ex10_3.htm


    
      

    

    
      EXHIBIT
        10.3

       

      Nonqualified
        Stock Option Agreement under

      the
        Orthofix International N.V.

      Amended
        and Restated 2004 Long-Term Incentive Plan

      


      


      This
        Option Agreement (the “Agreement”) is made this 19th
        day of November 2007 (the “Grant Date”) between
        Orthofix International N.V., a Netherlands Antilles company (the
“Company”), and the person signing this Agreement
        adjacent to the caption “Optionee” on the signature page hereof (the
“Optionee”). Capitalized terms used and not otherwise
        defined herein shall have the meanings attributed thereto in the Orthofix
        International N.V. Amended and Restated 2004 Long-Term Incentive Plan (the
        “Plan”).

      


      WHEREAS,
        pursuant to the Plan, the
        Company desires to afford the Optionee the opportunity to purchase Common
        Shares
        on the terms and conditions set forth herein;

      


      NOW,
        THEREFORE, in connection with the
        mutual covenants hereinafter set forth and for other good and valuable
        consideration, the parties hereto agree as follows:

      


      1.   Grant
        of
        Option. Subject to the provisions of this Agreement and the Plan, the
        Company hereby grants to the Optionee the right and option (the
“Option”) to purchase 25,000 Common Shares at an
        exercise price of $58.12 per share (the “Exercise
        Price”).

      


      2.   Incorporation
        of
        Plan. The Optionee acknowledges receipt of the Plan, a copy of which is
        annexed hereto, and represents that he or she is familiar with its terms
        and
        provisions and hereby accepts this Option subject to all of the terms and
        provisions of the Plan and all interpretations, amendments, rules and
        regulations which may, from time to time, be promulgated and adopted pursuant
        to
        the Plan. The Plan is incorporated herein by reference. In the event of any
        conflict or inconsistency between the Plan and this Agreement, the Plan shall
        govern and this Agreement shall be interpreted to minimize or eliminate any
        such
        conflict or inconsistency.

      


      3.   Nature
        of the
        Option. The Option shall be a Nonqualified Stock Option.

      


      4.   Vesting.
        Subject to earlier termination in accordance with the Plan or this Agreement
        and
        the terms and conditions herein or therein, the Option shall vest and become
        exercisable with respect to one-hundred percent (100%) of the shares covered
        thereby on the third anniversary of the Grant Date.

      


      5.   Term.
        The
        Option shall expire and no longer be exercisable 10 years from the Grant
        Date,
        subject to earlier termination in accordance with the Plan or this Agreement;
        provided, however: (i) if the termination date falls on a date on which the
        exercise of the Option would violate any applicable federal, state, local
        or
        foreign law, such termination date shall be extended to 30 days after the
        first
        date that exercise of the Option would no longer violate any applicable federal,
        state, local or foreign law, and (ii) if the termination date falls on a
        date on
        which the Optionee is prohibited by Company policy in effect on such date
        from
        engaging in transactions in the Company’s securities, such termination date
        shall be extended to the first date that the Optionee is permitted to engage
        in
        transaction in the Company’s securities under such Company policy so long as
        such extension does not cause the Option to become subject to Code Section
        409A
        or violate any other applicable law.

      


      6.   Termination
        of
        Employment.

      


      (a)     General.
        A termination of employment shall be deemed to have occurred if the Optionee
        is
        no longer employed by, or otherwise providing services to, the Company or
        any of
        its Subsidiaries for any reason. The Committee shall have discretion to
        determine whether an authorized leave of absence (as a result of disability
        or
        otherwise) shall constitute a termination of employment for purposes of the
        Plan.

