Exhibit 10.15

 

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Corporate Performance

Incentive Plan

Effective December 30, 2013

Performance Period: December 30, 2013 – December 28, 2013

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I. Philosophy/Purpose of the Plan

The purpose of the Tornier N.V. Corporate Performance Incentive Plan (the
“Plan”) is to provide financial reward in addition to base salary, based on
achievement of specific performance, to those who significantly impact the
growth and success of the Company. The plan is designed to reward employees for
achieving annual goals and to closely align their accomplishments with the
interests of the Company’s shareholders. This is done by providing annual
incentives for the achievement of key business and individual performance
measures that are critical to the success of the Company while linking a
significant portion of an employee’s annual compensation to the achievement of
such measures.

 

II. Eligible Participants

The Company will determine eligibility criteria for the Plan on an annual basis
and in its sole discretion. For 2014, the Plan covers the following: (i) all
regular, salaried, exempt United States employees in Levels 2 and above,
inclusive, and (ii) international and expatriate/inpatriate employees who are
determined by the Company to be eligible for participation. Notwithstanding the
foregoing, employees in positions covered by sales compensation plans are not
eligible Participants in the Plan.

The Plan year runs on a fiscal year basis each year, which for 2014 is from
December 30, 2013—December 29, 2014 (the “Plan Year”). Payouts will be made on
an annual basis during the calendar year following the performance year, but
prior to March 15th of such calendar year. Participants with less than a full
year of service or whose incentive target percent has changed during a Plan Year
may be eligible to participate in the Plan on a prorated basis, determined by
the percentage of time they were eligible to participate during that Plan Year
under applicable criteria. Plan Participants that were hired on or after
November 1 of the Plan Year will not be eligible to receive an award under the
Plan for that Plan Year.

To be eligible, Participants must have established and approved annual
individual performance goals by the end of the first quarter of each Plan Year
(or, for new employees, within two (2) months of the employee’s start date).
Managers are responsible for meeting this deadline. Participants and Managers
who do not complete the annual individual performance goal setting process by
such deadlines may become ineligible to participate in the Plan for that Plan
Year.

 

III. Administration of the Plan

The Compensation Committee of the Board of Directors of the Company will
administer the Plan. The Compensation Committee, in its sole discretion, may
delegate to the Company’s President and Chief Executive Officer (CEO) activities
relating to Plan administration that are not required to be exercised by the
Compensation Committee under applicable laws, rules, regulations and the
Compensation Committee Charter. Delegable activities include, but are not
limited to, establishing any policies under the Plan, interpreting provisions of
the Plan, determining eligibility to participate in the Plan, and approving any
final payouts under the Plan that do not affect Executive Officer level
employees. All decisions of the Compensation Committee and the President and CEO
will be final and binding upon all parties, including the Company and Plan
Participants.

 

IV. Incentive Targets

Incentive targets have been approved by the Compensation Committee for all
eligible Plan Participants based upon their level of responsibility within the
Company and impact on the business. These incentive targets represent the
incentive (as a percent of a Plan Participant’s base salary) that a Plan
Participant is eligible to receive under the Plan. It is the Company’s intention
to provide significant incentive and reward opportunities to its employees for
world-class performance achievement.

 

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Each position level (2-11) has an established target bonus, expressed as a
percentage of Base Salary Earned, as illustrated below.

 

     Level    Standard % of Base Salary Earned

President & CEO

   11    80%

COO

   10    n/a

CFO/ SVP, Product Delivery

   9    50%

Sr. Vice Presidents

   8    40%

Vice Presidents

   7    30%

(Sr.) Director

   6    25%

(Sr.) Managers, Principals

   5    15%

Sr. Level Ind. Contributors, Supervisors, Entry Level Mgr

   4    12.5%

Mid-Level Ind. Contributors, Entry Level Sup.

   3    10%

Entry Level Individual Contributors

   2    8%

Non-exempt

   1    Not eligible

The actual incentive is capped at 150% for the Company Performance Measures or
may result in 0 bonus based on achievement. In unusual circumstances,
modifications may be made if, in the Compensation Committee’s final judgment the
calculations do not accurately reflect performance.

 

V. Individual Performance Measures

Individual Performance Measures for a Plan Year are established during the
annual goal setting process. Each Plan Year, all Plan Participants are required
to develop three to five written, measurable and specific Management By
Objectives (MBOs), which must be agreed to and approved by the Participant and
two management levels above the Participant by a specific date set by the CEO or
Senior Vice President, Global Human Resources and HPMS and will not exceed the
end of the first quarter. For Executives in Grade Level 8 and up, each MBO and
targeted achievement levels must be approved by the CEO, the Senior Vice
President, Global Human Resources and HPMS and the Compensation Committee. All
MBOs are weighted by agreement, with areas of critical importance or critical
focus weighted most heavily. A rating of 1 to 4 is agreed upon, providing
specific achievement levels for each rating. A rating of 3 will always equal “on
plan” performance or 100%.

