Employment Agreement

Change in Control Agreement

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”), dated as of February 26, 2007 (the “Effective Date”), is made by and between Biomet, Inc., an Indiana corporation (the “Company”), and Jeffrey R. Binder (the “Executive”).

WHEREAS, the Company desires to engage the Executive, and the Executive desires to be engaged by the Company, as President and Chief Executive Officer of the Company; and

WHEREAS, the Company and the Executive desire to enter into this Agreement to set out the terms and conditions for the employment relationship of the Executive with the Company.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto agree as follows:

1.             Employment Agreement.  On the terms and conditions set forth in this Agreement, the Company agrees to employ the Executive and the Executive agrees to be employed by the Company for the Employment Period set forth in Section 2 and in the positions and with the duties set forth in Section 3.  Terms used herein with initial capitalization not otherwise defined are defined in Section 22.

2.             Term.  The initial term of employment under this Agreement shall be for a three-year period commencing on the Effective Date (the “Initial Term”).  The term of employment shall be automatically extended for an additional consecutive 12-month period (the “Extended Term”) on January 1, 2010 and each subsequent January 1, unless and until the Company or Executive provides written notice to the other party in accordance with Section 13 hereof not less than 90 days before such anniversary date that such party is electing not to extend the term of employment under this Agreement (“Non-Renewal”), in which case the term of this Agreement shall end as of the end of such Initial Term or Extended Term, as the case may be, unless sooner terminated as hereinafter set forth.  Such Initial Term and all such Extended Terms are collectively referred to herein as the “Employment Period.”

3.             Position and Duties.  During the Employment Period, the Executive shall serve as President and Chief Executive Officer of the Company.  In such capacities, the Executive shall report to the Board (or, if the Company becomes a subsidiary of a different entity, the board of directors of the Company’s ultimate parent company).  During the Employment Period, the Executive shall have the powers and authority customarily exercised by individuals serving as president and chief executive officer of a company of the size and nature of the Company.  In addition, on the Effective Date the Executive shall be appointed as a member of the Company’s Board of Directors (the “Board”) and appointed to the Board’s Executive Committee, if existing at the time.  During the Employment Period, the Board shall nominate the Executive for re-election to the Board at the annual meeting(s) that the Executive’s position is up for re-election in the ordinary course.  The Executive shall devote the Executive’s reasonable best efforts and

 



full business time to the performance of the Executive’s duties hereunder and the advancement of the business and affairs of the Company; provided that the Executive shall be entitled to serve as a member of the board of directors of another company approved by the Board, to serve on civic, charitable, educational, religious, public interest or public service boards approved by the Board, and to manage the Executive’s personal and family investments, in each case, to the extent such activities do not, individually or in the aggregate, materially interfere with the performance of the Executive’s duties and responsibilities hereunder.

4.             Place of Performance.  During the Employment Period, the Executive shall be based primarily at the principal executive offices of the Company in Warsaw, Indiana, except for reasonable travel on the Company’s business consistent with the Executive’s position.

5.             Compensation and Benefits; Options; Change in Control.

(a)           Base Compensation.  During the Employment Period, the Company shall pay to the Executive a base salary (the “Base Salary”) at the rate of no less than $650,000 per year.  The Base Salary shall be reviewed for increase by the Company no less frequently than annually and shall be increased in the discretion of the Company and any such adjusted Base Salary shall constitute “Base Salary” for purposes of this Agreement.  The Base Salary shall be paid in substantially equal installments in accordance with the Company’s regular payroll procedures.

(b)           Annual Bonus.  The Executive shall be given the opportunity to earn an annual incentive bonus for each fiscal year that ends during the Employment Period in accordance with the annual bonus plan generally applicable to the Company’s executive officers who are subject to Internal Revenue Code (the “Code”) Section 162(m), as the same may be in effect from time to time (the “Annual Plan”).  The Executive’s target annual incentive bonus opportunity under the Annual Plan shall be no less than 100% of the Executive’s Base Salary for on-target performance with the possibility of exceeding 100% for high achievement, and Executive’s Annual Plan bonus shall be pro-rated for the number of months (including a full month for any partial month) for the Company fiscal year in which Executive begins his employment.  The actual amount payable to the Executive as an annual bonus under the Annual Plan shall be dependent upon the achievement of performance objectives established in accordance with the Annual Plan by the Board or the Compensation and Stock Option Committee of the Board (or its successor committee) (the “Compensation Committee”).  Any bonus payable pursuant to this Section 5(b) shall be paid at the same time annual bonuses are payable to other officers of the Company in accordance with the terms of the Annual Plan.