      


      
        
          
          

        

        
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      (b)     Termination
        of Employment Other than for Cause, Death or Permanent Disability - Not Pursuant
        to an Employment Agreement. Subject to Section 6(c) below, if the Optionee's
        employment is terminated prior to vesting other than for Cause, death or
        Permanent Disability, the Option shall be considered vested and be immediately
        exercisable as of the date of such termination of employment with respect
        to the
        aggregate number of Common Shares as to which the Option would have been
        vested
        as of December 31 of the year in which such termination of employment occurs.
        The Optionee shall have the right, subject to the other terms and conditions
        set
        forth in this Agreement and the Plan, to exercise the Option, to the extent
        it
        has vested as of the date of such termination of employment, at any time
        within
        180 days after the date of such termination of employment, subject to the
        earlier expiration of the Option as provided in Section 5 hereof. To the
        extent
        the vested portion of the Option is not exercised within such 180 day period,
        the Option shall be cancelled and revert back to the Company and the Optionee
        shall have no further right or interest therein. The unvested portion of
        any
        Option shall be cancelled and revert back to the Company as of the date of
        the
        Optionee's termination of employment and the Optionee shall have no further
        right or interest therein.

      


      (c)     Termination
        of Employment Other than for Cause, Death or Permanent Disability - Pursuant
        to
        an Employment Agreement. Notwithstanding Section 6(b) above, in the event
        the Optionee's employment is terminated prior to vesting pursuant to an
        Employment Agreement, other than for Cause (which for this purpose shall
        include
        a resignation by the Optionee for “good reason,” or words of similar meaning,
        under any Employment Agreement), death or Permanent Disability, then the
        Option
        shall be considered vested in full and be immediately exercisable as of the
        date
        of such termination of employment unless the Employment Agreement expressly
        provides otherwise, in which case the terms of the Employment Agreement shall
        control.  The Optionee shall have the right, subject to the other
        terms and conditions set forth in this Agreement and the Plan, to exercise
        the
        Option until the expiration of the Option as provided in Section 5 hereof.
        To
        the extent the vested portion of the Option is not exercised within such
        period,
        the Option shall be cancelled and revert back to the Company and the Optionee
        shall have no further right or interest therein.

      


      (d)     Termination
        of Employment for Cause. Subject only to any greater rights in any
        Employment Agreement, if the Optionee's employment with the Company and its
        Subsidiaries is terminated by the Company or any of its Subsidiaries for
        Cause
        prior to vesting, the unvested portion of the Option shall be cancelled and
        revert back to the Company as of the date of such termination of employment,
        and
        the Optionee shall have no further right or interest therein unless the
        Committee in its sole discretion shall determine otherwise. The Optionee
        shall
        have the right, subject to the other terms and conditions set forth in this
        Agreement and the Plan, to exercise the Option, to the extent it has vested
        as
        of the date of such termination of employment, at any time within three months
        after the date of such termination, subject to the earlier expiration of
        the
        Option as provided in Section 5 hereof.

      


      (e)     Termination
        of Employment for Death or Permanent Disability. Subject only to any greater
        rights in any Employment Agreement, if the Optionee's employment with the
        Company and its Subsidiaries terminates by reason of death or Permanent
        Disability, the Option shall automatically vest and become immediately
        exercisable in full as of the date of such termination of
        employment.  The Option shall remain exercisable by the Optionee, a
        Permitted Transferee (as defined in Section 11 hereof), a transferee under
        a
        domestic relations order, or the Optionee's estate, personal representative
        or
        beneficiary, as applicable, at any time within 12 months after the date of
        such
        termination of employment, subject to the earlier expiration of the Option
        as
        provided in Section 5 hereof. To the extent the Option is not exercised within
        such 12 month period, the Option shall be cancelled and revert back to the
        Company and the Optionee, Permitted Transferee, transferee under a domestic
        relations order, or the Optionee’s estate, personal representative or
        beneficiary, as applicable, shall have no further right or interest
        therein.

      


      
        
          
          

        

        
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      7.   Change
        in
        Control. Upon the occurrence of a Change in Control, the Option shall
        automatically vest and become immediately exercisable in full and shall remain
        exercisable in accordance with the terms of Section 6 hereof, subject to
        the
        earlier expiration of the Option as provided in Section 5 hereof.

