Document:

ofix-ex102_7.htm

 

Exhibit 10.2

AMENDED EMPLOYMENT CONTRACT

 

This Amended Employment Contract (this “Agreement”), entered into and effective as of September 7, 2016 (the “Effective Date”), is by and between Orthofix International N.V., a company organized under the laws of Curacao (the “Company”), Davide Bianchi, an individual (the “Executive”), born on January 14, 1965, and, solely for purposes of Sections 6.1(b) and 7.4 hereof, Orthofix AG, a company organized under the laws of Switzerland and a wholly owned subsidiary of the Company (“AG”). 

 

PRELIMINARY STATEMENTS

 

A.Executive currently serves as the Company’s President, Extremity Fixation pursuant to an Amended and Restated Employment Agreement, entered into and effective as of November 20, 2014, between Executive and the Company (the “Existing Employment Agreement”), which Existing Employment Agreement is being amended and superseded by this Agreement. 

 

B.In connection with Executive’s current employment, AG and the Executive have entered into a Non-Competition Agreement, signed on November 26, 2013 (the “Non-Competition Agreement”), which Non-Competition Agreement is attached hereto as Exhibit B, and will remain in full force and effect after the Effective Date.

 

C.Simultaneous with the execution and delivery of this Agreement, the Executive and the Company are also entering into a Change in Control and Severance Agreement, dated as of September 7, 2016 (the “Severance Agreement”), which Severance Agreement will also be in full force and effect after the Effective Date.

 

D.Capitalized terms used herein and not otherwise defined have the meaning for them set forth on Exhibit A attached hereto and incorporated herein by reference.

 

The parties, intending to be legally bound, hereby agree as follows:

 

I.EMPLOYMENT AND DUTIES

 

1.1Duties.  The Company currently employs the Executive as its President, Extremity Fixation, and the Company and the Executive agree that Executive’s employment by the Company shall prospectively be governed by the terms and conditions set forth herein.  The Executive shall continue to have such power and authority and perform such duties, functions and responsibilities as are associated with and incident to his positions, and as the Board may from time to time require of him.  The Executive continues to agree to serve, if elected, as an officer or director of any other direct or indirect subsidiary of the Company, in each such case at no compensation in addition to that provided for in this Agreement, but the Executive serves in such positions 

  

 

 

solely as an accommodation to the Company and such positions shall grant him no rights hereunder (including for purposes of the definition of Good Reason). 

 

1.2Services.  During the Term (as defined in Section 1.3), and excluding any periods of vacation, sick leave or disability, the Executive agrees to dedicate his regular work hours fully to the Company, spare time work shall not conflict with the business interest of the Company. 

 

1.3Term of Employment.  The term of this Agreement shall commence on the Effective Date and shall continue until the earlier of (1) termination by either party in accordance with the terms of this Agreement or (2) automatically (a) at the end of the month in which the Executive reaches the legal retirement age (currently age 65) or (b) at the end of the day on which the Executive receives an early retirement pension or a full pension for disability (the “Term”).

 

1.4Place of Performance.  During the Term, the Executive’s primary business office shall be his home residence in Switzerland, provided, however, that Executive shall also from time-to-time perform services from the Company’s offices in Lewisville, Texas and Verona, Italy, and from such other locations as are agreed by the Company and the Executive.

 

1.5Working Hours.  Regular working hours are 40 hours per week (Monday through Friday).  Nevertheless, the demands of the Executive’s position may require him to work irregular hours and the Executive undertakes to work such irregular hours, at the request of the Company.  To that end, the Executive agrees, in accordance with business requirements as well as legal limits, to work overtime as well as to work on Sundays and bank holidays.  Upon request of the overtime, the Company has to consider the business needs as well as the rights of the Executive.  Overtime is covered inside the remuneration package.

 

II.COMPENSATION

 

2.1General.  The base salary and Incentive Compensation (as defined in Section 2.3.) payable to the Executive hereunder, as well as any stock-based compensation, including stock options, stock appreciation rights and restricted stock grants, shall be determined from time to time by the Board or the Compensation Committee and paid pursuant to the Company’s customary payroll practices or in accordance with the terms of the applicable Plans (as defined in Section 2.4).  The Company shall pay the Executive in cash (in Swiss Francs), in accordance with the normal payroll practices of the Company, the base salary and Incentive Compensation set forth below.  For the avoidance of doubt, in providing any compensation payable in stock, the Company may withhold, deduct or collect from the compensation otherwise payable or issuable to the Executive a portion of such compensation to the extent required to comply with applicable tax laws to the extent such withholding is not made or otherwise provided for pursuant to the agreement governing such stock-based compensation.

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2.2Base Salary.  The Executive’s base salary will be set no less than annually by the Board or the Compensation Committee.  As of the Effective Date, the Executive’s base salary is CHF 353,632, payable in 12 monthly installments of CHF 29,469 per month.

 

2.3Bonus or other Incentive Compensation.  With respect to each fiscal year of the Company during the Term, the Executive shall be eligible to receive annual bonus compensation under the Company’s Executive Annual Incentive Plan or any successor plan (the “Bonus Plan”), as determined by the Board or the Compensation Committee, based on the achievement of goals established by the Board or the Compensation Committee from time to time (the “Goals”).  For 2016, the Executive’s target bonus opportunity under the Bonus Plan shall be 60% of his current Base Salary with an opportunity to earn a maximum bonus of 90% of his current Base Salary.   The amount of any actual payment for 2016 and any subsequent year will depend upon the achievement (or not) of the Goals established by the Board.  Except as otherwise provided in this Agreement or the Severance Agreement, to receive a bonus under the Bonus Plan, the Executive must be employed on the date of payment of such bonus.   Amounts payable under the Bonus Plan shall be determined by the Board and shall be paid following such fiscal year and no later than two and one-half months after the end of such fiscal year.  In addition, the Executive shall be eligible to receive such additional bonus or incentive compensation as the Board or the Compensation Committee may establish from time to time in its sole discretion.  Any bonus or incentive compensation under this Section 2.3 under the Bonus Plan or otherwise is referred to herein as “Incentive Compensation.”  Stock-based compensation shall not be considered Incentive Compensation under the terms of this Agreement unless the parties expressly agree otherwise in writing.

 

2.4Stock Compensation.  The Executive shall be eligible to receive stock-based compensation, whether stock options, stock appreciation rights, restricted stock grants or otherwise, under the Company’s 2012 Long Term Incentive Plan or other stock-based compensation plans as the Company may establish from time to time (collectively, the “Plans”).  The Executive shall be considered for such grants no less often than annually as part of the Board’s and/or the Compensation Committee’s annual compensation review, but any such grants shall be at the sole discretion of the Board and/or Compensation Committee.  

 

2.5Car Allowance.  The Executive shall receive an annual car allowance to the extent provided for under any applicable Company policy and approved by the Board and/or Compensation Committee.

 

III.EMPLOYEE BENEFITS

 

3.1General.  So long as the Executive is employed by the Company pursuant to this Agreement, he shall be eligible for the following benefits to the extent generally available to senior executives of the Company or by virtue of his position, tenure, salary and other qualifications.  Any eligibility shall be subject to and in accordance with the 

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terms and conditions of the Company’s benefits policies and applicable plans (including as to deductibles, premium sharing, co-payments or other cost-splitting arrangements). 

 

3.2Savings and Retirement Plans.  The Executive shall be entitled to participate in, and enjoy the benefits of, all savings, pension, salary continuation and retirement plans, practices, policies and programs generally available to senior executives of the Company.  The premium contribution to the corporate pension scheme of the Company is compliant with the requirement of the Swiss Occupational Pension Legislation BVG (Berufsvorsorgegesetz).  The annual premium depends on the amount of the salary and the age of the Employee.  At the present time, it is approximately CHF 56,400.  Two thirds of the premium is paid by the Company and one third by the Employee. The Employee’s contribution is deducted from his salary in monthly installments of approximately CHF 1,600.  In addition, the Employee will receive further a voluntary contribution to the 3rd column in the amount of CHF 6,768 per annum.

 

3.3Welfare and Other Benefits.  

 

(a)The Executive and/or the Executive’s eligible dependents, as the case may be, shall be entitled to participate in, and enjoy the benefits of, all welfare benefit plans, practices, policies and programs provided by the Company at a level that is generally available to other senior executives of the Company.

 

(b)In the event that Executive is unable to perform his duties under this Agreement due to illness, the Executive shall receive his salary according to the terms and conditions of the insurance for loss of earnings due to illness, which is covered by the Company.  If insurance for loss of earnings due to illness has not been entered into, the continuation of pay shall be determined by Art. 324a of the Swiss Code of Obligations.

 

(c)The Company shall take out accident insurance for the employee according to Swiss law and to the terms usually offered by the Company.

 

3.4Vacation.  The Executive shall be entitled to 5 weeks paid vacation (25 working days) per calendar year, in addition to bank and other public holidays.  If the Executive’s employment begins or terminates during a calendar year, his entitlement to holidays shall be pro-rata temporis.  The Company shall be entitled to require the Executive to take holiday at its request and may also refuse to allow him to take holiday in circumstances where it would be inconvenient to the business.  The Company reserves the right to refuse holiday up to and including the day before the holiday is due to be taken.  In the event the Company exercises such right to refuse holiday, the Company will reimburse the Executive for all prepaid, nonrefundable costs or penalties associated with the cancellation.

 

3.5Expenses.  The Executive shall be entitled to receive prompt reimbursement for all reasonable business-related expenses incurred by the Executive in performing his duties under this Agreement.  Reimbursement of the Executive for such 

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expenses will be made upon presentation to the Company of expense vouchers that are in sufficient detail to identify the nature of the expense, the amount of the expense, the date the expense was incurred and to whom payment was made to incur the expense, all in accordance with the expense reimbursement practices, policies and procedures of the Company.   

