Exhibit 10.14

 

NUVASIVE, INC.

NOTICE OF GRANT OF PERFORMANCE CASH AWARD

 

NuVasive, Inc. (the “Company”) has granted to the participant identified below
(the “Participant”) a performance cash award (the “Award”) pursuant to the
NuVasive, Inc. 2014 Executive Incentive Compensation Plan (the “Plan”), which
represents the right to receive – on the Settlement Date provided in the
Performance Cash Award Agreement attached hereto (together with this Grant
Notice, the “Agreement”) – a cash amount as set forth in, and subject to the
terms and conditions of, this Agreement.  This Award is subject to all of the
terms and conditions set forth in the Agreement and the Plan, each of which is
incorporated herein by reference.  Unless otherwise defined herein, capitalized
terms shall have the meanings assigned to such terms in the Plan or the
Agreement, as appropriate, and, in the event of any inconsistency between the
Plan and the Agreement, the terms of the Plan shall control.

 

Participant:

 

Participant ID:

 

Date of Grant:

March 1, 2016

Base Cash Amount:

, subject to adjustment as provided by the Agreement.

Initial Performance Period:

January 1, 2016 – December 31, 2016 (or, in the event of a Change in Control,
through the last day of the Company’s last fiscal quarter ending after January
1, 2016, and before the date of a Change in Control).

Initial Performance Measure:

 

The Company’s earnings per share (“EPS”), as listed in Section 10.4(a)(xvi) of
the Plan, determined in accordance with generally accepted accounting principles
in the United States (“GAAP”), adjusted to reflect the impact of the change from
a basic to diluted share count, and determined excluding (1) litigation
liability expense; (2) amortization of intangible assets; (3) non-cash interest
expense on convertible notes; (4) intangible asset impairment; (5) leasehold
related charges; (6) acquisition related items (including expenses associated
with prior mergers-and-acquisitions-related activity and as incurred); (7)
integration related charges associated with the integration of acquired
businesses; (8) certain one-time and business consolidation costs; and (9) the
related tax charges and benefits associated with the exclusions (“Non-GAAP
EPS”), and subject to such further adjustments as the Committee may in its
discretion determine and specify in writing prior to March 30, 2016.  No
adjustments shall be made in the calculation of Non-GAAP EPS which would
preclude the payment of any amounts under this Award from satisfying the
requirements of Code section 162(m)(4)(C) and the regulations thereunder.

Initial Performance Target:

 

$1.00 or more of Non-GAAP EPS if the Initial Performance Period ends on December
31, 2016, and $0.10 or more of Non-GAAP EPS if the Initial Performance Period
ends on the last day of the Company’s last fiscal quarter ending after January
1, 2016, and before the date of a Change in Control.

 

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Maximum Payment:

In the event the Committee determines and certifies that the Initial Performance
Target is satisfied, the maximum payment that may be made to the Participant is
equal to 150% of the Base Cash Amount.  If the Committee determines and
certifies that the Initial Performance Target is not satisfied, no amounts are
payable pursuant to this Award.  Such determination and certification shall be
made by the Committee in writing no later than the February 28th that next
follows the end of the Initial Performance Period, provided, however, that if
the Initial Performance Period ends on the last day of the Company’s last fiscal
quarter ending after January 1, 2016, and before

the date of a Change in Control, the Committee shall make such determination and
certification no later than the date immediately preceding the date of the
Change in Control.  

Actual Payment:

 

In the event the Committee determines and certifies that the Initial Performance
Target is satisfied, the actual payment made pursuant to this Award shall be
determined pursuant to Section 3.

Vesting Date:

Subject to the terms and conditions of the Agreement (including, without
limitation, conditions requiring continued Service with the Company through the
applicable date), this Award vests on March 1, 2019 (the “Scheduled Vesting
Date”).

By electronically accepting the Award according to the instructions in the
Participant’s E*TRADE account (pursuant to which the Participant received this
Grant Notice), the Participant agrees that the Award is governed by this Grant
Notice and by the provisions of the Plan and the Agreement, both of which are
made a part of this document.

 

The Participant acknowledges that copies of the Plan and the Agreement are
available via the Participant’s E*TRADE account.

 

The Participant represents that the Participant has read and is familiar with
the provisions of the Plan and the Agreement, and hereby accepts the Award
subject to all of their terms and conditions.

