second anniversary of such date (the “Post-CIC Employment Period”).

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ARTICLE II

Termination of Employment

Section 2.01   Death
or Disability. The Executive’s employment shall terminate automatically
upon the Executive’s death during the Term. If the Company determines in good
faith that the Disability (pursuant to the definition of Disability set forth
below) of the Executive has occurred during the Term, it may give to the
Executive written notice in accordance with Article VII of this Agreement of
its intention to terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the “Disability Effective
Date”), provided that, within the thirty days after such receipt, the
Executive shall not have returned to full-time performance of the Executive’s
duties. For purposes of this Agreement, “Disability” shall mean the
absence of the Executive from the Executive’s duties with the Company on a
full-time basis for 180 consecutive business days as a result of incapacity due
to mental or physical illness, which is determined to be a disability pursuant
to the Company’s then existing long term disability plan or, in the absence of
such a plan, a disability determined to be total and permanent by a physician
selected by the Company and acceptable to the Executive or the Executive’s
legal representative.

Section 2.02   Cause.  The Company may terminate the Executive’s
employment during the Term for Cause.

Section 2.03   Good
Reason.  The Executive’s employment
may be terminated by the Executive for Post-CIC Good Reason.

Section 2.04   Notice
of Termination. Any termination by the Company for Cause, or by the
Executive for Post-CIC Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Article VII of
this Agreement. For purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date. The failure by the
Executive or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Post-CIC Good Reason or Cause
shall not waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the Executive’s or the Company’s
rights hereunder.

Section 2.05   Date
of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for
Post-CIC Good Reason, the date of receipt of the Notice of Termination or any
later date up to six months thereafter specified therein, as the case may be,
(ii) if the Executive’s employment is terminated by the Company other than for
Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination or any later date specified
therein within 30 days of such notice and (iii) if the Executive’s employment
is terminated by reason of death or Disability, the Date of Termination shall
be the date of death of the Executive or the Disability Effective Date, as the
case may be.

ARTICLE III

Obligations of the Company Upon Termination

Section 3.01   Post-CIC
Good Reason; Other Than for Cause or Disability. If, during the Post-CIC
Employment Period, the Executive shall terminate employment for Post-CIC Good
Reason or the Company shall terminate the Executive’s employment other than for
Cause or Disability (entitling the Executive to benefits under the Company’s
long-term disability plan, after any applicable waiting period):

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(a)           The Company shall
pay to the Executive in a lump sum in cash on the tenth (10) Business Day
following the Date of Termination the aggregate of the following amounts:

(i)            the
sum of (1) the Executive’s Annual Base Salary (which for this purpose shall
include any allowance for perquisites that is paid directly to the Executive)
through the end of the fiscal year containing the Date of Termination; (2) an
amount equal to (x) the higher of the target bonus amount or the bonus actually
paid to the Executive under the Company’s incentive bonus plan (or any
comparable successor plan(s)) for the fiscal year of the Company prior to the
Date of Termination (or the first date on which a Change in Control occurs, if
such date is earlier) or (y) the target bonus amount payable to the Executive
under such plan(s) for the fiscal year of the Company which contains the Date
of Termination, whichever of (x) or (y) is higher (the “Target Bonus”);
(3) the total contributions (other than salary reduction contributions) made by
the Company to all qualified retirement plans on behalf of the Executive
through the end of the fiscal year containing the Date of Termination; (4) the
total car allowance contributions made by the Company to the Executive through
the end of the fiscal year containing the Date of Termination;  and (5) any accrued vacation or other pay not
theretofore paid (the sum of the amounts described in clauses (1), (2), (3),
(4) and (5) are herein referred to as the “Accrued Obligations”); and,

(ii)           the
amount equal to the product of (1) two and (2) the sum of (w) the Executive’s
Annual Base Salary (which for this purpose shall include any allowance for
perquisites that is paid directly to the Executive) and (x) the higher of (aa)
the Target Bonus and (bb) the highest annual incentive bonus earned by
Executive during the last two (2) completed fiscal years of the Company
immediately preceding Executive’s Date of Termination (annualized in the event
Executive was not employed by the Company for the whole of any such fiscal
year), with the product of (1) and (2) reduced by the amounts paid, if any, to
the Executive pursuant to any other contractual arrangement with the Executive
or plan providing coverage to the Executive as a result of such termination;
(y)  the total contributions (other than
salary reduction contributions) made by the Company to all qualified retirement
plans on behalf of the Executive for the calendar year immediately preceding
the calendar year in which the Change in Control occurs; and (z) the total car
allowance contributions made by the Company to the Executive for the calendar
year immediately preceding the calendar year in which the Change in Control occurs.

(b)           The Company shall
provide the following benefit payments to the Executive:

(i)            For a 24-month
period after the Date of Termination, the Company will arrange to provide the
Executive with life insurance benefits and long-term disability benefits
substantially similar to those that the Executive was receiving from the
Company immediately prior to the Date of Termination (or the first date on
which a Change in Control occurs, if such date is earlier). Life insurance
benefits and long-term disability benefits otherwise receivable by the
Executive pursuant to the preceding sentence will be reduced to the extent
comparable benefits are actually received by or made available to the Executive
by any source other than the Company without greater cost to him than as
provided by the Company during the 24-month period following the Executive’s
termination of employment (and the Executive will report to the Company any
such benefits actually received by or made available to the Executive). If, as
of the Date of Termination, the Company reasonably determines that the
continued life insurance coverage and/or long-term disability coverage required
by this Section 3.01(b) is not available from the Company’s group insurance
carrier, cannot be procured from another carrier, and cannot be provided on a
self-insured basis without adverse tax consequences to the Executive or his
death beneficiary, then, in lieu of continued life insurance coverage and/or
long-term disability coverage, the Company will pay the Executive a lump sum
payment, in cash, equal to 24 times the full monthly premium payable to the
Company’s group insurance carrier for comparable coverage for an executive
employee under the Company’s group life insurance plan or long-term disability
plan then in effect.

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(ii)           The
Company will offer the Executive and any eligible family members the
opportunity to elect to continue medical and dental coverage pursuant to the
continuation coverage requirements of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”). The Executive will be
responsible for paying the required monthly premium for that coverage, but the
Company will pay the Executive a lump sum cash stipend equal to 24 times the
monthly premium then charged to qualified beneficiaries for full family COBRA
continuation coverage under the Company’s medical and dental plans, which the
Executive may choose to use for the payment of COBRA premiums. The Company will
pay the stipend to the Executive whether or not the Executive or anyone in his
family elects COBRA continuation coverage, whether or not the Executive
continues COBRA coverage for a full 24 months, and whether or not the Executive
receives health coverage from another employer while the Executive is receiving
COBRA continuation coverage.

