Exhibit 10.11

ORTHOFIX MEDICAL INC.

AMENDED AND RESTATED 2012 LONG-TERM INCENTIVE PLAN

 

Performance Stock Unit Agreement

COVER SHEET

 

 

 

Orthofix Medical Inc., a Delaware corporation (the “Company”), hereby grants
performance stock units (the “Performance Stock Units”) relating to shares of
the Company’s common stock, par value $0.10 per share (the “Stock”) to the
Grantee named below, subject to the achievement of performance goals and vesting
conditions set forth below.  Additional terms and conditions of the Performance
Stock Units are set forth on this cover sheet and in the attached Performance
Stock Unit Agreement (together, the “Agreement”), in the Company’s 2012
Long-Term Incentive Plan (as amended from time to time, the “Plan”), and in the
Change in Control and Severance Agreement between you and the Company or, if you
have not entered into such Change in Control and Severance Agreement as of the
Grant Date, the form of such agreement that was been approved by the Committee
on June 28, 2016 (as applicable, the “Severance Agreement”).

 

 

Grant Date:

 

 

 

Name of Grantee:

 

 

 

Employee ID Number:

 

 

 

Threshold Number of Performance Stock Units:

 

50% of Target Number

 

Target Number of Performance Stock Units:

 

 

 

Maximum Number of Performance Stock Units:

 

200% of Target Number

 

Performance Period:

 

 

•Beginning on ____________________ and

•Ending on _________________________1

 

You agree to all of the terms and conditions described in this Agreement, in the
Plan, and in the Severance Agreement unless you deliver a notice in writing
within thirty (30) days of receipt of this Agreement to the Company stating that
you do not accept the terms and conditions described in this Agreement and in
the Plan.  You acknowledge that you have carefully reviewed the Plan and agree
that the Plan will control in the event any provision of this Agreement should
appear to be inconsistent.

 

1 

Performance period end date to be third anniversary of the beginning date (such
that total performance period shall be three years).

 

    

 

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Attachment
This is not a stock certificate or a negotiable instrument.

2

 

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ORTHOFIX MEDICAL INC.

AMENDED AND RESTATED 2012 LONG-TERM INCENTIVE PLAN

 

Performance Stock Unit Agreement

 

Performance Stock Units

This Agreement evidences an award of Performance Stock Units in the number set
forth on the cover sheet and subject to the terms and conditions set forth in
the Agreement and the Plan.

Subject to satisfaction of the time-based vesting requirement set forth below,
the number of shares of Stock, if any, that may be issued pursuant to the terms
of this Agreement will be calculated based on the attainment, as determined by
the Committee, of the performance goals described in Exhibit A to this Agreement
(the “Performance Goals”) over the Performance Period set forth on the cover
sheet, which number of shares of Stock may be equal to all or a portion,
including none, of the Maximum Number of Performance Stock Units set forth on
the cover sheet.  If the Performance Goals are not achieved during the
Performance Period at a vesting percentage (as described on Exhibit A) in excess
of zero, you will forfeit all of your unvested Performance Stock Units as of the
end of the Performance Period, except as otherwise provided in this Agreement.  

Performance Stock Unit Transferability

 

Prior to the Settlement Date (as defined below), your Performance Stock Units
may not be sold, assigned, transferred, pledged, hypothecated, or otherwise
encumbered, whether by operation of law or otherwise, nor may the Performance
Stock Units be made subject to execution, attachment, or similar process.  If
you attempt to do any of these things, you will immediately and automatically
forfeit your Performance Stock Units.

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Vesting

Your Performance Stock Units will vest and become non-forfeitable on (A) the
date the Committee certifies the achievement of the Performance Goals following
the close of the Performance Period or, (B) in the event of a Change in Control
consummated prior to the end of the Performance Period, the last day of the
Performance Period (in each case, the “Vesting Date”), and subject to your
continued Service from the Grant Date through the Vesting Date, but only to the
extent and in the vesting percentage that the Performance Goals have been
satisfied.  (By way of illustration, if your service continues through the
Vesting Date and the Committee certifies the Performance Goals at a vesting
percentage equal to 50%, the Threshold Number of your Performance Stock Units
would vest, whereas if your service continues through the Vesting Date and the
Committee certifies the Performance Goals at a vesting percentage equal to 200%,
the Maximum Number of your Performance Stock Units would vest.)  Promptly
following the completion of the Performance Period (and no later than thirty
(30) days

following the end of the Performance Period) or, in the event of a Change in
Control consummated prior to the end of the Performance Period, within 30
calendar days of such Change in Control, the Committee will review and certify
in writing (i) whether, and to what extent, the Performance Goals for the
Performance Period have been achieved and (ii) the number of Performance Stock
Units that will vest (based on the applicable vesting percentage determined in
accordance with Exhibit A).  Such certification will be final, conclusive, and
binding.    

