Inducement Grant Nonqualified Stock Option Agreement
EXHIBIT 10.1
This
Option Agreement (the "Agreement")
is made this __ day of September 2008 (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").
WHEREAS,
as an inducement for the Optionee to accept employment with the Company, 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, the Company hereby grants to the
Optionee the right and option (the "Option")
to purchase 150,000 Common Shares at an exercise price of $25.05 per share (the
"Exercise
Price"), which Exercise Price is 100% of the Fair Market Value per share
on the date the Optionee entered into the Employment Agreement and became an
employee of the Company.
2. Nature of the Option.
The Option shall be a Nonqualified Stock Option.
3. Vesting. Subject to
earlier termination in accordance with this Agreement and the terms and
conditions herein, the Option shall vest and become exercisable with respect to
33 1/3% of the shares covered thereby on each of the first, second and third
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.
4. Term. The Option
shall expire and no longer be exercisable 10 years from the Grant Date, subject
to earlier termination in accordance with 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.
5. 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 this
Agreement.
(b) Termination of Employment
Other than for Cause, Death, Permanent Disability or Voluntary
Termination. If, prior to vesting, the Optionee's employment is
terminated or the Optionee retires in accordance with the Company's retirement
policies, then the Option shall be considered vested in full and be immediately
exercisable as of the date of such termination of employment. For the
avoidance of doubt, a resignation by the Optionee for "good reason" or words of
similar meaning under the Employment Agreement shall constitute a termination
subject to the terms and provisions of this Section 5(b) and upon such event the
Option shall be considered vested in full and be immediately exercisable as of
the date of such termination of employment. The Optionee shall have
the right, subject to the other terms and conditions set forth in this
Agreement, to exercise the Option until the expiration of the Option as provided
in Section 4 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. In no event shall this Section apply if termination is (i)
for Cause, (ii) by reason of death or Permanent Disability or (iii) as a result
of a Voluntary Termination.
(c) Termination of Employment
for Cause; Voluntary Termination. If, prior to vesting, (i) the
Optionee's employment with the Company and its Subsidiaries is terminated by the
Company or any of its Subsidiaries for Cause, or (ii) Optionee terminates
employment under circumstances constituting a Voluntary Termination, 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, to exercise the Option,
to the extent it has vested as of the date of 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 4 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 as of the date of such termination of
employment. The Option shall remain exercisable by the Optionee, a
Permitted Transferee (as defined in Section 10 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 4 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.
(e) Effect of Employment
Agreement. The terms of the Employment Agreement expressly
defining whether and in what manner (including upon termination of employment)
the unvested portion of an Option shall vest, be exerciseable or be cancelled
shall control over the terms of this Agreement.
(f) Discretion of
Committee. In connection with the Optionee's termination of employment,
the Committee shall have the discretion to accelerate the vesting,
exercisability or settlement of, eliminate the restrictions and conditions
applicable to, or extend the post-termination exercise period of any outstanding
Options, which provisions may be determined at a subsequent time. Similarly, the
Committee shall have full authority to determine the effect, if any, of a change
in control of the Company on the vesting, exercisability, settlement, payment or
lapse of restrictions applicable to an Award, which effect may be determined at
a subsequent time.
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6. 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 5 hereof, subject to the earlier expiration
of the Option as provided in Section 4 hereof.
7. 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 7(b) and 7(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 7(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;
Investment Intent. 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. The Committee may require
the Optionee to represent to and agree with the Company in writing that he is
acquiring the Common Shares subject to the Options for investment purposes and
not with a view to the distribution thereof. All certificates for Common Shares
delivered under this Agreement shall be subject to such stock-transfer orders
and other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any exchange upon which the Common Shares are then listed, and any applicable
securities law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such
restrictions.
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(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, in the discretion of the Committee, 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 9 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 9 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). Shares issued upon exercise of the Options may
be either authorized and unissued shares or shares held by the Company in its
treasury.
8. Recapitalization or
Reorganization.
(a) Authority of the Company and
Shareholders. The existence of this Agreement and the Options granted
hereunder shall not affect or restrict in any way the right or power of the
Company or the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or business, any merger or consolidation of the Company, any issue of
stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Shares or the rights thereof or which are convertible into or
exchangeable for Common Shares, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
(b) Change in
Capitalization. Notwithstanding any provision of this Agreement, the
number and kind of Common Shares authorized for issuance under this Agreement,
may be equitably adjusted in the sole discretion of the Committee in the event
of a stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, extraordinary dividend, split-up, spin-off, combination, exchange
of shares, warrants or rights offering to purchase Common Shares at a price
substantially below Fair Market Value or other similar corporate event affecting
the Common Shares in order to preserve, but not increase, the benefits or
potential benefits intended to be made available under this Agreement. In
addition, upon the occurrence of any of the foregoing events, the number of
outstanding Options and the number of Common Shares subject to any outstanding
Options and the Exercise Price may be equitably adjusted (including by payment
of cash to the Optionee) in the sole discretion of the Committee in order to
preserve the benefits or potential benefits intended to be made available to the
Optionee. Such adjustments shall be made by the Committee, in its sole
discretion, whose determination as to what adjustments shall be made, and the
extent thereof, shall be final. Unless otherwise determined by the Committee,
such adjusted Options shall be subject to the same restrictions and vesting or
settlement schedule to which the underlying Options are
subject.
