Nonqualified Stock Option Agreement under the Orthofix International N.V. Amended and Restated 2004 Long-Term Incentive Plan
EXHIBIT
10.3
the
Orthofix International N.V.
Amended
and Restated 2004 Long-Term Incentive Plan
This
Option Agreement (the “Agreement”) is made this 19th
day of November 2007 (the “Grant Date”) between
Orthofix International N.V., a Netherlands Antilles company (the
“Company”), and the person signing this Agreement
adjacent to the caption “Optionee” on the signature page hereof (the
“Optionee”). Capitalized terms used and not otherwise
defined herein shall have the meanings attributed thereto in the Orthofix
International N.V. Amended and Restated 2004 Long-Term Incentive Plan (the
“Plan”).
WHEREAS,
pursuant to the Plan, the
Company desires to afford the Optionee the opportunity to purchase Common
Shares
on the terms and conditions set forth herein;
NOW,
THEREFORE, in connection with the
mutual covenants hereinafter set forth and for other good and valuable
consideration, the parties hereto agree as follows:
1. Grant
of
Option. Subject to the provisions of this Agreement and the Plan, the
Company hereby grants to the Optionee the right and option (the
“Option”) to purchase 25,000 Common Shares at an
exercise price of $58.12 per share (the “Exercise
Price”).
2. Incorporation
of
Plan. The Optionee acknowledges receipt of the Plan, a copy of which is
annexed hereto, and represents that he or she is familiar with its terms
and
provisions and hereby accepts this Option subject to all of the terms and
provisions of the Plan and all interpretations, amendments, rules and
regulations which may, from time to time, be promulgated and adopted pursuant
to
the Plan. The Plan is incorporated herein by reference. In the event of any
conflict or inconsistency between the Plan and this Agreement, the Plan shall
govern and this Agreement shall be interpreted to minimize or eliminate any
such
conflict or inconsistency.
3. Nature
of the
Option. The Option shall be a Nonqualified Stock Option.
4. Vesting.
Subject to earlier termination in accordance with the Plan or this Agreement
and
the terms and conditions herein or therein, the Option shall vest and become
exercisable with respect to one-hundred percent (100%) of the shares covered
thereby on the third anniversary of the Grant Date.
5. Term.
The
Option shall expire and no longer be exercisable 10 years from the Grant
Date,
subject to earlier termination in accordance with the Plan or this Agreement;
provided, however: (i) if the termination date falls on a date on which the
exercise of the Option would violate any applicable federal, state, local
or
foreign law, such termination date shall be extended to 30 days after the
first
date that exercise of the Option would no longer violate any applicable federal,
state, local or foreign law, and (ii) if the termination date falls on a
date on
which the Optionee is prohibited by Company policy in effect on such date
from
engaging in transactions in the Company’s securities, such termination date
shall be extended to the first date that the Optionee is permitted to engage
in
transaction in the Company’s securities under such Company policy so long as
such extension does not cause the Option to become subject to Code Section
409A
or violate any other applicable law.
6. Termination
of
Employment.
(a) General.
A termination of employment shall be deemed to have occurred if the Optionee
is
no longer employed by, or otherwise providing services to, the Company or
any of
its Subsidiaries for any reason. The Committee shall have discretion to
determine whether an authorized leave of absence (as a result of disability
or
otherwise) shall constitute a termination of employment for purposes of the
Plan.
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(b) Termination
of Employment Other than for Cause, Death or Permanent Disability - Not Pursuant
to an Employment Agreement. Subject to Section 6(c) below, if the Optionee's
employment is terminated prior to vesting other than for Cause, death or
Permanent Disability, the Option shall be considered vested and be immediately
exercisable as of the date of such termination of employment with respect
to the
aggregate number of Common Shares as to which the Option would have been
vested
as of December 31 of the year in which such termination of employment occurs.
