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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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Who are the principal owners of Orthofix common shares?
The following table shows each person, or group of affiliated persons, who beneficially owned, directly or indirectly, at least 5% of our
common shares. Our information is based on reports filed with the SEC by each of the firms or individuals listed in the table below. You may obtain these reports from the SEC.
The Percent of Class figures for the common shares are based on 18,862,904 shares of our common stock outstanding as of May 21, 2018. Except as
otherwise indicated, each shareholder has sole voting and dispositive power with respect to the shares indicated.
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Name and Address of Beneficial Owner
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Amount and
Nature of
Beneficial
Ownership
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Percent of
Class
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BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
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2,464,012
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(1)
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13.1
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%
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The Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, PA 19355
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1,649,893
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(2)
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8.7
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%
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(1)
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Information obtained from a Schedule 13G/A filed with the SEC by BlackRock, Inc. (BlackRock) on January 19, 2018. The Schedule 13G/A discloses that
BlackRock has sole voting power over 2,417,965 shares and sole dispositive power over 2,464,012 shares.
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(2)
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Information obtained from a Schedule 13G/A filed with the SEC by The Vanguard Group, Inc. (Vanguard) on February 8, 2018. The Schedule 13G/A
discloses that Vanguard has sole power to vote or direct the vote of 22,745 shares, shared power to direct the vote of 7,396 shares, sole power to dispose of or to direct the disposition of 1,621,618 shares, and shared power to dispose or to direct
the disposition of 28,275 shares.
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Commo
n shares owned by Orthofixs directors
and executive officers
The following table sets forth the beneficial ownership of our common shares, including stock options currently
exercisable and exercisable within 60 days of May 21, 2018, by each director, each director nominee, each current and former executive officer listed in the Summary Compensation Table, and all current directors, director nominees and executive
officers as a group. The percent of class figure is based on 18,862,904 shares of our common stock outstanding as of May 21, 2018. All directors and executive officers as a group beneficially owned 1,274,442 shares of Orthofix common stock as
of such date. Unless otherwise indicated, the beneficial owners exercise sole voting and/or investment power over their shares.
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Name and Address of Beneficial Owner
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Amount and
Nature of
Beneficial
Ownership
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Percent of
Class
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Bradley R. Mason
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420,907
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(1)
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2.2
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%
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Michael M. Finegan
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153,490
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(2)
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*
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Ronald A. Matricaria
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131,613
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(3)
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*
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Davide Bianchi
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100,915
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(4)
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*
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Douglas C. Rice
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73,310
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(5)
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*
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James F. Hinrichs
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56,297
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(6)
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*
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Lilly Marks
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36,529
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(7)
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*
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Luke Faulstick
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30,229
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(8)
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*
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Maria Sainz
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29,267
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(9)
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*
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79
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Name and Address of Beneficial Owner
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Amount and
Nature of
Beneficial
Ownership
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Percent of
Class
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Michael E. Paolucci
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23,529
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(10)
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*
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Kimberley A. Elting
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21,365
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(11)
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*
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Alexis V. Lukianov
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11,566
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(12)
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*
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John Sicard
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All directors and executive officers as a group (16 persons)
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1,274,442
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6.8
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%
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*
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Represents less than 1%.
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(1)
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Reflects 145,721 shares owned directly and 275,186 shares issuable pursuant to stock options that are currently exercisable or exercisable within 60 days of May 21, 2018.
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(2)
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Reflects 36,844 shares owned directly and 116,646 shares issuable pursuant to stock options that are currently exercisable or exercisable within 60 days of May 21, 2018.
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(3)
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Reflects 95,105 shares owned directly, 6,508 shares issuable pursuant to deferred stock units that vest within 60 days of May 21, 2018 and 30,000 shares issuable pursuant to stock options that are currently exercisable
or exercisable within 60 days of May 21, 2018.
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(4)
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Reflects 56,022 shares owned directly and 44,893 shares issuable pursuant to stock options that are currently exercisable or exercisable within 60 days of May 21, 2018.
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(5)
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Reflects 38,337 shares owned directly and 34,973 shares issuable pursuant to stock options that are currently exercisable or exercisable within 60 days of May 21, 2018.
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(6)
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Reflects 22,718 shares owned directly, 3,579 shares issuable pursuant to deferred stock units that vest within 60 days of May 21, 2018 and 30,000 shares issuable pursuant to stock options that are currently exercisable
or exercisable within 60 days of May 21, 2018.
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(7)
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Reflects 10,450 shares owned directly, 3,579 shares issuable pursuant to deferred stock units that vest within 60 days of May 21, 2018 and 22,500 shares issuable pursuant to stock options that are currently exercisable
or exercisable within 60 days of May 21, 2018.
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(8)
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Reflects 4,150 shares owned directly, 3,579 shares issuable pursuant to deferred stock units that vest within 60 days of May 21, 2018 and 22,500 shares issuable pursuant to stock options that are currently exercisable
or exercisable within 60 days of May 21, 2018.
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(9)
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Reflects 25,688 shares owned directly and 3,579 shares issuable pursuant to deferred stock units that vest within 60 days of May 21, 2018.
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(10)
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Reflects 4,950 shares owned directly, 3,579 shares issuable pursuant to deferred stock units that vest within 60 days of May 21, 2018 and 15,000 shares issuable pursuant to stock options that are currently exercisable
or exercisable within 60 days of May 21, 2018.
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(11)
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Reflects 12,790 shares owned directly and 8,575 shares issuable pursuant to stock options that are currently exercisable or exercisable within 60 days of May 21, 2018.
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(12)
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Reflects 487 shares owned directly, 3,579 shares issuable pursuant to deferred stock units that vest within 60 days of May 21, 2018 and 7,500 shares issuable pursuant to stock options that are currently exercisable or
exercisable within 60 days of May 21, 2018.
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80
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PROPOSAL 2:
EL
ECTION OF DIR
ECTORS
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Our Existing Articles of Association provides that the Board shall consist of not less than six and no more than fifteen
directors, the exact number to be determined from
time-to-time
by resolution of the Board. The Board is currently comprised of nine seats, all of which seats will be up
for election at the Annual General Meeting. We have nominated Mr. Faulstick, Mr. Hinrichs, Mr. Lukianov, Ms. Marks, Mr. Mason, Mr. Matricaria, Mr. Paolucci, Ms. Sainz and Mr. Sicard to stand for election
at the Annual General Meeting for these nine seats. Each seat will be elected for a one year term expiring at the 2019 annual general meeting of shareholders and/or until their successors have been elected.