 

3.6Key Man Insurance.  The Company shall be entitled to obtain a “key man” or similar life or disability insurance policy on the Executive, and neither the Executive nor any of his family members, heirs or beneficiaries shall be entitled to the proceeds thereof.  Such insurance shall be available to offset any payments due to the Executive in accordance with Section 5.1 of this Agreement due to his death or Disability. 

 

IV.TERMINATION OF EMPLOYMENT

 

4.1Termination by Mutual Agreement.  The Executive’s employment may be terminated at any time during the Term by mutual written agreement of the Company and the Executive. 

 

4.2Death.  The Executive’s employment hereunder shall terminate upon his death.

 

4.3Disability.  In the event the Executive incurs a Disability, the Executive may terminate his employment during the Term by delivering a Notice of Termination (as defined in Section 4.7) to the Company 30 days in advance of the date of termination.  

 

4.4Good Reason; Cause. The Executive may terminate his employment at any time during the Term for Good Reason, the Company may terminate the Executive’s employment at any time during the Term for Cause, in each case by delivering a Notice of Termination to the other party 30 days in advance of the date of termination.  

 

4.5Termination without Cause by the Company. The Company may terminate the Executive’s employment at any time during the Term without Cause by delivering to the Executive a Notice of Termination 6 months in advance of the date of termination; provided that as part of such notice the Company may request that the Executive immediately tender the resignations contemplated by Section 4.8 and otherwise cease performing his duties hereunder.  The date of termination shall be the date set forth in the Notice of Termination.  

 

4.6Termination without Good Reason by the Executive.  The Executive may voluntarily terminate his employment at any time during the Term by delivering to the Company a Notice of Termination 6 months in advance of the date of termination (a “Voluntary Termination”).  For purposes of this Agreement, a Voluntary Termination shall not include a termination of the Executive’s employment by reason of death or Disability or for Good Reason, but shall include voluntary termination upon retirement in accordance with the Company’s retirement policies and/or applicable law. A Voluntary Termination shall not be considered a breach or other violation of this Agreement.

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4.7Notice of Termination.  Any termination of employment under this Agreement by the Company or the Executive requiring a notice of termination shall require delivery of a written notice by one party to the other party (a “Notice of Termination”). A Notice of Termination must indicate the specific termination provision of this Agreement relied upon and the date of termination. The date of termination specified in the Notice of Termination shall comply with the time periods required under this Article IV, and may in no event be earlier than the date such Notice of Termination is delivered to or received by the party getting the notice.  No Notice of Termination under Section 4.4 shall be effective until the applicable cure period, if any, shall have expired without the Company or the Executive, respectively, having corrected the event or events subject to cure to the reasonable satisfaction of the other party.  The terms “termination” and “termination of employment,” as used herein are intended to mean a termination of employment which constitutes a “separation from service” under Section 409A.

 

4.8Resignations.  Upon ceasing to be an employee of the Company for any reason, or earlier upon request by the Company pursuant to Section 4.5, the Executive agrees to immediately tender written resignations to the Company with respect to all officer and director positions he may hold at that time with any member of the Company Group.

 

V.PAYMENTS ON TERMINATION

 

5.1Death; Disability; Resignation for Good Reason; Termination without Cause.  If at any time during the Term the Executive’s employment with the Company is terminated due to his death, resignation for Disability or Good Reason or termination by the Company without Cause, the Executive shall be entitled to the payment and benefits set forth in Sections 3 or 4 of the Severance Agreement, as and to the extent applicable, and subject to all terms, conditions and requirements set forth in the Severance Agreement.

 

5.2Termination for Cause; Voluntary Termination.  If at any time during the Term the Executive’s employment with the Company is terminated by the Company for Cause or due to a Voluntary Termination, the Executive shall be entitled to only the following:

 

(a)any unpaid base salary and accrued unpaid vacation then owing through the date of termination, which amounts shall be paid to the Executive within 30 days of the date of termination.  

 

(b)whatever rights, if any, that are available to the Executive upon such a termination pursuant to the Plans or any award documents related to any stock-based compensation such as stock options, stock appreciation rights or restricted stock grants. This Agreement does not grant any greater rights with respect to such items than provided for in the Plans or the award documents in the event of any termination for Cause or a Voluntary Termination.  

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5.3Social Security.  The Executive and the Company shall each pay half of the contributions which are owed as a matter of law for AHV (Old Age and Survivors’ Insurance), IV (Invalidity Insurance), EO (Loss of Earnings) and ALV (Unemployment Insurance).  The Executive’s contributions shall be deducted by the Company from his gross salary. 

 

VI.PROTECTIVE PROVISIONS

 

6.1Noncompetition.  

 

(a) Without the prior written consent of the Board (which may be withheld in the Board’s sole discretion), so long as the Executive is an employee of the Company or any other member of the Company Group, the Executive agrees that he shall not anywhere in the Prohibited Area, for his own account or the benefit of any other, engage or participate in or assist or otherwise be connected with a Competing Business.  For the avoidance of doubt, the Executive understands that this Section 6.1 prohibits the Executive from acting for himself or as an officer, employee, manager, operator, principal, owner, partner, shareholder, advisor, consultant of, or lender to, any individual or other Person that is engaged or participates in or carries out a Competing Business or is actively planning or preparing to enter into a Competing Business.  The parties agree that such prohibition shall not apply to the Executive’s passive ownership of not more than 5% of a publicly-traded company.  In the case of any violation of this non-competition clause, the Executive shall pay to the Company liquidated damages in the amount of CHF 29,469 for each instance of violation.  The payment of liquidated damages shall not discharge the Executive from observing this non-competition covenant.  In addition to the payment of liquidated damages and further damages incurred by the Company, the Company shall have the right to request the termination of any of the Executive’s activities which violate this non-competition covenant.

(b)In addition to the obligations described in Section 6.1(a) hereof (which obligations apply with respect to the period during which Executive is an employee of the Company), Executive shall also remain bound after the date hereof by the terms of the Non-Competition Agreement.  In connection with the foregoing and notwithstanding anything in this Agreement to the contrary, the Executive, the Company and AG expressly confirm their prior agreement as of November 20, 2014, (i) all rights and obligations of AG under the Non-Competition Agreement have been assigned (and Executive consents to such assignment) to the Company, (ii) the Non-Competition Agreement remains in full force and effect, with the “Employment Relationship” referenced in the Non-Competition Agreement being deemed to have continued (and to be uninterrupted) for purposes of the Non-Competition Agreement following the transition as of November 20, 2014of the Executive’s employment from AG to the Company, (iii) the Company shall have been deemed to have satisfied all payment obligations under Section 3 of the Non-Competition Agreement (which 

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amounts were previously paid by AG), and (iv) in the event that Executive’s employment hereunder is terminated by the Company without Cause or as a result of Executive’s resignation for Good Reason, the Company shall have been deemed to have satisfied all payment and remuneration obligations referenced in Section 5 of the Non-Competition Agreement and the “Option” referenced in the Non-Competition Agreement shall be deemed to be exercised and fully paid-up thereunder.  

6.2No Solicitation or Interference.  So long as the Executive is an employee of the Company or any other member of the Company Group (other than while an employee acting solely for the express benefit of the Company Group) and for a twelve-month period thereafter, the Executive shall not, whether for his own account or for the account or benefit of any other Person, throughout the Prohibited Area: 

 

(a)request, induce or attempt to influence (i) any customer of any member of the Company Group to limit, curtail, cancel or terminate any business it transacts with, or products or services it receives from or sells to, or (ii) any Person employed by (or otherwise engaged in providing services for or on behalf of) any member of the Company Group to limit, curtail, cancel or terminate any employment, consulting or other service arrangement, with any member of the Company Group. Such prohibition shall expressly extend to any hiring or enticing away (or any attempt to hire or entice away) any employee or consultant of the Company Group.

 

(b)solicit from or sell to any customer any products or services that any member of the Company Group provides or is capable of providing to such customer and that are the same as or substantially similar to the products or services that any member of the Company Group, sold or provided while the Executive was employed with, or providing services to, any member of the Company Group.

 

(c)contact or solicit any customer for the purpose of discussing (i) services or products that are competitive with and the same or closely similar to those offered by any member of the Company Group or (ii) any past or present business of any member of the Company Group.

 

(d)request, induce or attempt to influence any supplier, distributor or other Person with which any member of the Company Group has a business relationship or to limit, curtail, cancel or terminate any business it transacts with any member of the Company Group.

 

(e)otherwise interfere with the relationship of any member of the Company Group with any Person which is, or within one-year prior to the Executive’s date of termination was, doing business with, employed by or otherwise engaged in performing services for, any member of the Company Group.

 

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6.3Confidential Information.  During the period of the Executive’s employment with the Company or any member of the Company Group and at all times thereafter, the Executive shall hold in secrecy for the Company all Confidential Information that may come to his knowledge, may have come to his attention or may have come into his possession or control while employed by the Company (or otherwise performing services for any member of the Company Group).  Notwithstanding the preceding sentence, the Executive shall not be required to maintain the confidentiality of any Confidential Information which (a) is or becomes available to the public or others in the industry generally (other than as a result of disclosure or inappropriate use, or caused, by the Executive in violation of this Section 6.3) or (b) the Executive is compelled to disclose under any applicable laws, regulations or directives of any government agency, tribunal or authority having jurisdiction in the matter or under subpoena.  Except as expressly required in the performance of his duties to the Company under this Agreement, the Executive shall not use for his own benefit or disclose (or permit or cause the disclosure of) to any Person, directly or indirectly, any Confidential Information unless such use or disclosure has been specifically authorized in writing by the Company in advance.  During the Executive’s employment and as necessary to perform his duties under Section 1.1, the Company will provide and grant the Executive access to the Confidential Information.  The Executive recognizes that any Confidential Information is of a highly competitive value, will include Confidential Information not previously provided the Executive and that the Confidential Information could be used to the competitive and financial detriment of any member of the Company Group if misused or disclosed by the Executive.  The Company promises to provide access to the Confidential Information only in exchange for the Executive’s promises contained herein, expressly including the covenants in Sections 6.1, 6.2 and 6.4. 