(c)           Equity Awards.  If, and only if, the Agreement and Plan of Merger among the Company, LVB Acquisition, LLC and LVB Acquisition Merger Sub, Inc., dated as of December 18, 2006 (the “Transaction Agreement”), is terminated in accordance with its terms prior to the consummation of the transactions contemplated thereby (the “Transactions”), the Executive shall be entitled to the benefits described in this Section 5(c).  If the Transactions are consummated in accordance with the Transaction Agreement (as amended from time to time), this Section 5(c) shall have no force or effect.  During a period that is at least one (1) week and no more than four (4) weeks after the  termination of the Transaction Agreement, and at the first meeting of the Board during each fiscal year commencing on or after May 31, 2008 if the

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Executive is then employed by the Company on the applicable date of grant, the Company shall grant the Executive equity awards having a nominal value on the date of grant of no less than $3,500,000 (each an “Annual Equity Award”), which shall vest in five equal installments on each of the first five anniversaries of the date of this Agreement for the first such Annual Equity Award and on the first five anniversaries of the date of grant for subsequent Annual Equity Awards  if the Executive is then employed by the Company.  The Compensation Committee shall determine the form for the Annual Equity Award in its sole discretion, but it is expected that 50% of the value will be awarded in the form of options and 50% of the value will be awarded in the form of restricted stock or restricted stock units, and all Annual Equity Awards shall have post-termination exercise periods of no less than 90 days (unless the Executive is terminated for Cause, in which case post-termination exercise periods shall be no less than 30 days).  Up to four-sevenths (4/7) of each Annual Equity Award may be granted in the form of restricted stock or restricted stock units the vesting of which will be contingent on the achievement of performance goals mutually agreed upon in good faith by the Compensation Committee and the Executive.  For purposes of this Section 5(c), options or other similar awards shall be valued at the aggregate amount to be recognized by the Company as an expense under FAS 123R and restricted stock, restricted stock units or other similar awards shall have a value equal to the aggregate fair market value (as determined reasonably and in good faith by the Committee) on the date of grant of the shares of the Company’s common stock subject to the award.

(d)           Vacation; Benefits.  During the Employment Period, the Company shall provide to the Executive employee benefits and perquisites on a basis that is no less favorable to that provided to other senior officers of the Company, including participation in the Company’s Deferred Compensation Plan, as in effect from time to time.  Subject to the terms of this Agreement, all benefits are provided at the Company’s sole discretion.  Subject to the terms of this Agreement, the Company shall have the right to change insurance carriers and to adopt, amend, terminate or modify employee benefit plans and arrangements at any time and without the consent of the Executive.

(e)           Transitional Matters.  In connection with the hiring of the Executive by the Company, the Executive shall additionally be entitled to the following:

(i)            The Company shall make a cash lump sum payment to the Executive in an amount equal to the bonus the Executive is required to repay his former employer in connection with his termination of employment, such amount not to exceed $1,320,000 (the “Make-Whole Bonus”).  The Make-Whole Bonus shall be paid on or before the date on which the Executive repays his former employer.  The Executive shall be required to repay the Make-Whole Bonus to the Company if, prior to the second anniversary of the Effective Date, the Executive terminates his employment with the Company other than for Good Reason or the Company terminates the Executive’s employment for Cause, provided that such repayment obligation shall lapse with respect to twenty-five percent (25%) of the Make-Whole Bonus for each six (6) month period of employment completed by Executive commencing on the Effective Date.

(ii)           Promptly after the Effective Date, the Company will purchase the Executive’s current residence in Winnetka, Illinois at its then appraised value, such amount not

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to exceed $2,199,000 (the “Purchase Price”).  In the event the Executive recognizes any income as the result of the subsequent sale of his residence by the Company at a price less than the Purchase Price (such amount “Imputed Income”), the Company shall make an additional payment to the Executive in an amount such that after payment of all applicable taxes on such payment, the Executive is left with an amount equal to the aggregate taxes imposed on the Imputed Income.  In addition, the Company shall pay directly, or reimburse the Executive for, the reasonable costs of relocating the Executive’s household from Winnetka, Illinois to Warsaw, Indiana.

(iii)          Unless otherwise required by the reasonable needs of the Company, the Company acknowledges that the Executive will spend weekends during the Employment Period at his home in Austin, Texas.  The Company shall arrange, at its expense, for the Executive to fly once per week to and from the Executive’s Texas home and the Company’s headquarters or such other location reasonably specified by the Company during the Employment Period.  The Company shall not gross up the Executive for taxes incurred in connection with these benefits which shall be calculated in accordance with applicable law; provided, however, if the Executive uses a commercial flight and the income imputed in connection therewith is greater than the amount that would have been imputed to the Executive if he had used a Company-operated aircraft, the Company shall gross up the Executive for taxes incurred on the incremental income associated with the commercial flight.  Notwithstanding anything to the contrary contained herein, the Company’s incremental costs associated with extending these benefits to the Executive shall not exceed $500,000 in any 12-month period.  For purposes of applying this limitation, the Company’s incremental cost for commercial flights shall be the cost of the Executive’s ticket and for flights on Company-operated aircraft shall be the incremental per-hour cost associated with the Executive’s flight(s) and other incremental costs related to such flights, such as landing fees, transportation and housing costs of aircrew and other similar costs.

(f)            Change in Control Agreement.  On the date hereof, the Company and the Executive are entering into a Change in Control Agreement dated the date hereof (the “CIC Agreement”).