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Name
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Age
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Director
Since
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Independent
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Audit and
Finance
Committee
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Compensation
Committee
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Compliance
and Ethics
Committee
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Nominating
and
Governance
Committee
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Luke Faulstick
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55
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2014
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✓
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✓
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Chair
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James Hinrichs
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50
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2014
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✓
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Chair
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✓
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Alexis V. Lukianov
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62
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2016
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✓
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✓
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✓
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Lilly Marks
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70
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2015
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✓
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✓
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Bradley R. Mason
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64
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2013
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Ronald Matricaria (
Chairman
)
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75
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2014
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✓
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✓
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Michael E. Paolucci
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58
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2016
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✓
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Chair
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✓
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Maria Sainz
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52
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2012
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✓
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✓
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Chair
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John Sicard
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55
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2018
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✓
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We know of no reason why any nominee may be unable to serve as a director. If any nominee is unable to serve,
your proxy may vote for another nominee proposed by the Board, or the Board may reduce the number of directors to be elected. If any director resigns, dies or is otherwise unable to serve out his term, the Board may fill the vacancy until the
next annual general meeting of shareholders.
Current Directors (and Director
s Standing for
Election at the Annual General Meeting)
Luke Faulstick
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Director (Nominated to Stand for
Re-Election
as Director at the Annual General Meeting)
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Mr. Faulstick, 55, joined the Board in September 2014. He has over 25 years of experience as a manufacturing executive and is a recognized expert on Lean Manufacturing and work culture. Since 2012,
Mr. Faulstick has been
co-owner,
President and Chief Executive Officer of PPI Inc., a company operating several manufacturing-focused businesses. Prior to forming PPI, he was the Executive Vice President
and Chief Operating Officer of DJO Global. He previously held senior operating management roles at Tyco Healthcare, Graphic Controls, Mitsubishi Consumer Electronics and Eastman Kodak. Under his leadership, DJO Globals operations teams and
manufacturing plants won numerous awards including the Shingo Prize for Operational Excellence, Industry Weeks Best Plants, and the Association of Manufacturing Excellence Operational Excellence Award. Mr. Faulstick received a Bachelor of
Science Degree in Engineering from Michigan State University and a Master of Science Degree in Engineering from Rochester Institute of Technology. He previously served on the boards of Alphatec Spine and Microdental, as well as Chairman of the Board
of the Association of Manufacturing Excellence. Currently he is a member of the Rady Childrens Hospital Foundation Board of Trustees and a Certified Board of Director through the UCLA Anderson School of Business.
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81
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The Board believes that Mr. Faulsticks extensive experience as a manufacturing executive, operational knowledge and industry expertise, as well as his previous and current board memberships, brings unique and
valuable insight to the Board.
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James F. Hinrichs
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Director (Nominated to Stand for
Re-Election
as Director at the Annual General Meeting)
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Mr. Hinrichs, 50, was appointed to the Board in April 2014. Since April 2018, he has served as Chief Financial Officer of Cibus, a privately-held agricultural biotech company. From April 2015 to October 2017, he
served as Executive Vice President and Chief Financial Officer of Alere Inc, a publicly traded diagnostic company, prior to its sale to Abbott Labs. From December 2010 through March 2015, he served as Chief Financial Officer of CareFusion
Corporation, a publicly traded medical technology company, prior to its sale to Becton Dickinson. He previously served as CareFusions Senior Vice President, Global Customer Support, from January 2010 to December 2010, and as its Senior Vice
President, Controller, from January 2009 to January 2010. Prior to joining CareFusion when it was spun off from Cardinal Health, Inc., he worked since 2004 at Cardinal Health in various positions including Executive Vice President and Corporate
Controller of Cardinal Health, and as Executive Vice President and Chief Financial Officer of its Healthcare Supply Chain Services segment. He joined Cardinal Health following over a decade of finance and marketing roles at Merck & Co. He
holds undergraduate and graduate degrees in business from Carnegie Mellon University.
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The Board believes that Mr. Hinrichs financial and accounting experience gained through the foregoing roles, including in particular his experience as a public company chief financial officer, provide
important expertise to the Board and enable him to provide service and leadership as the Chair of the Companys Audit and Finance Committee.
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Alexis V. Lukianov
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Director (Nominated to Stand for
Re-Election
as
Re-Director
at the Annual General Meeting)
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Mr. Lukianov, 62, became a director in December 2016, bringing to the Board his more than 30 years of experience in the orthopedic industry. He is Chairman and CEO of Tissue Differentiation Intelligence, LLC, a
privately-held ultrasound spine company formed in 2017. From July 1999 to March 2015, he served as Chief Executive Officer and a director of NuVasive, Inc., a publicly-traded medical device company focused on the design, development and marketing of
products for the surgical treatment of spine disorders, including serving as Chairman of the Board between 2004 and 2015. From April 1996 to April 1997, Mr. Lukianov was a founder of and served as Chairman of the Board and Chief
Executive Officer of BackCare Group, Inc., a spine physician practice management company. From January 1990 to October 1995, Mr. Lukianov held a variety of senior executive positions, including President, with Medtronic Sofamor
Danek, Inc., a developer and manufacturer of medical devices to treat disorders of the cranium and spine and a subsidiary of Medtronic, Inc., a publicly-traded medical technology company. Between 1987 and 1990, he was the director of a business unit
at Smith & Nephew Orthopaedics that brought limb lengthening technology to the United States from Russia. From 2007 until its acquisition in 2015 by Royal Philips, he served on the Board of Directors of Volcano Corporation, a
Nasdaq-listed medical technology company. He has previously served on the boards and the executive committees of BIOCOM, a regional life sciences trade association, the Medical Device Manufacturers Association (MDMA), a national trade association,
and the California Health Institute (CHI). Mr. Lukianov also serves on a number of private and
non-profit
boards.
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82
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The Board believes that Mr. Lukianovs experience leading medical device and orthopedic companies brings valuable industry experience to the Board.
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Lilly Marks
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Director (Nominated to Stand for
Re-Election
as Director at the Annual General Meeting)
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Ms. Marks, 70, was appointed to the Board in June 2015. Since 2010, Ms. Marks has served as Vice President for Health Affairs for the University of Colorado and Anschutz Medical Campus, which includes the
universitys Schools of Medicine, Dental Medicine, Pharmacy, Public Health, College of Nursing and Graduate School and the University of Colorado Hospital and Childrens Hospital Colorado. Prior to her health campus leadership role, Ms.