 

6.4Inventions.

 

(a)The Executive shall promptly and fully disclose to the Company any and all ideas, improvements, discoveries and inventions, whether or not they are believed to be patentable (“Inventions”), that the Executive conceives of or first actually reduces to practice, either solely or jointly with others, during the Executive’s employment with the Company or any other member of the Company Group, and that relate to the business now or thereafter carried on or contemplated by any member of the Company Group or that result from any work performed by the Executive for any member of the Company Group.

 

(b)The Executive acknowledges and agrees that all Inventions shall be the sole and exclusive property of the Company (or member of the Company Group) and are hereby assigned to the Company (or applicable member of the Company Group).  During the term of the Executive’s employment with the Company (or any other member of the Company Group) and thereafter, whenever requested to do so by the Company, the Executive shall take such action as may be requested to execute and assign any and all applications, assignments and other instruments that the Company shall deem necessary or appropriate in order to apply for and obtain Letters Patent of the United States and/or of any foreign 

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countries for such Inventions and in order to assign and convey to the Company (or any other member of the Company Group) or their nominees the sole and exclusive right, title and interest in and to such Inventions. 

 

(c)The Company acknowledges and agrees that the provisions of this Section 6.4 do not apply to an Invention: (i) for which no equipment, supplies, or facility of any member of the Company Group or Confidential Information was used; (ii) that was developed entirely on the Executive’s own time and does not involve the use of Confidential Information; (iii) that does not relate directly to the business of any member of the Company Group or to the actual or demonstrably anticipated research or development of any member of the Company Group; and (iv) that does not result from any work performed by the Executive for any member of the Company Group.

 

6.5Return of Documents and Property.  Upon termination of the Executive’s employment for any reason, the Executive (or his heirs or personal representatives) shall immediately deliver to the Company (a) all documents and materials containing Confidential Information (including without limitation any “soft” copies or computerized or electronic versions thereof) or otherwise containing information relating to the business and affairs of any member of the Company Group (whether or not confidential), and (b) all other documents, materials and other property belonging to any member of the Company Group that are in the possession or under the control of the Executive.  

 

6.6Reasonableness; Remedies.  The Executive acknowledges that each of the restrictions set forth in this Article VI are reasonable and necessary for the protection of the Company’s business and opportunities (and those of the Company Group) and that a breach of any of the covenants contained in this Article VI would result in material irreparable injury to the Company and the other members of the Company Group for which there is no adequate remedy at law and that it will not be possible to measure damages for such injuries precisely.  Accordingly, the Company and any member of the Company Group shall be entitled to the remedies of injunction and specific performance, or either of such remedies, as well as all other remedies to which any member of the Company Group may be entitled, at law, in equity or otherwise, without the need for the posting of a bond or by the posting of the minimum bond that may otherwise be required by law or court order. 

 

6.7Extension; Survival.  The Executive and the Company agree that the time periods identified in this Article VI will be stayed, and the Company’s obligation to make any payments or provide any benefits under Article V shall be subject to a right of set-off, during the period of any breach or violation by the Executive of the covenants contained herein.  The parties further agree that this Article VI shall survive the termination or expiration of this Agreement for any reason.  The Executive acknowledges that his agreement to each of the provisions of this Article VI is fundamental to the Company’s willingness to enter into this Agreement and for it to provide for the severance and other benefits described in Article V, none of which the Company was required to do prior to the date hereof.  Further, it is the express intent and desire of the 

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parties for each provision of this Article VI to be enforced to the fullest extent permitted by law.  If any part of this Article VI, or any provision hereof, is deemed illegal, void, unenforceable or overly broad (including as to time, scope and geography), the parties express desire is that such provision be reformed to the fullest extent possible to ensure its enforceability or if such reformation is deemed impossible then such provision shall be severed from this Agreement, but the remainder of this Agreement (expressly including the other provisions of this Article VI) shall remain in full force and effect.   

 

VII.MISCELLANEOUS

 

7.1Notices.  Any notice required or permitted under this Agreement shall be given in writing and shall be deemed to have been effectively made or given if personally delivered, or if sent via recognized overnight delivery service (e.g., FedEx, UPS, or DHL), all courier charges prepaid, or sent via confirmed e-mail or facsimile to the other party at its address set forth below in this Section 7.1, or at such other address as such party may designate by written notice to the other party hereto.  Any effective notice hereunder shall be deemed given on the date personally delivered, or one business day after it is sent via overnight delivery service or via confirmed e-mail or facsimile, as the case may be, to the following address:

 

If to the Company:

 

Orthofix International N.V.

Attn: General Counsel

3451 Plano Parkway
Lewisville, Texas 75056

Facsimile:  (214) 937-3096

E-mail: brentalldredge@orthofix.com 

 

With a copy, which shall not constitute notice, to: 

 

Hogan Lovells US LLP

555 Thirteenth Street, N.W.

Washington, D.C. 20004

Facsimile: (202) 637-5910

Email: joseph.gilligan@hoganlovells.com

 

If to the Executive:

 

Davide Bianchi

Chemin du Mont Blanc 4   

1272 Genolier,

Switzerland

 

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7.2Legal Fees. 

 

(a)The Company shall pay all reasonable legal fees and expenses of the Executive’s counsel in connection with the preparation and negotiation of this Agreement.  

 

(b)Any and all disputes arising from the employment relationship between the Company and the Executive, shall be settled exclusively by arbitration to be governed by ICC Rules (International Chamber of Commerce) and resolved by three (3) arbitrators appointed as follows: The Company shall jointly appoint one (1) arbitrator, the executive shall appoint one (1) arbitrator and the third arbitrator shall be appointed by the already appointed arbitrators.  The place of arbitration shall be Zug, Switzerland, and shall be conducted in the English language. 

 

7.3Severability.  If an arbitrator or a court of competent jurisdiction determines that any term or provision hereof is void, invalid or otherwise unenforceable, (a) the remaining terms and provisions hereof shall be unimpaired and (b) such arbitrator or court shall replace such void, invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the void, invalid or unenforceable term or provision. For the avoidance of doubt, the parties expressly intend that this provision extend to Article VI of this Agreement.

 

7.4Entire Agreement; Termination of Existing Employment Agreement.  This Agreement shall supersede the Existing Employment Agreement as of the Effective Date, and from and after such Effective Date the Existing Employment Agreement shall be of no further force or effect.  Executive’s service as an officer of the Company (including as its President, Extremity Fixation) shall be uninterrupted by the termination of the Existing Employment Agreement and the effectiveness of this Agreement (i.e., Executive will remain seamlessly employed by the Company), and such termination of the Existing Employment Agreement and effectiveness of this Agreement shall not cause any severance payment or other termination-related payment or right to accrue pursuant to the Existing Employment Agreement.  For the avoidance of doubt, any accrued vacation that Executive has earned under the Existing Employment Agreement shall remain accrued under this Agreement, and Executive’s service to the Company under the Plans shall be deemed uninterrupted.  Subject to the foregoing, this Agreement, the Severance Agreement and the Non-Competition Agreement represents the entire agreement of the parties with respect to the subject matter hereof and shall supersede any and all previous contracts, arrangements or understandings between the Company, AG and the Executive relating to the Executive’s employment by the Company.  Nothing in this Agreement shall modify or alter any indemnity agreement between the Company and the Executive or alter or impair any of the Executive’s rights under the Plans or related award agreements.  In the event of any conflict between this Agreement and any other agreement between the Executive and the Company (or any other member of the Company Group), this Agreement shall control. 

 

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7.5Amendment; Modification.  This Agreement may be amended at any time only by mutual written agreement of the Executive and the Company; provided, however, that, notwithstanding any other provision of this Agreement or the Plans (or any award documents under the Plans), the Company may reform this Agreement, the Plans (or any award documents under the Plans) or any provision thereof (including, without limitation, an amendment instituting a six-month waiting period before a distribution) or otherwise as contemplated by Section 7.16 below. 

 

7.6Withholding.  The Company shall be entitled to withhold, deduct or collect or cause to be withheld, deducted or collected from payment any amount of withholding taxes required by law, statutory deductions or collections with respect to payments made to the Executive in connection with his employment, termination (including Article V) or his rights hereunder, including as it relates to stock-based compensation.

 

7.7Representations. 

 

(a)The Executive hereby represents and warrants to the Company that (i) the execution, delivery and performance of this Agreement by the Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which he is bound, and (ii) upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of the Executive, enforceable in accordance with its terms.  

 

(b)The Company hereby represents and warrants to the Executive that (i) the execution, delivery and performance of this Agreement by the Company do not and shall not conflict with, breach, violate or cause a default under any material contract, agreement, instrument, order, judgment or decree to which the Company is a party or by which it is bound and (ii) upon the execution and delivery of this Agreement by the Executive, this Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms.

 

7.8Governing Law; Jurisdiction.  This Agreement is subject to Swiss law.  Except as otherwise provided in Section 7.2, all actions or proceedings arising out of this Agreement shall exclusively be heard and determined in courts in Zug, Switzerland having appropriate jurisdiction.  The parties expressly consent to the exclusive jurisdiction of such courts in any such action or proceeding and waive any objection to venue laid therein or any claim for forum nonconveniens. 

 

7.9Successors.  This Agreement shall be binding upon and inure to the benefit of, and shall be enforceable by the Executive, the Company, and their respective heirs, executors, administrators, legal representatives, successors, and assigns.  In the event of any assignment of this Agreement by the Company, the Company shall remain 

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primarily liable for its obligations hereunder. The Executive expressly acknowledges that the members of the Company Group (and their successors and assigns) are third-party beneficiaries of this Agreement and may enforce this Agreement on behalf of themselves or the Company.  Both parties agree that there are no third-party beneficiaries to this Agreement other than as expressly set forth in this Section 7.9. 