 

 

 

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NUVASIVE, INC.

PERFORMANCE CASH AWARD AGREEMENT

 

NuVasive, Inc. has granted to the Participant named in the Notice of Grant of
Performance Cash Award (the “Grant Notice”) to which this Performance Cash Award
Agreement is attached (together, the Performance Cash Award Agreement and the
Grant Notice being referred to collectively herein as this “Agreement”) an Award
subject to the terms and conditions set forth in this Agreement.  The Award has
been granted pursuant to, and shall - in all respects - be subject to the terms
and conditions of the NuVasive, Inc. 2014 Executive Incentive Compensation Plan
(the “Plan”), as amended from time-to-time, the provisions of which are
incorporated herein by reference.  By accepting the Award (as provided in the
Grant Notice), the Participant: (a) acknowledges receipt of, and represents that
the Participant has read and is familiar with, this Agreement and the Plan,
(b) accepts the Award subject to all of the terms and conditions of this
Agreement and the Plan, and (c) agrees to accept as binding, conclusive and
final all decisions or interpretations of the Committee or its delegate (to the
extent delegation is permitted under the Plan) in the event any questions arise
(and/or interpretation may be required) regarding this Agreement or the Plan.

1.Definitions and Construction.

1.1Definitions.  Unless otherwise defined herein, capitalized terms shall have
the meanings assigned to such terms in the Grant Notice or the Plan.

(a)“2018 Non-GAAP Operating Margin” means the Company’s non-GAAP operating
margin as publicly reported by the Company in its earnings press release for the
fiscal year ended December 31, 2018, consistent with the Company’s non-GAAP
policy, adjusted to exclude the effect of acquisitions and divestitures related
activity that close after January 1, 2018, and subject to such further
adjustments as the Committee may in its discretion determine and specify in
writing (such adjustments, the “Adjustments”).  Notwithstanding the foregoing,
in the event of a Change in Control, the non-GAAP operating margin will be
determined based on the Company’s financial performance over the four
consecutive fiscal quarters ending with and including the last fiscal quarter
prior to such Change in Control.

(b) “Performance Multiplier” means the respective percentage calculated using
(or as identified in) the table below:

2018 Non-GAAP Operating Margin

% of Goal Achieved

Performance Multiplier

<15.98%

<85.00%

No Payout

15.98%

85.00%

25.0%

16.45%

87.50%

37.5%

16.92%

90.00%

50.0%

17.39%

92.50%

62.5%

17.86%

95.00%

75.0%

18.80%

100.00%

100.0%

19.18%

102.00%

110.0%

19.27%

102.50%

112.5%

19.46%

103.50%

118.5%

20.45%

108.75%

150.0%

If the Company achieves a 2018 Non-GAAP Operating Margin that falls between the
foregoing levels, the Performance Multiplier will be determined by linear
interpolation between the applicable

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levels noted above and using the following guiding principles:

 

·

a 5% decrease in funding for every 1% of goal achieved below target (up to 85%
of goal achieved, below which the Performance Multiplier shall be zero);

 

·

a 5.0% increase in funding for every 1% of goal achieved between 100% and 102.5%
of goal achieved; and

 

·

a 6.0% incremental increase in funding for 1% of goal achieved above 102.5%, up
to a maximum funding of 150% of target.

In each case, the Performance Multiplier shall be rounded up to the nearest
tenth of a percent.

1.2Construction.  Captions and titles contained herein are for convenience only
and shall not affect the meaning or interpretation of any provision of this
Agreement.  Except when otherwise indicated by the context, the singular shall
include the plural and the plural shall include the singular.  Use of the term
“or” is not intended to be exclusive, unless the context clearly requires
otherwise.

2.Administration.

2.1Committee Actions.  All questions of interpretation concerning this
Agreement, the Plan or any other form of agreement or other document employed by
the Company in the administration of the Plan or the Award shall be determined
by the Committee or its delegate.  All such determinations by the Committee or
its delegate shall be final, binding and conclusive upon all persons having an
interest in the Award, unless fraudulent or made in bad faith.  Any and all
actions, decisions and determinations taken or made by the Committee in the
exercise of its discretion pursuant to the Plan or the Award or other agreement
thereunder (other than determining questions of interpretation pursuant to the
preceding sentence) shall be final, binding and conclusive upon all persons
having an interest in the Award.  