6.             Expenses.  The Executive is expected and is authorized to incur reasonable expenses in the performance of his duties hereunder.  The Company shall reimburse the Executive for all such expenses reasonably and actually incurred in accordance with policies which may be adopted from time to time by the Company promptly upon periodic presentation by the Executive of an itemized account, including reasonable substantiation, of such expenses.

7.             Confidentiality, Non-Disclosure and Non-Competition Agreement.  The Company and the Executive acknowledge and agree that during the Executive’s employment with the Company, the Executive will have access to and may assist in developing Company Confidential Information and will occupy a position of trust and confidence with respect to the Company’s affairs and business and the affairs and business of the Company Affiliates.  The Executive agrees that the following obligations are necessary to preserve the confidential and proprietary nature of Company Confidential Information and to protect the Company and the Company Affiliates against harmful solicitation of employees and customers, harmful

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competition and other actions by the Executive that would result in serious adverse consequences for the Company and the Company Affiliates:

(a)           Non-Disclosure.  During the Executive’s employment with the Company and thereafter, the Executive will not knowingly use, disclose or transfer any Company Confidential Information other than as authorized in writing by the Company or within Executive’s good faith interpretation of the scope of the Executive’s duties.  Anything herein to the contrary notwithstanding, the provisions of this Section 7(a) shall not apply (i) when disclosure is required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with actual or apparent jurisdiction to order the Executive to disclose or make accessible any information; or (ii) to information that becomes generally known to the public or within the relevant trade or industry other than due to the Executive’s violation of this Section 7(a).

(b)           Materials.  The Executive will not remove any Company Confidential Information or any other property of the Company or any Company Affiliate from the Company’s premises or make copies of such materials except for normal and customary use in the Company’s business.  The Company acknowledges that the Executive, in the ordinary course of his duties, routinely uses and stores Company Confidential Information at home and other locations.  The Executive will return to the Company all Company Confidential Information and copies thereof and all other property of the Company or any Company Affiliate at any time upon the request of the Company and in any event promptly after termination of Executive’s employment.  The Executive agrees to attempt in good faith to identify and return to the Company any copies of any Company Confidential Information after the Executive ceases to be employed by the Company.  Anything to the contrary notwithstanding, nothing in this Section 7 shall prevent the Executive from retaining a home computer, papers and other materials of a personal nature (including diaries and calendars), information relating to his compensation or relating to reimbursement of expenses, information that he reasonably believes may be needed for tax purposes, and copies of plans, programs and agreements relating to his employment.

(c)           No Solicitation or Hiring of Employees.  During the Non-Compete Period, the Executive shall not solicit, entice, persuade or induce any individual who is employed by the Company or the Company Affiliates (or who was so employed within 180 days prior to the Executive’s action) to terminate or refrain from continuing such employment or to become employed by or enter into contractual relations with any other individual or entity other than the Company or the Company Affiliates, and the Executive shall not, directly or indirectly, hire, or participate in the hiring, as an employee, consultant or otherwise, any such person.

(d)           Non-Competition.

(i)            During the Non-Compete Period, the Executive shall not, directly or indirectly, (A) solicit or encourage any client or customer of the Company or a Company Affiliate, or any person or entity who was a client or customer within 180 days prior to Executive’s action to terminate, reduce or alter in a manner adverse to the Company, any existing business arrangements with the Company or a Company Affiliate or to transfer existing business from the Company or a Company Affiliate to any other person or entity, (B) provide

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services anywhere in the United States to any entity that competes with the Company or a Company Affiliate or that provides a product or service competitive with any product or service provided by the Company or any Company Affiliate or (C) own an interest in any entity described in subsection (B) immediately above; provided, however, that Executive may own, as a passive investor, securities of any such entity that has outstanding publicly traded securities so long as his direct holdings in any such entity shall not in the aggregate constitute more than 2% of the voting power of such entity.  The Executive agrees that, before providing services, whether as an employee or consultant, to any entity during the Non Compete Period, he will provide a copy of this Agreement to such entity and acknowledge, to the Company in writing, that he has done so. Notwithstanding the foregoing, nothing in this Section 7 shall prevent the Executive from providing services to a division or a subsidiary of an entity that does not compete with the Company or any Corporate Affiliate and that does not provide products or services competitive with products or services provided by the Company or any Corporate Affiliate even if other divisions or subsidiaries of that entity compete with the Company so long as the Executive does not have any managerial or supervisory authority with respect to such competitive division or subsidiary.  The Executive acknowledges that this covenant has a unique, very substantial and immeasurable value to the Company, that the Executive has sufficient assets and skills to provide a livelihood for the Executive while such covenant remains in force and that, as a result of the foregoing, in the event that the Executive breaches such covenant, monetary damages would be an insufficient remedy for the Company and equitable enforcement of the covenant would be proper.  The Executive further covenants that he shall not challenge the reasonableness of any of the covenants set forth in this Section 7, but reserves the right to challenge the Company’s interpretation of such covenants.