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9. 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.
10. 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 10.
11. 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 10. The grant
of the Option shall impose no obligation on the Optionee to exercise or settle
the Option.
12. Prohibition on
Repricing. The Committee and/or the Board may neither (a)
amend the Option to reduce the Exercise Price, nor (b) cancel or replace the
Option with Options having a lower exercise or xxxxx xxxxx, without the approval
of the shareholders of the Company.
13. 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 constitutes the entire agreement between the parties hereto with
regard to the subject matter hereof and, except for the Employment Agreement,
supersedes all other agreements, representations or understandings (whether oral
or written and whether express or implied) that relate to the subject matter
hereof. Any conflicts or ambiguities between the Employment Agreement
and this Agreement shall be resolved first by reference to the Employment
Agreement and then to this Agreement.
(e) Amendments.
Notwithstanding anything herein to the contrary, the Board and the Committee
shall have the power to amend or modify this Agreement; provided, however, that
no amendment or modification of this Agreement shall materially and adversely
alter or impair the rights of the Optionee without the consent of the Optionee,
except as otherwise provided in Section 13(i), and any such amendment or
modification of the terms of this Agreement 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 amendment or
modification 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 this
Agreement.
(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 Agreement 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. For purposes of
this Agreement only, the term "employment" shall include circumstances under
which Optionee provides consulting or other services to the Company or any of
its Subsidiaries as an independent contractor, but such Optionee is not, nor
shall be considered, an employee; provided, however, nothing in this Section
13(h) or this Agreement shall create an employment relationship between such
person and the Company or its applicable Subsidiary, as the usages described in
this Section are for convenience only.
(i) Compliance with Code Section
409A. It is the intent of the parties that this Agreement incorporates
the terms and conditions necessary to avoid the consequences specified in Code
Section 409A(a)(1). To the extent applicable, this Agreement shall be
interpreted and construed in compliance with Code Section 409A and Department of
Treasury regulations and other interpretive guidance issued thereunder.
Notwithstanding any provision of this Agreement to the contrary, in the event
that the Committee or the Board determines that the Option may be subject to
Code Section 409A, the Committee or the Board may, without the consent of the
Optionee, adopt such amendments to this Agreement or adopt other policies and
procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, that the Committee or the Board determines
are necessary or appropriate to (i) exempt the Option from Code Section 409A or
(ii) comply with the requirements of Code Section 409A and Department of
Treasury regulations and other interpretive guidance issued
thereunder.
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(j) Administration. The
Committee shall administer this Agreement and the related Options, and shall
have full power and authority, subject to the express provisions hereof,
to: (i) determine the terms and
conditions of this Agreement, including, without limitation, those related to
term, vesting, forfeiture, payment, settlement, exercisability and the effect,
if any, of a Participant's termination of employment with the Company or any of
its Subsidiaries or a change in control of the Company, including the authority
to amend the terms and conditions of this Agreement after the granting hereof to
the Optionee in a manner that is not, without the consent of the Optionee,
prejudicial to his rights in such Agreement, and is otherwise consistent with
Section 13(e) (ii) construe and interpret this Agreement, (iii) proscribe, amend
and rescind rules and procedures relating to this Agreement, (iv) employ such
legal counsel, independent auditors and consultants as it deems desirable for
such administration and to rely upon any opinion or computation received
therefrom, (v) vary the terms of this Agreement to take account of tax,
securities law and other regulatory requirements of foreign jurisdictions, (vi)
make all other determinations and take any other action desirable or necessary
to interpret, construe or implement properly the provisions of this
Agreement. All determinations by the Committee in carrying out and
administering this Agreement and in construing and interpreting this Agreement
shall be final, binding and conclusive for all purposes and upon all persons
interested herein.