(c)           All outstanding
Options will become immediately vested and exercisable (to the extent not yet
vested and exercisable as of the Date of Termination) and shall remain
exercisable until the earlier of (i) the expiration of the option term or (ii)
five (5) years after the Date of Termination. To the extent not otherwise
provided under the written agreement, if any, evidencing the grant of any restricted Shares to the Executive, all
outstanding Shares that have been granted to the Executive subject to
restrictions that, as of the Date of Termination, have not yet lapsed will
lapse automatically upon the Date of Termination, and the Executive will own
those Shares free and clear of all such restrictions.

(d)           For 12 months
following the Date of Termination the Company shall, at its sole expense,
reimburse the Executive for the cost (but not in excess of $25,000 in the aggregate), as incurred, for
outplacement services the scope and provider of which shall be selected by the
Executive in Executive’s sole discretion.

(e)           To the extent not
theretofore paid or provided, the Company shall timely pay or provide to
Executive any other amounts or benefits required to be paid or provided or
which Executive is eligible to receive under any plan, program, policy,
practice, contract or agreement of the Company (such other amounts and benefits
shall be hereinafter referred to as the “Other Benefits”).

Section 3.02   Death.
If the Executive’s employment is terminated by reason of the Executive’s death
during the Term and prior to a Change in Control, this Agreement shall
terminate without further obligations to the Executive’s legal representatives
under this Agreement. Anything in this Agreement to the contrary
notwithstanding, if the Executive’s 
death occurs after a Change In Control, then this Section 3.02 shall not
apply and the Executive’s estate and/or beneficiaries shall be entitled to the
benefits of Section 3.01.

Section 3.03   Disability.
If the Executive’s employment is terminated by reason of the Executive’s Disability
during the Term, this Agreement shall terminate without further obligations to
the Executive, other than for payment of Accrued Obligations and the timely
payment or provision of Other Benefits. Accrued Obligations shall be paid to
the Executive in a lump sum in cash on the twentieth (20th) Business Day
following the Date of Termination. The term “Other Benefits” as utilized in
this Section 3.03 shall include, without limitation, and the Executive shall be
entitled after the Disability Effective Date to receive, disability and other
benefits at least equal to the most favorable of those generally provided by
the Company and its affiliated companies to disabled executives and/or their
families in accordance with such plans, programs, practices and policies
relating to disability, if any, as in effect generally with respect to other
peer executives and their families at any time during the 120-day period
immediately preceding the Date of Termination (or the date on which a Change in
Control occurs, if such date is earlier) or, if more favorable to the Executive
and/or the Executive’s family, as in effect at any time thereafter generally
with respect to other peer executives of the Company and their families.

Section 3.04   Termination
in Anticipation of a Change in Control.

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(a)           An “Anticipatory Termination” occurs if either

(i)            (1)
the Company terminates the Executive’s employment other than for Cause or
Disability prior to the date on which a Change in Control occurs, (2) it is
reasonably demonstrated by the Executive that such termination of employment
(x) was at the request or instruction of a third party who had taken steps
reasonably calculated to effect a Change in Control or (y) otherwise arose
within six months of, and was in connection with or in anticipation of, a
Change in Control, and (3) a Change in Control occurs, or 

(ii)           (1)
during the Term, an event occurs that would have constituted Post-CIC Good
Reason if the date on which a Change in Control occurs was deemed to be the
date immediately prior to the date of such event and the Executive terminated
his employment subsequent to such event, (2) the Executive can reasonably
demonstrate that such Post-CIC Good Reason event (x) was at the request or
instruction of a third party who had taken steps reasonably calculated to
effect a Change in Control or (y) otherwise arose within six months of, and was
in connection with or in anticipation of, a Change in Control, and (3) a Change
in Control occurs. 

(iii)          For purposes of
clauses (i)(1)(y) and (ii)(1)(y) of this Section 3.04(a), it shall be presumed
that such event was in connection with or in anticipation of a Change in
Control unless the Company establishes otherwise by clear and convincing
evidence.

(b)           If the Executive has
reason to believe that an Anticipatory Termination may have occurred, he shall
provide a notice setting forth such belief in accordance with Article VII of
this Agreement within 120 days after a Change in Control has occurred. Upon an
Anticipatory Termination, the Executive shall be entitled to (A) the payments
specified in Sections 3.01(a),(d) and (e) (to the extent not previously paid),
(B) the benefits specified in Section 3.01(b) (to the extent not previously
provided) (or the after-tax equivalent thereof to the extent that such benefits
have not been or are not provided in kind), (C) to the extent that the
Executive has outstanding any unexercised stock options and other stock-based
awards, the provisions of Section 3.01(c) shall apply to them, (D) in respect
of any stock options or other stock based awards that were forfeited by the
Executive as a result of his termination of employment but would have vested
had Section 3.01(c) applied, such awards shall be reinstated (or if not
reinstated, the Executive shall be paid in cash the fair value of such award),
and (E) liquidated damages of $25,000 for penalties associated with the
Anticipatory Termination. For the purposes of this Section 3.04(b), the
Executive’s Date of Termination shall be deemed to be his last date of employment
by the Company.

Section 3.05   Nonexclusivity
of Rights. Nothing in this Agreement shall prevent or limit the Executive’s
continuing or future participation in any plan, program, policy or practice
provided by the Company and for which the Executive may qualify, nor, subject
to Section 8.02, shall anything herein limit or otherwise affect such rights as
the Executive may have under any contract or agreement with the Company.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice, or program of or any contract or
agreement with the Company at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract
or agreement except as explicitly modified by this Agreement.

Section 3.06   Certain
Additional Payments by the Company.

(a)           Anything in this
Agreement or in any other agreement between the Company and the Executive or in
any stock option or other benefit plan to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise, but determined without regard to any additional payments required

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under this Section 3.06) (a “Payment”) would be
subject to the excise tax imposed by Section 4999  of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then the Executive shall be entitled
to receive an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by the Executive of all taxes (including any interest
or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.