      


      8.   Method
        of
        Exercising Option.

      


      (a)     Notice
        of
        Exercise. Subject to the terms and conditions of this Agreement, the Option
        may be exercised by written or electronic notice to the Company, from the
        Optionee, a Permitted Transferee, a transferee pursuant to a domestic relations
        order, or following the Optionee’s death, the Optionee’s estate, personal
        representative, or beneficiary, as applicable, and stating the number of
        Common
        Shares in respect of which the Option is being exercised. Such notice shall
        be
        accompanied by payment of the Exercise Price for all Common Shares purchased
        pursuant to the exercise of such Option. The date of exercise of the Option
        shall be the later of (i) the date on which the Company receives the notice
        of
        exercise or (ii) the date on which the conditions set forth in Sections 8(b)
        and
        8(e) are satisfied. Notwithstanding any other provision of this Agreement,
        the
        Optionee may not exercise the Option and no Common Shares will be issued
        by the
        Company with respect to any attempted exercise when such exercise is prohibited
        by law or any Company policy then in effect. The Option may not be exercised
        at
        any one time as to less than 100 shares (or such number of shares as to which
        the Option is then exercisable if less than 100). In no event shall the Option
        be exercisable for a fractional share.

      


      (b)     Payment.
        Prior to the issuance of the Common Shares pursuant to Section 8(e) hereof
        in
        respect of which all or a portion of the Option shall have been exercised,
        the
        Optionee shall have paid to the Company the Exercise Price for all Common
        Shares
        purchased pursuant to the exercise of such Option. Payment may be made by
        personal check, bank draft or postal or express money order (such modes of
        payment are collectively referred to as “cash”) payable to the order of the
        Company in U.S. dollars. Payment may also be made in mature Common Shares
        owned
        by the Optionee, or in any combination of cash or such mature shares as the
        Committee in its sole discretion may approve. The Company may also permit
        the
        Optionee to pay for such Common Shares by directing the Company to withhold
        Common Shares that would otherwise be received by the Optionee, pursuant
        to such
        rules as the Committee may establish from time to time. In the discretion
        of the
        Committee, and in accordance with rules and procedures established by the
        Committee, the Optionee may be permitted to make a “cashless” exercise of all or
        a portion of the Option.

      


      (c)     Shareholder
        Rights. The Optionee shall have no rights as a shareholder with respect to
        any Common Shares issuable upon exercise of the Option until the Optionee
        shall
        become the holder of record thereof, and no adjustment shall be made for
        dividends or distributions or other rights in respect of any Common Shares
        for
        which the record date is prior to the date upon which the Optionee shall
        become
        the holder of record thereof.

      


      (d)     Limitation
        on Exercise. The Option shall not be exercisable unless the offer and sale
        of Common Shares pursuant thereto has been registered under the Securities
        Act
        of 1933, as amended (the “1933 Act”), and qualified
        under applicable state “blue sky” laws or the Company has determined that an
        exemption from registration under the 1933 Act and from qualification under
        such
        state “blue sky” laws is available.

      


      (e)     Issuance
        of
        Common Shares. Subject to the foregoing conditions, as soon as is reasonably
        practicable after its receipt of a proper notice of exercise and payment
        of the
        Exercise Price for all Common Shares purchased pursuant to the exercise of
        such
        Option, the Company shall either: (i) deliver or cause to be delivered to
        the
        Optionee (or a Permitted Transferee, a transferee under a domestic relations
        order, or following the Optionee's death, the Optionee's estate, personal
        representative or beneficiary, as applicable) one or more share certificates
        for
        the appropriate number of Common Shares issued in connection with such exercise
        (less any Common Shares withheld under Section 10 below), or (ii) cause its
        third-party recordkeeper to credit an account established and maintained
        in the
        name of the Optionee (or a Permitted Transferee, a transferee under a domestic
        relations order, or following the Optionee's death, the Optionee's estate,
        personal representative or beneficiary, as applicable) with the number of
        Common
        Shares issued in connection with such exercise (less any Common Shares withheld
        under Section 10 below); provided, however, that an actual share certificate
        shall be delivered if requested by the Optionee (or a Permitted Transferee,
        a
        transferee under a domestic relations order, or following the Optionee's
        death,
        the Optionee's estate, personal representative or beneficiary, as applicable).
        Such Common Shares shall be fully paid and nonassessable and shall be issued
        in
        the name of the Optionee (or a Permitted Transferee, a transferee under a
        domestic relations order, or following the Optionee's death, the Optionee's
        estate, personal representative or beneficiary, as applicable).