 

7.10Nonassignability.  Neither this Agreement nor any right or interest hereunder shall be assignable by the Executive, his beneficiaries, dependents or legal representatives without the Company’s prior written consent; provided, however, that nothing in this Section 7.10 shall preclude (a) the Executive from designating a beneficiary to receive any benefit payable hereunder upon his death or (b) the executors, administrators or other legal representatives of the Executive or his estate from assigning any rights hereunder to the Person(s) entitled thereto.

 

7.11No Attachment.  Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation in favor of any third party, or to execution, attachment, levy or similar process or assignment by operation of law in favor of any third party, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect.

 

7.12Waiver.  No term or condition of this Agreement shall be deemed to have been waived, nor there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

7.13Construction.  The headings of articles or sections herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.  References to days found herein shall be actual calendar days and not business days unless expressly provided otherwise.

 

7.14Counterparts.  This Agreement may be executed by any of the parties hereto in counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

 

7.15Effectiveness. This Agreement shall be effective as of the Effective Date when signed by the Executive and the Company.

 

7.16Code Section 409A.

 

(a)Although the parties hereto do not expect payments hereunder to be subject to U.S. income taxation, in the event such U.S. income taxation were to apply to any payments hereunder, it is the intent of the parties that payments and 

14

  

 

 

benefits under this Agreement comply with Section 409A and, accordingly, to interpret, to the maximum extent permitted, this Agreement to be in compliance therewith.  If the Executive notifies the Company in writing  (with specificity as to the reason therefore) that the Executive believes that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Section 409A and the Company concurs with such belief or the Company (without any obligation whatsoever to do so) independently makes such determination, the parties shall, in good faith, reform such provision to try to comply with Code Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A.  To the extent that any provision hereof is modified by the parties to try to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent of the applicable provision without violating the provisions of Code Section 409A.  Notwithstanding the foregoing, the Company shall not be required to assume any economic burden in connection therewith. 

 

(b)If the Executive is deemed on the date of “separation from service” to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B), then, with regard to any payment or the provision of any benefit that is specified as subject to this Section, such payment or benefit shall, if required to avoid the imposition of additional tax or interest under Section 409A, be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Executive, and (B) the date of the Executive’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 7.16 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.  If a payment is to be made promptly after a date, it shall be made within sixty (60) days thereafter.  

 

(c)Any expense reimbursement under this Agreement shall be made promptly upon Executive’s presentation to the Company of evidence of the fees and expenses incurred by the Executive and in all events on or before the last day of the taxable year following the taxable year in which such expense was incurred by the Executive, and no such reimbursement or the amount of expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year.

 

7.17Survival.  Articles VI and VII shall survive the termination or expiration of this Agreement for any reason.    

 

(Remainder of this page intentionally left blank)

15

  

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

 

 

		
	
 

ORTHOFIX INTERNATIONAL N.V.

 

 

 

/s/ Bradley R. Mason

Bradley R. Mason

Chief Executive Officer
	
 

EXECUTIVE

 

 

 

/s/ Davide Bianchi

Davide Bianchi

an Individual

 

	
 
	
 

	
 

 
	
 

	
 

ORTHOFIX AG

 

 

 

/s/ Armin L. Landtwing

Name:Armin L. Landtwing

Title:  _Verwaltungsrat_________________

	
 

 

 

16

  

 

 

 

 

EXHIBIT A

Definitions

For purposes of this Agreement, the following capitalized terms have the meanings set forth below: 

“Board” shall mean the Board of Directors of the Company. Any obligation of the Board other than termination for Cause under this Agreement may be delegated to an appropriate committee of the Board, including the Compensation Committee, and references to the Board herein shall be references to any such committee, as appropriate.

“Cause” shall have the meaning set forth in the Severance Agreement.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Company Group” shall mean the Company, together with its direct and indirect subsidiaries.

“Compensation Committee” shall mean the Compensation Committee of the Board.

“Competing Business” means any business or activity that (i) competes with any member of the Company Group for which the Executive performed services or the Executive was involved in for purposes of making strategic or other material business decisions and involves (ii) (A) the same or substantially similar types of products or services (individually or collectively) manufactured, marketed or sold by any member of the Company Group during Term or (B) products or services so similar in nature to that of any member of the Company Group during Term (or that any member of the Company Group will soon thereafter offer) that they would be reasonably likely to displace substantial business opportunities or customers of the Company Group.

“Confidential Information” shall include Trade Secrets and includes information acquired by the Executive in the course and scope of his activities under this Agreement, including information acquired from third parties, that (i) is not generally known or disseminated outside the Company Group (such as non-public information), (ii) is designated or marked by any member of the Company Group as “confidential” or reasonably should be considered confidential or proprietary, or (iii) any member of the Company Group indicates through its policies, procedures, or other instructions should not be disclosed to anyone outside the Company Group.  Without limiting the foregoing definitions, some examples of Confidential Information under this Agreement include (a) matters of a technical nature, such as scientific, trade or engineering secrets, “know-how”, formulae, secret processes, inventions, and research and development plans or projects regarding existing and prospective customers and products or services, (b) information about costs, profits, markets, sales, customer lists, customer needs, customer preferences and customer purchasing histories, supplier lists, internal financial data, personnel evaluations, non-public information about medical devices or products of any member of the Company Group (including future plans about them), information and material provided by third parties in confidence and/or with nondisclosure restrictions, computer access passwords, 

  

 

 

and internal market studies or surveys and (c) and any other information or matters of a similar nature.

“Disability” shall have the meaning set forth in the Severance Agreement.  

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Good Reason” shall have the meaning set forth in the Severance Agreement.

 

“Person” shall include individuals or entities such as corporations, partnerships, companies, firms, business organizations or enterprises, and governmental or quasi-governmental bodies. 

“Prohibited Area” means North America, South America and the European Union, which Prohibited Area the parties have agreed to as a result of the fact that those are the geographic areas in which the members of the Company Group conduct a preponderance of their business and in which the Executive provides substantive services to the benefit of the Company Group.

“Section 409A” shall mean Section 409A of the Code and regulations promulgated thereunder (and any similar or successor federal or state statute or regulations).

“Trade Secrets” are information of special value, not generally known to the public that any member of the Company Group has taken steps to maintain as secret from Persons other than those selected by any member of the Company Group.  

     

 

 

EXHIBIT B

Non-Competition Agreement

			

     

 

 

			
	
OPZIONE PER UN PATTO DI NON CONCORRENZA

 

Tra

 

Orthofix AG

c/o ALLconsultServices

Bundesstrasse 3

CH-6304 Zug

 

E

 

Il Mr. Davide Bianchi, residente in Ch. Du Mont Blanc 4, 1272 Genolier, Vaud- Svizzera (di seguito “Dirigente”)

 

Di seguito denominate “le Parti”

Premesso che

 

i)La Società e il Gruppo cui essa appartiene (con il termine “Gruppo” si intende includere la Società, la sua controllante e tutte le società dalle stesse direttamente o indirettamente controllate o partecipate) ricoprono una posizione leader a livello mondiale nel settore delle Tecnologie Medicali. In particolare il Gruppo si occupa di sviluppo, della produzione, e della vendita di prodotti nei seguenti segmenti del mercato: tutti i prodotti alla gamma di « Extremity Fixation »

ii)il Dirigente è stato assunto dalla Società dal giorno 22 July 2013 con la posizione di Presidente Internazionale della fissazione esterna (di seguito il “Rapporto di Lavoro”;

iii)nel corso del Rapporto di Lavoro il Dirigente verrà a conoscenza di informazioni riservate riguardanti la 

Società e il Gruppo, nonché i prodotti della Società e del Gruppo, che rivestono primaria importanza per lo svolgimento dell’attività di impresa della Società; 

iv)la Società e il Gruppo intendono tutelare i loro interessi in relazione alle attività e agli incarichi che il Dirigente potrebbe svolgere in concorrenza con la Società successivamente alla cessazione del Rapporto di Lavoro.

 

 
	
 
	
OPTION OF NON-COMPETITION AGREEMENT

 

Between

 

Orthofix AG

c/o ALLconsultServices

Bundesstrasse 3

CH-6304 Zug

 

And

 

Il Mr. Davide Bianchi, residente in Ch. Du Mont Blanc 4, 1272 Genolier, Vaud- Svizzera (below “Manager”)

 

Hereinafter mentioned as  “Parties”

WHEREAS

 

i)The Company and the Group to which it belongs, (Group intended to include the Company, its holding company, and all companies directly or indirectly controlled by the same or associated), cover a worldwide leading position in the field of Medical Technologies. In particular, the Group is engaged in the development, production and sales of products in the following market sector: all products in the Product Range “Extremity Fixation”

ii)The Manager has been employed by the Company since 22 July 2013, for the position of President of International Extremity Fixation (hereinafter  “The Employment Relationship”);

iii)In the course of the Employment Relationship Manager will be aware of confidential information regarding the Company and the Group, as well as the products of the Company and the Group, which are of major importance for the conduct of the business of the Company;

 

iv)The Company and the Group wish to protect their interests in relation to  the activities and the tasks that the Manager could carry out in competition with the Company subsequent to the termination of the Employment Relationship .

 

 

	
Ciò premesso, le Parti convengono quanto segue:

 

1)OPZIONE- EFFICACIA E CONDIZIONE SOSPENSIVA:

1.1.Il Dirigente concede alla Società un’opzione per la conclusione di un patto di non concorrenza nei termini e alle condizioni specificati al successivo paragrafo 4 (qui di seguito l’Opzione).

1.2.La Società accetta l’Opzione e si impegna ad esercitarla nei termini e alle condizioni specificati al successivo paragrafo 2.

 
	
 
	
Accordingly the Parties agree as follows:

 

1)OPTION- EFFECTIVENESS AND SUSPENSION CONDITION:

1.1.The Manager, grants to the Company an option for the conclusion of a non-competition agreement, under  the terms and conditions  specified in the following paragraph 4 (hereinafter “the Option”);

1.2.The Company accepts and agrees to exercise    the option according to the terms and condition specified in paragraph 2.