(b)           All determinations
required to be made under this Section 3.06, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
the Accounting Firm, which shall provide detailed supporting calculations both
to the Company and the Executive within fifteen business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time
as is requested by the Company. In the event that the Accounting Firm is
serving as accountant or auditor for the Company or the individual, entity or
group effecting the Change in Control, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 3.06, shall be paid by the Company to the Executive in the calendar
year that includes the date on which the Payment was made; provided, however,
that if a payment is made after December 1 of any calendar year, then the
Gross-Up Payment, as determined pursuant to this Section 3.06, shall be paid by
the Company to the Executive in the immediately succeeding calendar year.  In either case, the Gross-Up Payment shall be
made on the later of the fifth day following the Accounting Firm’s determination and the first day of the applicable
calendar year. Any determination
by the Accounting Firm shall be binding upon the Company and the Executive.

Section 3.07   Tax
Matters. 
Notwithstanding anything contained in this Agreement (or any other
agreement between Executive and the Company or any of its subsidiaries) to the
contrary, the Company and its subsidiaries shall be entitled to deduct and
withhold any amounts required by the Code or under any state or local law
relating to compensation from any payment amounts distributable or due to
Executive from the Company or any of its subsidiaries, including from Executive’s
wages, compensation, or benefits, as may be required by the Code or under any
state or local law relating to compensation. 
The Company and the Executive agree to use commercially reasonable
efforts to ensure that this Agreement complies with Section 409A of the Code
such that Executive is not subject to any additional taxes, interest or
penalties under such provisions. In furtherance thereof, if payment or
provision of any amount or benefit hereunder at the time specified in this
Agreement would subject such amount or benefit to any additional tax under
Section 409A of the Code, the payment or provision of such amount or benefit
shall be postponed to the earliest commencement date on which the payment or
the provision of such amount or benefit could be made without incurring such
additional tax (including paying any severance that is delayed in a lump sum
upon the earliest possible payment date which is consistent with Section 409A
of the Code).  Without limiting the generality
of the immediately preceding sentence, if payment or provision of any amount or
benefit hereunder at the time specified in this Agreement would fail to comply
with the provisions of Section 409A of the Code because the Executive is
treated as a “specified” employee (within the meaning of Section
409A(a)(2)(B)(i) of the Code), then such amount or benefit shall not be paid or
provided at the time otherwise specified in this Agreement, but instead shall
be paid or provided on the date that is six months after the date of separation
from service (or, if earlier, the date of death of the Executive). In addition,
to the extent that any regulations or guidance issued under Code §409A (after
application of the previous provision of this paragraph) would result in
Executive being subject to the payment of interest or any additional tax under
Code §409A, the Company and 

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the Executive agree, to the extent
reasonably possible, to amend this Agreement in order to avoid the imposition
of any such interest or additional tax under Code §409A, which amendment shall
have the minimum economic effect necessary on Executive and be reasonably
determined in good faith by the Company and the Executive.

ARTICLE IV

No Mitigation

The
Company agrees that, if the Executive’s employment by the Company is terminated
during the term of this Agreement, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to Article III. Further, the amount of any
payment or benefit provided for in Article III (other than Section 3.01(b)(i))
will not be reduced by any compensation earned by the Executive as the result
of employment by another employer, by retirement benefits, by offset against
any amount claimed to be owed by the Executive to the Company, or otherwise.

ARTICLE V

The Executive’s Covenants

Section 5.01   Noncompetition
Agreement.  In consideration for this
Agreement, the Executive will execute, concurrent with the execution of this
Agreement, a noncompetition agreement in the form attached to this Agreement as
Exhibit A. In the event of termination of this Agreement as
provided in Section 1.01, the noncompetition Agreement shall survive
termination.

Section 5.02   Confidential
Information.  The Executive shall
hold in a fiduciary capacity for the benefit of the Company all material
proprietary information, knowledge or data relating to the Company or any of
its affiliated companies, and their respective businesses, which shall have
been obtained by the Executive during the Executive’s employment by the Company
or any of its affiliated companies and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the Executive’s
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it. In no event shall an asserted
violation of the provisions of this Section 5.02 constitute a basis for
denying, deferring or withholding any amounts or benefits payable to the
Executive under this Agreement.

Section 5.03   General
Release.  The Executive agrees that,
notwithstanding any other provision of this Agreement, the Executive will not
be eligible for any payments under Section 3.01 unless the Executive timely
signs, and does not timely revoke, a General Release in substantially the form
attached to this Agreement as Exhibit B.

ARTICLE VI

Successors; Binding
Agreement

Section 6.01   Obligation
of Successors.  In addition to any
obligations imposed by law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no succession had occurred. Failure of the Company to obtain such
an assumption and agreement prior to the effectiveness of any such succession
will be a breach of this Agreement.

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Section 6.02   Enforcement
Rights of Others.  This Agreement
will inure to the benefit of and be enforceable by the Executive’s personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees. If the Executive dies while any amount is
still payable to the Executive under this Agreement, (other than amounts that,
by their terms, terminate upon the Executive’s death), then, unless otherwise
provided in this Agreement, all such amounts will be paid in accordance with
the terms of this Agreement to the executors, personal representatives, or
administrators of the Executive’s estate.

ARTICLE VII

Notices

For
the purpose of this Agreement, notices and all other communications provided
for in the Agreement will be in writing and will be deemed to have been duly
given when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth
below, or to such other address as either party may furnish to the other in
writing in accordance with this Article VIII, except that notice of change of
address will be effective only upon actual receipt:

	
  To the Company:

  	
  To the Executive:

  	
   

  
	
  Biomet, Inc.

  	
  Charles E. Niemier

  	
   

  
	
  56 E. Bell Drive

  	
   

  	
   

  
	
  P. O. Box 587

  	
   

  	
   

  
	
  Warsaw, Indiana
  46581-0587

  	
   

  	
   

  

ARTICLE VIII

Miscellaneous; At-Will

Section 8.01   Miscellaneous.  No provision of this Agreement may be
modified, waived, or discharged unless the waiver, modification, or discharge
is agreed to in writing and signed by the Executive and an officer of the
Company specifically designated by the Board. No waiver by either party at any
time of any breach by the other party of, or compliance with, any condition or
provision of this Agreement to be performed by the other party will be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any
other time. Neither party has made any agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter of this
Agreement that are not expressly set forth in this Agreement. The validity,
interpretation, construction, and performance of this Agreement will be
governed by the laws of the State of Indiana. All references to sections of the
Exchange Act or the Code will be deemed also to refer to any successor
provisions to those sections. Any payments provided for under this Agreement
will be paid net of any applicable withholding required under federal, state,
or local law and any additional withholding to which the Executive has agreed.
The obligations of the Company and the Executive under Articles III, IV, and VI
will survive the expiration of this Agreement, if applicable.