2.2Express Authority Required.  Only individuals expressly designated by the
Committee shall have the authority to act on behalf of the Committee with
respect to certain of the matters, rights, obligations, modifications, or
elections allocated to the Company herein (or in the Plan).

3.Payment.  Subject to satisfaction of the Initial Performance Target, and
except as otherwise provided in Section 3.1 or 3.2, the cash amount that shall
be payable in settlement of this Award on the date specified in Section 5 below
shall be equal to the Base Cash Amount multiplied by the Performance Multiplier,
rounding up to the nearest whole dollar.  If the Performance Multiplier is 0%,
the Award is forfeited and no cash payment will be paid.

3.1Death or Disability.  Upon the Participant’s death or termination of Service
due to Disability, the cash amount that shall be payable in settlement of this
Award on the date specified in Section 5 below shall be the Base Cash Amount (as
provided in the Notice of Grant, with no application of the Performance
Multiplier).

3.2Change in Control.  Upon any Change in Control, the amount of cash that shall
be paid in settlement of this Award shall be equal to the greater of (i) the
Base Cash Amount (as set forth in the Notice of Grant) without regard to any
Performance Multiplier, and (ii) such Base Cash Amount multiplied by the
Performance Multiplier, rounding up to the nearest whole dollar.

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4.Vesting; Forfeiture. 

4.1Vesting of Award.  Provided that the Participant’s Service has not terminated
prior to the applicable date, the Award shall become vested upon the earliest
date to occur of the following (the “Vesting Date”):

(a)the Scheduled Vesting Date (as provided in the Grant Notice);

(b)the Participant’s death;

(c)termination of the Participant’s Service due to Disability; and

(d)immediately before any Change in Control.

4.2Leaves of Absence.

(a)If Participant takes an approved medical, FMLA (or other statutorily
protected leave), or military leave (each, an “Approved Leave”) and returns from
such leave for at least thirty calendar days, then Participant shall be treated
as if the period of such Approved Leave had been a period of continuous Service
with the Company or Affiliate, and the Award shall be settled in accordance with
Section 5.

(b)In the event the Participant takes a leave of absence other than an Approved
Leave, the cash amount payable as determined under Section 3, shall be prorated
by multiplying such amount by a fraction the numerator of which is the number of
whole months during the period commencing on January 1, 2015 and ending on the
earlier of the date of a Change in Control or December 31, 2017 (the “Vesting
Period”) that Participant had been in continuous Service with the Company or
Affiliate, and the denominator of which is the number of months the Vesting
Period spans, rounding up to the nearest whole number.

(c)In the event of Participant’s termination of Service during any leave of
absence, then the Award shall expire in accordance with the provisions set forth
in Section 4.3.

4.3Forfeiture of Award Upon Termination of Service.  Except as otherwise
provided in Section 4.1, the Award will terminate automatically without any
further action by the Company and be forfeited without further notice and at no
cost to the Company upon Participant’s termination of Service.

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5.Settlement of Award.  Subject to the terms and conditions of the Plan and this
Agreement, any cash amount that is determined to be payable pursuant to
Section 3 shall be distributed to Participant (or Participant’s estate in the
event of death) with respect to Participant’s Award within thirty days following
the Vesting Date for such Award, except as otherwise provided in Section 8.1.
(the “Settlement Date”). 

6.Tax Withholding.  By accepting the Award (as provided in the Grant Notice),
the Participant hereby authorizes withholding from payroll and any other amounts
payable to the Participant, including withholding of a portion of the cash
amount otherwise payable to the Participant in settlement of the Award, and
otherwise agrees to make adequate provision for, any sums required to satisfy
the federal, state, local and foreign tax (including any social insurance)
withholding obligations of the Participating Company, if any, which arise in
connection with the Award, the vesting of the Award or the payment of cash in
settlement of the Award.

7.Rights as a Director, Employee or Consultant.

If the Participant is an Employee, the Participant understands and acknowledges
that, except as otherwise provided in a separate, written employment agreement
between a Participating Company and the Participant, the Participant’s
employment is “at will” and is for no specified term.  Nothing in this Agreement
shall confer upon the Participant any right to continue in the Service of a
Participating Company or interfere in any way with any right of the
Participating Company Group to terminate the Participant’s Service at any time.