(k) Liability; Board
Action. No
member of the Board or Committee, the CEO, or any officer or employee of the
Company to whom any duties or responsibilities are delegated hereunder shall be
liable for any action or determination made in connection with the operation,
administration or interpretation of this Agreement and the Company shall
indemnify, defend and hold harmless each such person from any liability arising
from or in connection with this Agreement, except where such liability results
directly from such person's fraud, willful misconduct or failure to act in good
faith. In the performance of its responsibilities with respect to this
Agreement, the Committee shall be entitled to rely upon information and advice
furnished by the Company's officers, the Company's accountants, the Company's
counsel and any other party the Committee deems necessary, and no member of the
Committee shall be liable for any action taken or not taken in reliance upon any
such advice. Anything in this Agreement to the contrary
notwithstanding, any authority or responsibility that, under the terms of this
Agreement may be exercised by the Committee, may alternatively be exercised by
the Board.
(l) Section 16(b) of the
Exchange Act. This Agreement is intended to comply in all respects with
Section 16(b) of the Exchange Act. Notwithstanding anything contained in this
Agreement to the contrary, if the consummation of any transaction under this
Agreement, or the taking of any action by the Committee in connection with a
change in control of the Company, would result in the possible imposition of
liability on the Optionee pursuant to Section 16(b) of the Exchange Act, the
Committee shall have the right, in its sole discretion, but shall not be
obligated, to defer such transaction or the effectiveness of such action to the
extent necessary to avoid such liability, but in no event for a period longer
than 180 days.
14. Definitions. For
purposes of this Agreement, the following capitalized words shall have the
meanings set forth below.
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"Board"
means the Board of Directors of the Company.
"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 the
Employment Agreement.
"CEO" means
the Chief Executive Officer of the Company.
"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
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(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 the Employment Agreement (even if
broader than as defined above).
"Code"
means the United States Internal Revenue Code of 1986, as amended.
"Committee"
shall mean the Compensation Committee of the Board or such other committee
appointed by the Board to administer equity compensation plan-related
matters.
"Common
Shares" means the common shares of the Company, par value $0.10 per
share.
"Employment
Agreement" shall mean that certain employment agreement between Orthofix
Inc. and the Optionee dated September 7, 2008, as amended or modified from time
to time, and includes any successor employment agreement entered into between
the Optionee and the Company or any Subsidiary.
"Fair Market
Value" means, as of any date that requires the determination of the Fair
Market Value of a Common Share under this Agreement, the value of a Common Share
on such date of determination, calculated as follows:
(a) If
the Common Shares are then listed or admitted to trading on a Nasdaq market
system or a stock exchange which reports closing sale prices, the Fair Market
Value shall be the closing sale price on such date on such Nasdaq market system
or principal stock exchange on which the Common Shares are then listed or
admitted to trading, or, if no closing sale price is quoted on such day, then
the Fair Market Value shall be the closing sale price of the Common Shares on
such Nasdaq market system or such exchange on the next preceding day on which a
closing sale price is reported;
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(b) If
the Common Shares are not then listed or admitted to trading on a Nasdaq market
system or a stock exchange which reports closing sale prices, the Fair Market
Value shall be the average of the closing bid and asked prices of the Common
Shares in the over-the-counter market on such date; or
(c) If
neither (a) nor (b) is applicable as of such date, then the Fair Market Value
shall be determined by the Committee in good faith using any reasonable method
of evaluation, which determination shall be conclusive and binding on all
interested parties.
"Nonqualified
Stock Option" means an option that is not intended to comply with the
requirements of Section 422 of the Code or any successor provision
thereto.
"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.
"Permitted
Transferees" has the meaning set forth in Section 10.
"Subsidiary"
means (i) a domestic or foreign corporation or other entity with respect to
which the Company, directly or indirectly, has the power, whether through the
ownership of voting securities, by contract or otherwise, to elect at least a
majority of the members of such corporation's board of directors or analogous
governing body or (ii) any other domestic or foreign corporation or other entity
in which the Company, directly or indirectly, has an equity or similar interest
and which the Committee designates as a Subsidiary.
"Voluntary
Termination" shall occur when the Optionee voluntarily ceases employment
with, or the provision of services to, the Company and its Subsidiaries for any
reason or no reason (e.g., the Optionee elects to cease being an employee or
provide consulting services or the Optionee resigns or quits). For
the avoidance of doubt, a Voluntary Termination shall not occur as a result of
termination of employment as a result of death, Permanent Disability (as
provided hereunder), or termination for "good reason" or similar words (as
permitted hereunder and pursuant to an Employment Agreement) or as the result of
the Optionee's retirement in accordance with the Company's retirement
policies.
10
EXECUTED
as of the date first written above.
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COMPANY:
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ORTHOFIX
INTERNATIONAL N.V.
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By:
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Name: Xxxx
X. Xxxxxxxxx
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Title: Chief
Executive Officer
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OPTIONEE:
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By:
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Name: Xxxxxx
X. Xxxxxx
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Title: Chief
Financial Officer
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