(ii)           If the restrictions contained in Section 7(d)(i) shall be determined by any court of competent jurisdiction to be unenforceable by reason of their extending for too great a period of time or over too great a geographical area or by reason of their being too extensive in any other respect, Section 7(d)(i) shall be modified to be effective for the maximum period of time for which it may be enforceable and over the maximum geographical area as to which it may be enforceable and to the maximum extent in all other respects as to which it may be enforceable.

(e)           Publicity.  During the Employment Period, the Executive hereby grants to the Company the right to use, in a reasonable and appropriate manner, the Executive’s name and likeness, without additional consideration, on, in and in connection with technical, marketing or disclosure materials, or any combination thereof, published by or for the Company or any Company Affiliate.

(f)            Conflicting Obligations and Rights.  The Executive represents and warrants that he is not subject to agreement or contractual commitment that prevents or in any way limits his ability to fully discharge his duties and responsibilities hereunder and that he is not in possession of any confidential or proprietary information of another person or entity that will be used in connection with the discharge of his duties hereunder.  The Executive acknowledges and agrees the accuracy of the foregoing representation and warranty is a condition precedent to the enforceability of the Company’s obligations hereunder.

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(g)           Enforcement.  The Executive acknowledges that in the event of any breach of this Section 7, the business interests of the Company and the Company Affiliates will be irreparably injured, the full extent of the damages to the Company and the Company Affiliates will be impossible to ascertain, monetary damages will not be an adequate remedy for the Company and the Company Affiliates, and the Company will be entitled to enforce this Agreement by a temporary, preliminary and/or permanent injunction or other equitable relief, without the necessity of posting bond or security, which the Executive expressly waives.  The Executive understands that the Company may waive some of the requirements expressed in this Agreement, but that such a waiver to be effective must be made in writing and should not in any way be deemed a waiver of the Company’s right to enforce any other requirements or provisions of this Agreement.  The Executive agrees that each of the Executive’s obligations specified in this Agreement is a separate and independent covenant and that the unenforceability of any of them shall not preclude the enforcement of any other covenants in this Agreement.

(h)           Coordination with the CIC Agreement.  The applicability of the provisions of this Section 7 are subject to the terms of the CIC Agreement.

8.             Termination of Employment.  The Executive’s employment hereunder may be terminated during the Employment Period under the following circumstances:

(a)           Death.  The Executive’s employment hereunder shall terminate upon the Executive’s death;

(b)           By the Company.  The Company may terminate the Executive’s employment for:

(i)            Disability.  If the Executive shall have been substantially unable to perform the Executive’s material duties hereunder by reason of illness, physical or mental disability or other similar incapacity, which inability shall continue for 90 consecutive days or 180 non-consecutive days in any 24-month period and which qualified Executive for long term disability coverage under applicable Company disability plans (a “Disability”); or

(ii)           Cause.  The Company may terminate the Executive’s employment for Cause as defined herein;

(c)           By the Executive.  The Executive may terminate his employment for any reason or for no reason upon not less than 90 days notice to the Company.  During this 90-day period, the Company may, without breaching this Agreement or constituting Good Reason or a Termination without Cause, relieve the Executive of his positions, titles, duties and responsibilities and direct the Executive to cease appearing on Company property.  In addition, upon delivery of such Notice of Termination by the Executive, the Executive shall be deemed to have resigned as a member of the Board.

(d)           Notice of Termination.  Any termination of the Employment Period, other than pursuant to the Executive’s death, shall be effected by delivery to the other party of a notice of termination (a “Notice of Termination”) from the party terminating the Employment Period.

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(e)           Other Resignations.  Upon any termination of the Executive’s employment, he shall automatically resign, and shall automatically be deemed to have resigned, from all positions with the Company and Company Affiliates, including his position as a member of the Board.

9.             Compensation Upon Termination.

(a)           Death.  If the Executive’s employment is terminated during the Employment Period as a result of the Executive’s death, this Agreement and the Employment Period shall terminate without further notice or any action required by the Company or the Executive’s legal representatives.  Upon the Executive’s death, the Company shall pay or provide the following:  (i) the Company shall pay to the Executive’s legal representative or estate, as applicable, the Executive’s Base Salary due through the Executive’s Date of Termination; (ii) the Company shall pay to the Executive’s legal representative or estate, as applicable, a pro rated portion (based on the percentage of the Company’s fiscal year preceding the Executive’s Date of Termination) of the average of (x) the annual incentive bonus earned by the Executive for the prior year and (y) the annual incentive bonus the Executive would have received for the current year if his employment had not been terminated, based on the Company’s performance to the date of termination extrapolated through the end of the current year; and (iii) the Company shall pay, at the time when such payments are due, to the Executive’s legal representative or estate, as applicable, the Accrued Benefits and the rights of the Executive’s legal representative or estate with respect to equity or equity-related awards shall be governed by the applicable terms of the related plan or award agreement.  Except as set forth herein, the Company shall have no further obligation to the Executive under this Agreement.