Marks spent two decades as both Senior Associate Dean for Finance and Administration at the School Of Medicine and Executive Director of University Physicians, Inc., the 501(c)(3) faculty practice plan. Ms. Marks has served as Chair, Board of
Directors of the University of Colorado Hospital and is currently a board member of the Board of Directors of the UCHealth System, Childrens Hospital Colorado, Federal Reserve Bank of Kansas City, the Advisory Board for Clinical Research of
the National Institutes of Health, the Fitzsimons Redevelopment Authority, the Association of Academic Health Centers (AAHC), the Global Down Syndrome Foundation, and the Rose Community Foundation. She is also a member of the AAMC Advisory Panel on
Research and is a trustee of the University of Colorado Foundation.
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The Board believes that Ms. Marks extensive experience from her previous and current board memberships, as well as her accomplished academic background, brings unique and valuable insight to the Board.
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Bradley R. Mason
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Director President and Chief Executive Officer (Nominated to Stand for
Re-Election
as Director at the Annual General Meeting)
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Mr. Mason, 64, has served as a director since the Companys 2013 annual general meeting of shareholders. Mr. Mason rejoined Orthofix in March 2013 as our President and Chief Executive Officer after
previously serving as Group President, North America from June 2008 through October 2009, and as a Strategic Advisor from November 2009 through October 2010. Prior to being appointed as Group President, North America, he had served as a Vice
President of the Company since December 2003, when the Company acquired Breg, Inc. Prior to its acquisition by Orthofix, Mr. Mason had served as President and Chairman of Breg, a company he principally founded in 1989 with five other
shareholders. Mr. Mason has over 30 years of experience in the medical device industry, some of which were spent with dj Orthopedics (formerly DonJoy) where he became an owner and executive in its early development stage and held the
position of Executive Vice President. Since his retirement from Orthofix in 2010, he has served in a variety of part-time consulting and advisory roles, including as a consultant to Orthofix since October 2012 (which consulting relationship has
been terminated as of March 13, 2013). Mr. Mason is the named inventor on 38 issued patents in the orthopedic product arena. He graduated Summa Cum Laude with an Associate of Arts and Associate of Science degree from MiraCosta College.
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The Board believes that Mr. Masons leadership skills, operational knowledge and industry expertise, and his perspective as the Companys President and Chief Executive Officer, brings unique and valuable
insight to the Board.
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Ronald Matricaria
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Chairman of the Board (Nominated to Stand for
Re-Election
as Director at the Annual General Meeting)
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Mr. Matricaria, 75, was appointed to the Board in March 2014. He has more than 35 years of medical device
and pharmaceutical experience at St. Jude Medical, Inc. and Eli
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83
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Lilly and Company, Inc. From April 1993 to May 1999, he served as President and Chief Executive Officer of St. Jude Medical, Inc. and served as Chairman of the Board of Directors from January
1995 to May 2002. Prior to joining St. Jude Medical, Mr. Matricaria spent 23 years with Eli Lilly and Company, Inc., where his last position was Executive Vice President of the Pharmaceutical Division of Eli Lilly and Company and President of
its North American operations. He also served as President of Eli Lilly International Corporation, as well as President of its Medical Device Division. He currently serves as a director of Kinaxis Inc. a SaaS based software company traded on the
Toronto Stock Exchange. Until recently, he served as Chairman of the Board at Volcano Corporation and as a member of the Boards of Phoenix Childrens Hospital and Life Technologies Corporation. Additionally, Mr. Matricaria previously has
served on the board of a number of other public and private companies including Home Depot Inc., Diametric Medical Inc., Ceridian Inc., Centocor Inc., Haemonetics Inc., Kinetic Concepts, Inc., Hospira Inc., Cyberonics Inc., Vistacare Inc., Advanced
Medical Technology Association (AdvaMed), the Pharmaceutical Manufacturers Association International Section, the American Diabetes Association, the American Foundation for Pharmaceutical Education, the National Foundation for Infectious Diseases,
the National Retiree Volunteer Center and the Indiana Repertory Theatre as well as a trustee on the board of the Massachusetts College of Pharmacy and Allied Health Science. He also chaired the BioMedical Engineering Institute campaign, which raised
an operating endowment for the Institute at the University of Minnesota. He remains a Trustee emeritus of the University of Minnesota Foundation. Mr. Matricaria holds a bachelors degree in pharmacy from the Massachusetts College of
Pharmacy and was awarded an honorary Doctor of Science degree in pharmacy, as well as an honorary PharmD degree, in recognition of his contributions to the practice of pharmacy.
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The Board believes that Mr. Matricarias wealth of experience as both an executive and director in the medical device industry brings invaluable experience and leadership qualities to the Board.
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Michael E. Paolucci
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Director (Nominated to Stand for
Re-Election
as Director at the Annual General Meeting)
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Mr. Paolucci, 58, was named to the Board and appointed to the Compensation Committee in March 2016. A seasoned Human Resource (HR) executive, Mr. Paolucci has more than 20 years of global experience working
directly with Boards of Directors and
C-level
executives to improve organizational capabilities and HR programs that result in sustained improvements in business performance. Since July 2015, he has served as
Vice President and Chief Human Resources Officer for Halozyme Therapeutics Inc., a late stage oncology and biopharmaceutical company. From August 2014 to June 2015, Mr. Paolucci served as Executive Vice President and Chief Human Resource
Officer for CareFusion. He also served as Executive Vice President of Human Resources at NuVasive from February 2014 to August 2014, and spent five years at Life Technologies from 2009 to February 2014. Previously, he was head of Human Resources for
the services division of Hewlett Packard and served in several leadership roles with EDS, which was acquired by Hewlett Packard. Prior to HP/EDS, he was a partner with the HR consulting firm Towers Perrin. Mr. Paolucci is a graduate of Ohio
State University.
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The Board believes that Mr. Paoluccis extensive experience as a HR executive and relevant knowledge and understanding of public company compensation issues brings unique and valuable insight to the Board.