Section 8.02   At-Will.  The Executive and the Company acknowledge
that, except as may otherwise be provided under any other written agreement
between the Executive and the Company, the employment of the Executive by the
Company is “at will,” and the Executive’s employment may be terminated by
either the Executive or the Company at any time.

ARTICLE IX

Validity

The
invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision of this Agreement,
which will remain in full force and effect.

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ARTICLE X

Counterparts

This
Agreement may be executed in several counterparts, each of which will be deemed
to be an original but all of which together will constitute one and the same
instrument.

ARTICLE XI

Settlement of Disputes; Arbitration

All
claims by the Executive for benefits under this Agreement must be in writing
and will be directed to and determined by the Board. Any denial by the Board of
a claim for benefits under this Agreement will be delivered to the Executive in
writing and will set forth the specific reasons for the denial and the specific
provisions of this Agreement relied upon. The Board will afford a reasonable
opportunity to the Executive for a review of the decision denying a claim and
will further allow the Executive to appeal to the Board a decision of the Board
within 60 days after notification by the Board that the Executive’s claim
has been denied. Any further dispute or controversy arising under or in
connection with this Agreement will be settled exclusively by arbitration in
Warsaw, Indiana in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator’s award
in any court having jurisdiction. Each party will bear its own expenses in the
arbitration for attorneys’ fees, for its witnesses, and for other expenses of
presenting its case. Other arbitration costs, including arbitrators’ fees,
administrative fees, and fees for records or transcripts, will be borne equally
by the parties. Notwithstanding anything in this Article to the contrary, if
the Executive prevails with respect to any dispute submitted to arbitration
under this Article, the Company will reimburse or pay all reasonable legal fees
and expenses that the Executive incurred in connection with that dispute as
required by Section 3.08.

ARTICLE XII

Definitions

For
purposes of this Agreement, the following terms will have the meanings
indicated below:

“401(k)
Plan” means the Biomet, Inc. Profit Sharing Plan and Trust qualified under
section 401(k) of the Code and any comparable successor plan(s).

“Accounting
Firm” means such nationally recognized certified public accounting firm as
may be designated by the Executive.

“Accrued
Obligations” shall have the meaning described in Section 3.01(a)(i).

“Annual
Base Salary” means the Executive’s annual base salary as in effect
immediately prior to the date of the Change in Control.

“Anticipatory
Termination” shall have the meaning described in Section 3.04.

“Beneficial
Owner” has the meaning stated in Rule 13d-3 under the Exchange Act.

“Board”
means the Board of Directors of the Company.

“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the State of Indiana.

 9
 

 

“Cause”
for termination by the Company of the Executive’s employment, after any Change
in Control, means (1) the willful and continued failure by the Executive
to substantially perform the Executive’s duties with the Company (other than
any such failure resulting from the Executive’s incapacity due to physical or
mental illness or any such actual or anticipated failure after the issuance of
a Notice of Termination for Post-CIC Good Reason or Pre-CIC Good Reason or by
the Executive pursuant to Sections 3.01 and 3.02) for a period of at least 30
consecutive days after a written demand for substantial performance is
delivered to the Executive by the Board, which demand specifically identifies
the manner in which the Board believes that the Executive has not substantially
performed the Executive’s duties; (2) the Executive willfully engages in
conduct that is demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise; or (3) the Executive is convicted
of, or has entered a plea of no contest to, a felony. For purposes of clauses
(1) and (2) of this definition, no act, or failure to act, on the
Executive’s part will be deemed “willful” unless it is done, or omitted to be
done, by the Executive not in good faith and without reasonable belief that the
Executive’s act, or failure to act, was in the best interest of the Company.

“Change
in Control” will be deemed to have occurred if any of the following events
occur:

(a)           Individuals who, as
of September 20, 2006, constitute the Board (the “Incumbent Directors”)
cease for any reason to constitute at least a majority of such Board, provided
that any person becoming a director after September 20, 2006 and whose election
or nomination for election was approved by a vote of at least a majority of the
Incumbent Directors then on the Board shall be deemed an Incumbent Director; provided,
however, that no individual initially elected or nominated as a director
of the Company as a result of an actual or threatened election contest with
respect to the election or removal of directors (“Election Contest”) or
other actual or threatened solicitation of proxies or consents by or on behalf
of any Person other than the Board (“Proxy Contest”), including by
reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest, shall be deemed an Incumbent Director; or

(b)           Any Person is or
becomes a Beneficial Owner directly or indirectly, of either (A) 20% or more of
the then-outstanding Company Shares or (B) securities of the Company
representing 20% or more of the combined voting power of the Company’s then
outstanding securities eligible to vote for the election of directors (the “Company
Voting Securities”); provided, however, that for purposes of
this subsection (b), the following acquisitions shall not constitute a Change
in Control: (i) an acquisition directly from the Company, (ii) an acquisition
by the Company or a subsidiary of the Company, or (iii) an acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any subsidiary of the Company; or

(c)           The consummation of
a reorganization, merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company or a subsidiary (a “Reorganization”),
or the sale or other disposition of all or substantially all of the Company’s
assets (a “Sale”) or the acquisition of assets or stock of another
corporation (an “Acquisition”), unless immediately following such
Reorganization, Sale or Acquisition: (A) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
outstanding Company Shares and outstanding Company Voting Securities
immediately prior to such Reorganization, Sale or Acquisition beneficially own,
directly or indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Reorganization, Sale or
Acquisition (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets or stock either directly or through one or more subsidiaries, the “Surviving
Corporation”) in substantially the same proportions as their ownership,
immediately prior to such Reorganization, Sale or Acquisition, of the
outstanding Company Shares and the outstanding Company Voting Securities, as
the case may be, and (B) no person 

 10
 

 

(other than (i) the Company or any subsidiary of the
Company, (ii) the Surviving Corporation or its ultimate parent corporation, or
(iii) any employee benefit plan or related trust sponsored or maintained by any
of the foregoing) is the beneficial owner, directly or indirectly, of 20% or
more of the total common stock or 20% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Surviving
Corporation, and (C) at least a majority of the members of the board of
directors of the Surviving Corporation were Incumbent Directors at the time of
the Board’s approval of the execution of the initial agreement providing for
such Reorganization, Sale or Acquisition; or

(d)           Approval by the
shareowners of the Company of a complete liquidation or dissolution of the
Company.

