Document:

ofix-ex104_80.htm

Exhibit 10.4

 

ORTHOFIX INTERNATIONAL N.V.

2012 LONG-TERM INCENTIVE PLAN

Performance Stock Unit Agreement

COVER SHEET

 

Orthofix International N.V., a company organized under the laws of Curaçao (the “Company”), hereby grants performance stock units (the “Performance Stock Units”) relating to shares of the Company’s common stock, par value $0.01 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:
	
 
	
July 1, 2016

	
 

Name of Grantee:
	
 
	
 

	
 

Last Four Digits of Grantee’s Social Security Number:
	
 
	
 

	
 

Threshold Number of Performance Stock Units:
	
 
	
 

	
 

Target Number of Performance Stock Units:
	
 
	
 

	
 

Maximum Number of Performance Stock Units:
	
 
	
 

	
 

Performance Period:

 
	
 
	
·Beginning on Friday, July 1, 2016, and 

·Ending on Friday, June 28, 2019

 

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.

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

 

     

 

 

 ORTHOFIX INTERNATIONAL N.V.

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 Texas, 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 Percentile100% (Target)

55th Percentile120%

60th Percentile140%

65th Percentile160%

70th Percentile180%

75th Percentile or Greater200% (Maximum)

 

     

 

 

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 Friday, June 28, 2019 is greater than five times the closing price of the Company’s common stock on Friday, July 1, 2016.

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 (Friday, July 1, 2016).

“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 (Friday, June 28, 2019).

“Index Companies” means companies that are included in the S&P Healthcare Select index as of Friday, July 1, 2016, 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%).

	
 
	
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.ofix-ex105_79.htm

Exhibit 10.5

Employee

Restricted Stock Grant Agreement under

the Orthofix International N.V.

2012 Long-Term Incentive Plan

 

This Employee Restricted Stock Grant Agreement (the “Agreement”) is made this _____ day of __________ (the “Grant Date”) between Orthofix International N.V., a Curacao company (the “Company”), and the person signing this Agreement adjacent to the caption “Award Recipient” on the signature page hereof (the “Award Recipient”).  Capitalized terms used and not otherwise defined herein shall have the meanings attributed thereto in the Orthofix International N.V. 2012 Long-Term Incentive Plan (the “Plan”).

 

WHEREAS, pursuant to the Plan, the Company desires to afford the Award Recipient the opportunity to acquire 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 Restricted Stock.

 

(a)           Number of Shares/Vesting.  The Company hereby grants to the Award Recipient, on the Grant Date, an Award of _____ shares of Stock (“Common Shares”) under the Plan subject to the vesting schedule and terms and conditions set forth below (the “Restricted Stock”).  Subject to earlier termination in accordance with the Plan or this Agreement and the terms and conditions herein, Restricted Stock granted under this Agreement shall vest with respect to 25% of the shares covered hereby on each of the first, second, third and fourth anniversaries of the Grant Date (each, a “Vesting Date”); provided, however, for the avoidance of doubt, that there shall be no proportionate or partial vesting in the periods prior to or between each Vesting Date unless otherwise provided under this agreement or the Plan.  

 

(b)           Additional Documents.  The Award Recipient agrees to execute such additional documents and complete and execute such forms as the Company may require for purposes of this Agreement.

 

(c)           Issuance of Restricted Stock; Dividend and Distribution Rights.  Upon the vesting of any Restricted Stock pursuant to the terms hereof, the restrictions of Sections 1(a) and 3 shall lapse with respect to such vested Restricted Stock.  The issuance of the Restricted Stock under this grant shall be evidenced in such a manner as the Company, in its discretion, will deem appropriate, including, without limitation, book-entry registration or issuance of one or more stock certificates.  As the Award Recipient’s vests as described above, the recordation of the number of Common Shares attributable to such Award Recipient will be appropriately modified.

 

2.           Incorporation of Plan. The Award Recipient 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 grant of Restricted Stock 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.           Restrictions on Transfer.  To the extent not yet vested, the Restricted Stock may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of, whether by operation of law or otherwise.

 

4.           Notification of Election Under Section 83(b) of the Code.  Under Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), the difference between the purchase price paid for the Restricted Stock (i.e., zero), and the fair market value of shares on the date any forfeiture restrictions lapse with respect to such shares, will be reportable as ordinary income at that time.  An Award Recipient may elect to be taxed at the time the shares are acquired, rather than when such shares cease to be subject to such forfeiture restrictions, by filing an election under Section 83(b) of the Code within thirty days after the Grant Date.  In such event, the Award 

 

 

Recipient will have to make a tax payment based on the fair market value of the shares on the Grant Date being treated as ordinary income.  The form for making this election is attached as Exhibit A hereto.  Failure to make this filing within the thirty (30) day period will result in the recognition of ordinary income by the Award Recipient as the forfeiture restrictions lapse.

