Nonqualified Stock Option Agreement under the Orthofix International N.V. Amended and Restated 2004 Long-Term Incentive Plan
Exhibit
99.1
the
Orthofix International N.V.
Amended
and Restated 2004 Long-Term Incentive Plan
This
Option Agreement (the “Agreement”)
is
made effective as of __________ (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 __________ Common Shares at an exercise price of $__________ 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 therein, the Option shall vest and become exercisable
with respect to thirty three and one-third percent (33 1/3%) of the shares
covered thereby on each of the first (1st), second (2nd) and third (3rd)
anniversaries of the Grant Date; provided,
however,
that
the exercisability of any portion of the Option relating to a fractional share
shall be deferred until such time, if any, that such portion can be exercised
as
a whole Common Share.
5. Term.
The Option shall expire and no longer be exercisable ten (10) years from the
Grant Date, subject to earlier termination in accordance with the Plan or this
Agreement;
provided,
however, 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 transactions in the Company’s securities
under such Company policy.
6. Termination
of Employment.
(a) General.
A
termination of employment shall be deemed to have occurred if the Optionee
is no
longer employed by 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.
(b) Termination
of Employment Other than for Cause, Death or Permanent
Disability.
If the
Optionee’s employment is terminated prior to vesting other than for Cause, death
or Permanent Disability, the Option shall be considered vested 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 one hundred and eighty (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 one hundred and eighty (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. Notwithstanding the foregoing, in the event Optionee’s
employment is terminated by the Company or any of its Subsidiaries pursuant
to
an Employment Agreement, if any, other than for Cause (which for this purpose
shall include a resignation by the Optionee for “good reason” (or words of
similar meaning) under an Employment Agreement, if any), death or Permanent
Disability, then (i) to the extent not otherwise vested, the Option shall be
considered vested in full and be immediately exercisable as of the date of
such
termination of employment, and (ii) 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 later of (i) December 31 of the calendar year
during which the 180 day period set forth above would otherwise expire due
to
his termination or (ii) two and one-half months after the date the 180 day
period set forth above would otherwise expire due to his termination, subject
to
earlier termination 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.
(c) Termination
of Employment for Cause.
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 to the Company, 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.
(d) Termination
of Employment for Death or Permanent Disability.
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 and remain exercisable by the Optionee, a
Permitted Transferee or the Optionee’s estate, personal representative or
beneficiary, as applicable, at any time within twelve (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 twelve (12) month period, the Option shall be cancelled
and revert back to the Company and the Optionee shall have no further right
or
interest therein.
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 notice to the Company signed by the Optionee or a Permitted Transferee
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 full Purchase
Price. 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 one
hundred (100) shares (or such number of shares as to which the Option is then
exercisable if less than one hundred (100)). In no event shall the Option be
exercisable for a fractional share.
(b)
Payment.
Prior
to the issuance of a certificate pursuant to Section 8(e) hereof evidencing
the
Common Shares 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 Share Certificate.
Subject
to the foregoing conditions, as soon as is reasonably practicable after its
receipt of a proper notice of exercise and payment of the Purchase Price, the
Company shall deliver or cause to be delivered to the Optionee (or
a
Permitted Transferee 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. Such Common Shares shall be fully paid and nonassessable
and
shall be issued in the name of the Optionee (or a Permitted Transferee or,
following the Optionee’s death, the Optionee’s estate, personal representative
or beneficiary, as applicable).
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 delivery of any
certificates evidencing Common Shares to be issued upon full or partial exercise
of the Option (whether by the Optionee or any Permitted Transferees), to require
the Optionee to remit to the Company any amount sufficient to satisfy the
minimum required federal, state or local tax withholding requirements. 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 required 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.
Miscellaneous
Provisions.
(a)
Notices.
Any
notice required by the terms of this Agreement shall be given in writing and
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. Notice 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.
(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
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
Section 16 of the Plan, and any alteration or amendment of the terms of the
Option by 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 written 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 Company by mutual consent to alter or amend the terms of the
Option in any manner which is consistent with the Plan and approved by the
Committee.
(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.
14.
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 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 an Employment
Agreement, if any.
“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
(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;
or
(iv)
the
approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.
“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 as in effect on the
date hereof, as such may subsequently be amended, modified or
superseded.
“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 one hundred
and
eighty (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.
“Purchase
Price”
shall
mean the Exercise Price multiplied by the number of Common Shares with respect
to which the Option is being exercised.
EXECUTED
effective as of the day and year first written above.
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ORTHOFIX
INTERNATIONAL N.V.
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COMPANY:
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By:
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Name:
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Title:
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OPTIONEE:
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By:
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Name:
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Title:
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