“COBRA”
means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

“Code”
means the Internal Revenue Code of 1986, as amended from time to time, and
interpretative rules and regulations.

“Company”
means Biomet, Inc., an Indiana corporation, and any successor to its business
and/or assets that assumes and agrees to perform this Agreement by operation of
law, or otherwise (except in determining whether or not any Change in Control
of the Company has occurred in connection with the succession).

“Company
Shares” means shares of common stock of the Company or any equity
securities into which those shares have been converted.

“Date
of Termination” shall have the meaning described in Section 2.05.

“Disability”
shall have the meaning described in Section 2.01.

“Disability
Effective Date” shall have the meaning described in Section 2.01.

“Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to
time, and interpretive rules and regulations.

“Excise
Tax” shall have the meaning described in Section 3.05(a).

“Executive”
“ shall have the meaning described in the first paragraph of this Agreement.

“Gross-Up
Payment” shall have the meaning described in Section 3.06(a).

“Notice
of Termination” shall have the meaning described in Section 2.04.

“Options”
means options for Shares granted to the Executive under the Stock Option Plan.

“Other
Benefits” shall have the meaning described in Section 3.01 (e) or 3.03, as
determined by the nature of the termination of the Agreement, as described in
each of those sections.

“Payment”
shall have the meaning described in Section 3.06(a).

“Person”
has the meaning stated in section 3(a)(9) of the Exchange Act, as modified and
used in sections 13(d) and 14(d) of the Exchange Act; however, a Person will
not include (1) the Company or any of its subsidiaries, (2) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any of its subsidiaries, (3) an underwriter temporarily holding securities
pursuant to an 

 11
 

 

offering of those securities, or (4) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

“Post-CIC
Employment Period” shall have the meaning assigned in Section 1.02.

“Post-CIC
Good Reason” for termination by the Executive of the Executive’s employment
means the death of the Executive during the Post-CIC Employment Period or the
occurrence (without the Executive’s express written consent) of any one of the
following acts by the Company, or failures by the Company to act, in each case
during the Post-CIC Employment Period, unless, in the case of any act or
failure to act described in paragraph (i), (iv), (v), (vi), or (viii) below,
the act or failure to act is corrected prior to the Date of Termination
specified in the Executive’s Notice of Termination:

(i)            The assignment to
the Executive of any duties inconsistent with the Executive’s status as an
executive officer of the Company or a substantial adverse alteration in the
nature or status of the Executive’s responsibilities from those in effect
immediately prior to a Change in Control;

(ii)           A
reduction by the Company in the Executive’s annual base salary and/or Target
Bonus as in effect on the date of this Agreement or as the same may be
increased from time to time;

(iii)          The
Company’s requiring the Executive to be based more than 50 miles from the
Company’s offices at which the Executive is based prior to a Change in Control
(except for required travel on the Company’s business to an extent
substantially consistent with the Executive’s business travel obligations
immediately prior to the Change in Control), or, in the event the Executive
consents to any such relocation of his offices, the Company’s failure to
provide the Executive with all of the benefits of the Company’s historical
practices with respect to relocation of executive employees as in operation
immediately prior to the Change in Control;

(iv)          The
Company’s failure, without the Executive’s consent, to pay to the Executive any
portion of the Executive’s current compensation (which means, for purposes of
this paragraph (4), the Executive’s annual base salary as in effect on the date
of this Agreement, or as it may be increased from time to time, and any
installment of the annual target bonus earned by the Executive) or to pay to
the Executive any portion of an installment of deferred compensation under any
deferred compensation program of the Company, within seven days of the date the
compensation is due;

(v)           The
Company’s failure to continue in effect any compensation plan in which the
Executive participates immediately prior to a Change in Control, which plan is
material to the Executive’s total compensation, including, but not limited to,
the Stock Option Plan or any substitute plans adopted prior to the Change in
Control, unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to that plan, or the Company’s failure
to continue the Executive’s participation in such a plan (or in a substitute or
alternative plan) on a basis not materially less favorable, both in terms of
the amount of benefits provided and the level of the Executive’s participation
relative to other participants, as existed at the time of the Change in
Control;

(vi)          The
Company’s failure to continue to provide the Executive with benefits
substantially similar to those enjoyed by the Executive under any of the
Company’s retirement plans (including, without limitation, the Company’s 401(k)
Plan, the Biomet, Inc. Employee Stock Bonus Plan, and such other life
insurance, medical, health and accident, or disability plans in which the
Executive was participating at the time of the Change in Control); the taking
of any action by the Company that would directly or indirectly materially
reduce any of those benefits or deprive the Executive of any material fringe
benefit enjoyed by the Executive at the time of a Change in Control; or the
Company’s failure to provide the Executive with the number of paid vacation
days  to which the Executive is entitled
on the 

 12
 

 

basis of years of service with the Company in
accordance with the Company’s normal vacation policy in effect at the time of
the Change in Control;

(vii)         Any
purported termination of the Executive’s employment that is not effected
pursuant to a Notice of Termination satisfying the requirements of
Section 4.01; for purposes of this Agreement, no such purported
termination will be effective; or

(viii)        any
failure by the Company to comply with and satisfy Section 6.01 of this
Agreement.

The
Executive’s right to terminate the Executive’s employment for Post-CIC Good
Reason will not be affected by the Executive’s incapacity due to physical or
mental illness. The Executive’s continued employment will not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
that constitutes Post-CIC Good Reason. 
Notwithstanding the foregoing, the occurrence of an event that would
otherwise constitute Post-CIC Good Reason will cease to be an event
constituting Post-CIC Good Reason if the Executive does not timely provide a
Notice of Termination to the Company within 120 days of the date on which
the Executive first becomes aware (or reasonably should have become aware) of
the occurrence of that event.

“Renewal
Date” shall have the meaning described in Section 1.01.

“Shares”
means shares of the common stock of the Company.

“Stock
Option Plan” means the 1998 Biomet, Inc. Qualified and Non-Qualified Stock
Option Plan and any other equity compensation plan of the Company approved by
the Board and adopted by the shareholders of the Company.

“Target
Bonus” shall have the meaning described in Section 3.01(a)(i).