 

	
2)ESERCIZIO DELL’OPZIONE

2.1 La Società potrà esercitare l’Opzione in ogni momento nel corso del Rapporto di Lavoro.

2.2. La volontà della Società di esercitare l’Opzione e, di conseguenza, di concludere il patto di non concorrenza di cui al successivo paragrafo 4, dovrà essere comunicata ad Dirigente per iscritto.

 

 
	
 
	
2)OPTION EXERCISE

2.1 The Company may exercise  the option at  any time during the Employment Relationship;

2.2. The intention of the Company to exercise  the Option and, therefore, to conclude the non-competition agreement, referred to in paragraph 4, shall be notified to the manager in written form.

 

 

     

 

 

			
	
3)CORRISPETTIVO PER L’OPZIONE

 

       A titolo di corrispettivo per la concessione dell’Opzione  la Società Le corrisponderà un importo lordo pari a Euro 

5000,--, in tre tranche di uguale importo e unitamente alle competenze dei tre mesi successivi alla sottoscrizione della presente Opzione. Resta inteso e convenuto che il predetto importo si intende già comprensivo di ogni incidenza su tutti gli istituti contrattuali e di legge,  e che non sarà considerato retribuzione utile ai fini del calcolo del Trattamento di Fine Rapporto e degli istituti ad esso collegati.

 

 
	
 
	
3)PAYMENT AGREEMENT 

 

For the grant of the Option, the Company will correspond a gross amount of € 5,000.00, in three installments each of the same amount and together with the payment of three months’ remuneration after the signature of the present otion. It is agreed that said  amount already includes any effect on  any contractual and legal obligations, and that compensation will not be considered useful for the calculating severance indemnities and institutions connected to it.

 

 

     

 

 

			
	
4)REGOLAMENTAZIONE DEL PATTO DI NON CONCORRENZA

4.1 Qualora la Società eserciti l’Opzione secondo i termini e alle condizioni di cui al precedente paragrafo 2, per un periodo di 12 mesi (dodici) decorrente dalla data di effettiva cessazione del Rapporto di Lavoro (a prescindere dalle ragioni di tale cessazione) il Dirigente si impegna a non prestare la sua opera, direttamente o indirettamente, in favore di soggetti terzi, né a svolgere attività in qualità di titolare, socio, dipendente, lavoratore autonomo o agente, nel campo dei Orthofix prodotti alla gamma di « Extremity Fixation »su tutto il territorio dell’Unione Europea e degli Stati Uniti d’America.

 

4.2. Il Dirigente si impegna inoltre a non distrarre e/o stornare clienti con i quali ella abbia trattato, direttamente o indirettamente, negli ultimi tre anni del Rapporto di Lavoro. Il Dirigente si asterrà altresì dal distrarre e/o stornare dipendenti o altri collaboratori della Società, nonché dall’indurli a cessare il loro rapporto di collaborazione con la Società stessa.

 

4.3. Al fine di consentire alla Società un adeguato controllo sul rispetto del patto di non concorrenza da parte del Dirigente, quest’ultimo si impegna a fornire alla Società tutte le informazioni rilevanti riguardanti le attività lavorative e 

professionali che la stessa svolgerà durante il periodo di validità del patto di non concorrenza. Tali informazioni verranno comunicate per iscritto e anteriormente all’effettivo svolgimento delle predette attività. Il Dirigente si impegna altresì ad informare anticipatamente il proprio nuovo datore di lavoro e/o committente dell’esistenza del presente patto di non concorrenza, del quale il Dirigente è autorizzato a fornire copia.

 

4.4. Ogni singola violazione, da parte del Dirigente, degli obblighi di non concorrenza di cui al presente paragrafo 4, comporterà il pagamento, da parte del Dirigente stesso, di una penale pari ad Euro 150.000 senza alcun pregiudizio per il diritto della Società al risarcimento dell’eventuale maggior danno. Al verificarsi della violazione, e fermo restando il pagamento della penale di cui sopra, la Società avrà la facoltà di risolvere il patto di non concorrenza per inadempimento o di continuare a chiederne il corretto adempimento da parte del Dirigente. In questo caso è fatto salvo il diritto del Dirigente al corrispettivo ancora eventualmente dovuto ai sensi del successivo paragrafo 5.1. In caso di risoluzione, il Dirigente, oltre a corrispondere la penale di cui sopra, sarà tenuta a restituire alla Società il corrispettivo eventualmente già percepito ai sensi di quanto previsto al successivo paragrafo 5.1.

 

4.5 Resta inteso che la Società potrà decidere di non esercitare l’Opzione. In questo caso, il patto di non concorrenza come regolato al presente paragrafo 4 non entrerà in vigore e non produrrà nessun effetto, e al dirigente non spetterà alcun corrispettivo ai sensi di quanto previsto al successivo paragrafo 5.1.

 

 
	
 
	
4)REGULATION OF NON-COMPETITION AGREEMENT

4.1. If the Company exercises the Option in accordance with the terms and conditions referred to paragraph in 2 above, for a period of 12 months (twelve months) from the effective date of termination  of the Employment Relationship (independently from  the reason of termination  of the employment relation) the Manager  agrees not to provide his work, directly or indirectly, in favor of third parties, or engage as owner, partner, employee, self-employed or agent, in the field of the Orthofix Portfolio “Extremity Fixation” on the whole territory of the European Union and the United States of America.

 

4.2  The Manager  agrees not to distract  or divert a customer to whom he has dealt with, directly or indirectly, in the last three years of the Employment Relationship.. The Manager will also refrain from distracting and/or divert employees or other employees of the Company and from inducing them to cease their relationship with the Company.

 

4.3. In order to allow the Company an adequate monitoring compliance with the non-competition agreement by the Manager, the latter undertakes to provide the Company with all relevant information concerning the business and professional activities that take place during the same period of validity of the non-competition agreement.

These informations have to be communicated in written form and prior to  the actual  performance  of said activities. The Manager has to inform in advance his new employer of the existence of this non-competition agreement. The Manager is authorized to provide a copy of this contract to his employer.

 

4.4. For each violation incurred by the Manager, of this non-compete option, according to what referred to in this paragraph 4, the Manager will pay to the Company, a penalty of Euros 150,000.00 without prejudice to compensation for further damages to the Company. Upon occurrence of the violation, and without prejudice of payment of the abovementioned penalty, The Company will have the right to terminate the non-competition agreement for non-performance or to continue to ask for the proper performance by the Manager.. In this case, the Manager is entitled to the payment, as defined in paragraph 5.1.. 

In case of termination of the contract, the Manager will have to pay the penalty, and will have to return back to the Company the amount he has already received under the provisions of paragraph 5.1.

 

4.5. It is understood that the Company may decide not to exercise the option. In this case, the non-competition agreement, as regulated in this Paragraph 4, will not produce any effect, and the Manager will  not receive any payment, as defined in paragraph 5.1.

 

     

 

 

			
	
 

5)CORRISPETTIVO PER IL PATTO DI NON CONCORRENZA 

5.1 Tenuto conto del background professionale del Dirigente, le Parti convengono che un corrispettivo per il predetto patto di non concorrenza pari al 70% della retribuzione fissa annua lorda in vigore al momento della cessazione del Rapporto di lavoro, sia equo e ragionevole.

 

5.2. Il corrispettivo di cui al presente paragrafo 5.1. verrà corrisposto in due rate di pari importo come segue:

- il 50% entro e non oltre sette mesi dalla data di entrata in vigore del patto;

- il residuo 50% entro e non oltre il mese successivo alla data di termine del patto.

 

 
	
 
	
 

5)PAYMENT FOR NON-

COMPETITION AGREEMENT

5.1. According to the professional background of the Manager, the Parties agree that a remuneration for the non-competition agreement of 70% of annual gross salary in force at the time of the termination of the employment relationship, is fair  and reasonable.

 

5.2. The remuneration, referred to in this paragraph 5.1., will be paid in two installments  as follows:

- 50% no later than seven months from the date of entry into force of the agreement;

- The remaining 50% within and no later than the month following the date of termination of the agreement.

 

	
 
	
 
	
 

	
Date:  November 26, 2013
	
 
	
Date:  November 18, 2013

	
 

ORTHOFIX AG

 

 

/s/ Armin L. Landtwing
	
 
	
/s/ Davide Bianchi

	
Armin L. Landtwing    

Verwaltungsrat                     
	
 
	
Davide Bianchi

	
 
	
 
	
 

	
 
	
 
	
 

	
 

/s/ Brad Mason
	
 
	
 

	
Brad Mason

CEO Orthofix InternationalEX-10.1

 Exhibit 10.1 

DONNELLEY FINANCIAL SOLUTIONS, INC. 
 2016 PERFORMANCE
INCENTIVE PLAN 
 (as adopted by the Board of Directors on [●], 2016) 
  

	I.	General 

 1. Plan. To provide incentives to officers, other employees and other
persons providing services to Donnelley Financial Solutions, Inc. (the “Company”) through rewards based upon the ownership or performance of the common stock, par value $0.01 per share, of the Company (“common stock”) or other
performance measures, the Committee hereinafter designated may grant cash or bonus awards, stock options, stock appreciation rights (“SARs”), restricted stock, stock units or combinations thereof, to eligible participants, on the terms and
subject to the conditions stated in this 2016 Performance Incentive Plan (the “Plan”). In addition, to provide incentives to members of the Board of Directors (the “Board”) who are not employees of the Company (“non-employee
directors”), such non-employee directors are eligible to receive awards as set forth in Article V of the Plan. For purposes of the Plan, references to employment by or service to the Company also means employment by or service to a direct or
indirect majority-owned subsidiary of the Company and employment by or service to any other entity designated by the Board or the Committee in which the Company has a direct or indirect equity interest. 