The Optionee shall have the right, subject to the other terms and conditions
set
forth in this Agreement and the Plan, to exercise the Option, to the extent
it
has vested as of the date of such termination of employment, at any time
within
180 days after the date of such termination of employment, subject to the
earlier expiration of the Option as provided in Section 5 hereof. To the
extent
the vested portion of the Option is not exercised within such 180 day period,
the Option shall be cancelled and revert back to the Company and the Optionee
shall have no further right or interest therein. The unvested portion of
any
Option shall be cancelled and revert back to the Company as of the date of
the
Optionee's termination of employment and the Optionee shall have no further
right or interest therein.
(c) Termination
of Employment Other than for Cause, Death or Permanent Disability - Pursuant
to
an Employment Agreement. Notwithstanding Section 6(b) above, in the event
the Optionee's employment is terminated prior to vesting pursuant to an
Employment Agreement, other than for Cause (which for this purpose shall
include
a resignation by the Optionee for “good reason,” or words of similar meaning,
under any Employment Agreement), death or Permanent Disability, then the
Option
shall be considered vested in full and be immediately exercisable as of the
date
of such termination of employment unless the Employment Agreement expressly
provides otherwise, in which case the terms of the Employment Agreement shall
control. The Optionee shall have the right, subject to the other
terms and conditions set forth in this Agreement and the Plan, to exercise
the
Option until the expiration of the Option as provided in Section 5 hereof.
To
the extent the vested portion of the Option is not exercised within such
period,
the Option shall be cancelled and revert back to the Company and the Optionee
shall have no further right or interest therein.
(d) Termination
of Employment for Cause. Subject only to any greater rights in any
Employment Agreement, if the Optionee's employment with the Company and its
Subsidiaries is terminated by the Company or any of its Subsidiaries for
Cause
prior to vesting, the unvested portion of the Option shall be cancelled and
revert back to the Company as of the date of such termination of employment,
and
the Optionee shall have no further right or interest therein unless the
Committee in its sole discretion shall determine otherwise. The Optionee
shall
have the right, subject to the other terms and conditions set forth in this
Agreement and the Plan, to exercise the Option, to the extent it has vested
as
of the date of such termination of employment, at any time within three months
after the date of such termination, subject to the earlier expiration of
the
Option as provided in Section 5 hereof.
(e) Termination
of Employment for Death or Permanent Disability. Subject only to any greater
rights in any Employment Agreement, if the Optionee's employment with the
Company and its Subsidiaries terminates by reason of death or Permanent
Disability, the Option shall automatically vest and become immediately
exercisable in full as of the date of such termination of
employment. The Option shall remain exercisable by the Optionee, a
Permitted Transferee (as defined in Section 11 hereof), a transferee under
a
domestic relations order, or the Optionee's estate, personal representative
or
beneficiary, as applicable, at any time within 12 months after the date of
such
termination of employment, subject to the earlier expiration of the Option
as
provided in Section 5 hereof. To the extent the Option is not exercised within
such 12 month period, the Option shall be cancelled and revert back to the
Company and the Optionee, Permitted Transferee, transferee under a domestic
relations order, or the Optionee’s estate, personal representative or
beneficiary, as applicable, shall have no further right or interest
therein.
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7. Change
in
Control. Upon the occurrence of a Change in Control, the Option shall
automatically vest and become immediately exercisable in full and shall remain
exercisable in accordance with the terms of Section 6 hereof, subject to
the
earlier expiration of the Option as provided in Section 5 hereof.
8. Method
of
Exercising Option.
(a) Notice
of
Exercise. Subject to the terms and conditions of this Agreement, the Option
may be exercised by written or electronic notice to the Company, from the
Optionee, a Permitted Transferee, a transferee pursuant to a domestic relations
order, or following the Optionee’s death, the Optionee’s estate, personal
representative, or beneficiary, as applicable, and stating the number of
Common
Shares in respect of which the Option is being exercised. Such notice shall
be
accompanied by payment of the Exercise Price for all Common Shares purchased
pursuant to the exercise of such Option. The date of exercise of the Option
shall be the later of (i) the date on which the Company receives the notice
of
exercise or (ii) the date on which the conditions set forth in Sections 8(b)
and
8(e) are satisfied. Notwithstanding any other provision of this Agreement,
the
Optionee may not exercise the Option and no Common Shares will be issued
by the
Company with respect to any attempted exercise when such exercise is prohibited
by law or any Company policy then in effect. The Option may not be exercised
at
any one time as to less than 100 shares (or such number of shares as to which
the Option is then exercisable if less than 100). In no event shall the Option
be exercisable for a fractional share.