      


      
        
          
          

        

        
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      9.   Adjustment
        of
        and Changes in Common Shares. In the event of any merger, consolidation,
        recapitalization, reclassification, stock dividend, extraordinary dividend,
        or
        other event or change in corporate structure affecting the Common Shares,
        the
        Committee shall make such adjustments, if any, as it deems appropriate in
        the
        number and class of shares subject to, and the exercise price of, the Option.
        The foregoing adjustments shall be determined by the Committee in its sole
        discretion.

      


      10.     Tax
        Withholding. The Company shall have the right, prior to the issuance of any
        Common Shares upon full or partial exercise of the Option (whether by the
        Optionee or any Permitted Transferees, a transferee under a domestic relations
        order, or following the Optionee’s death, the Optionee’s estate, personal
        representative, or beneficiary, as applicable), to require the Optionee to
        remit
        to the Company any amount sufficient to satisfy the minimum required federal,
        state or local tax withholding requirements, as well as all applicable
        withholding tax requirements of any other country or jurisdiction. The Company
        may permit the Optionee to satisfy, in whole or in part, such obligation
        to
        remit taxes, by directing the Company to withhold Common Shares that would
        otherwise be received by the Optionee, pursuant to such rules as the Committee
        may establish from time to time. The Company shall also have the right to
        deduct
        from all cash payments made pursuant to, or in connection with, the Option,
        the
        minimum federal, state or local taxes required to be withheld with respect
        to
        such payments.

      


      11.     Transfers.
        Unless the Committee determines otherwise after the Grant Date, the Option
        shall
        not be transferable other than by will or by the laws of descent and
        distribution or pursuant to a domestic relations order; provided, however,
        the
        Option may be transferred to the Optionee's family members or to one or more
        trusts or partnerships established in whole or in part for the benefit of
        one or
        more of such family members (collectively, the “Permitted Transferees”). Any
        Option transferred to a Permitted Transferee shall be further transferable
        only
        by will or the laws of descent and distribution or, for no consideration,
        to
        another Permitted Transferee of the Optionee. The Committee may in its
        discretion permit transfers of Options other than those contemplated by this
        Section 11.

      


      12.     Option
        Exercisable Only by the Optionee. During the lifetime of the Optionee, an
        Option shall be exercisable only by the Optionee or by a Permitted Transferee
        to
        whom such Option has been transferred in accordance with Section
        11.

      


      13.      Prohibition
        on Repricing.  The Agreement may not be amended to (a) reduce the
        Exercise Price of the Option granted hereunder, nor (b) cancel or replace
        the
        Option  hereunder with an Option having a lower exercise price.
 

      


      14.     Miscellaneous
        Provisions.

      


      (a)     Notices.
        Any notice required by the terms of this Agreement shall be delivered or
        made
        electronically, over the Internet or otherwise (with request for assurance
        of
        receipt in a manner typical with respect to communications of that type),
        or
        given in writing.  Any notice given in writing shall be deemed
        effective upon personal delivery or upon deposit with the United States Postal
        Service, by registered or certified mail, with postage and fees prepaid,
        and
        shall be addressed to the Company at its principal executive office and to
        the
        Optionee at the address that he or she has most recently provided to the
        Company.   Any notice given electronically shall be deemed
        effective on the date of transmission.