2. Eligibility. Officers and other employees of, and other persons providing services to the Company (“participants”) shall
be eligible, upon selection by the Committee, to receive cash or bonus awards, stock options, SARs, restricted stock and stock units, either singly or in combination, as the Committee, in its discretion, shall determine. In addition, non-employee
directors shall receive awards on the terms and subject to the conditions stated in the Plan. 
 3. Limitation on Shares to be
Issued. Subject to adjustment as provided in Section 5 of this Article I, 3,500,000 shares of common stock shall be available under the Plan, reduced by the aggregate number of shares of common stock which become subject to outstanding bonus
awards, stock options, SARs which are not granted in tandem with or by reference to a stock option (“free-standing SARs”), restricted stock awards and stock unit awards. Shares subject to a grant or award under the Plan which are not
issued or delivered, by reason of the expiration, termination, cancellation or forfeiture of all or a portion of the grant or award or the settlement of the grant or award in cash shall again be available for future grants and awards under the Plan;
provided, however, that for purposes of this sentence, stock options and SARs granted in tandem with or by reference to a stock option granted prior to the grant of such SARs (“tandem SARs”) shall be treated as one grant. Shares
tendered or withheld upon exercise of an option, vesting of restricted stock or stock units, settlement of an SAR or upon any other event to pay exercise price or tax withholding shall not be available for future issuance under the Plan. In
addition, upon exercise of an SAR, the total number of shares remaining available for issuance under the Plan shall be reduced by the gross number of shares for which the SAR is exercised. 

For the purpose of complying with Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and the rules and
regulations thereunder, the maximum number of shares of common stock with respect to which options or SARs or a combination thereof may be 

 
granted during any calendar year to any person shall be 1,500,000, subject to adjustment as provided in Section 5 of this Article I; provided, however, that for purposes of this sentence,
stock options and tandem SARs shall be treated as one grant. If the Plan becomes effective, no new grants shall be made under any equity plan of the Company that is in effect as of the date immediately prior to the date of stockholder approval of
the Plan (the “Existing Company Plans”) and all such Existing Company Plans shall be terminated, provided, however, that such termination shall have no effect on any outstanding awards granted under any Existing Company Plan. 

Shares of common stock to be issued may be treasury shares reacquired by the Company or authorized and unissued shares, or a combination of
both. 
 4. Administration of the Plan. The Plan shall be administered by a Committee designated by the Board (the
“Committee”), provided that the Board may designate a separate committee, also meeting the requirements set forth in the following sentence, to administer Article V hereof. Each member of the Committee shall be a director that the Board
has determined to be (i) an “outside director” within the meaning of Section 162(m) of the Code, (ii) a “Non-Employee Director” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) and (iii) “independent” within the meaning of the rules of the principal stock exchange on which the common stock is traded. The Committee shall, subject to the terms of the Plan, select eligible participants for
grants and awards; determine the form of each grant and award, either as cash, bonus awards, stock options, SARs, restricted stock awards, stock unit awards or a combination thereof; and determine the number of shares or units subject to the grant
or award, the fair market value of the common stock or units when necessary, the timing and conditions of vesting, exercise or settlement, whether dividends or dividend equivalents accrue under any award, and all other terms and conditions of each
grant and award, including, without limitation, the form of instrument evidencing the grant or award. Notwithstanding the foregoing and subject to Article V, all stock option awards, SARs, restricted stock awards and stock unit awards, other than
awards that are subject to performance-based vesting conditions over a performance period of at least one year, shall have a minimum vesting period of at least three years from the date of grant (such vesting may, in the discretion of the Committee,
occur in full at the end of such period or may occur in specified installments over such period, provided that no more than 40% of any particular award may vest by the end of the first year following the date of grant and no more than 80% of any
particular award may vest by the end of the second year following the date of grant); provided, however, that the Committee may provide for early vesting upon the death, permanent and total disability, retirement or termination of service of
the award recipient. The Committee may also waive this minimum vesting-period requirement (A) with respect to awards made to newly hired employees, (B) to accelerate vesting of awards made to existing employees affected by workforce reductions, (C)
in similar circumstances, as determined by the Committee in the exercise of its discretion and (D) as otherwise required by law or the terms of the Plan. The Committee may establish rules and regulations for the administration of the Plan, interpret
the Plan, and impose, incidental to a grant or award, conditions with respect to competitive employment or other activities not inconsistent with the Plan. All such rules, regulations, interpretations and conditions shall be conclusive and binding
on all parties. Notwithstanding anything in this Plan to the contrary and subject to Section 5 of this Article I, to the extent required by the New York Stock Exchange, or any other stock exchange on which shares of Common Stock are traded, the
Committee will not amend or replace any previously granted option or SAR in a transaction that constitutes a repricing, without the approval of the stockholders of the Company. 

  
 -2- 

 Each grant and award shall be evidenced by a written instrument and no grant or award shall be
valid until an agreement is executed by the Company and such grant or award shall be effective as of the effective date set forth in the agreement. The Committee may delegate some or all of its power and authority hereunder to the chief executive
officer or other executive officer of the Company as the Committee deems appropriate; provided, however, that the Committee may not delegate its power and authority with regard to (i) the selection for participation in the Plan of (A) a
person who is a “covered employee” within the meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to be a covered employee at any time during the period a grant or award hereunder to such participant
would be outstanding, (B) an officer or other person subject to Section 16 of the Exchange Act or (C) a person who is not an employee of the Company or (ii) decisions concerning the time, pricing or amount of a grant or award to a participant,
officer or other person described in clause (i) above. A majority of the Committee shall constitute a quorum. The acts of the Committee shall be either (i) acts of a majority of the members of the Committee present at any meeting at which a quorum
is present or (ii) acts approved in writing by all of the members of the Committee without a meeting. 
 Notwithstanding anything to the
contrary contained herein, the Board may, in its sole discretion, at any time and from time to time, grant Awards or administer the Plan. In any such case, the Board will have all of the authority and responsibility granted to the Committee herein.

 5. Adjustments. In the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other similar change in capitalization or event affecting the Company or its common stock, or any distribution to holders of the Company’s common stock other than a regular cash
dividend, the number, class and kind of securities (including, for this purpose, securities of any other entity that is a party to such transaction) available under the Plan, the specific share limitations otherwise set forth in the Plan, the
number, class and kind of securities (including, for this purpose, securities of any other entity that is a party to such transaction) subject to each outstanding bonus award, the number, class and kind of securities (including, for this purpose,
securities of any other entity that is a party to such transaction) subject to each outstanding stock option and the purchase price per security and the terms of each outstanding SAR shall be appropriately adjusted by the Committee, such adjustments
to be made in the case of outstanding stock options and SARs without an increase in the aggregate purchase price or base price. For purposes of the Plan, the fair market value of the common stock on a specified date shall be the closing market price
of the common stock on such date, or, if no such trading in the common stock occurred on such date, then on the next preceding date when such trading occurred. 

6. Effective Date and Term of Plan. The Plan shall be submitted to the stockholders of the Company for approval at the next meeting of
stockholders held following the Board’s adoption of the Plan and, if approved, shall become effective on the date of such stockholder approval. The Plan shall terminate on the date on which shares are no longer available for grants or awards
under the Plan, unless terminated prior thereto by action of the Board; provided, however that if the Plan itself has not previously terminated, Section 1 of Article V shall terminate on the date that is ten years from the date of stockholder
approval of the Plan. No further grants or awards shall be made under the Plan after termination, but termination shall not affect the rights of any participant under any grants or awards made prior to termination. 

  
 -3- 

 7. Amendments. The Plan may be amended or terminated by the Board in any respect except
that no amendment may be made without stockholder approval if stockholder approval is required by applicable law, rule or regulation, including Section 162(m) of the Code, or such amendment would increase (subject to Section 5 of this Article I) the
number of shares available under the Plan or would amend the prohibition on repricing of awards set forth in Section 4 of this Article I or otherwise permit the repricing of awards granted hereunder. No amendment may impair the rights of
a holder of an outstanding grant or award without the consent of such holder. 
  

	II.	Bonus Awards 

 1. Form of Award. Bonus awards, whether performance awards or fixed
awards, may be made to eligible participants in the form of (i) cash, whether in an absolute amount or as a percentage of compensation, (ii) stock units, each of which is substantially the equivalent of a share of common stock but for the power to
vote and, if the Committee so determines, in its sole discretion, the entitlement to an amount equal to dividends or other distributions otherwise payable on a like number of shares of common stock, (iii) shares of common stock issued to the
participant but forfeitable and with restrictions on transfer in any form as hereinafter provided or (iv) any combination of the foregoing. 

2. Performance Awards. (a) Awards may be made in terms of a stated potential maximum dollar amount, percentage of compensation or
number of units or shares, with such actual amount, percentage or number to be determined by reference to the level of achievement of corporate, sector, business unit, division, individual or other specific performance goals over a performance
period of not less than one nor more than ten years, as determined by the Committee. 
 (b) In no event shall any participant
receive a payment with respect to any performance award if the minimum threshold performance goals requirement applicable to the payment is not achieved during the performance period. 

(c) If the Committee desires that compensation payable pursuant to performance awards be “qualified performance-based
compensation” within the meaning of Section 162(m) of the Code, then with respect to such performance awards, for any calendar year (i) the maximum compensation payable pursuant to any such performance awards granted during such year, to the
extent payment thereunder is determined by reference to shares of common stock (or the fair market value thereof), shall not exceed 900,000 shares of common stock (or the fair market value thereof), subject to adjustment as set forth in Section 5 of
Article I, and (ii) the maximum compensation payable pursuant to any such performance awards granted during such year, to the extent payment is not determined by reference to shares of common stock, shall not exceed $9,000,000. The limits set forth
in this Section (c) of Article II shall be proportionately increased for performance periods that are longer than 12 months. 

(d) The Committee may provide in any agreement evidencing a performance award under the Plan that the Committee shall retain
sole discretion to reduce the amount of or eliminate any payment otherwise payable to a participant with respect to any 

  
 -4- 

 
performance award. If so provided in any agreement evidencing a performance award, the Committee may exercise such discretion by establishing conditions for payments in addition to the
performance goals, including the achievement of financial, strategic or individual goals, which may be objective or subjective, as it deems appropriate. 