You will forfeit to the Company all of the unvested Performance Stock Units to
the extent the specified Performance Goals have not been achieved, as determined
by the Committee, effective as of the Vesting Date.

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Vesting upon Termination of Service Prior to a Change in Control

Death or Disability.  If, prior to a Change in Control, your Service terminates
during the Performance Period as a result of your death or Disability, your
Performance Stock Units will vest as to the Target Number of Performance Stock
Units set forth on the cover sheet on the effective date of your termination of
Service.  If your Service terminates following the end of the Performance Period
but prior to the Vesting Date as a result of your death or Disability, your
Performance Stock Units will vest to the extent and in the vesting percentage
that the Performance Goals have been satisfied as if your Service had not
terminated, effective as of the Vesting Date.

Certain Terminations without Cause or for Good Reason.  If, prior to a Change in
Control, your Service terminates more than 6 months after the Grant Date but
prior to the Vesting Date because of your involuntary termination of Service by
the Company without Cause or your voluntary termination for Good Reason, you
will remain eligible to vest on the Vesting Date (to the extent and in the
vesting percentage that the Performance Goals are satisfied) with respect to a
pro rata portion of the Performance Stock Units as if your Service had not
terminated, which pro rata portion will be calculated by multiplying the total
number of the Performance Stock Units that would vest based on actual
performance (i.e., the Target Number of Performance Share Units multiplied by
the applicable vesting percentage determined in accordance with Exhibit A) by a
fraction, the numerator of which equals the number of days that you provided
Service during the Performance Period and the denominator of which equals the
total number of days in the Performance Period, effective as of the Vesting
Date.

Certain Terminations upon Qualified Retirement.  If, prior to a Change in
Control, your Service terminates more than 6 months after the Grant Date but
prior to the Vesting Date because of your Qualified Retirement you will remain
eligible to vest on the Vesting Date (to the extent and in the vesting
percentage that the Performance Goals are satisfied) with

respect to a pro rata portion of the Performance Stock Units as if your Service
had not terminated, which pro rata portion will be calculated by multiplying the
total number of the Performance Stock Units that would vest based on actual
performance by an additional percentage, which percentage shall be:

•If termination of Service because of Qualified Retirement occurs more than 6
months but no more than 12 months after the Grant Date, then the additional
multiplier percentage shall be 33.3%;

•If termination of Service because of Qualified Retirement occurs more than 12
months but no more than 24 months after the Grant Date, then the additional
multiplier percentage shall be 66.7%; and

•If termination of Service because of Qualified Retirement occurs more than 24
months after the Grant Date, then the additional multiplier percentage shall be
100%.

Other Terminations.  If, prior to the Vesting Date, your Service terminates (i)
because of your involuntary termination of Service by the Company for Cause,
(ii) because of your voluntary termination other than for Good Reason, Qualified
Retirement or Disability, or (iii) because of a Qualified Retirement within the
first six months following the Grant Date, you will forfeit to the Company all
of the unvested portion of the Performance Stock Units on the date of your
termination of Service.

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Change in Control

Notwithstanding the vesting schedule set forth above, upon the consummation of a
Change in Control during the Performance Period, the Performance Goals will be
deemed achieved at the greater of (i) a percentage of 100% (i.e., the Target
Number) or (ii) the percentage that would be determined pursuant to the
methodology set forth on Exhibit A assuming that the “Ending Period Average
Price” on Exhibit A were calculated based on closing prices per share over the
twenty consecutive trading days ending with the last trading date preceding the
consummation of such Change in Control. If the Performance Stock Units are
assumed or continued in connection with such Change in Control, such Performance
Stock Units shall thereafter become a time-based award and shall vest and become
non-forfeitable, at the percentage determined pursuant to the preceding
sentence, on the earlier to occur of (i) your continued status as a Service
Provider through the last day of the Performance Period or (ii) your termination
of Service during the period following the consummation of such Change in
Control and prior to full vesting as a result of (A) death, (B) Disability, (C)
your involuntary termination of Service by the Company without Cause, (D) your
voluntary termination for Good Reason or (E) your

Qualified Retirement. If the Performance Stock Units are assumed or continued in
connection with the Change in Control and your Service terminates prior to end
of the Performance Period (x) because of your involuntary termination of Service
by the Company for Cause, (y) because of your voluntary termination other than
for Good Reason, Qualified Retirement or Disability, you will forfeit to the
Company all of the Performance Stock Units on the date of such termination of
Service.