(b)           Disability.  If the Company terminates the Executive’s employment during the Employment Period because of the Executive’s Disability pursuant to Section 8(b)(i), (i) the Company shall pay to the Executive the Executive’s Base Salary due through the Executive’s Date of Termination, (ii) the Company shall pay to the Executive a pro rated portion (based on the percentage of the Company’s fiscal year preceding the Executive’s Date of Termination) of the average of (x) the annual incentive bonus earned by the Executive for the prior year and (y) the annual incentive bonus the Executive would have received for the current year if his employment had not been terminated, based on the Company’s performance to the date of termination extrapolated through the end of the current year; and (iii) the Company shall pay to the Executive, at the time when such payments are due, the Accrued Benefits and the rights of the Executive with respect to equity or equity-related awards shall be governed by the applicable terms of the related plan or award agreement.  Except as set forth herein, the Company shall have no further obligation to the Executive under this Agreement.

(c)           Certain Terminations by the Company or Voluntarily by the Executive.  If, during the Employment Period, the Company terminates the Executive’s employment for Cause or the Executive voluntarily terminates his employment other than for Good Reason, the Company shall pay to the Executive the Executive’s Base Salary due through the Date of Termination and all Accrued Benefits, if any, to which the Executive is entitled as of the Date of Termination, at the time such payments are due, and the Executive’s rights with respect to equity

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or equity-related awards shall be governed by the applicable terms of the related plan or award agreement.

(d)           Termination by the Company Other Than in Connection with a Change of Control, or by the Executive for Good Reason other than in Connection with a Change of Control.  If the Company terminates the Executive’s employment during the Employment Period other than for Cause or due to Disability or if Executive terminates the Executive’s employment during the Employment Period for Good Reason, in either event, at a time when the Executive would not also be entitled to benefits under the CIC Agreement if his employment were terminated by the Company without “cause” (as defined in the CIC Agreement) or by the Executive for “good reason” (as defined in the CIC Agreement), Executive shall be entitled to:

(i)            An amount equal to (a) 1.5 times the Base Salary in effect at the date of termination (the “Base Component”) plus (b) 1.5 times the average of (x) the annual incentive bonus earned by the Executive for the prior year and (y) the annual incentive bonus the Executive would have received for the current year if his employment had not been terminated, based on the Company’s performance to the date of termination extrapolated through the end of the current year (the “Bonus Component”, and together with the “Base Component”, the “Severance Benefit”).  The total amount of the Severance Benefit will be paid in equal, ratable installments in accordance with the Company’s regular payroll policies over the course of the Non-Compete Period.  If the Executive becomes employed by another employer during that period, the Bonus Component will cease and the Severance Benefit will be limited to the Base Component; provided that 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 this Section 9(d);

(ii)           If the Executive is eligible for and elects continuation coverage pursuant to COBRA (with respect to the Executive and/or the Executive’s dependents who are eligible to elect COBRA under the Company’s group health plan(s) as a direct result of the Executive’s termination of employment), the Company shall pay (as of the first of each applicable month) the premiums for such coverage (or reimburse the Executive for such premiums) during the Non-Compete Period;

(iii)          Continued payment of the Executive’s Company-provided car allowance, if any, for a period of twelve months from the termination date;

(iv)          All outstanding options granted to the Executive by the Company (including the Annual Equity Awards) on any common shares of stock of Biomet, Inc., that would have vested in the ordinary course within 12 (twelve) months after the termination date if the Executive’s employment had not been terminated will become immediately vested and exercisable (to the extent not yet vested and exercisable) as of the termination date and all vested options shall remain exercisable until the earlier of (x) the expiration of their original term (such expiration not to be affected by any post-termination exercise period) or (y) 18 (eighteen) months from the date of termination. To the extent not otherwise provided under the written agreement, if any, evidencing

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the grant of any restricted common shares of stock of the Company to the Executive, all such outstanding shares that have been granted to the Executive subject to restrictions that would have lapsed in the ordinary course within 12 (twelve) months after the termination date if the Executive’s employment had not been terminated will vest automatically upon the termination date, and the Executive will become the owner of such shares free and clear of all such restrictions.  The Company shall pay the Executive an additional $1,000,000 in a cash lump sum if, and only if, a termination described in this Section 9(d) occurs prior to the grant by the Company to the Executive of the first Annual Equity Award. Such payment, if any, shall be made upon the termination of the Executive’s employment; provided that the Executive shall not be entitled to such payment if such termination occurs on or after consummation of the Transactions;

(v)           Notwithstanding the preceding provisions or any provision in this Agreement to the contrary, all payments pursuant hereto are intended to comply with Code Section 409A and the guidance thereunder, and this Agreement 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 Agreement 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).

For the sake of clarity, the Executive shall not be eligible to receive benefits under this Section 9(d) at a time when he would also be entitled to benefits under the CIC Agreement if his employment were terminated by the Company without “cause” (as defined in the CIC Agreement) or by the Executive for “good reason” (as defined in the CIC Agreement).