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84
Maria Sainz
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Director
(Nominated to Stand for
Re-Election
as Director at the Annual General Meeting)
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Ms. Sainz, 52, became a director of Orthofix in November 2012, after previously having served on the Board from June 2008 to September 2011. Since May 2018, she has served as President & CEO of AEGEA
Medical, Inc., a privately-held womens health company in the field of endometrial ablation. From April 2012 to June 2017, she was the President and Chief Executive Officer, and a director, of CardioKinetix Inc., a heart failure related medical
device company. From April 2008 to October 2011, she was President and Chief Executive Officer of Concentric Medical, Inc., a company developing and commercializing devices to perform mechanical clot removal post-stroke, which was sold to
Stryker Corporate in October 2011. Upon this acquisition, she served as General Manager of the Stryker Neurovascular business unit until April 2012. From 2003 to 2006, she was the President of the Cardiac Surgery division of Guidant
Corporation. After Boston Scientific acquired Guidant, Ms. Sainz led the integration process for both the Cardiac Surgery and European Cardiac Rhythm Management business of Guidant into Boston Scientific. Between 2001 and 2003,
Ms. Sainz was the Vice President of Global Marketing Vascular Intervention of Guidant. Ms. Sainz earned a Bachelor and Masters of Arts from the Universidad Complutense de Madrid and a Masters Degree in International
Management from American Graduate School of International Management. Ms. Sainz has served as a director of Halyard Health, Inc. since February 2015 and of Iridex Corporation since April 2018. Ms. Sainz previously served as a director of
The Spectranetics Corporation from 2010 until its sale in August 2017, and of MRI Interventions, Inc. from January 2014 to May 2018.
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Ms. Sainz provides the Board with significant experience in the medical device industry, as well as insight into international markets. The Board also values the perspective she brings from her current
position as a chief executive officer.
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John Sicard
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Director (Nominated to Stand for Election as Director at the Annual General Meeting)
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Mr. Sicard, 55, became a director of Orthofix in March 2018. Mr. Sicard joined the Board in March 2018. Since January 2016, he has served as the President and Chief Executive Officer, and Board Member of
Kinaxis, a global supply chain management software company that delivers cloud-based solutions to some of the worlds largest manufacturing companies, including many in the life science sector. Mr. Sicard joined Kinaxis in 1994 where he
has held a number of senior management roles including being Chief Product Officer from October 2013 to January 2016 and Chief Strategy Officer from September 2012 to September 2013, as well as previously serving as Chief Operating Officer,
Executive Vice President of Marketing Development and Service Operations and Vice President of Professional Services. Prior to Kinaxis, Mr. Sicard held positions at FastMAN Software Systems, and Monenco Agra.
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The Board believes that Mr. Sicards extensive experience as a strategic supply chain management executive, as well as his current board membership, brings unique and valuable insight to the Board.
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The Board unanimously recommends that you vote
FOR
the election of each of the foregoing director nominees standing for election at the
Annual General Meeting.
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85
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PROPOSAL 3: APPROVAL OF FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017
|
Shareholders will be asked to consider, and, if thought fit, approve the consolidated balance sheet and consolidated statement
of operations at and for the fiscal year ended December 31, 2017.
Pursuant to Article 116 of Book 2 of the CCC, the Board is required to draw up the
Companys consolidated balance sheet and consolidated statement of operations within eight months after the end of the fiscal year and to submit the same to the Annual General Meeting for approval. Approval of these financial statements does
not constitute an expression of approval of the Companys financial performance. Rather, the approval by shareholders of these statements is a legally mandated process under Curaçao law. In the event that shareholders do not
approve the financial statements, the Company may be required to call a special meeting of shareholders to
re-submit
the same financial statements for additional approval, which we believe would constitute a
waste of shareholder assets. As such, we urge shareholders to support the proposal to permit the Company to comply with its obligations under Curaçao law.
A copy of the Companys consolidated balance sheet and consolidated statement of operations at and for the fiscal year ended December 31, 2017 is
included in the 2017 Form
10-K,
a copy of which accompanies this proxy statement/prospectus.
|
The Board unanimously recommends that you vote FOR the
proposal to
approve the consolidated balance sheet and consolidated statement of
operations
at and for the fiscal year ended December 31, 2017.
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86
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PROPOSAL 4: ADVISORY AND
NON-BINDING
VOTE ON EXECUTIVE COMPENSATION
|
As required by section 14A of the Securities Exchange Act of 1934, as amended, we are providing our shareholders an opportunity
to indicate whether they support our named executive officer compensation as described in this proxy statement/prospectus. This advisory and
non-binding
vote, commonly referred to as
say-on-pay,
is not intended to address any specific item of compensation, but instead relates to the Compensation Discussion and Analysis, the tabular disclosures
regarding named executive officer compensation, and the narrative disclosure accompanying the tabular presentation. These disclosures allow you to view the trends in our executive compensation program and the application of our compensation
philosophies for the years presented. Because our Board views the advisory vote as a good corporate governance practice, and because a majority of our shareholders have expressed a preference for an annual advisory vote, we hold such votes on an
annual basis. At the 2017 annual meeting, the Companys
say-on-pay
proposal was supported by 92% of the votes cast, which we believe supports the Companys
pay-for-performance
approach to executive compensation. The Committee evaluated these results of the vote in the fall of 2017.
The Committee believes that the voting results over the course of the last several years (which has included 90% or greater approval votes at five of the
Companys last six annual general meetings of shareholders) affirm shareholders overall support of the Companys approach to executive compensation, including continuing efforts by the Committee during that time to evolve the
Companys compensation programs towards policies viewed by institutional and other shareholders as aligning executive compensation with the interests of shareholders and good corporate governance. In addition to responding to the input of
shareholders, the Committee also has considered many other factors in evaluating and setting the Companys executive compensation programs, including the Committees assessment of the interaction of our compensation programs with our
corporate business objectives, periodic analysis of our programs by our compensation consultant, and annual review of data versus a comparator group of peer companies, each of which is evaluated in the context of the Committee members
fiduciary duty to act as the directors determine to be in shareholders best interests. Each of these factors informed the Compensation Committees decisions regarding named executive officers compensation for 2017. The Committee
will continue to consider feedback from shareholders, including the outcome of the Companys
say-on-pay
votes, when making future compensation decisions for its
named executive officers.
As discussed in the Compensation Discussion and Analysis section of this proxy statement/prospectus, we believe that our
executive compensation program properly links executive compensation to Company performance and aligns the interests of our executive officers with those of our shareholders.
Accordingly, the Board unanimously recommends that shareholders vote in favor of the following resolution:
RESOLVED, that the shareholders approve the compensation of the Companys named executive officers as disclosed in this proxy
statement/prospectus pursuant to the rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and the related footnotes and narrative disclosures.
Although this vote is advisory and is not binding on the Company, the Compensation Committee of the Board will take into account the outcome of the vote when
considering future executive compensation decisions.
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The Board unanimously recommends you
for FOR the
say-on-pay
proposal.
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PROPOSAL 5: APPROVAL OF THE AMENDED AND RESTATED 2012 LONG-TERM INCENTIVE PLAN
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Shareholders will be asked to consider the terms of the Amended and Restated 2012 Plan and vote on the adoption of the Amended
and Restated 2012 Plan at the Annual General Meeting.