Settlement of Performance Stock Units

Your rights to receive the shares of Stock represented by your vested
Performance Stock Units will become non-forfeitable on the Vesting Date, and the
Performance Stock Units will be settled, converted into shares of Stock and
delivered on the date that is one year following the Vesting Date (the
“Settlement Date”), subject to any reduction required in accordance with any
“clawback” or recoupment policy, as described below). Notwithstanding the
foregoing, such delayed settlement will not apply with respect to the vesting
and settlement of Performance Stock Units upon (i) the consummation of a Change
in Control that is also a “change in control event” within the meaning of Code
Section 409A (“Section 409A”), in which case the Performance Stock Units shall
settle, convert and be delivered within 30 calendar days of the end of the
Performance Period (or if the Performance Stock Units are not assumed or
continued in connection with the Change in Control, within 30 calendar days of
such Change in Control), or (ii) upon your termination of Service for death or
Disability, in which case the Performance Stock Units shall settle, convert and
be delivered within 30 calendar days of such termination of Service. On the date
on which shares of Stock are delivered to you (or your beneficiary or, if none,
your estate in the event of your death) under this paragraph, the Company shall
also deliver to you (or your beneficiary or, if none, your estate in the event
of your death) the number of additional shares of Stock, the number of any other
securities of the Company and the amount of any other property (in the case of
cash dividends, assuming such dividends had been reinvested in shares of Stock
as of the ex-dividend date thereof), in each case that the Company distributed
per share of Stock to holders generally during the period commencing on the
first day of the Performance Period  and ending on the delivery date, multiplied
by the number of shares of Stock that are being delivered to you under this
paragraph, without interest, and less any tax withholding amount applicable to
such distribution.  To the extent that the Performance Stock Units are forfeited
prior to vesting, the right to receive such distributions shall also be
forfeited.

Evidence of Issuance

The issuance of the shares of Stock with respect to the Performance Stock Units
will be evidenced in such a manner as the Company, in its discretion, deems
appropriate, including, without limitation, book-entry, registration, or
issuance of one or more share certificates.

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Withholding

In the event that the Company or any Affiliate determines that any federal,
state, local, or foreign tax or withholding payment is required relating to the
Performance Stock Units, or the issuance of shares of Stock with respect to the
Performance Stock Units, the Company or any Affiliate will have the right to (i)
require you to tender a cash payment, (ii) deduct from payments of any kind
otherwise due to you, (iii) permit or require you to enter into a “same day
sale” commitment with a broker-dealer that is a member of the Financial Industry
Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a
portion of the shares of Stock to be delivered in connection with the
Performance Stock Units to satisfy withholding obligations and whereby the FINRA
Dealer irrevocably commits to forward the proceeds necessary to satisfy the
withholding obligations directly to the Company or any Affiliate, or (iv)
withhold the delivery of vested shares of Stock otherwise deliverable under this
Agreement to meet such obligations; provided, however, that (x) the shares of
Stock so withheld will have an aggregate Fair Market Value not exceeding the
minimum amount of tax required to be withheld by Applicable Law and (y) in the
event that you are subject to any tax withholding on a date prior to the
Settlement Date, clauses (iii) and (iv) shall not be available as a means of
satisfying such tax withholding obligations.

Retention Rights

This Agreement and the Performance Stock Units evidenced by this Agreement do
not give you the right to be retained by the Company or any Affiliate in any
capacity.  The Company or any Affiliate, as applicable, reserves the right to
terminate your Service with the Company or an Affiliate at any time and for any
reason.

Shareholder Rights

You have no rights as a shareholder with respect to the Performance Stock Units
unless and until the Stock relating to the Performance Stock Units has been
delivered to you.  No adjustments are made for dividends, distributions, or
other rights if the applicable record date occurs before your certificate is
issued (or an appropriate book entry is made), except as described in the Plan.

Clawback

The Performance Stock Units are subject to mandatory repayment by you to the
Company to the extent you are or in the future become subject to any Company
“clawback” or recoupment policy or Applicable Laws that require the repayment by
you to the Company of compensation paid by the Company to you in the event that
you fail to comply with, or violate, the terms or requirements of such policy or
Applicable Laws.