(b) Payment.
Prior to the issuance of the Common Shares pursuant to Section 8(e) hereof
in
respect of which all or a portion of the Option shall have been exercised,
the
Optionee shall have paid to the Company the Exercise Price for all Common
Shares
purchased pursuant to the exercise of such Option. Payment may be made by
personal check, bank draft or postal or express money order (such modes of
payment are collectively referred to as “cash”) payable to the order of the
Company in U.S. dollars. Payment may also be made in mature Common Shares
owned
by the Optionee, or in any combination of cash or such mature shares as the
Committee in its sole discretion may approve. The Company may also permit
the
Optionee to pay for such Common Shares by directing the Company to withhold
Common Shares that would otherwise be received by the Optionee, pursuant
to such
rules as the Committee may establish from time to time. In the discretion
of the
Committee, and in accordance with rules and procedures established by the
Committee, the Optionee may be permitted to make a “cashless” exercise of all or
a portion of the Option.
(c) Shareholder
Rights. The Optionee shall have no rights as a shareholder with respect to
any Common Shares issuable upon exercise of the Option until the Optionee
shall
become the holder of record thereof, and no adjustment shall be made for
dividends or distributions or other rights in respect of any Common Shares
for
which the record date is prior to the date upon which the Optionee shall
become
the holder of record thereof.
(d) Limitation
on Exercise. The Option shall not be exercisable unless the offer and sale
of Common Shares pursuant thereto has been registered under the Securities
Act
of 1933, as amended (the “1933 Act”), and qualified
under applicable state “blue sky” laws or the Company has determined that an
exemption from registration under the 1933 Act and from qualification under
such
state “blue sky” laws is available.
(e) Issuance
of
Common Shares. Subject to the foregoing conditions, as soon as is reasonably
practicable after its receipt of a proper notice of exercise and payment
of the
Exercise Price for all Common Shares purchased pursuant to the exercise of
such
Option, the Company shall either: (i) deliver or cause to be delivered to
the
Optionee (or a Permitted Transferee, a transferee under a domestic relations
order, or following the Optionee's death, the Optionee's estate, personal
representative or beneficiary, as applicable) one or more share certificates
for
the appropriate number of Common Shares issued in connection with such exercise
(less any Common Shares withheld under Section 10 below), or (ii) cause its
third-party recordkeeper to credit an account established and maintained
in the
name of the Optionee (or a Permitted Transferee, a transferee under a domestic
relations order, or following the Optionee's death, the Optionee's estate,
personal representative or beneficiary, as applicable) with the number of
Common
Shares issued in connection with such exercise (less any Common Shares withheld
under Section 10 below); provided, however, that an actual share certificate
shall be delivered if requested by the Optionee (or a Permitted Transferee,
a
transferee under a domestic relations order, or following the Optionee's
death,
the Optionee's estate, personal representative or beneficiary, as applicable).
Such Common Shares shall be fully paid and nonassessable and shall be issued
in
the name of the Optionee (or a Permitted Transferee, a transferee under a
domestic relations order, or following the Optionee's death, the Optionee's
estate, personal representative or beneficiary, as applicable).
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9. Adjustment
of
and Changes in Common Shares. In the event of any merger, consolidation,
recapitalization, reclassification, stock dividend, extraordinary dividend,
or
other event or change in corporate structure affecting the Common Shares,
the
Committee shall make such adjustments, if any, as it deems appropriate in
the
number and class of shares subject to, and the exercise price of, the Option.
The foregoing adjustments shall be determined by the Committee in its sole
discretion.