The Board of Directors has adopted the Amended and Restated 2012 Plan, subject to approval from our
shareholders. We are asking our shareholders to approve the Amended and Restated 2012 Plan as we believe that approval of the plan is essential to our continued success. The purpose of the Amended and Restated 2012 Plan is to provide eligible
employees and
non-employee
directors an incentive to contribute to the success of the Company and to operate and manage our business in a manner that will provide for the Companys long term growth and
profitability and provide a means of obtaining, rewarding and retaining key personnel. In the judgment of the Board of Directors, awards under the Amended and Restated 2012 Plan will be a valuable incentive and will serve to the ultimate benefit of
our shareholders by aligning more closely the interests of Amended and Restated 2012 Plan participants with those of our shareholders.
If our
shareholders approve the Amended and Restated 2012 Plan, the number of shares of common stock reserved for issuance under the plan will be increased by 1,550,000 shares. As of May 16, 2018, 14,305 shares remained available for future award
grants under the 2012 LTIP (assuming all currently outstanding performance share units ultimately are achieved at target levels). In addition, if all performance share units outstanding as of such date were achieved at maximum levels, a further
604,879 shares would be issuable.
If our shareholders approve the Amended and Restated 2012 Plan, the new terms of the plan will govern awards made on
and following the date of shareholder approval and the terms of the plan prior to its amendment and restatement will govern awards made prior to the date of shareholder approval. On May 22, 2018, the closing price of our common stock was
$54.09 per share.
The following is a summary of certain material differences between the Amended and Restated 2012 Plan and the 2012 LTIP as it
currently exists:
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The Amended and Restated 2012 Plan retains the individual limits on the maximum number of shares of common stock that may be granted under the plan pursuant to specified awards and the maximum dollar amount that may be
paid as a cash-denominated award over specified periods, but adds a separate, higher limit on the grants that can be made the first year a grantee is employed by the Company. Notwithstanding that changes resulting from the Tax Act (as described
below) have made imposing these limits on future awards irrelevant for their original intended purpose, which was the ability to grant awards that qualified as performance-based compensation under Section 162(m) of the Code, we have
retained and expanded upon these individual limits because they currently represent good corporate governance procedures and are favored by institutional investors and proxy advisory services. In addition, the Amended and Restated 2012 Plan adds a
separate limit on the maximum total compensation (including cash payments and the aggregate grant date value of awards) that may be granted in a fiscal year to an outside director. These limits are discussed in more detail below under
Share
Limits
.
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The Amended and Restated 2012 Plan retains the requirement that awards subject to time-based vesting are subject to a time-based vesting schedule of a least one year following the date of grant and that awards subject
to performance-based vesting are subject to a performance-based vesting schedule that vests based on the achievement of performance metrics over a period of not less than one year from the date of grant, but adds an exception providing that up to 5%
of the number of shares of common stock available for issuance under the Amended and Restated 2012 Plan may be granted without such limitations and that awards that that vest due to a grantees death, disability or retirement, or in connection
with a corporate transaction are not subject to the
one-year
vesting limitation.
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The 2012 LTIP included certain design features that were intended to allow awards that qualified as
performance-based compensation under Section 162(m) of the Code. These awards were intended to
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be exempt from the $1 million deduction limit that would otherwise apply under Section 162(m) for compensation paid to certain executive officers. The Tax Act eliminated the exception
from the Section 162(m) deduction limit for performance-based compensation and expanded the group of executive officers to which the $1 million deduction limit applies. As a result, while the Amended and Restated 2012 Plan
continues to allow awards to be granted that are subject to performance-vesting conditions, the Amended and Restated 2012 Plan eliminates certain of the provisions that had been required for awards to comply with the exception to the deduction
limitation for performance-based compensation. However, the Amended and Restated 2012 Plan still retains certain of the features common to performance-based compensation under Section 162(m) as in effect before the Tax
Act, including certain individual award limits and a list of performance criteria, even though those features are no longer required by tax law after the Tax Act. The Company may
re-evaluate
these features at
a later date as guidance is provided by the Internal Revenue Service regarding the changes made to Section 162(m) by the Tax Act. As a result of the changes imposed by the Tax Act, therefore, none of the new awards under the Amended and
Restated 2012 Plan will be able to qualify as performance-based compensation under the provisions of Section 162(m) of the Code as in effect prior to the Tax Act, and any awards granted under the Amended and Restated 2012 Plan to
our chief executive officer, chief financial officer, and three other most highly compensated executive officers will be subject to the $1 million deduction limit of Section 162(m) of the Code. The provisions of the 2012 LTIP will continue
to apply to any awards granted on or prior to November 2, 2017 that were intended to qualify as performance-based compensation or that were intended to be exempt from the limitations imposed by Section 162(m) of the Code.
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Though the Company does not currently have a practice of paying dividends, the Amended and Restated 2012 Plan provides that any cash dividends declared or paid on shares of restricted stock will not be paid currently,
but will instead be accrued and will be subject to the same vesting conditions and restrictions that apply to the underlying shares of restricted stock. As a result, any dividends paid in respect of shares of restricted stock will not vest and
become payable unless and until the shares of restricted stock to which the dividends apply become vested and nonforfeitable. The 2012 LTIP allowed dividends to be paid on unvested shares of restricted stock.
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Assuming a quorum is present at the Annual General Meeting, the approval of the holders of a majority of the votes cast will be required to approve this
proposal. Neither abstentions nor broker
non-votes
will have any effect on the outcome of voting this proposal.
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The Board unanimously recommends that you
vote FOR the approval of the Amended and Restated 2012 Plan.
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Description of the Plan
A description of the material provisions of the Amended and Restated 2012 Plan is set forth below. This summary is qualified in its entirety by the detailed
provisions of the Amended and Restated 2012 Plan, a copy of which is attached as Annex C to this proxy statement/prospectus.
Administration.