(e) For purposes of the Plan, “performance goals” means the objectives established by the Committee which shall be
satisfied or met during the applicable performance period as a condition to a participant’s receipt of all or a part of a performance-based award under the Plan. The performance goals shall be tied to one or more of the following business
criteria, determined with respect to the Company or the applicable sector, business unit or division: net sales; cost of sales; gross profit; earnings from operations; earnings before interest, taxes, depreciation and amortization; earnings before
income taxes; earnings before interest and taxes; cash flow measures; return on equity; return on assets; return on net assets employed; return on capital; working capital; leverage ratio; stock price measures; enterprise value; safety measures; net
income per common share (basic or diluted); EVATM (Economic Value Added, which represents the cash operating earnings of the Company after deducting a charge for capital employed); cost
reduction objectives or, in the case of awards not intended to be “qualified performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code, any other similar criteria established by the Plan Committee
for the applicable performance period. The Committee may provide in any agreement evidencing a performance award under the Plan that the Committee shall amend or adjust the performance goals or other terms or conditions of an outstanding award in
recognition of unusual or nonrecurring events. If the Committee desires that compensation payable pursuant to any award subject to performance goals be “qualified performance-based compensation” within the meaning of Section 162(m) of the
Code, the performance goals (i) shall be established by the Committee no later than 90 days after the beginning of the applicable performance period (or such other time designated by the Internal Revenue Service) and (ii) shall satisfy all other
applicable requirements imposed under Treasury Regulations promulgated under Section 162(m) of the Code, including the requirement that such performance goals be stated in terms of an objective formula or standard. 

3. Fixed Awards. Awards may be made which are not contingent on the achievement of specific objectives, but are contingent on the
participant’s continuing in the Company’s employ for a period specified in the award. 
 4. Rights with Respect to Restricted
Shares. If shares of restricted common stock are subject to an award, the participant shall have the right, unless and until such award is forfeited or unless otherwise determined by the Committee at the time of grant, to vote the shares and to
receive dividends thereon from the date of grant and the right to participate in any capital adjustment applicable to all holders of common stock; provided, however, that (i) a distribution with respect to shares of common stock, other than a
regular quarterly cash dividend, and (ii) a regular cash dividend with respect to shares of common stock that are subject to performance-based vesting conditions, in each case shall be deposited with the Company and shall be subject to the same
restrictions as the shares of common stock with respect to which such distribution was made. 

  
 -5- 

 During the restriction period, the shares subject to a restricted stock award shall be held in
book entry form, with the restrictions, terms and conditions duly noted, or alternatively a certificate or certificates representing restricted shares shall be registered in the holder’s name or the name of a nominee of the Company and may bear
a legend, in addition to any legend which may be required under applicable laws, rules or regulations, indicating that the ownership of the shares of common stock represented by such certificate is subject to the restrictions, terms and conditions
of the Plan and the agreement relating to the shares of restricted common stock. All such certificates shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed
in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares of common stock subject to the award in the event such award is forfeited in whole or in part.
Upon termination of any applicable restriction period, including, if applicable, the satisfaction or achievement of applicable objectives, and subject to the Company’s right to require payment of any taxes, the requisite number of shares of
common stock shall be delivered to the holder of such award. 
 5. Rights with Respect to Stock Units. If stock units are credited to
a participant pursuant to an award, then, except as otherwise provided by the Committee in its sole discretion, amounts equal to dividends and other distributions otherwise payable on a like number of shares of common stock after the crediting of
the units (unless the record date for such dividends or other distributions precedes the date of grant of such award) shall be credited to an account for the participant and held until the award is forfeited or paid out and interest may be credited
on the account at a rate determined by the Committee. 
 6. Events Upon Vesting. At the time of vesting of an award made pursuant to
this Article II, (i) the award (and any dividend equivalents, other distributions and interest which have been credited), if in units, shall be paid to the participant either in shares of common stock equal to the number of units, in cash equal to
the fair market value of such shares, or in such combination thereof as the Committee shall determine, (ii) the award, if a cash bonus award, shall be paid to the participant either in cash, or in shares of common stock with a then fair market value
equal to the amount of such award, or in such combination thereof as the Committee shall determine and (iii) shares of restricted common stock issued pursuant to an award shall be released from the restrictions. 

 

	III.	Stock Options 

 1. Options for Eligible Participants. Options to purchase shares
of common stock may be granted to such eligible participants as may be selected by the Committee. These options may, but need not, constitute “incentive stock options” under Section 422 of the Code. To the extent that the aggregate fair
market value (determined as of the date of grant) of shares of common stock with respect to which options designated as incentive stock options are exercisable for the first time by an optionee during any calendar year (under the Plan or any other
plan of the Company, or any parent or subsidiary) exceeds the amount (currently $100,000) established by the Code, such options shall not constitute incentive stock options. No incentive stock options may be granted under the Plan after the earlier
of the tenth anniversary of (a) the date the Plan is approved by the Board or (b) the effective date of the Plan. 

  
 -6- 

 2. Number of Shares and Purchase Price. The number of shares of common stock subject to an
option and the purchase price per share of common stock purchasable upon exercise of the option shall be determined by the Committee; provided, however, that the purchase price per share of common stock shall not be less than 100% of the fair
market value of a share of common stock on the date of grant of the option; provided, further, that if an incentive stock option shall be granted to any person who, on the date of grant of such option, owns capital stock possessing more than
ten percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or subsidiary) (a “Ten Percent Holder”), the purchase price per share of common stock shall be the price (currently 110% of
fair market value) required by the Code in order to constitute an incentive stock option. 
 3. Exercise of Options. The period
during which options granted hereunder may be exercised shall be determined by the Committee; provided, however, that no stock option shall be exercised later than ten years after its date of grant; provided further, that if an
incentive stock option shall be granted to a Ten Percent Holder, such option shall not be exercisable more than five years after its date of grant. The Committee may, in its discretion, establish performance measures which shall be satisfied or met
as a condition to the grant of an option or to the exercisability of all or a portion of an option. The Committee shall determine whether an option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any
time. An exercisable option, or portion thereof, may be exercised only with respect to whole shares of common stock. 
 An option may be
exercised (i) by giving written notice to the Company (or following other procedures designated by the Company) specifying the number of whole shares of common stock to be purchased and accompanied by payment therefor in full (or arrangement made
for such payment to the Company’s satisfaction) either (A) in cash, (B) in previously owned whole shares of common stock (for which the optionee has good title free and clear of all liens and encumbrances) having a fair market value, determined
as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (C) by authorizing the Company to withhold whole shares of Common Stock that would otherwise be delivered having a fair market value, determined as
of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (D) in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise, (E) to the extent
expressly authorized by the Committee, via a cashless exercise arrangement with the Company or (F) a combination of (A) and (B), (ii) if applicable, by surrendering to the Company any SARs which are canceled by reason of the exercise of the option
and (iii) by executing such documents as the Company may reasonably request. The Committee shall have the sole discretion to disapprove of an election pursuant to clause (D). Any fraction of a share of common stock which would be required to pay
such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the optionee. No shares of common stock shall be delivered until the full purchase price therefor has been paid. 

 

	IV.	Stock Appreciation Rights 

 1. Grants. Free-standing SARs entitling the grantee to
receive cash or shares of common stock having a fair market value equal to the appreciation in market value of a stated number of shares of common stock from the date of grant to the date of exercise of such SARs,

  
 -7- 

 
or in the case of tandem SARs, from the date of grant of the related stock option to the date of exercise of such tandem SARs, may be granted to such participants as may be selected by the
Committee. The holder of a tandem SAR may elect to exercise either the option or the SAR, but not both. Tandem SARs shall be automatically canceled upon exercise of the related stock option. 

2. Number of SARs and Base Price. The number of SARs subject to a grant shall be determined by the Committee. Any tandem SAR related to
an incentive stock option shall be granted at the same time that such incentive stock option is granted. The base price of a tandem SAR shall be the purchase price per share of common stock of the related option. The base price of a free-standing
SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the fair market value of a share of common stock on the date of grant of such SAR. 

3. Exercise of SARs. The agreement relating to a grant of SARs may specify whether such grant shall be settled in shares of common
stock (including restricted shares of common stock) or cash or a combination thereof. Upon exercise of an SAR, the grantee shall be paid the excess of the then fair market value of the number of shares of common stock to which the SAR relates over
the base price of the SAR. Such excess shall be paid in cash or in shares of common stock having a fair market value equal to such excess or in such combination thereof as the Committee shall determine. The period during which SARs granted hereunder
may be exercised shall be determined by the Committee; provided, however, no SAR shall be exercised later than ten years after the date of its grant; and provided, further, that no tandem SAR shall be exercised if the related option
has expired or has been canceled or forfeited or has otherwise terminated. The Committee may, in its discretion, establish performance measures which shall be satisfied or met as a condition to the grant of an SAR or to the exercisability of all or
a portion of an SAR. The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time. An exercisable SAR, or portion thereof, may be exercised, in the case of a tandem
SAR, only with respect to whole shares of common stock and, in the case of a free-standing SAR, only with respect to a whole number of SARs. If an SAR is exercised for restricted shares of common stock, the restricted shares shall be issued in
accordance with Section 4 of Article II and the holder of such restricted shares shall have such rights of a stockholder of the Company as determined pursuant to such Section. Prior to the exercise of an SAR for shares of common stock, including
restricted shares, the holder of such SAR shall have no rights as a stockholder of the Company with respect to the shares of common stock subject to such SAR. 

A tandem SAR may be exercised (i) by giving written notice to the Company (or following other procedures designated by the Company) specifying
the number of whole SARs which are being exercised, (ii) by surrendering to the Company any options which are canceled by reason of the exercise of such SAR and (iii) by executing such documents as the Company may reasonably request. A free-standing
SAR may be exercised (i) by giving written notice to the Company specifying the whole number of SARs which are being exercised and (ii) by executing such documents as the Company may reasonably request. 