“Term”
shall have the meaning described in Section 1.01.

*    *    *

	
  EXECUTIVE

  	
   

  	
  BIOMET, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/  Charles
  E. Niemier

  	
   

  	
   

  	
   

  	
   

  
	
  Charles E.
  Niemier

  	
   

  	
  By:

  	
  /s/
  Daniel P. Hann

  
	
   

  	
   

  	
  Name:

  	
  Daniel P. Hann

  
	
   

  	
   

  	
  Its:

  	
  Interim President and CEO

  

 

 13Exhibit
10.4

 

 

 

Biomet,
Inc. Executive Severance
Pay Plan

 

 

 

 

 

 

 

Effective
as of September 22, 2006

 

BIOMET, INC.  EXECUTIVE SEVERANCE PAY PLAN

The Biomet, Inc. Executive Severance Pay Plan (“Plan”) is hereby adopted
by Biomet, Inc. (“Company”), effective September 22, 2006, for a select group
of key management employees of the Company and its affiliates and/or
subsidiaries.  The Plan is intended to
qualify as a welfare plan for certain selected employees within the meaning 29
C.F.R. §2520.104-24.

ARTICLE 1

General
Provisions

Biomet, Inc. has
established the Plan, effective September 22, 2006, to provide severance pay
and benefits for Eligible Employees in the case of certain involuntary
Terminations of Employment, as determined by the Administrator in its sole
discretion.

ARTICLE 2

Use of
Defined Terms

Certain defined
terms are used throughout the Plan.  The
definitions of these terms are contained in Appendix A attached hereto.  Whenever a defined term is used, it begins
with a capital letter.  Please refer to
Appendix A for the meaning of capitalized terms as you read the provisions of
the Plan.

ARTICLE 3

Participation

An employee of the
Company will become a Participant immediately upon becoming an Eligible
Employee, and such employee will cease to be a Participant upon the later of
(i) the date on which such employee ceases to be an Eligible Employee or (ii)
the date on which such employee is no longer entitled to future benefits under
the Plan.

ARTICLE 4

Funding
of Plan

All Plan benefits
are paid from the Company’s general assets.

ARTICLE 5

Severance
Benefits

Section 5.01.         Payment of Severance Benefits.  Subject
to the terms specified herein, if a Participant’s Employment terminates in a
Qualifying Termination, the Employer will pay the following amounts and provide
the following benefits:

 

(a)       Salary
Continuation, in accordance with the Employer’s standard payroll practices, at
the Salary Continuation Rate, throughout the Continuation Period.  Salary Continuation shall not be considered
compensation for purposes of any other benefit plan of the Company, unless
expressly provided for therein;

(b)      If
the Participant is eligible for and elects Continuation Coverage pursuant to
COBRA (with respect to the Participant and/or the Participant’s dependents who
are eligible to elect COBRA under the Company’s group health plan(s) as a
direct result of the Participant’s Termination of Employment), the Company
shall pay (as of the first of each applicable month) the premiums for such
coverage (or reimburse the Participant for such premiums) for the Benefits
Continuation Period.  If the Company pays
the premiums for such coverage, they will constitute taxable income to the
Participant;

(c)               Continued
payment of the Participant’s Employer-provided car allowance, if any, for a
period of twelve months from the Termination Date;

(d)    Payment of a pro-rated
portion of the Participant’s target bonus established from time to time by the
Employer for the fiscal year in which the Termination Date occurs (payable
within 75 days after the end of the Employer’s fiscal year).  The applicable pro-rated percentage to be
applied to the Participant’s target bonus shall be determined, in the sole
discretion of the Employer, based upon the Employer’s performance and any other
performance criteria related to the Participant’s target bonus; and,

(e)       All
outstanding options granted to the Participant by the Employer on any common
shares of stock of Biomet, Inc. will become immediately vested and exercisable
(to the extent not yet vested and exercisable) as of the Termination Date and
shall remain exercisable until the earlier of (i) the expiration of the
applicable option term (associated with each such option) or (ii) five (5)
years after the Termination Date.  To the
extent not otherwise provided under the written agreement, if any, evidencing the grant of
any restricted common shares of stock of Biomet, Inc.  to the Participant by an Employer, all such
outstanding shares that have been granted to the Participant subject to
restrictions that, as of the Termination Date have not yet lapsed, will lapse
automatically upon the Termination Date, and the Participant will become the
owner of such shares free and clear of all such restrictions.

(f)       Notwithstanding
the preceding provisions or any provision in this Plan to the contrary, this
Plan and all payments pursuant hereto are intended to comply with Code Section
409A and the guidance thereunder, and this Plan shall be construed
accordingly.  To the extent that
compliance with Section 409A(a)(2)(B)(i) would require any payment otherwise
provided for by this Plan to be delayed, such payment shall be made as soon as
administratively feasible after the period of delay required by Code Section
409A(a)(2)(B)(i).

Section 5.02.         Qualified Terminations.

(a)       Subject
to the provisions of Subsection (b), the Termination of a Participant’s
Employment will be deemed to be a Qualified Termination if the termination is,
as determined 

 

by the Administrator, for
reasons unrelated to the Participant’s (i) performance of his employment duties
or (ii) his commission of an act or acts outside of the scope of his employment
duties that would constitute the basis of a termination for cause under his
Change in Control Agreement.

(b)      Notwithstanding
Subsection (a), a Termination of Employment will not be considered a Qualified
Termination under any of the following circumstances, as determined by the
Administrator:

(1)                                the
Participant fails to comply with the requirements of Section 5.03;

(2)                                the
Participant is offered and accepts employment with (i) the Company (or any of
its related entities) or (ii) an entity (or any of its related entities) that
acquires part or all of the business operations of the Company;

(3)                                the
Participant is offered and rejects Comparable Employment with (i) the Company
(or any of its related entities) or (ii) an entity (or any of its related
entities) that acquires part or all of the business operations of the Company;

(4)                                the
Participant’s employment is terminated because of the limitation or interruption
of business operations by occurrences beyond the Company’s control, such as an
act of war, civil disturbance, fire, flood, or other disaster;

(5)                                the
Participant is entitled to payments or benefits under Participant’s Change in
Control Agreement as a result of the Termination of Employment;

(6)                                the
Participant voluntarily resigns, quits or retires from his position of
employment; or

(7)                                the
Participant’s employment is terminated for any reason other than as provided in
Subsection (a).