The Amended and Restated 2012 Plan is administered by the Compensation Committee of the Board of Directors. The members of
the Compensation Committee meet the requirements of
Rule 16b-3
of the Exchange Act and comply with the independence requirements of current Nasdaq listing standards. In addition, to the extent necessary
to satisfy any transition rule or applicable transition guidance pertaining to awards intended to satisfy the criteria for performance-based compensation under Section 162(m) of the Code, the committee administering such awards will consist of
two or more directors who qualify as outside directors within the meaning of Section 162(m) and the applicable guidance thereunder. Subject to the terms of the plan, the Compensation Committee may select participants to receive
awards, determine the types and amounts of awards and terms and conditions of awards, and interpret provisions of the plan. Members of the Compensation
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Committee serve at the pleasure of the Board of Directors. The Board of Directors may also appoint one or more separate committees, each composed of one or more directors who need not satisfy the
independence requirements described above to administer the Amended and Restated 2012 Plan with respect to employees or other service providers who are not officers or directors of the Company. In addition, to the extent permitted by applicable
laws, the Compensation Committee may, by resolution, delegate some or all of its authority with respect to the plan and awards to the President and Chief Executive Officer and/or any other officer of the Company designated by the Compensation
Committee, provided that the officer delegated such authority may not make grants to Company directors, to executive officers (as defined in Rule
3b-7
under the Exchange Act), or to himself or
herself. In addition, the Compensation Committee may not delegate its authority to interpret the Amended and Restated 2012 Plan, any award or any award agreement.
Common Stock Reserved for Issuance under the Plan.
The common stock issued or to be issued under the Amended and Restated 2012 Plan
consists of authorized but unissued shares or, to the extent permitted by applicable law, issued shares that have been reacquired by the Company. The Amended and Restated 2012 Plan provides for a
so-called
fungible share pool pursuant to which awards of options and stock appreciation rights (SARs) will be counted against the plan limit as one share for every one share subject to an option or SAR granted under the plan, and
full value awards (all awards other than options and SARs) will be counted against the plan limit as 1.84 shares for every one share subject to such full value award. If any shares covered by an award under the Amended and Restated
2012 Plan are not purchased or are forfeited, or if an award otherwise terminates without delivery of any common stock, then the number of shares of common stock counted against the aggregate number of shares available under the plan with respect to
the award will again be available for making awards under the Amended and Restated 2012 Plan in accordance with the previously described fungible share pool. The number of shares of common stock available for issuance under the Amended and Restated
2012 Plan will not be increased by (i) any shares tendered or withheld or award surrendered in connection with the purchase of shares of common stock upon exercise of an option SAR, (ii) any shares of common stock that were not issued upon
the net settlement or net exercise of an option or stock-settled SAR, (iii) any shares of common stock deducted from an award payment in connection with the Companys tax withholding obligations, or (iv) any shares of common stock
purchased by the Company with proceeds from option or SAR exercises.
Eligibility.
Awards may be made under the Amended and Restated
2012 Plan to directors, or employees of or consultants to the Company or any of our affiliates, including any such employee who is an officer or director of us or of any affiliate.
Minimum Vesting Provisions
.
Except with respect to a maximum of 5% of the shares that may be granted under the Amended and Restated 2012
Plan, no portion of any award that vests on the basis of a grantees continued service may be granted with vesting conditions under which vesting occurs earlier than the one year anniversary of the grant date, and no portion of any award that
vests based upon the attainment of performance measures may be granted with a performance period of less than 12 months. (Certain substitute awards that the Company may assume in corporate transactions are not subject to this provision.) The
Compensation Committee may, however, provide for the earlier vesting, exercisability, and/or settlement under any award in the event of a grantees death, disability or retirement in connection with a corporate transaction.
Amendment or Termination of the Plan.
The Board of Directors may terminate or amend the Amended and Restated 2012 Plan at any time and for
any reason. The Amended and Restated 2012 Plan shall terminate in any event 10 years after the date of shareholder approval of the plan (which, if the plan is approved at the annual meeting, shall make such termination date June 18, 2028).
Amendments will be submitted for shareholder approval to the extent required by the Code or other applicable laws, rules or regulations.
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Options.
The Amended and Restated 2012 Plan permits the granting of options to purchase
shares of common stock intended to qualify as incentive stock options under the Code and options that do not qualify as incentive stock options.
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Exercise Price.
The exercise price of each option may not be less than 100% of the fair market value of our common stock on the date of grant. The fair market value is generally determined as the closing
price of the common stock on the date of grant. In the case of certain 10% shareholders who receive incentive stock options, the exercise price may not be less than 110% of the fair market value of the common stock on the date of grant. An exception
to these requirements is made for options that the Company grants in substitution for options held by employees of companies that the Company acquires. In such a case the exercise price is adjusted to preserve the economic value of the
employees option from his or her former employer. The term of each option is fixed by the Compensation Committee and may not exceed 10 years from the date of grant (or five years from the date of grant in the case of certain 10%
shareholders who receive incentive stock options). The Compensation Committee determines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment during which
options may be exercised. Options may be made exercisable in installments. In general, an optionee may pay the exercise price of an option by cash, certified check, or, to the extent an award agreement so provides, by tendering shares of common
stock, by means of a broker-assisted cashless exercise or by means of net exercise.
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Transfers.
Options and SARs granted under the Amended and Restated 2012 Plan may not be sold, transferred, pledged or assigned other than by will or under applicable laws of descent and distribution.
However, the Company may permit limited transfers of
non-qualified
options and SARs for the benefit of immediate family members of grantees to help with estate planning concerns.
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Repricing Prohibited.
Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation,
split-up,
spin-off,
combination, or exchange of shares), the Company may not amend the terms of outstanding options or SARs to
reduce the exercise price or SAR price, as applicable, of such outstanding options or SARs, cancel or assume outstanding options or SARs in exchange for or substitution of options or SARs with an exercise price or SAR price, as applicable, that is
less than the exercise price or SAR price, as applicable, of the original options or SARs, or cancel or assume outstanding options or SARs with an exercise price or SAR price, as applicable, above the current fair market value in exchange for cash,
awards, or other securities, in each case, unless such action is subject to and approved by the Companys shareholders.
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Other
Awards.