(e)           Liquidated Damages.  The parties acknowledge and agree that damages which will result to the Executive for termination by the Company of the Executive’s employment shall be extremely difficult or impossible to establish or prove, and agree that the amounts payable to the Executive under Section 9(d) (the “Severance Payments”) shall constitute liquidated damages for any such termination.

(f)            Full Discharge of Company Obligations.  In the event of any breach of this Agreement by the Company, the Executive shall be entitled to the lesser of (i) the amount of damages incurred by the Executive as a direct result of each breach and (ii) the Severance Payments the Executive would be entitled to under Section 9(d) if his employment were terminated thereunder.  The amounts payable to Executive following termination of the Employment Period or upon or any actual or constructive termination of the Executive’s employment  pursuant to this Section 9 shall be in full and complete satisfaction of Executive’s rights under this Agreement and any other claims he may have in respect of his employment by the Company or any Company Affiliate, and Executive acknowledges that such amounts are fair and reasonable, and his sole and exclusive remedy, in lieu of all other remedies at law or in equity, with respect to the termination of his employment hereunder.  Payment of any Severance Payment pursuant to Section 9(d) shall be conditioned upon Executive’s execution and non-revocation of a release, in a form substantively identical in terms to the form attached as Exhibit A.

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(g)           Section 409A.  To the extent the Executive would be subject to the additional 20% tax imposed on certain deferred compensation arrangements pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), as a result of any provision of this Agreement, such provision shall be deemed amended to the minimum extent necessary to avoid application of such tax and the parties shall promptly execute any amendment reasonably necessary to implement this Section 9(g).

10.           Notices.  All notices, demands, requests, or other communications which may be or are required to be given or made by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, or transmitted by facsimile transmission addressed as follows:

(i)            If to the Company:

Biomet, Inc.
56 E. Bell Drive
P.O. Box 587

Warsaw, Indiana  46581-0587

Attn:  Chief Legal Officer
Facsimile Number:  (574) 267-8137

(ii)           If to the Executive:

Jeffrey R. Binder
Address last shown on the Company’s Records

Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent.  Each notice, demand, request, or communication that shall be given or made in the manner described above shall be deemed sufficiently given or made for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, confirmation of facsimile transmission or the affidavit of messenger being deemed conclusive but not exclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

11.           Severability.  The invalidity or unenforceability of any one or more provisions of this Agreement shall not affect the validity or enforceability of the other provisions of this Agreement, which shall remain in full force and effect.

12.           Effect on Other Agreements.  The provisions of this Agreement shall supersede the terms of any plan, policy, agreement, award or other arrangement of the Company (whether entered into before or after the Effective Date) to the extent application of the terms of this Agreement is more favorable to the Executive.

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13.           Survival.  It is the express intention and agreement of the parties hereto that the provisions of Sections 5(e)(i),  7, 9, 10, 11, 12, 13, 14, 15, 18, 19, 21 and 22 hereof shall survive the termination of employment of the Executive.

14.           Assignment.  The rights and obligations of the parties to this Agreement shall not be assignable or delegable, except that (i) in the event of the Executive’s death, the personal representative or legatees or distributees of the Executive’s estate, as the case may be, shall have the right to receive any amount owing and unpaid to the Executive hereunder and (ii) the rights and obligations of the Company hereunder shall be assignable and delegable in connection with any subsequent merger, consolidation, sale of all or substantially all of the assets or equity interests of the Company or similar transaction involving the Company or a successor corporation.  The Company shall require any successor to 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 such succession had taken place.

15.           Binding Effect.  Subject to any provisions hereof restricting assignment, this Agreement shall be binding upon the parties hereto and shall inure to the benefit of the parties and their respective heirs, devisees, executors, administrators, legal representatives, successors and assigns.

16.           Amendment; Waiver.  This Agreement shall not be amended, altered or modified except by an instrument in writing duly executed by the party against whom enforcement is sought.  Neither the waiver by either of the parties hereto of a breach of or a default under any of the provisions of this Agreement, nor the failure of either of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights or privileges hereunder.

17.           Headings.  Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

18.           Governing Law.  This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Indiana (but not including any choice of law rule thereof that would cause the laws of another jurisdiction to apply).  Except as otherwise provided in Section 7(g), each of the parties agrees that any dispute between the parties shall be resolved only in the courts of the State of Indiana or the United States District Court for the Northern District of Indiana and the appellate courts having jurisdiction of appeals in such courts.  In that context, and without limiting the generality of the foregoing (but subject to Section 7(g)), each of the parties hereto irrevocably and unconditionally (a) submits for himself or itself in any proceeding relating to this Agreement or Executive’s employment by the Company or any Related Entity, or for the recognition and enforcement of any judgment in respect thereof (a “Proceeding”), to the exclusive jurisdiction of the courts of the State of Indiana, the court of the United States of America for the Northern District of Indiana, and appellate courts having jurisdiction of appeals

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from any of the foregoing, and agrees that all claims in respect of any such Proceeding shall be heard and determined in such Indiana State court or, to the extent permitted by law, in such federal court; (b) consents that any such Proceeding may and shall be brought in such courts and waives any objection that he or it may now or thereafter have to the venue or jurisdiction of any such Proceeding in any such court or that such Proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) waives all right to trial by jury in any Proceeding (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or Executive’s employment by the Company or any Company Affiliate, or his or its performance under or the enforcement of this Agreement; (d) agrees that service of process in any such Proceeding may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at his or its address as provided in Section 10; and (e) agrees that nothing in this Agreement shall affect the right to effect service of process in any other manner permitted by the laws of the State of Indiana.