      


      
        
          
          

        

        
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      (b)     Headings.
        The headings of sections and subsections are included solely for convenience
        of
        reference and shall not affect the meaning of the provisions of this
        Agreement.

      


      (c)     Counterparts.
        This Agreement may be executed in two or more counterparts, each of which
        shall
        be deemed to be an original but all of which together will constitute one
        and
        the same instrument.

      


      (d)     Entire
        Agreement. This Agreement and the Plan constitute the entire agreement
        between the parties hereto with regard to the subject matter hereof. They
        supersede all other agreements, representations or understandings (whether
        oral
        or written and whether express or implied) that relate to the subject matter
        hereof.

      


      (e)     Amendments.
        The Board and the Committee shall have the power to alter or amend the terms
        of
        the Option as set forth herein from time to time, in any manner consistent
        with
        the provisions of Sections 16 and 19 of the Plan, and any alteration or
        amendment of the terms of the Option by the Board or the Committee shall,
        upon
        adoption, become and be binding on all persons affected thereby without
        requirement for consent or other action with respect thereto by any such
        person.
        The Committee shall give notice to the Optionee of any such alteration or
        amendment as promptly as practicable after the adoption thereof. The foregoing
        shall not restrict the ability of the Optionee and the Board or the Committee
        by
        mutual written consent to alter or amend the terms of the Option in any manner
        which is consistent with the Plan.

      


      (f)      Binding
        Effect. This Agreement shall be binding upon the heirs, executors,
        administrators and successors of the parties hereto and may only be amended
        by
        written agreement of the parties hereto.

      


      (g)     Governing
        Law. This Agreement shall be governed by, and construed in accordance with,
        the laws of the State of New York, without regard to the choice of law
        provisions thereof.

      


      (h)     No
        Employment or Other Rights. This Option grant does not confer upon the
        Optionee any right to be continued in the employment of, or otherwise provide
        services to, the Company or any Subsidiary or other affiliate thereof, or
        interfere with or limit in any way the right of the Company or any Subsidiary
        or
        other affiliate thereof to terminate such Optionee’s employment at any
        time.

      


      15.     Definitions.
        For purposes of this Agreement, the following capitalized words shall have
        the
        meanings set forth below.

      


      “Cause”
shall
        mean termination of the Optionee's employment because of the Optionee's (i)
        involvement in fraud, misappropriation or embezzlement related to the business
        or property of the Company, (ii) conviction for, or guilty plea to, a felony
        or
        crime of similar gravity in the jurisdiction in which such conviction or
        guilty
        plea occurs, (iii) unauthorized disclosure of any trade secrets or other
        confidential information relating to the Company's business and affairs (except
        to the extent such disclosure is required under applicable law), or (iv)
        such
        other circumstances constituting a termination for cause under any Employment
        Agreement.

      


      “Change
        in
        Control” shall mean:

      


      (i)   the
        acquisition by
        any individual, entity or group (within the meaning of Section 13(d)(3) or
        14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange
        Act”)) (a “Person”) of beneficial
        ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
        Act)
        of 50% or more of either (A) the then outstanding shares of the Company's
        common
        stock (the “Outstanding Common Stock”) or (B) the
        combined voting power of the then outstanding voting securities of the Company
        entitled to vote generally in the election of directors (the
“Outstanding Voting
        Securities”);  excluding,  however, the
        following: (1) any acquisition directly from the Company, other than an
        acquisition by virtue of the exercise of a conversion privilege unless the
        security being so converted was itself acquired directly from the Company;
        (2)
        any acquisition by the Company; (3) any acquisition by any employee benefit
        plan
        (or related trust) sponsored or maintained by the Company or any entity
        controlled by the Company; or (4) any acquisition pursuant to a transaction
        which complies with clauses (A), (B) and (C) of subsection (iii) of this
        definition of Change of Control; or

      


      
        
          
          

        