10. Tax
Withholding. The Company shall have the right, prior to the issuance of any
Common Shares upon full or partial exercise of the Option (whether by the
Optionee or any Permitted Transferees, a transferee under a domestic relations
order, or following the Optionee’s death, the Optionee’s estate, personal
representative, or beneficiary, as applicable), to require the Optionee to
remit
to the Company any amount sufficient to satisfy the minimum required federal,
state or local tax withholding requirements, as well as all applicable
withholding tax requirements of any other country or jurisdiction. The Company
may permit the Optionee to satisfy, in whole or in part, such obligation
to
remit taxes, by directing the Company to withhold Common Shares that would
otherwise be received by the Optionee, pursuant to such rules as the Committee
may establish from time to time. The Company shall also have the right to
deduct
from all cash payments made pursuant to, or in connection with, the Option,
the
minimum federal, state or local taxes required to be withheld with respect
to
such payments.
11. Transfers.
Unless the Committee determines otherwise after the Grant Date, the Option
shall
not be transferable other than by will or by the laws of descent and
distribution or pursuant to a domestic relations order; provided, however,
the
Option may be transferred to the Optionee's family members or to one or more
trusts or partnerships established in whole or in part for the benefit of
one or
more of such family members (collectively, the “Permitted Transferees”). Any
Option transferred to a Permitted Transferee shall be further transferable
only
by will or the laws of descent and distribution or, for no consideration,
to
another Permitted Transferee of the Optionee. The Committee may in its
discretion permit transfers of Options other than those contemplated by this
Section 11.
12. Option
Exercisable Only by the Optionee. During the lifetime of the Optionee, an
Option shall be exercisable only by the Optionee or by a Permitted Transferee
to
whom such Option has been transferred in accordance with Section
11.
13. Prohibition
on Repricing. The Agreement may not be amended to (a) reduce the
Exercise Price of the Option granted hereunder, nor (b) cancel or replace
the
Option hereunder with an Option having a lower exercise price.
14. Miscellaneous
Provisions.
(a) Notices.
Any notice required by the terms of this Agreement shall be delivered or
made
electronically, over the Internet or otherwise (with request for assurance
of
receipt in a manner typical with respect to communications of that type),
or
given in writing. Any notice given in writing shall be deemed
effective upon personal delivery or upon deposit with the United States Postal
Service, by registered or certified mail, with postage and fees prepaid,
and
shall be addressed to the Company at its principal executive office and to
the
Optionee at the address that he or she has most recently provided to the
Company. Any notice given electronically shall be deemed
effective on the date of transmission.
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(b) Headings.
The headings of sections and subsections are included solely for convenience
of
reference and shall not affect the meaning of the provisions of this
Agreement.
(c) Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall
be deemed to be an original but all of which together will constitute one
and
the same instrument.
(d) Entire
Agreement. This Agreement and the Plan constitute the entire agreement
between the parties hereto with regard to the subject matter hereof. They
supersede all other agreements, representations or understandings (whether
oral
or written and whether express or implied) that relate to the subject matter
hereof.
(e) Amendments.
The Board and the Committee shall have the power to alter or amend the terms
of
the Option as set forth herein from time to time, in any manner consistent
with
the provisions of Sections 16 and 19 of the Plan, and any alteration or
amendment of the terms of the Option by the Board or the Committee shall,
upon
adoption, become and be binding on all persons affected thereby without
requirement for consent or other action with respect thereto by any such
person.
The Committee shall give notice to the Optionee of any such alteration or
amendment as promptly as practicable after the adoption thereof. The foregoing
shall not restrict the ability of the Optionee and the Board or the Committee
by
mutual written consent to alter or amend the terms of the Option in any manner
which is consistent with the Plan.
(f) Binding
Effect. This Agreement shall be binding upon the heirs, executors,
administrators and successors of the parties hereto and may only be amended
by
written agreement of the parties hereto.
(g) Governing
Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without regard to the choice of law
provisions thereof.
(h) No
Employment or Other Rights. This Option grant does not confer upon the
Optionee any right to be continued in the employment of, or otherwise provide
services to, the Company or any Subsidiary or other affiliate thereof, or
interfere with or limit in any way the right of the Company or any Subsidiary
or
other affiliate thereof to terminate such Optionee’s employment at any
time.
15. Definitions.
For purposes of this Agreement, the following capitalized words shall have
the
meanings set forth below.