For 2014, there is a funding gate that requires Tornier to achieve at least the
“Minimum” or threshold Free Cash Flow corporate performance goal in order to
fund Vice President’s and above individual performance, or MBO, payouts. In
other words, if the threshold Free Cash Flow corporate performance goal is not
achieved, then Participants at Level 7 and above will not receive any payout
under this Plan for individual performance.

 

VI. Company Performance Measures

For each Plan Year, the Board, upon recommendation of the Compensation
Committee, will approve Company Performance Measures, including the specific
financial objectives and weightings for both the corporate performance measures
and the divisional performance measures. In recommending Company Performance
Measures, the Compensation Committee and the Senior Vice President, Global Human
Resources and HPMS, together with input from the CEO, will identify critical
Company Performance Measures. The 2014 Company Performance Measures are:

 

  •   Adjusted Revenue in Constant Currency

 

  •   Adjusted EBITDA

 

  •   Adjusted Free Cash Flow

In recommending the specific financial objectives and weightings, the finance
team, Senior Vice President, Global Human Resources and HPMS and the CEO will
establish specific financial objectives for the Company Performance Measures,
which will be tied to the Company’s approved

 

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operating plan. All objectives will be assigned a specific weighting, with areas
of critical importance or critical focus weighted most heavily. In addition, for
each Company Performance Measure minimum, target and maximum achievement levels
will be established. Achieving target performance levels will result in 100%
achievement. The Company’s Performance Measures are capped at 150%.

 

VII. Bonus Calculation

All Plan performance measures and objectives are based on percent achievement
and they are weighted based on relative importance in order to obtain a weighted
performance rating for each objective. All weighted performance ratings are
added together to obtain an overall rating for each Participant.

For each Participant the actual results are multiplied by each weighted
performance rating and then the combined result is multiplied by the target
bonus percentage and the Base Salary Earnings (as defined below) for that Plan
Year to calculate the award, e.g. 100% actual incentive percentage times 20%
target bonus equals an award of 20% of earned base salary.

For new or newly eligible Participants who join the Plan during the Plan Year,
the award may be calculated by using the Participant’s Base Salary Earnings from
the Plan Year.

“Base Salary Earnings” are defined as earnings received within the Plan Year to
include regular base salary earnings, vacation pay, and sick pay and to exclude,
but not limited to the following; disability pay, commissions, bonuses, gifts,
auto allowance, housing allowance, relocation and RSU/stock option exercise
earnings.

 

VIII. Individual Incentive Payment Criteria, Calculation, and Payout

A Plan Participant must remain actively employed by the Company past the last
day of the Plan Year to be eligible for an incentive payment under the Plan for
that Plan Year.

The incentive payment under the Plan for any eligible Plan Participant for a
particular Plan Year will vary depending upon the approved individual objectives
and company performance measures, the Plan Participant’s Base Salary Earnings of
that Plan Year, and the Plan Participant’s incentive target for that Plan Year.

In the following cases, the final incentive payout will be prorated. If the Plan
Participant was on a Leave of Absence for part of the Plan Year, his or her
bonus will be pro-rated based upon the Base Salary Earnings within the Plan
Year. If the Plan Participant works less than a full-time schedule (40
hours/week), the incentive payout will be prorated and determined on his or her
Base Salary Earnings for the Plan Year or if the Plan Participant has a change
to a full-time status throughout the year, his or her incentive payout will
likewise be prorated for the portion of the year in which the Plan Participant
worked a part-time schedule and again be based on Base Salary Earnings for the
Plan Year. If the Plan Participant received a promotion during the year with a
change in target incentive, the final payout will be prorated for the time spent
at each incentive target using the Base Salary Earnings from each of the periods
within that Plan Year.

At the end of the Plan Year, each Participant will review his or her MBO’s and
results with his or her direct manager to determine the rating earned for each
MBO objective. Each MBO objective rating will be combined to calculate an
overall rating for the individual objectives. In addition, as soon as
practicable after the appropriate financial and other data has been compiled,
the finance department will calculate the results for the Corporate Performance
Measures. The achievement from the Corporate Performance Measures and MBOs will
be combined together per the applicable weighting factors to determine the final
payout for each individual Plan Participant. Individual incentive payments under
the Plan will be made in a lump sum, less applicable withholding taxes, as soon
as reasonably practicable after the determination of such payments, during the
calendar year following the performance year and ending on March 15 of such
calendar year.

 

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Participant must have a total weighted MBO rating of 1.75 or greater in order to
eligible for a MBO payout.

In all cases, recommendations for final incentive awards are submitted to the
Senior Vice President, Global Human Resources and HPMS and the CEO for approval,
with final approval by the Compensation Committee.

In the event that a Participant is on a Performance Improvement Plan (PIP) for
all or part of the Plan Year, Tornier reserves the right to withhold all or
partial bonus payment from the Participant.

The CEO and/or the Compensation Committee may make a recommendation to modify an
award by plus/minus 20% if, in its subjective judgment, the Participant has not
been equitably treated by the mechanics of the incentive plan. Such
modifications of awards should only be used in truly exceptional cases.