  
 -8- 

	V.	Awards to Non-Employee Directors 

 1. Annual Grants to Non-Employee Directors. On
the date of the Company’s 2017 annual meeting of stockholders, and on the date of each subsequent annual meeting prior to the termination of this Section 1, the Company shall make an award under the Plan to each individual who is, immediately
following such annual meeting, a non-employee director. Awards granted pursuant to this Section 1 of Article V shall be in the form of stock options, restricted stock, stock units or SARs. The form of such awards, and the number of shares subject to
each such award, shall be determined by a committee meeting the requirements for the Committee described above in Section 4 of Article I in the exercise of its sole discretion. Notwithstanding anything to the contrary set forth elsewhere in the
Plan, an award granted to a non-employee director pursuant to this Section 1 of Article V shall have a minimum vesting period of one year from the date of grant. 

2. Elective Options for Non-Employee Directors. Each non-employee director may from time to time elect, in accordance with procedures
to be specified by the Committee, to receive in lieu of all or part of any annual base cash retainer fee for services as a director of the Company, any fees for attendance at meetings of the Board or any committee of the Board and any fees for
serving as a member or chairman of any committee of the Board that would otherwise be payable to such non-employee director (“Fees”), an option to purchase shares of common stock, which option shall have a value (as determined in
accordance with the Black-Scholes stock option valuation method) as of the date of grant of such option equal to the amount of such Fees and which shall be subject to all of the terms and conditions set forth in Article III of the Plan.
Notwithstanding anything to the contrary set forth elsewhere in the Plan, an option granted to a non-employee director pursuant to this Section 2 of Article V shall become exercisable in full on the first anniversary of the date of grant. 

 

	VI.	Other 

 1. Non-Transferability of Options and Stock Appreciation Rights. No option
or SAR shall be transferable other than (i) by will, the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Company or (ii) as otherwise set forth in the agreement relating to such option or SAR. Each
option or SAR may be exercised during the participant’s lifetime only by the participant or the participant’s guardian, legal representative or similar person or the permitted transferee of the participant. Except as permitted by the
second preceding sentence, no option or SAR may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any
attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any option or SAR, such award and all rights thereunder shall immediately become null and void. 

2. Tax Withholding. The Company shall have the right to require, prior to the issuance or delivery of any shares of common stock or the
payment of any cash pursuant to a grant or award hereunder, payment by the holder thereof of any federal, state, local or other taxes which may be required to be withheld or paid in connection therewith. An agreement may provide that (i) the Company
shall withhold whole shares of common stock which would otherwise be delivered to a holder, having an aggregate fair market value determined as of the date the obligation to withhold or pay taxes arises in connection therewith (the “Tax
Date”), or 

  
 -9- 

 
withhold an amount of cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the
following means: (A) a cash payment to the Company, (B) delivery to the Company of previously owned whole shares of common stock (which the holder has held for at least six months prior to the delivery of such shares or which the holder purchased on
the open market and for which the holder has good title, free and clear of all liens and encumbrances) having an aggregate fair market value determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation, (C) authorizing
the Company to withhold whole shares of common stock which would otherwise be delivered having an aggregate fair market value determined as of the Tax Date or withhold an amount of cash which would otherwise be payable to a holder, equal to the
amount necessary to satisfy any such liability, (D) in the case of the exercise of an option, a cash payment by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) any combination of
(A), (B) and (C); provided, however, that the Committee shall have sole discretion to disapprove of an election involving clause (D). An agreement relating to a grant or award hereunder may not provide for shares of common stock to be
withheld having an aggregate fair market value in excess of the minimum amount of taxes required to be withheld. Any fraction of a share of common stock which would be required to satisfy such an obligation shall be disregarded and the remaining
amount due shall be paid in cash by the holder. 
 3. Acceleration Upon Change in Control. If while (i) any performance award or
fixed award granted under Article II is outstanding, (ii) any stock option granted under Article III of the Plan or SAR granted under Article IV of the Plan is outstanding or (iii) any award made to non-employee directors pursuant to Article V
(“nonemployee director awards”) is outstanding: 
 (a) any “person,” as such term is defined in Section
3(a)(9) of the Exchange Act, as modified and used in Section 13(d) and 14(d) thereof (but not including (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or
any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company) (hereinafter a “Person”) is or becomes the beneficial owner, as defined in Rule 13d-3 of the Exchange Act, directly or indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the Company or its affiliates, excluding an acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable
securities) representing 50% or more of the combined voting power of the Company’s then outstanding securities; or 

(b) during any period of two (2) consecutive years beginning on the date that stockholders approve the Plan, individuals who at
the beginning of such period constitute the Board and any new director (other than a director designated by a Person who has entered into any agreement with the Company to effect a transaction described in Clause (a), (c) or (d) of this Section)
whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or 

  
 -10- 

 (c) a merger or consolidation of the Company with any other corporation
(hereinafter, a “Corporate Transaction”) is consummated, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or acquiring entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company, at least 50% of the
combined voting power of the voting securities of the Company or such surviving or acquiring entity outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person acquires more than 50% of the combined voting power of the Company’s then outstanding securities; or 

(d) the stockholders of the Company approve a plan of complete liquidation of the Company or for the consummation of the sale
or disposition by the Company of all or substantially all of the Company’s assets, 
 (any of such events being hereinafter referred to as a
“Change in Control”), then upon the date of such Change in Control, (i) with respect to such performance awards, the highest level of achievement specified in the award shall be deemed met and the award shall be immediately and fully
vested, (ii) with respect to such fixed awards, the period of continued employment specified in the award upon which the award is contingent shall be deemed completed and the award shall be immediately and fully vested, (iii) with respect to such
options and SARs, all such options and SARs, whether or not then exercisable in whole or in part, shall be immediately and fully exercisable and (iv) with respect to such non-employee director awards, all conditions with respect to vesting or
exercisability shall be deemed to be satisfied and such awards shall be immediately and fully vested and exercisable. In connection with such Change in Control, the Board (as constituted prior to the Change in Control) may, in its discretion: 

(i) require that shares of capital stock of the corporation resulting from or succeeding to the business of the Company
pursuant to such Change in Control, or a parent corporation thereof, be substituted for some or all of the shares of common stock subject to an outstanding award, with an appropriate and equitable adjustment to such award as determined by the
Committee in accordance with Section 5 of Article I; and/or 
 (ii) require outstanding awards, in whole or in part, to be
surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (a) a cash payment in an amount equal to (1) in the case of an option or an SAR, the number of shares of common stock
then subject to the portion of such option or SAR surrendered multiplied by the excess, if any, of the fair market value of a share of common stock as of the date of the Change in Control, over the exercise price or base price per share of common
stock subject to such option or SAR, (2) in the case of a restricted stock 

  
 -11- 

 
award, stock unit award or bonus award denominated in shares of common stock, the number of shares of common stock then subject to the portion of such award surrendered, multiplied by the fair
market value of a share of common stock as of the date of the Change in Control, and (3) in the case of a bonus award denominated in cash, the value of the bonus award then subject to the portion of such award surrendered; (b) shares of capital
stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (a) above; or (c) a
combination of the payment of cash pursuant to clause (a) above and the issuance of shares pursuant to clause (b) above. 
 4.
Restrictions on Shares. Each grant and award made hereunder shall be subject to the requirement that if at any time the Company determines that the listing, registration or qualification of the shares of common stock subject thereto upon any
securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder, such shares shall not
be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company may require that certificates evidencing shares
of common stock delivered pursuant to any grant or award made hereunder bear a legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and
the rules and regulations thereunder. 
 5. No Right of Participation or Employment. No person (other than non-employee directors to
the extent provided in Article V) shall have any right to participate in the Plan. Neither the Plan nor any grant or award made hereunder shall confer upon any person any right to employment or continued employment by the Company, any subsidiary or
any affiliate of the Company or affect in any manner the right of the Company, any subsidiary or any affiliate of the Company to terminate the employment of any person at any time without liability hereunder. 

6. Rights as Stockholder. No person shall have any right as a stockholder of the Company with respect to any shares of common stock or
other equity security of the Company which is subject to a grant or award hereunder unless and until such person becomes a stockholder of record with respect to such shares of common stock or equity security. 

7. Awards Subject to Clawback. The awards and any cash payment or securities delivered pursuant to an award are subject to forfeiture,
recovery by the Company or other action pursuant to the applicable award agreement or any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy which the Company may be required to
adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. 

8. Governing Law. The Plan, each grant and award hereunder and the related agreement, and all determinations made and actions taken
pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of
laws. 

  
 -12- 

 9. Foreign Participants. Notwithstanding any provision of the Plan to the contrary the
Committee may, with a view to both promoting achievement of the purposes of the Plan and complying with (i) provisions of laws in countries outside the United States in which the Company or its subsidiaries operate or have employees and (ii) the
rules of any foreign stock exchange upon which the common stock may be listed, determine which persons outside the United States shall be eligible to participate in the Plan on such terms and conditions different from those specified in the Plan as
may in the judgment of the Committee be necessary or advisable and, to that end, the Committee may establish sub-plans, modified option exercise procedures and other terms and procedures. 

10. Insider Limits. Notwithstanding any other provision of the Plan, (i) the maximum number of shares of common stock which may be
reserved for issuance to insiders (as defined in the Ontario Securities Act) under the Plan, together with any other previously established or proposed incentive plan, shall not exceed 10% of the outstanding shares of common stock, (ii) the
maximum number of shares of common stock which may be issued to insiders under the Plan, together with any other previously established or proposed incentive plan, within any one year period shall not exceed 10% of the outstanding shares of common
stock, and (iii) the maximum number of shares of common stock which may be issued to any one insider and his or her associates under the Plan, together with any other previously established or proposed incentive plan, within a one-year period, shall
not exceed 5% of the outstanding shares of common stock. 
 11. Approval of Plan. The Plan and all grants and awards made hereunder
shall be null and void if the adoption of the Plan is not approved by the affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the next meeting of stockholders following the Board’s adoption
of the Plan. 

  
 -13-

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