 

BY SIGNING THIS AGREEMENT, THE AWARD RECIPIENT ACKNOWLEDGES THAT IT IS HIS OR HER SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER SECTION 83(b), EVEN IF THE AWARD RECIPIENT REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.  THE AWARD RECIPIENT AGREES AND ACKNOWLEDGES THAT HE OR SHE IS RELYING SOLELY ON HIS OR HER OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE ANY 83(b) ELECTION. 

 

5.           Termination of Service; Change in Control.

 

(a)           Certain Terminations of Service.  If, prior to vesting, the Award Recipient’s Service is terminated for any reason other than (i) death, (ii) Disability, (iii) a Qualified Retirement occurring no less than six months after the Grant Date or (iv) a circumstance providing for accelerated vesting pursuant Section 5(d) hereof, the unvested portion of the Restricted Stock shall be forfeited by the Award Recipient and cancelled by the Company as of the date of the Award Recipient’s termination of Service, and the Award Recipient shall have no further right or interest therein unless the Committee in its sole discretion shall determine otherwise.

 

(b)           Termination of Service for Death or Disability. If the Award Recipient’s Service terminates by reason of death or Disability, the Restricted Stock shall automatically vest in full as of the date of the Award Recipient’s termination of Service.

 

(c)           Termination of Service for Certain Qualified Retirements. If the Award Recipient’s Service terminates by reason of a Qualified Retirement occurring no less than six months after the Grant Date but prior to the second anniversary of the Grant Date, the Restricted Stock shall be considered vested as of the date of such Qualified Retirement with respect to the aggregate number of Common Shares as to which the Restricted Stock would have been vested as of such second anniversary of the Grant Date. If the Award Recipient’s Service terminates by reason of a Qualified Retirement after the second anniversary of the Grant Date but before the third anniversary of the Grant Date, the Restricted Stock shall be considered vested as of the date of such Qualified Retirement with respect to the aggregate number of Common Shares as to which the Restricted Stock would have been vested as of the third anniversary of the Grant Date. In each of the circumstances described in the preceding two sentences, the portion of the Restricted Stock that shall not be considered vested as of the date of such Qualified Retirement shall be forfeited by the Award Recipient and cancelled by the Company as of the date of such Qualified Retirement. If the Award Recipient’s Service terminates by reason of a Qualified Retirement after the third anniversary of the Grant Date but before the fourth anniversary of the Grant Date, the remaining unvested Restricted Stock shall automatically vest in full as of the date of such Qualified Retirement. 

 

(d)           Certain Additional Change in Control Circumstances. In the event that the unvested portion of the Award of Restricted Stock is assumed or continued, or substituted for new restricted common stock or another equity-based Award of a successor entity, or parent or subsidiary thereof (with appropriate adjustments as to the number of shares), in each case upon the consummation of any Change in Control, and the employment of the Award Recipient with the Company or an Affiliate is terminated within 24 months following the consummation of such Change in Control by the employer without Cause or by the Award Recipient for Good Reason, the unvested portion of the Restricted Stock shall be fully vested on the date of such termination of employment with the Company. (Nothing in the preceding sentence shall limit or alter the Award Recipient’s rights under Section 5(c) hereof in the event that Award Recipient instead terminates his or her Service by reason of a Qualified Termination.) In the event a Change in Control occurs in which this Award of Restricted Stock is not being assumed, continued or substituted (as contemplated by the preceding sentence), the unvested portion of the Award of Restricted Stock shall be treated in accordance with the default rules applicable under Section 17.3 of the Plan.

  

    

   

 

 

6.          Effect of Severance Agreements Generally.  The Company and the Award Recipient agree that notwithstanding anything herein to the contrary, the terms of a Severance Agreement expressly defining whether and in what manner (including upon termination of employment) the unvested portion of the Restricted Stock shall vest shall control over the terms of this Agreement (including the vesting, forfeiture and other provisions contained in Section 5 hereof), and shall not be disregarded with respect to the terms of this Award.

 

7.           Withholding.  The Award Recipient (or following the Award Recipient’s death, the Award Recipient’s estate, personal representative, or beneficiary, as applicable) shall be liable for any and all applicable and required taxes of any kind required by law to be withheld with respect to the vesting of Restricted Stock.  When the Restricted Stock vests (or, in the event that tax withholding is required as of an earlier date, then such earlier date), the Company shall cause the Award Recipient (or following the Award Recipient’s death, the Award Recipient’s estate, personal representative, or beneficiary, as applicable) to satisfy all of his or her tax withholding obligations by having the Company withhold a number of Common Shares that would otherwise become vested (or would be eligible for future vesting) having a Fair Market Value (as of the close of business on the Vesting Date or date that tax withholding is required) not in excess of the minimum amount of tax withholding obligations required by law to be withheld with respect to such vesting or other applicable event requiring tax withholding.