        
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      (ii)     a
        change in the composition of the Board such that the individuals who, as
        of the
        date hereof, constitute the Board (such Board shall be hereinafter referred
        to
        as the “Incumbent Board”) cease for any reason to
        constitute at least a majority of the Board; provided,  however, for
        purposes of this paragraph, that any individual who becomes a member of the
        Board subsequent to the date hereof, whose election, or nomination for election
        by the Company's shareholders, was approved by a vote of at least a majority
        of
        those individuals who are members of the Board and who were also members
        of the
        Incumbent Board (or deemed to be such pursuant to this proviso) shall be
        considered as though such individual were a member of the Incumbent Board;
        but  provided further that any such individual whose initial
        assumption of office occurs as a result of either an actual or threatened
        election contest (as such terms are used in Rule 14a-11 of Regulation 14A
        promulgated under the Exchange Act) or other actual or threatened solicitation
        of proxies or consents by or on behalf of a Person other than the Board shall
        not be so considered as a member of the Incumbent Board; or

      


      (iii)    consummation
        of a
        reorganization, merger or consolidation or sale or other disposition of all
        or
        substantially all of the assets of the Company (“Corporate
        Transaction”);  excluding, however, such a Corporate
        Transaction pursuant to which all of the following conditions are met: (A)
        all
        or substantially all of the individuals and entities who are the beneficial
        owners, respectively, of the Outstanding Common Stock and Outstanding Voting
        Securities immediately prior to such Corporate Transaction will beneficially
        own, directly or indirectly, more than 50% of, respectively, the 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 Corporate Transaction
        (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
        either directly or through one or more subsidiaries) in substantially the
        same
        proportions as their ownership, immediately prior to such Corporate Transaction,
        of the Outstanding Common Stock and Outstanding Voting Securities, as the
        case
        may be, (B) no Person (other than the Company, any employee benefit plan
        (or
        related trust) of the Company or such corporation resulting from such Corporate
        Transaction) will beneficially own, directly or indirectly, 50% or more of,
        respectively, the outstanding shares of common stock of the corporation
        resulting from such Corporate Transaction or the combined voting power of
        the
        outstanding voting securities of such corporation entitled to vote generally
        in
        the election of directors except to the extent that such ownership existed
        prior
        to the Corporate Transaction, and (C) individuals who were members of the
        Incumbent Board will constitute at least a majority of the members of the
        board
        of directors of the corporation resulting from such Corporate
        Transaction;

      


      (iv)    the
        approval by the shareholders of the Company of a complete liquidation or
        dissolution of the Company; or

      


      (v)     any
        similar or other definition contained in any Employment Agreement (even if
        broader than as defined above).

      


      “Committee”
        shall mean the Compensation Committee of the Board or such other committee
        appointed by the Board to administer the Plan

      


      
        
          
          

        

        
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      “Employment
        Agreement” shall mean a written employment, change in control or
        change of control agreement between the Optionee and the Company and/or a
        Subsidiary.

       

      “Permanent
        Disability” shall mean termination of the Optionee's employment as
        a result of a physical or mental incapacity which substantially prevents
        the
        Optionee from performing his or her duties as an employee and that has continued
        for at least 180 days and can reasonably be expected to continue indefinitely.
        Any dispute as to whether or not the Optionee is disabled within the meaning
        of
        the preceding sentence shall be resolved by a physician selected by the
        Committee.

      


      


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      EXECUTED
        as of the date first written
        above.

      


       

      
        	
                COMPANY:

              	
                ORTHOFIX
                  INTERNATIONAL N.V.

              	 
	 	 	 	 
	 	
                By:

              	
                /s/
                  Alan W. Milinazzo

              	 
	 	
                Name:

              	
                Alan
                  W. Milinazzo

              	 
	 	
                Title:

              	
                Chief
                  Executive Officer

              	 
	 	 	 	 
	
                OPTIONEE:

              	 	 	 
	 	
                By:

              	
                /s/
                  Timothy Adams

              	 
	 	
                Name:

              	
                Timothy
                  Adams

              	 
	 	
                Title:

              	
                Chief
                  Financial Officer

              	 


      

    

     

     

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