“Cause”
shall
mean termination of the Optionee's employment because of the Optionee's (i)
involvement in fraud, misappropriation or embezzlement related to the business
or property of the Company, (ii) conviction for, or guilty plea to, a felony
or
crime of similar gravity in the jurisdiction in which such conviction or
guilty
plea occurs, (iii) unauthorized disclosure of any trade secrets or other
confidential information relating to the Company's business and affairs (except
to the extent such disclosure is required under applicable law), or (iv)
such
other circumstances constituting a termination for cause under any Employment
Agreement.
“Change
in
Control” shall mean:
(i) the
acquisition by
any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange
Act”)) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act)
of 50% or more of either (A) the then outstanding shares of the Company's
common
stock (the “Outstanding Common Stock”) or (B) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
“Outstanding Voting
Securities”); excluding, however, the
following: (1) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Company;
(2)
any acquisition by the Company; (3) any acquisition by any employee benefit
plan
(or related trust) sponsored or maintained by the Company or any entity
controlled by the Company; or (4) any acquisition pursuant to a transaction
which complies with clauses (A), (B) and (C) of subsection (iii) of this
definition of Change of Control; or
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(ii) a
change in the composition of the Board such that the individuals who, as
of the
date hereof, constitute the Board (such Board shall be hereinafter referred
to
as the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however, for
purposes of this paragraph, that any individual who becomes a member of the
Board subsequent to the date hereof, whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at least a majority
of
those individuals who are members of the Board and who were also members
of the
Incumbent Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Board;
but provided further that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board shall
not be so considered as a member of the Incumbent Board; or
(iii) consummation
of a
reorganization, merger or consolidation or sale or other disposition of all
or
substantially all of the assets of the Company (“Corporate
Transaction”); excluding, however, such a Corporate
Transaction pursuant to which all of the following conditions are met: (A)
all
or substantially all of the individuals and entities who are the beneficial
owners, respectively, of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such Corporate Transaction will beneficially
own, directly or indirectly, more than 50% of, respectively, the outstanding
shares of common stock, and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors,
as
the case may be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's
assets
either directly or through one or more subsidiaries) in substantially the
same
proportions as their ownership, immediately prior to such Corporate Transaction,
of the Outstanding Common Stock and Outstanding Voting Securities, as the
case
may be, (B) no Person (other than the Company, any employee benefit plan
(or
related trust) of the Company or such corporation resulting from such Corporate
Transaction) will beneficially own, directly or indirectly, 50% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power of
the
outstanding voting securities of such corporation entitled to vote generally
in
the election of directors except to the extent that such ownership existed
prior
to the Corporate Transaction, and (C) individuals who were members of the
Incumbent Board will constitute at least a majority of the members of the
board
of directors of the corporation resulting from such Corporate
Transaction;
(iv) the
approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company; or
(v) any
similar or other definition contained in any Employment Agreement (even if
broader than as defined above).
“Committee”
shall mean the Compensation Committee of the Board or such other committee
appointed by the Board to administer the Plan
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“Employment
Agreement” shall mean a written employment, change in control or
change of control agreement between the Optionee and the Company and/or a
Subsidiary.
“Permanent
Disability” shall mean termination of the Optionee's employment as
a result of a physical or mental incapacity which substantially prevents
the
Optionee from performing his or her duties as an employee and that has continued
for at least 180 days and can reasonably be expected to continue indefinitely.
Any dispute as to whether or not the Optionee is disabled within the meaning
of
the preceding sentence shall be resolved by a physician selected by the
Committee.
(Remainder
of page intentionally left blank)
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EXECUTED
as of the date first written
above.
|
COMPANY:
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ORTHOFIX
INTERNATIONAL N.V.
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By:
|
/s/
Xxxx X. Xxxxxxxxx
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|
Name:
|
Xxxx
X. Xxxxxxxxx
|
||
|
Title:
|
Chief
Executive Officer
|
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OPTIONEE:
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|||
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By:
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/s/
Xxxxxxx Xxxxx
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Name:
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Xxxxxxx
Xxxxx
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Title:
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Chief
Financial Officer
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