The Compensation Committee may also award:
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shares of unrestricted stock, which are shares of common stock at no cost or for a purchase price determined by the Compensation Committee which are free from any restrictions under the plan. Unrestricted shares of
common stock may be granted, subject to 5% limit discussed above under
Minimum Vesting Provisions
, to participants in recognition of past services or other valid consideration, and may be issued in lieu of cash compensation
to be paid to participants;
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shares of restricted stock, which are shares of common stock subject to restrictions. Shares of restricted stock have the right to vote and the right to receive dividends declared or paid with respect to such shares,
except that cash and stock dividends will not be paid currently but instead will be subject to the same vesting conditions and restrictions applicable to the underlying shares of restricted stock;
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stock units, which are common stock units subject to restrictions;
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dividend equivalent rights, which are rights entitling the recipient to receive credits for dividends that would
be paid if the recipient had held a specified number of shares of common stock. Dividend equivalent rights granted as a component for another award, such as in connection with stock units, will
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not be paid currently but instead will be subject to the same vesting conditions and restrictions applicable to the underlying award;
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SARs, which are a right to receive a number of shares or, at the discretion of the Compensation Committee, an amount in cash or a combination of shares and cash, based on the increase in the fair market value of the
shares underlying the right during a stated period specified by the Compensation Committee. The exercise price for an SAR shall not be less than the fair market value of a share of common stock on the grant date of the SAR. The term of each SAR is
fixed by the Compensation Committee and may not exceed 10 years from the date of grant. The Compensation Committee determines when the SAR may be exercised and the period of time, if any, after retirement, death, disability or termination of
employment during which the SAR may be exercised; and
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performance and annual incentive awards, ultimately payable in common stock or cash, as determined by the Compensation Committee. The Compensation Committee may grant multi-year and annual incentive awards subject to
achievement of specified performance metrics tied to business criteria (described below). The Compensation Committee may specify the amount of the incentive award as a percentage of these performance criteria, a percentage in excess of a threshold
amount or as another amount which need not bear a strictly mathematical relationship to these performance criteria. The Compensation Committee may modify, amend or adjust the terms of each award and the performance criteria.
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Effect of Certain Corporate Transactions
.
Unless an applicable award agreement provides otherwise, certain change in control
transactions involving us, such as a sale of the Company, will cause grantees of restricted stock, stock units, stock appreciation rights and options to become fully vested, unless the awards are continued or substituted for in connection with the
change in control transaction. For awards based on the satisfaction of performance conditions (Performance Awards) that are denominated in shares of common stock or stock units, if less than half of the performance period has lapsed,
such Performance Awards will be converted into restricted stock or stock units assuming target performance has been achieved (or into unrestricted shares of common stock if no further restrictions apply). If more than half the performance period has
lapsed, such Performance Awards will be converted into restricted stock or stock units based on actual performance to date (or into unrestricted shares of common stock if no further restrictions apply). If actual performance is not determinable,
such Performance Awards will be converted into restricted stock or stock units assuming target performance has been achieved, based on the discretion of the Compensation Committee (or into unrestricted shares of common stock if no further
restrictions apply).
Adjustments for Stock Dividends and Similar Events.
The Compensation Committee will make appropriate adjustments
in outstanding awards and the number of shares available for issuance under the Amended and Restated 2012 Plan, including the individual limitations on awards (described below), to reflect stock splits and other similar events.
Section
162(m) of the Code.
Following the passage of the Tax Act, Section 162(m) disallows a tax
deduction for any publicly held corporation for individual compensation exceeding $1.0 million in any taxable year to any person who has served as chief executive officer, chief financial officer, or as one of its three other most highly
compensated executive officers in any fiscal year beginning after December 31, 2016 (our covered employees). Prior to the passage of the Tax Act, Section 162(m) disallowed a tax deduction for any publicly held corporation for individual
compensation exceeding $1.0 million in any taxable year to its chief executive officer and each of its three other most highly compensated executive officers, other than its chief financial officer, unless such compensation qualified as
performance-based compensation within the meaning of the Code. The changes under Section 162(m) are generally effective for taxable years beginning in 2018, but there is a grandfather rule for compensation paid pursuant to a
written, binding contract that was in effect on November 2, 2017, which was not modified in any material respect on or after that date.
As a result
of the changes imposed by the Tax Act, the Amended and Restated 2012 Plan does not contain all of the provisions providing for grants of performance-based compensation under the legacy Section 162(m)
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provisions that our 2012 LTIP currently contains. However, the Amended and Restated 2012 Plan does permit the Compensation Committee to provide that vesting of any of the awards that may be
granted under the Amended and Restated 2012 Plan may be made subject to the achievement of performance metrics determined by the Compensation Committee, which metrics may include, but are not limited to: (i) net earnings or net income;
(ii) operating earnings; (iii) pretax earnings; (iv) earnings per share; (v) share price, including growth measures and total shareholder return; (vi) earnings before interest and taxes; (vii) earnings before interest,
taxes, depreciation and/or amortization; (viii) earnings before interest, taxes, depreciation and/or amortization as adjusted to exclude any one or more of the following: stock-based compensation expense; income from discontinued operations;
gain on cancellation of debt; debt extinguishment and related costs; restructuring, separation and/or integration charges and costs; reorganization and/or recapitalization charges and costs; impairment charges; gain or loss related to investments;
sales and use tax settlement; and gain on
non-monetary
transactions; (ix) sales or revenue growth, whether in general, by type of product or service, or by type of customer; (x) gross or operating
margins; (xi) return measures, including return on assets, capital, investment, equity, sales or revenue; (xii) cash flow, including: operating cash flow; free cash flow, defined as earnings before interest, taxes, depreciation and/or
amortization (as adjusted to exclude any one or more of the items that may be excluded pursuant to the Performance Measure specified in clause (viii) above) less capital expenditures; levered free cash flow, defined as free cash flow less
interest expense; cash flow return on equity; and cash flow return on investment; (xiii) productivity ratios; (xiv) expense targets; (xv) market share; (xvi) financial ratios as provided in credit agreements of the Company and
its Subsidiaries; (xvii) working capital targets; (xviii) completion of acquisitions of businesses or companies; (xix) completion of divestitures and asset sales; and (xx) any combination of the foregoing business criteria.
Share Limits.
The maximum number of shares of common stock subject to options or SARs that can be granted under the Amended and Restated
2012 Plan to any person who is not a
non-employee
director is 400,000 per
12-month
period, provided that in a grantees year of hire the applicable limit is
800,000. The maximum number of shares of common stock that can be granted under the Amended and Restated 2012 Plan to any person who is not a
non-employee
director, other than pursuant to an option or SAR, is
200,000 per
12-month
period, provided that in a grantees year of hire the applicable limit is 400,000. The maximum amount that may be paid as an annual incentive award or other cash award in any
12-month
period to any one person who is not a
non-employee
director is $3,000,000 and the maximum amount that may be paid as a performance award or other cash award in
respect of a performance period greater than 12 months to any one person who is not a
non-employee
director is $6,000,000.
The maximum total compensation (including cash payments and the aggregate grant date fair value of awards that may be granted under the Amended and Restated
2012 Plan) that may be paid to or granted in a
12-month
period to a
non-employee
director for such directors service on the Board of Directors or a committee of
the Board of Directors is $1,000,000.
Federal Income Tax Consequences
Incentive Stock Options.