8.Compliance with Section 409A.

It is intended that the settlement of the Award as set forth in this Agreement
qualify for exemption from, or comply with, the requirements of Section 409A,
and any ambiguities herein will be interpreted to so qualify or
comply.  Notwithstanding the foregoing, if it is determined that the Award fails
to satisfy the requirements of the “short-term deferral” exemption and are
otherwise Section 409A Deferred Compensation, it is intended that any payment or
benefit which is made or provided pursuant to or in connection with this Award
shall comply in all respects with the applicable requirements of Section 409A
(including applicable regulations or other administrative guidance thereunder,
as determined by the Committee in good faith) to avoid the unfavorable tax
consequences provided therein for non‑compliance.  In connection with effecting
such compliance with Section 409A, the following shall apply:

8.1Separation from Service; Required Delay in Payment to Specified
Employee.  Notwithstanding anything set forth herein to the contrary, no amount
payable pursuant to this Agreement on account of the Participant’s termination
of Service which constitutes a “deferral of compensation” within the meaning of
the Treasury Regulations issued pursuant to Section 409A of the Code (the
“Section 409A Regulations”) shall be paid unless and until the Participant has
incurred a “separation from service” within the meaning of the Section 409A
Regulations.  Furthermore, to the extent that the Participant is a “specified
employee” within the meaning of the Section 409A Regulations as of the date of
the Participant’s separation from service, no amount that constitutes a deferral
of compensation which is payable on account of the Participant’s separation from
service shall be paid to the Participant before the date (the “Delayed Payment
Date”) which is first day of the seventh month after the date of the
Participant’s separation from service or, if earlier, the date of the
Participant’s death following such separation from service.  All such amounts
that would, but for this Section, become payable prior to the Delayed Payment
Date will be accumulated and paid on the Delayed Payment Date.

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8.2Other Changes in Time of Payment.  Neither the Participant nor the Company
shall take any action to accelerate or delay the payment of any benefits under
this Agreement in any manner which would not be in compliance with the Section
409A Regulations. 

8.3Amendments to Comply with Section 409A; Indemnification.  Notwithstanding any
other provision of this Agreement to the contrary, the Company is authorized to
amend this Agreement, to void or amend any election made by the Participant
under this Agreement and/or to delay the payment of any monies and/or provision
of any benefits in such manner as may be determined by the Company, in its
discretion, to be necessary or appropriate to comply with the Section 409A
Regulations without prior notice to or consent of the Participant.  The
Participant hereby releases and holds harmless the Company, its directors,
officers and stockholders from any and all claims that may arise from or relate
to any tax liability, penalties, interest, costs, fees or other liability
incurred by the Participant in connection with the Award, including as a result
of the application of Section 409A.

8.4Advice of Independent Tax Advisor.  The Company has not obtained a tax ruling
or other confirmation from the Internal Revenue Service with regard to the
application of Section 409A to the Award, and the Company does not represent or
warrant that this Agreement will avoid adverse tax consequences to the
Participant, including as a result of the application of Section 409A to the
Award.  The Participant hereby acknowledges that he or she has been advised to
seek the advice of his or her own independent tax advisor prior to entering into
this Agreement and is not relying upon any representations of the Company or any
of its agents as to the effect of or the advisability of entering into this
Agreement.

9.Miscellaneous Provisions.

9.1Termination or Amendment.  The Committee may terminate or amend the Plan or
this Agreement at any time; provided, however, that no such termination or
amendment may have a materially adverse effect on the Participant’s rights under
this Agreement without the consent of the Participant unless such termination or
amendment is necessary to comply with applicable law or government regulation,
including, but not limited to, Section 409A.  No amendment or addition to this
Agreement shall be effective unless in writing.

9.2Nontransferability of the Award.  Prior to the payment of cash on the
applicable Settlement Date, neither this Award nor any cash amount payable under
this Award shall be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors
of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution.  All rights with respect to the Award
shall be exercisable during the Participant’s lifetime only by the Participant
or the Participant’s guardian or legal representative.