Section 5.03.         Prerequisites to Receiving Benefits.  As
a prerequisite to receiving any benefit hereunder, the Participant must submit
to the Administrator a signed release acceptable to the Administrator, on a
form provided by the Administrator, releasing the Company and certain related
entities from any liability whatsoever in connection with  Participant’s employment or the termination
thereof, except as provided in such release. The release must have become valid
according to its terms, and the period for revoking the release must have
passed.  In addition, Participant must
submit to the Administrator a signed Confidentiality and Non-Compete Agreement
acceptable to the Administrator, on a form provided by the Administrator.

 

ARTICLE 6

Plan Administration

The Plan shall be
administered by the Company, which shall be a named fiduciary within the
meaning of the ERISA.  In administering
the Plan, the Company shall have the authority to interpret the terms of the
Plan, prescribe rules for administering the Plan, decide disputes regarding the
rights of Participants under the Plan, and perform all other functions
necessary or appropriate to the administration of the Plan.  In performing its duties as Administrator,
the Company shall have the authority to exercise its discretion to the maximum
extent permitted by law.  Benefits shall
be paid under this Plan only if the Administrator, in its sole discretion,
determines that the applicant for benefits hereunder is entitled to such
benefits.

ARTICLE 7

Claims and Appeals Procedures

Section 7.01.         Claims for Benefits.

(a)       All
claims for Plan benefits will be subject to the rules set out in this
Article.  If a Participant believes that
he is entitled to benefits that have not been provided, he may file a claim,
either directly or through an authorized representative, by mailing a written
notice of the claim to the Company’s General Counsel.

(b)      The
Administrator will provide the claimant with written or electronic notice of
its approval or denial of a properly filed claim within 90 days after receiving
the claim, unless special circumstances require an extension of the decision
period.  If special circumstances require
an extension of the period for processing the claim, the first 90-day decision
period may be extended for up to an additional 90 days.  If an extension of the first 90-day period is
needed, the Administrator will provide written notice of the required extension
before the end of the first 90-day period, specifying (i) the circumstances
requiring an extension and (ii) the date by which the Administrator expects to make a decision.

(c)       If
a claim for benefits is denied,
the Administrator will provide the claimant with written or electronic notice
containing (i) the specific reasons for the denial, (ii) references to the Plan provisions on which the denial is
based; (iii) a description of any additional material or information needed and
why such material or information is necessary; (iv) a description of the
applicable review procedures and time limits.

(d)      A
claimant may appeal the denial of
a claim by filing a written appeal with the Administrator within 60 days after
receiving notice of the denial.  The claimant’s appeal will be
deemed filed upon receipt by the Administrator. 
If the claimant does not file a timely appeal, the Administrator’s
decision will be final.

(e)       The
Administrator will provide the claimant with written or electronic notice of
its decision on appeal within 60 days after receiving the claim, unless special
circumstances require 

 

an extension of the decision period. 
If special circumstances require an extension of the period for
processing the claim, the first 60-day decision period may be extended for up
to an additional 60 days.  If an
extension of the first 60-day period is needed, the Administrator will provide written notice
of the required extension before the end of the first 60-day period, specifying
(i) the circumstances requiring an extension and (ii) the date by which the
Administrator expects to
make a decision.

(f)       If
a claim is denied on appeal, the Administrator will provide the claimant with
written or electronic notice containing (i) the specific reasons for the
denial, (ii) reference to the Plan provisions on which the denial is based, and (iii) a statement
that the Administrator will
provide the claimant, upon request and free of charge, reasonable access to and
copies of all documents records, and other information relevant to the claim.
The Administrator’s decision on review will be final.

Section 7.02.         Authorized Representative.  The claimant’s authorized representative may
act on his behalf in pursuing a benefit claim or appeal under the Plan.

Section 7.03.         Full and Fair Review.  Upon request and free of charge, a
Participant’s duly authorized representative will be given reasonable access
to, and copies of, all documents, records, and other information relevant to
the Participant’s claim.  In addition,
the Participant or his authorized representative may submit to the appropriate
person or entity written comments, documents, records, and other information
relating to the claim.  If timely
requested, the review of a denied claim will take into account all comments,
documents, records, and other information that the Participant or his duly
authorized representative have submitted relating to the claim, without regard
to whether such information was submitted or considered in the initial benefit
determination.

Section 7.04.         Exhaustion of Remedies.  If a Participant fails to file a request for
review of a claim denial in accordance with the procedures described in this
Article, he will not have the right of appeal or the right to bring an action
in any court, and the claim denial will be final.

ARTICLE 8

Amendment
and Termination

Biomet, Inc., by
action of its Board of Directors or the Board’s duly authorized delegate, may
amend or terminate the Plan at any time.

ARTICLE 9

Miscellaneous
Provisions

Section 9.01.         Non-alienation of Benefits.  
Benefits payable under the Plan are not subject in any manner to alienation,
sale, transfer, assignment, pledge, encumbrance, charge, 

 

garnishment, execution, or levy of any kind, either voluntary or
involuntary, before being received by the Participant (or any other person
entitled to receive benefits under the Plan) and any attempt to alienate, sell,
transfer, assign, pledge, encumber, charge, or otherwise dispose of any right
to benefits under the Plan shall be void.

Section 9.02.         Limitation of Rights.  Neither
the establishment nor the maintenance of the Plan nor any amendment thereof nor
any act or omission under the Plan or resulting from the operation of the Plan
shall be construed:

(a)       as
conferring upon a Participant or any other person a right or claim against the
Employer, except to the extent that such right or claim shall be specifically
expressed and provided in the Plan or as provided under ERISA;

(b)      as
creating any responsibility or liability of the Employer for the validity or
effect of the Plan;

(c)       as
a contract or agreement between the Plan or the Employer and the Participant or
any other person; or

(d)      as
giving a Participant the right to be retained in the service of the Company or
to interfere with the right of the Employer to discharge Participant or any
other person at any time in its discretion.

Section 9.03.         Rules of Interpretation.  The
following rules of construction will govern any interpretation of the Plan:

(a)       The
Plan shall be construed, enforced, and administered and the validity thereof
determined in accordance with the laws of the State of Indiana to the extent
that such laws are not preempted by federal law.

(b)      Words
used in the masculine shall be construed to include the feminine, where
appropriate, and vice versa.

(c)       Words
used in the singular or plural shall be construed as being in the plural or
singular, where appropriate.