 

IX. Plan Discretion

All benefits payable under the Plan are discretionary and no Plan Participant
shall have any right to payment under the Plan until actually paid.

To the extent necessary with respect to any Plan Year, in order to avoid any
undue windfall or hardship due to external causes, the Compensation Committee
may without the consent of any affected Plan Participant, revise one or more of
the Company Performance Measures, or otherwise make adjustments to payouts under
the Plan to take into account any acquisition or disposition by the Company not
taken into account in determining the Company Performance Measures for the Plan
Year, any change in accounting principles or standards, or any extraordinary or
non-recurring event or item, so as to equitably reflect such event or events,
such that the criteria for evaluating whether a Company Performance Measure has
been achieved will be substantially the same (as determined by the Compensation
Committee) following such event as prior to such event.

 

X. Recoupment

Any payments under the Plan are subject to recoupment under certain
circumstances. The Company will, to the full extent permitted by applicable law,
have the sole and absolute authority to require that each executive officer
agree to reimburse the Company for all or any portion of any cash bonuses or
incentive based compensation if: (a) the payment was predicated upon the
achievement of certain financial results that were subsequently the subject of a
material financial restatement, (b) in the Committee’s view, the executive
officer engaged in fraud or misconduct that caused or partially caused the need
for a material financial restatement by the Company, and (c) a lower payment
would have occurred based upon the restated financial results. In each such
instance, the Company will, to the extent practicable and allowable under
applicable laws, require reimbursement of any bonus or incentive based
compensation awarded to the executive officer in the amount by which the
individual executive officer’s annual bonus or incentive based compensation for
the relevant period exceeded the lower payment that would have been made based
on the restated financial results, provided that the Company will not seek to
recover bonuses or incentive based compensation paid more than 18 months prior
to the date the applicable restatement is disclosed.

Any recoupment under this Plan may be in addition to any other actions or
remedies that may be available to the Company under applicable law and any other
policies of the Company, including disciplinary actions up to and including
termination of employment.

For purposes of this Plan, the term “executive officer” means any officer who
has been designated an executive officer by the Board. For purposes of this
Plan, the term “misconduct” means any material violation of the Tornier Inc.
Code of Business Conduct, the Tornier Inc. Code of Ethics for Senior Executive
and Financial Officers or other illegal or unethical activity, as determined by
the Compensation Committee.

 

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XI. Termination, Suspension, or Modification

The Company may terminate, suspend, modify and if suspended, may reinstate or
modify, all or part of the Plan at any time, with or without notice to the Plan
Participants. Exceptions to the eligibility of or the extent to which the Plan
applies to, any particular Plan Participant must be approved, on a case-by-case
basis, by the Compensation Committee for officer Participants, or in the case of
non-officer Participants, the CEO or the Senior Vice President, Global Human
Resources and HPMS.

 

XII. Limitation of Liability

No member of the Company’s Board of Directors, the Compensation Committee, any
officer, employee, or agent of the Company, or any other person participating in
any determination of any question under the Plan, or in the interpretation,
administration, or application of the Plan, shall have any liability to any
party for any action taken, or not taken, in good faith under the Plan.

 

XIII. No Right to Employment

This document sets forth the terms of the Plan and it is not intended to be a
contract or employment agreement between any Plan Participant and the Company.
Nothing contained in the Plan (or in any other documents related to the Plan)
shall confer upon any employee or Plan Participant any right to continue in the
employ or other service of the Company or constitute any contract or limit in
any way the right of the Company to change such person’s compensation or other
benefits or to terminate the employment or other service of such person with or
without cause or notice.

 

XIV. Non-Assignability

Except for the designation of a beneficiary (ies) to receive payments of
benefits for a particular Plan year following a Plan Participant’s death after
the completion of such Plan Year, no amount payable at any time under the Plan
shall be subject to sale, transfer, assignment, pledge, attachment, or other
encumbrance of any kind. Any attempt to sell, transfer, assign, pledge, attach,
or otherwise encumber any such benefits, whether currently or thereafter
payable, shall be void.

 

XV. Withholding Taxes

The Company is entitled to withhold and deduct from any payments made pursuant
to the Plan or from future wages of a Plan Participant (or from other amounts
that may be due and owing to the Plan Participant from the Company), or make
other arrangements for the collection of, all legally required amounts necessary
to satisfy any and all federal, state, and local withholding and
employment-related tax requirements attributable to any payment made pursuant to
the Plan.

 

XVI. Unfunded Status of Plan

The Plan shall be unfunded. No provisions of the Plan shall require the Company,
for the purpose of satisfying any obligations under the Plan, to purchase assets
or place any assets in a trust or other entity to which contributions are made
or otherwise to segregate any assets. Plan Participants shall have no rights
under the Plan other than as unsecured general creditors of the Company.

 

XVII. Other

Except to the extent in connection with other matters of corporate governance
and authority (all of which shall be governed by the laws of the Company’s
jurisdiction of incorporation), the validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations, and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the internal, substantive laws of the State of Minnesota, without regard to
the conflict of law rules of the State of Minnesota or any other jurisdiction.

 

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