19.           Entire Agreement.  This Agreement, the CIC Agreement and the plans and agreements governing the Annual Equity Awards constitute the entire agreement between the parties respecting the employment of the Executive and supersede all other agreements and understandings.

20.           Counterparts.  This Agreement may be executed in two counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.

21.           Withholding.  The Company may withhold from any benefit payment under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

22.           Definitions.

“Accrued Benefits” means (i) any compensation deferred by the Executive prior to the Date of Termination and not paid by the Company; (ii) any amounts or benefits owing to the Executive or to the Executive’s beneficiaries under the then applicable benefit plans of the Company; (iii) any amounts owing to the Executive for reimbursement of expenses properly incurred by the Executive prior to the Date of Termination and which are reimbursable in accordance with Section 6; and (iv) any other benefits or amounts due and owing to the Executive under the terms of any plan, program or arrangement of the Company.

“Cause” means (i) the 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 by the Executive of a Notice of Termination for Good Reason), after a written notice from the Company identifying with reasonable specificity the manner in which the Executive has not substantially performed his duties; (ii) the Executive’s conviction of, or entering a plea of guilty or no contest to, a felony or other crime involving dishonesty or the Executive being subject to a final regulatory sanction that is not appealable within the relevant agency, in connection with his employment by the Company or its affiliates; (iii) a material

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violation by Executive of any material written policy of the Company that is generally applicable to all employees or all officers of the Company; (iv) the Executive willfully engaging in conduct that is demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise, provided that no such conduct will be deemed “willful” unless it is engaged in by the Executive not in good faith and without reasonable belief that the Executive’s conduct was in the best interests of the Company;  (v) Executive’s unreasonable failure to cooperate, if reasonably requested by the Board in good faith, with any material investigation or inquiry by the Board or any governmental or regulatory entity  into his or the Company’s business practices, including, but not limited to, Executive’s unreasonable refusal to be deposed or to provide testimony at any trial or inquiry; (vi) or any material breach by Executive of the provisions of this Agreement that is not cured within fifteen (15) days of written notice from the Company identifying such breach.

“Company Affiliate” means any entity controlled by, in control of, or under common control with, the Company.

“Company Confidential Information” means information known to the Executive to constitute trade secrets or proprietary information belonging to the Company or other Company confidential financial information, operating budgets, strategic plans or research methods, personnel data, projects or plans, or non-public information regarding the Company or any Company Affiliate, in each case, received by the Executive in the course of his employment by the Company or in connection with his duties with the Company.

“Date of Termination” means (i) if the Executive’s employment is terminated by the Executive’s death, the date of the Executive’s death; (ii) if the Executive’s employment is terminated because of the Executive’s Disability pursuant to Section 8(b)(i), 30 days after Notice of Termination, provided that the Executive shall not have returned to the performance of the Executive’s duties on a full-time basis during such 30-day period; (iii) if the Executive’s employment is terminated by the Company pursuant to Section 8(b)(ii) or by the Executive pursuant to Section 8(c), the date specified in the Notice of Termination, which in the case of a termination by the Executive may not be less than 90 days following the date the notice is provided.

“Extended Term” shall have the meaning set forth in Section 2.

“Good Reason” means 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 Employment Term but prior to a Change in Control (as defined in Executive’s CIC Agreement dated the date hereof) unless, in the case of an act or failure to act described in paragraphs (i) and (ii) below, the act or failure to act is corrected prior to the Date of Termination specified in the Executive’s Notice of Termination (as defined in Executive’s Severance and Change in Control Agreement dated the date hereof):

(i)            the assignment of the Executive to a position and duties inconsistent with the Executive’s status as CEO, as those duties and that position existed at the time when this Agreement was executed or a substantially adverse alteration in the nature or status of the Executive’s responsibilities from those in effect immediately prior to such date; provided that Good Reason shall not exist under this prong (i) as a consequence, without

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more, of the Company ceasing to be a public company or becoming a portfolio company, in either case, in connection with the consummation of the transactions contemplated by the Transaction Agreement; or

(ii)           a reduction by the Company in the Executive’s annual base salary and/or Target Bonus as in effect on the date immediately prior to the date that this Agreement was executed.

(iii)          The Executive’s right to terminate the Executive’s employment for 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 Good Reason.  Notwithstanding the foregoing, the occurrence of an event that would otherwise constitute Good Reason will cease to be an event constituting Good Reason if the Executive does not timely provide a Notice of Termination (as defined in Executive’s Severance and Change in Control Agreement dated the date hereof) to the Company within one-hundred twenty (120) days of the date on which the Executive first becomes aware (or reasonably should have become aware) of the occurrence of that event.