(d)      The
headings and subheadings in the Plan are inserted for convenience of reference
only and are not to be considered in the construction of any provision of the
Plan.

(e)       If
any provision of the Plan is held to be illegal or invalid for any reason, that
provision shall be deemed to be null and void, but the invalidation of that
provision will not otherwise affect the Plan.

Section 9.04.         Tax Withholding.  The
Company may withhold from any payment hereunder income or employment taxes as
it deems necessary to comply with applicable tax laws.

 

Section 9.05.         Notices.  Any notice
given under the Plan will be sufficient if given to the Company, when addressed
to its principal business office, or if given to the Participant, when
addressed to the Participant at his address as it appears in the records of the
Company.

Section 9.06.         Plan Document Governs.  This
Plan document constitutes the only legally governing document for the
Plan.  No statement or other
communication will amend or modify any provision of the Plan.

Section 9.07.         Arbitration.  All disputes, demands, claims, controversies,
actions, and/or causes of action arising from or relating to this Plan shall be
resolved by binding arbitration under the
rules of the then current CPR
Institute for Dispute Resolution, by one arbitrator.  The decision of the arbitrator will be
final.  The place of arbitration shall be
Warsaw, Indiana.  This arbitration
contract is made pursuant to a transaction in interstate commerce, and shall be
governed by the Federal Arbitration Act. 
Any judgment upon the award rendered by the arbitrator may be entered by
any court having jurisdiction thereof. 
The parties voluntarily and knowingly waive any right they have to a
jury trial.  The arbitrator is not
empowered to award punitive damages or damages in excess of compensatory
damages and each party hereby irrevocably waives any right to recover any
damages other than compensatory damages with respect to any dispute resolved by
arbitration.  The parties also agree that
neither will have the right to participate as a representative or member of any
class of claimants pertaining to a claim subject to arbitration under this
Plan.  The parties further agree that
neither will have the right to consolidate claims subject to arbitration under
this Plan.

 

APPENDIX
A

Defined
Terms

“Administrator”
means the Biomet, Inc.

“Benefits
Continuation Period” means the shorter of the (i) the Continuation Period, (ii)
the period for which the Participant is eligible for and elects Continuation
Coverage pursuant to COBRA, not to exceed eighteen (18) months

“Change in Control
Agreement” means, with respect to an Employee, the Change in Control Agreement
between the Employee and the Company, as in effect from time to time.

“COBRA” means
ERISA Sections 601 through 607 and Code Section 4980B, as amended from time to
time.

“Comparable
Employment” means an employment position that would (i) provide the Participant
with a base salary rate and target bonus that is not less than the Participant’s
base salary rate and target bonus rate at the time of the offer of such
employment, (ii) provide other benefits and compensation that are, in the
Administrator’s judgment, in the aggregate, comparable in value to the other
benefits and compensation for which the Participant is eligible at the time of
such offer, and (iii) would not require that the Participant change his
principal work location by more than 50 miles from such location at the time of
the offer of such employment.

“Company” means
Biomet, Inc., its wholly-owned subsidiaries, and any joint venture in which it
participates.  For purposes of Articles
VI and VII, “Company” means Biomet, Inc.

“Continuation
Coverage” means continuation coverage under the Employer’s medical and/or
dental program pursuant to COBRA.

“Continuation
Period” means the period after a Qualified Termination for which payments are
payable and/or benefits to be provided pursuant to the Plan.  In general, the “Continuation Period” for a
Participant will begin on the effective date of his Qualified Termination and end
after a number of weeks equal to the sum of (i) the Base Continuation Period,
plus (ii) one additional week for each Year of Service (up to a maximum of 26
additional weeks).  For purposes of the
preceding sentence, the Base Continuation Period shall be 52 weeks.

“Covered Dependent”
means a Participant’s dependent who is covered by the Company’s medical
benefits plan upon a Qualified Termination.

“Eligible Employee”
means an Employee who (i) is a party to a Change in Control Agreement with the
Company, (ii) has not received any payments pursuant to such Change in Control
Agreement, and (iii) has completed at least one (1) Year of Service.

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“Employee” means
an individual compensated as a common law employee of the Company or a
wholly-owned subsidiary of the Company.

“Employer” means
the specific Biomet group company (i.e. wholly-owned subsidiary of Biomet,
Inc., joint venture in which Biomet, Inc. or one of its wholly-owned
subsidiaries participates or Biomet, Inc. itself) for which Employee provides
services and receives compensation as a common law employee.

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time.

“Participant”
means an Eligible Employee who has become a Participant pursuant to Article III
and who has not ceased to be a Participant as provided in Article III.

“Plan” means the
Biomet, Inc. Executive Severance Pay Plan, as set out in this document, as
amended from time to time.

“Plan Year” means
the calendar year.

“Qualified
Termination” has the meaning specified in Section 5.02.

“Salary
Continuation” means payments of base salary made pursuant to Subsection
5.01(a).

“Salary
Continuation Rate” means the rate of the Participant’s base salary (without
respect to bonuses, incentive compensation, or any other type of special pay)
in effect on the date of Participant’s Qualified Termination, before any
reduction on account of salary reduction contributions pursuant to Code Section
125 or 401(k) or pursuant to a nonqualified deferred compensation plan of the Company.

“Termination of
Employment,” “Terminates Employment,” or “Terminates his/her Employment” means,
with respect to a Participant, complete termination of the employment
relationship between the Participant and the Company and all related entities.

“Termination Date”
means the date as of which an Employee Terminates Employment.

“Year of Service”
means a measuring period of 12 consecutive months throughout which an Employee
is continuously employed as a full-time Employee.  For purposes of the preceding sentence, an
Employee will be considered to be continuously employed as a full-time Employee
during any Employer-approved leave, provided that he is a full-time Employee
immediately before the leave and returns to work as a full-time Employee
immediately after the leave.  For
purposes of this definition, an Employee’s first measuring period will begin on
the date on which he first provides services to the Employer as a full-time
Employee, and his later measuring periods will begin on the anniversaries of that
date; provided, however, if the Employee Terminates Employment and later
provides services as a full-time Employee, his later measuring periods will
begin with the date on which he first provides services as a full-time Employee
after 

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his Termination of
Employment and the anniversaries of that date. 
If the Employer acquires another employer or significant business
operations of another employer, in the case of an Employee hired by the
Employer as part of the acquisition, service with the predecessor employer will
be treated as service with the Employer to the extent provided in the agreement
of acquisition.

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