 

Applicable Law

This Agreement will be interpreted and enforced under the laws of the State of
Delaware, other than any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of this Agreement to the
substantive law of another jurisdiction.

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Definitions

For purposes of this Agreement, “Cause,” “Good Reason” and “Qualified
Retirement” will be as defined in the Severance Agreement.  Any other
capitalized terms used in this Agreement other than the foregoing (and other
than those defined and used in Exhibit A hereto) shall have the meanings set
forth in the Plan.

The Plan

The text of the Plan is incorporated in this Agreement by reference.

This Agreement, the Plan, and the Severance Agreement constitute the entire
understanding between you and the Company regarding the Performance Stock
Units.  Any prior agreements, commitments, or negotiations concerning the
Performance Stock Units are superseded.

Data Privacy

To administer the Plan, the Company may process personal data about you.  Such
data includes, but is not limited to, information provided in this Agreement and
any changes thereto, other appropriate personal and financial data about you,
such as your contact information, payroll information, and any other information
that might be deemed appropriate by the Company to facilitate the administration
of the Plan.  By accepting the Performance Stock Units, you give explicit
consent to the Company to process any such personal data.

Disclaimer of Rights

The grant of Performance Stock Units under this Agreement will in no way be
interpreted to require the Company to transfer any amounts to a third party
trustee or otherwise hold any amounts in trust or escrow for payment to
you.  You will have no rights under this Agreement or the Plan other than those
of a general unsecured creditor of the Company.  Performance Stock Units
represent unfunded and unsecured obligations of the Company, subject to the
terms and conditions of the Plan and this Agreement.

Electronic Delivery

By accepting the Performance Stock Units, you consent to receive documents
related to the Performance Stock Units by electronic delivery and, if requested,
agree to participate in the Plan through an on-line or electronic system
established and maintained by the Company or another third party designated by
the Company, and your consent shall remain in effect throughout your term of
Service and thereafter until you withdraw such consent in writing to the
Company.

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Code Section 409A

The grant of Performance Stock Units under this Agreement is intended to comply
with Section 409A” to the extent subject thereto, and, accordingly, to the
maximum extent permitted, this Agreement will be interpreted and administered to
be in compliance with Section 409A.  Notwithstanding anything to the contrary in
the Plan or this Agreement, neither the Company, its Affiliates, the Board, nor
the Committee will have any obligation to take any action to prevent the
assessment of any excise tax or penalty on you under Section 409A, and neither
the Company, its Affiliates, the Board, nor the Committee will have any

liability to you for such tax or penalty.

To the extent that the Performance Share Units constitute “deferred
compensation” under Section 409A, a termination of Service occurs only upon an
event that would be a Separation from Service within the meaning of Section
409A.  If, at the time of your Separation from Service, (1) you are a “specified
employee” within the meaning of Section 409A, and (2) the Company makes a good
faith determination that an amount payable on account of your Separation from
Service constitutes deferred compensation (within the meaning of Section 409A),
the payment of which is required to be delayed pursuant to the six (6)-month
delay rule set forth in Section 409A to avoid taxes or penalties under Section
409A (the “Delay Period”), then the Company will not pay such amount on the
otherwise scheduled payment date but will instead pay it in a lump sum on the
first business day after the Delay Period (or upon your death, if earlier),
without interest.  Each installment of Performance Share Units that vest under
this Agreement (if there is more than one installment) will be considered one of
a series of separate payments for purposes of Section 409A.

By accepting this Agreement, you agree to all of the terms and conditions
described above and in the Plan.  In the event that any term of this Agreement
conflicts with the terms of the Severance Agreement, the terms of the Severance
Agreement shall supersede the conflicting terms herein.

 

 

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Exhibit A

Performance Stock Unit Agreement

Performance Goals

The Performance Stock Units will vest based on the percentile rank of the common
stock of the Company’s Performance Period TSR in relation to the Performance
Period TSR of the Index Companies.  Such percentile ranking will be determined
by ordering the Index Companies (plus the Company if the Company is not one of
the Index Companies) from highest to lowest based on Performance Period TSR and
counting down from the company with the highest Performance Period TSR (ranked
first) to the Company’s position on the list.  (If two companies are ranked
equally, the ranking of the next company shall account for the tie, so that if
one company is ranked first, and two companies are tied for second, the next
company is ranked fourth.)  After this ranking, the Performance Period TSR
percentile ranking will be calculated using the following formula, rounded to
the nearest whole percentile by application of regular rounding:

Performance Period TSR percentile ranking = (N-R)/(N-1)*100

“N” represents the number of Index Companies for the Performance Period (plus
one if the Company is not one of the Index Companies for the Performance
Period).