“Non-Compete Period” means the period commencing on the Effective Date and ending eighteen (18) months after the earlier of the expiration of the Employment Period or the Executive’s Date of Termination.

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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement, or have caused this Agreement to be duly executed and delivered on their behalf.

 

BIOMET, INC.

 

 

 

 

 

By:

/s/ Niles L. Noblitt

 

Name:

Niles L. Noblitt

 

Title:

Chairman of the Board

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Jeffrey R. Binder

 

 

Jeffrey R. Binder

 

 

 

 

 

 

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EXHIBIT 10.2

CHANGE IN CONTROL AGREEMENT

THIS AGREEMENT, dated as of February 26, 2007, is made by and between Biomet, Inc., an Indiana corporation (the “Company”), and Jeffrey R. Binder (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.

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.            In addition, the Board recognizes that the service of the Executive as President and Chief Executive Officer raises questions of uncertainty that may result in the distraction of the Executive to the detriment of the Company and its shareholders.

D.            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.

E.             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.

(a)           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.

 



(b)           Notwithstanding anything to the contrary contained herein, this Agreement and the Noncompetition Agreement (as defined in Section 5.01) shall automatically terminate and be canceled and the Executive shall have no further rights or obligations hereunder or thereunder immediately prior to the Closing, as defined in the Agreement and Plan of Merger dated December 18, 2006 by and among Biomet, Inc., LVB Acquisition Merger Sub, Inc. and LVB Acquisitions LLC, as such may be amended from time to time (the “Transaction Agreement”).

Section 1.02           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 “Employment Period”).

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 Good Reason.

Section 2.04           Notice of Termination. Any termination by the Company for Cause, or by the Executive for 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 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.

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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 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

Any severance or termination benefits provided under this Article III are intended to be without duplication of any other severance or termination benefits the Executive has received under the Employment Agreement.  Accordingly, any benefits or payments provided under Article III shall be reduced by any severance or termination benefits the Executive has received or is entitled to receive under the Employment Agreement.

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

(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) three 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 three (3) 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

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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.

(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.  The Company shall pay the Executive an additional $1,000,000 in a cash lump sum if, and only if, a termination described in this Section 3.01 occurs prior to the earlier of (i) the grant by the Company to the Executive of the first Annual Equity Award (as such term is defined in the Employment Agreement) or (ii) the payment by the Company to the Executive of the $1,000,000 cash lump sum pursuant to Section 9(d)(iv) of the Employment Agreement.  Such payment, if any, shall be made upon the tenth (10) Business Day following the Date of Termination.

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(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.

(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 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 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.

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(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 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

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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 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.

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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 (the “Noncompetition Agreement”).   The provisions of the Noncompetition Agreement shall become effective upon the receipt by the Executive of benefits pursuant to Section 3.01 or 3.04 of this Agreement, and upon such effectiveness, Section 7 of the Employment Agreement shall automatically terminate and be cancelled and the Executive shall have no further obligations thereunder.

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.

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.

 

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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 VII, except that notice of change of address will be effective only upon actual receipt:

To the Company:
Biomet, Inc.
56 E. Bell Drive
P. O. Box 587

Warsaw, Indiana 46581-0587

Attn: Chief Legal Officer
Facsimile Number: (574) 267-8137

 

To the Executive:
Jeffrey R. Binder
Address last shown on the Company’s Records

 

 

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 3.07.

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.

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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 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 February 26, 2007, 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 February 26, 2007 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

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Company Shares and the outstanding Company Voting Securities, as the case may be, and (B) no person (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;

provided, however, in the case of each of (a), (b), (c) and (d) above, the Transaction Agreement and the consummation of the transactions contemplated thereby shall not be deemed to be, cause or result in a Change in Control as defined herein.

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.

Employment Agreement” means that Employment Agreement of even date herewith by and between the Company and the Executive.

Employment Period” shall have the meaning assigned in Section 1.02.

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 3.06(a).

Executive” means Jeffrey R. Binder.

Good Reason” for termination by the Executive of the Executive’s employment means the death of the Executive during the   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 Employment Period, unless, in the case of any act or failure to act described in

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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 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

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(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 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 Good Reason.  Notwithstanding the foregoing, the occurrence of an event that would otherwise constitute Good Reason will cease to be an event constituting 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.

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

Noncompetition Agreement” shall have the meaning described in Section 5.01.

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 3.02, 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 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.

Renewal Date” shall have the meaning described in Section 1.01(a).

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(a).

Transaction Agreement” shall have the meaning described in Section 1.01(b).

*    *    *

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EXECUTIVE

BIOMET, INC.

 

 

 

 

/s/ Jeffrey R. Binder

 

By:

/s/ Niles L. Noblitt

 

Jeffrey R. Binder

Name:

Niles L. Noblitt

 

Its:

Chairman of the Board

 

 

 

 

 

 

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