 

8.           No Employment or Other Rights.  This grant of Restricted Stock does not confer upon the Award Recipient 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 Award Recipient’s employment or other service relationship at any time.  For purposes of this Agreement only, the term “employment” shall include circumstances under which Award Recipient provides consulting or other Services to the Company or any of its Subsidiaries as an independent contractor, but such Award Recipient is not, nor shall be considered, an employee; provided, however, nothing in this Section 8 or this Agreement shall create an employment relationship between such person and the Company or its applicable Subsidiary, as the usages described in this Section are for convenience only.

 

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 the Restricted Stock. The foregoing adjustments shall be determined by the Committee in its sole discretion.

 

10.           Rights as a Shareholder.  Except as otherwise provided in this Agreement, the Award Recipient shall have all rights of a stockholder with respect to the Restricted Stock granted under this Agreement, including voting rights.  Notwithstanding the foregoing, dividends with respect to any Restricted Stock granted under this Agreement shall accrue, but shall not be paid, until the Award Recipient shall become the holder of record thereof, and no adjustment shall be made for dividends or distributions or other rights in respect of any Restricted Stock for which the record date is prior to the date upon which the Award Recipient shall become the holder of record thereof.

 

11.           Discretionary Nature of Plan.  The Plan is discretionary in nature, and the Company may suspend, modify, amend or terminate the Plan in its sole discretion at any time, subject to the terms of the Plan and any applicable limitations imposed by law.  This Restricted Stock grant under the Plan is a one-time benefit and does not create any contractual or other right to receive additional Restricted Stock or other benefits in lieu of Restricted Stock in the future.  Future grants, if any, will be at the sole discretion of the Committee, including, but not limited to, the timing of any grant, the number of shares of Restricted Stock granted, and the vesting provisions.

 

12.           Miscellaneous Provisions.

 

(a)           Applicable Law.  The validity, construction, interpretation and effect of this instrument will be governed by and construed in accordance with the laws of the State of Texas, without giving effect to the conflicts of law provisions thereof.

 

  

    

   

 

 

(b)           Notice.  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 recipient 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 Award Recipient 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.

(c)           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.

 

(d)          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.

 

(e)           Amendments. The Board and the Committee shall have the power to alter or amend the terms of the grant of Restricted Stock as set forth herein from time to time, in any manner consistent with the provisions of Sections 5.3 and 18.10 of the Plan, and any alteration or amendment of the terms of this grant of Restricted Stock 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 Award Recipient of any such alteration or amendment as promptly as practicable after the adoption thereof. The foregoing shall not restrict the ability of the Award Recipient and the Board or the Committee by mutual written consent to alter or amend the terms of this grant of Restricted Stock 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 Award Recipient and the Company.

 

(g)          Entire Agreement.  This Agreement and the Plan constitute the entire agreement between the Award Recipient and the Company regarding the grant of Restricted Stock and supersede all prior arrangements or understandings (whether oral or written and whether express or implied) with respect thereto.  In the event the Award Recipient has a Severance Agreement, any conflicts or ambiguities shall be resolved first by reference to the Severance Agreement, then to Plan, and finally to this Agreement.  

 

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

 

“Severance Agreement” shall mean a written change in control and severance agreement between the Award Recipient and the Company.    

 

“Good Reason” shall mean the Award Recipient voluntarily terminating his or her employment, following a Change in Control, after the occurrence of any of the following circumstances (in each case, after notice by the Award Recipient to employer of the circumstance, and failure by the employer to cure and eliminate such circumstance within 15 calendar days of such notice):  (i) a requirement that the Award Recipient work principally from a location that is more than fifty (50) miles from his or her principal place of employment immediately prior to such Change in Control, or (ii) a ten percent or greater reduction in Award Recipient’s Total Compensation from the amount of such Total Compensation immediately prior to such Change in Control.

 

“Qualified Retirement” shall mean a retirement from Service by the Award Recipient in which, at the time of such retirement, the sum of the Award Recipient’s age and aggregate 12-month completed periods of Service (whether or not such completed 12-month periods are consecutive), in each case without giving credit for any partial years, equals or exceeds 75.

 

 “Total Compensation” shall mean aggregate of base salary, target bonus opportunity, employee benefits (retirement plan, welfare plans, and fringe benefits), and grant date fair value of equity-based compensation, but 

  

    

   

 

 

excluding for the avoidance of doubt any reductions caused by the failure to achieve performance targets) taken as a whole.

 

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EXECUTED on the date first written above.

 

 

 

 

				
	
COMPANY:
	
  
	
ORTHOFIX INTERNATIONAL N.V.

	
  
	
  
	
  

	
  
	
  
	
By:   
	
  

	
  
	
  
	
Name:  

	
  
	
  
	
Title:  

	
  
	
  
	
  

	
AWARD RECIPIENT:
	
  
	
  

	
  
	
  
	
By:   
	
  

	
  
	
  
	
Name:  

	
  
	
  
	
Title:

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