“R” represents the Company’s ranking among the Index Companies (including the
Company if the Company is not one of the Index Companies for the Performance
Period).

For example, if there are 100 Index Companies (including the Company), and the
Company ranked 40th, the Performance Period TSR percentile ranking would be the
61st percentile (61% = (100 – 40)/(100 – 1) * 100, rounded to the nearest whole
percentile by application of regular rounding).

Achieved vesting percentages shall be as follows:

Company’s Performance Period

TSR Percentile RankVesting Percentage

Below 25th Percentile 0%
25th Percentile50% (Threshold)

30th Percentile60%

35th Percentile70%

40th Percentile80%

45th Percentile90%

50th Percentile

100% (Target)

55th Percentile

120%

60th Percentile

140%

65th Percentile

160%

70th Percentile

180%

75th Percentile or Greater

200% (Maximum)

 

    

 

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In the event the Company’s Performance Period TSR percentile rank falls between
any of the amounts set forth above (to the extent greater than the Threshold and
lower than the Maximum), the vesting percentage shall be determined by linear
interpolation between such amounts.

Notwithstanding the foregoing, (i) in no event shall the vesting percentage
exceed 100% if the Company’s Performance Period TSR is negative, and (ii) in no
event shall the vesting percentage exceed an amount such that the product of the
vesting percentage multiplied by the closing price of the Company’s common stock
on [  ]2 is greater than five times the closing price of the Company’s common
stock on [  ]3.

For purposes of this Exhibit A, the following capitalized terms shall mean as
follows:

“Beginning Period Average Price” means the average official closing price per
share of the respective company over the twenty consecutive trading days ending
with and including the first day of the Performance Period.

“Ending Period Average Price” means the average official closing price per share
of the respective company over the twenty consecutive trading days ending with
and including the last day of the Performance Period.

“Index Companies” means companies that are included in the [  ]4 as of the
beginning of the Performance Period, with the following adjustments:

 

i.

In the event of a merger, acquisition or business combination transaction of an
Index Company with or by another Index Company, the surviving entity shall
remain an Index Company.

 

ii.

In the event of a merger of an Index Company with an entity that is not an Index
Company, or the acquisition or business combination transaction by or with an
Index Company, or with an entity that is not an Index Company, in each case
where the Index Company is the surviving entity and remains publicly traded, the
surviving entity shall remain an Index Company.

 

iii.

In the event of a merger or acquisition or business combination transaction of
an Index Company by or with an entity that is not an Index Company, a “going
private” transaction involving an Index Company or the liquidation of an Index
Company, where the Index Company is not the surviving entity or is otherwise no
longer publicly traded, the company shall no longer be an Index Company.

 

iv.

In the event of a bankruptcy of an Index Company, such company shall remain an
Index Company (with such Index Company being deemed to have a Performance Period
TSR of negative 100%).

 

2 

Insert performance period end date.

3 

Insert performance period beginning date.

4 

For grants made in 2018 or earlier, insert S&P Healthcare Select Index. For
grants made in 2019 or later, insert S&P Healthcare Equipment Select Index.

 

    

 

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v.

In the event of a stock distribution from an Index Company consisting of the
shares of a new publicly-traded company (a “spin-off”), the Index Company shall
remain an Index Company and the stock distribution shall be treated as a
dividend from the Index Company based on the closing price of the shares of the
spun-off company on its first day of trading (with the amount of such dividend
deemed reinvested in additional shares of the Index Company at the closing price
of the shares of the Index Company on the same date).  The performance of the
shares of the spun-off company shall not thereafter be tracked for purposes of
calculating Performance Period TSR.

“Performance Period TSR” means total shareholder return as determined by
dividing (i) the sum of (A) the Ending Period Average Price minus the Beginning
Period Average Price plus (B) all dividends and other distributions paid on a
company’s shares during the Performance Period by (ii) the Beginning Period
Average Price.  In calculating TSR, all dividends are assumed to have been
reinvested in shares when paid.  The Committee shall have the authority to make
appropriate equitable adjustments to account for extraordinary items affecting a
company’s Performance Period TSR.