9.3Repayment/Forfeiture.  Any benefits the Participant may receive hereunder
shall be subject to repayment or forfeiture as may be required to comply with
(a) any applicable listing standards of a national securities exchange adopted
in accordance with Section 954 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (regarding recovery of erroneously awarded compensation) and any
implementing rules and regulations of the U.S. Securities and Exchange
Commission adopted thereunder, (b) similar rules under the laws of any other
jurisdiction, and (c) the Company’s Incentive Compensation Recoupment Policy or
any policies adopted by the Company to implement such requirements, all to the
extent determined by the Company in its discretion to be applicable to the
Participant.

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9.4Further Instruments.  The parties hereto agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement. 

9.5Binding Effect.  This Agreement shall inure to the benefit of the successors
and assigns of the Company and, subject to the restrictions on transfer set
forth herein, be binding upon the Participant and the Participant’s heirs,
executors, administrators, successors and assigns.

9.6Delivery of Documents and Notices.  Any document relating to participation in
the Plan or any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given (except to the extent that this Agreement
provides for effectiveness only upon actual receipt of such notice) upon
personal delivery, electronic delivery at the e-mail address, if any, provided
for the Participant by a Participating Company, or upon deposit in the U.S. Post
Office or foreign postal service, by registered or certified mail, or with a
nationally recognized overnight courier service, with postage and fees prepaid,
addressed to the other party at the address of such party set forth in the Grant
Notice or at such other address as such party may designate in writing from time
to time to the other party.

(a)Description of Electronic Delivery.  The Plan documents, which may include
but do not necessarily include: the Plan, this Agreement, and any reports of the
Company provided generally to the Company’s stockholders, may be delivered to
the Participant electronically.  In addition, if permitted by the Company, the
Participant may deliver electronically the Grant Notice to the Company or to
such third party involved in administering the Plan as the Company may designate
from time to time.  Such means of electronic delivery may include but do not
necessarily include the delivery of a link to a Company intranet or the Internet
site of a third party involved in administering the Plan, the delivery of the
document via e-mail or such other means of electronic delivery specified by the
Company.

(b)Consent to Electronic Delivery.  The Participant acknowledges that the
Participant has read Section 9.6(a) of this Agreement and consents to the
electronic delivery of the Plan documents and, if permitted by the Company, the
delivery of the Grant Notice, as described in Section 9.6(a).  The Participant
acknowledges that he or she may receive from the Company a paper copy of any
documents delivered electronically at no cost to the Participant by contacting
the Company by telephone or in writing.  The Participant further acknowledges
that the Participant will be provided with a paper copy of any documents if the
attempted electronic delivery of such documents fails.  Similarly, the
Participant understands that the Participant must provide the Company or any
designated third party administrator with a paper copy of any documents if the
attempted electronic delivery of such documents fails.  The Participant may
revoke his or her consent to the electronic delivery of documents described in
Section 9.6(a) or may change the electronic mail address to which such documents
are to be delivered (if Participant has provided an electronic mail address) at
any time by notifying the Company of such revoked consent or revised e-mail
address by telephone, postal service or electronic mail.  Finally, the
Participant understands that he or she is not required to consent to electronic
delivery of documents described in Section 9.6(a), but has nevertheless
knowingly and voluntarily chosen to do so by accepting the Award (as provided in
the Grant Notice).

9.7Integrated Agreement.  This Agreement and the Plan shall constitute the
entire understanding and agreement of the Participant and the Participating
Company Group with respect to the subject matter contained herein or therein and
supersede any prior agreements, understandings, restrictions, representations,
or warranties among the Participant and the Participating Company Group with
respect to such subject matter.  To the extent contemplated herein or therein,
the provisions of this Agreement and the Plan shall survive any settlement of
the Award and shall remain in full force and effect.

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9.8Applicable Law.  This Agreement shall be governed by the laws of the State of
Delaware as such laws are applied to agreements between Delaware residents
entered into and to be performed entirely within the State of Delaware. 

9.9Terms and Conditions Subject to Change in the Event the Participant Transfers
Outside of the United States.  Should the Participant transfer his or her
residence and/or employment with the Company to another country, the Company, in
its sole discretion, shall determine whether application of certain additional
and/or supplemental terms and conditions is necessary or advisable in order to
comply with respective laws, rules and regulations or to facilitate the
operation and administration of the Award and the Plan.  In all circumstances,
the Company will provide the Participant with its ordinary-course terms and
conditions for such country(ies) in the form of an amendment and/or addendum,
which shall thereafter be part of this Agreement.

 

 

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