The grant of an option will not be a taxable event for the grantee or for the Company. A grantee will not
recognize taxable income upon exercise of an incentive stock option (except that the alternative minimum tax may apply), and any gain realized upon a disposition of our common stock received pursuant to the exercise of an incentive stock option will
be taxed as long-term capital gain if the grantee holds the shares of common stock for at least two years after the date of grant and for one year after the date of exercise (the holding period requirement). We will not be entitled to
any business expense deduction with respect to the exercise of an incentive stock option, except as discussed below.
For the exercise of an option to
qualify for the foregoing tax treatment, the grantee generally must be our employee or an employee of our subsidiary from the date the option is granted through a date within three months before the date of exercise of the option.
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If all of the foregoing requirements are met except the holding period requirement mentioned above, the
grantee will recognize ordinary income upon the disposition of the common stock in an amount generally equal to the excess of the fair market value of the common stock at the time the option was exercised over the option exercise price (but not in
excess of the gain realized on the sale). The balance of the realized gain, if any, will be capital gain. We will be allowed a business expense deduction to the extent the grantee recognizes ordinary income, subject to the one million dollar
limitation imposed by Section 162(m), described above, and to certain reporting requirements.
Non-Qualified
Options.
The grant of an option will not be a taxable event for the grantee or the
Company. Upon exercising a
non-qualified
option, a grantee will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the common stock on the
date of exercise. Upon a subsequent sale or exchange of shares acquired pursuant to the exercise of a
non-qualified
option, the grantee will have taxable capital gain or loss, measured by the difference
between the amount realized on the disposition and the tax basis of the shares of common stock (generally, the amount paid for the shares plus the amount treated as ordinary income at the time the option was exercised).
If we comply with applicable reporting requirements, we will be entitled to a business expense deduction in the same amount and generally at the same time as
the grantee recognizes ordinary income, subject to the one million dollar limitation imposed by Section 162(m).
A grantee who has transferred a
non-qualified
option to a family member by gift will realize taxable income at the time the
non-qualified
option is exercised by the family member. The grantee will be subject
to withholding of income and employment taxes at that time. The family members tax basis in the shares of common stock will be the fair market value of the shares of common stock on the date the option is exercised. The transfer of vested
non-qualified
options will be treated as a completed gift for gift and estate tax purposes. Once the gift is completed, neither the transferred options nor the shares acquired on exercise of the transferred options
will be includable in the grantees estate for estate tax purposes.
In the event a grantee transfers a
non-qualified
option to his or her
ex-spouse
incident to the grantees divorce, neither the grantee nor the
ex-spouse
will
recognize any taxable income at the time of the transfer. In general, a transfer is made incident to divorce if the transfer occurs within one year after the marriage ends or if it is related to the end of the marriage (for example, if
the transfer is made pursuant to a divorce order or settlement agreement). Upon the subsequent exercise of such option by the
ex-spouse,
the
ex-spouse
will recognize
taxable income in an amount equal to the difference between the exercise price and the fair market value of the shares of common stock at the time of exercise. Any distribution to the
ex-spouse
as a result of
the exercise of the option will be subject to employment and income tax withholding at this time.
Restricted Stock.
A grantee who is
awarded restricted stock will not recognize any taxable income for federal income tax purposes in the year of the award, provided that the shares of common stock are subject to restrictions (that is, the restricted stock is nontransferable and
subject to a substantial risk of forfeiture). However, the grantee may elect under Section 83(b) of the Code to recognize compensation income in the year of the award in an amount equal to the fair market value of the common stock on the date
of the award (less the purchase price, if any), determined without regard to the restrictions. If the grantee does not make such a Section 83(b) election, the fair market value of the common stock on the date the restrictions lapse (less the
purchase price, if any) will be treated as compensation income to the grantee and will be taxable in the year the restrictions lapse and dividends paid while the common stock is subject to restrictions will be subject to withholding taxes. If we
comply with applicable reporting requirements, and subject to the one million dollar deduction limitation of Section 162(m), we will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee
recognizes ordinary income.
Stock Units.
There are no immediate tax consequences of receiving an award of stock units under the
Amended and Restated 2012 Plan. A grantee who is awarded stock units will be required to recognize ordinary income in
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an amount equal to the fair market value of shares issued to such grantee at the end of the restriction period or, if later, the payment date. If we comply with applicable reporting requirements,
and subject to the one million dollar deduction limitation of Section 162(m), we will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
Dividend Equivalent Rights.
Participants who receive dividend equivalent rights will be required to recognize ordinary income in an amount
distributed to the grantee pursuant to the award. If we comply with applicable reporting requirements, and subject to the one million dollar deduction limitation of Section 162(m), we will be entitled to a business expense deduction in the same
amount and generally at the same time as the grantee recognizes ordinary income.
Stock Appreciation Rights.
There are no immediate tax
consequences of receiving an award of stock appreciation rights under the Amended and Restated 2012 Plan. Upon exercising a stock appreciation right, a grantee will recognize ordinary income in an amount equal to the difference between the exercise
price and the fair market value of the common stock on the date of exercise. If we comply with applicable reporting requirements and subject to the one million dollar deduction limitation of Section 162(m), we will be entitled to a business
expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
Performance and Annual Incentive
Awards.
The award of a performance or annual incentive award will have no federal income tax consequences for us or for the grantee. The payment of the award is taxable to a grantee as ordinary income. If we comply with applicable
reporting requirements, and subject to the one million dollar deduction limitation of Section 162(m), we will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary
income.
Unrestricted Common Stock.
Participants who are awarded unrestricted common stock will be required to recognize ordinary
income in an amount equal to the fair market value of the shares of common stock on the date of the award, reduced by the amount, if any, paid for such shares. If we comply with applicable reporting requirements and subject to the one million dollar
deduction limitation of Section 162(m), we will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
Section
280G.
To the extent payments which are contingent on a change in control are determined to exceed
certain Code limitations, they may be subject to a 20% nondeductible excise tax and the Companys deduction with respect to the associated compensation expense may be disallowed in whole or in part. The Amended and Restated 2012 Plan includes a
Section 280G best after tax provision, meaning, if any of the payments under the Amended and Restated 2012 Plan or otherwise would constitute parachute payments within the meaning of Section 280G of the Code and be subject to
the excise tax imposed under Section 4999 of the Code, the payments will be reduced by the amount required to avoid the excise tax if such a reduction would give the grantee a better
after-tax
result than
if the grantee received the payments in full.
Section
409A.
The Company intends for awards granted
under the plan to comply with Section 409A of the Code. To the extent a grantee would be subject to the additional 20% excise tax imposed on certain nonqualified deferred compensation plans as a result of a provision of an award under the plan,
the provision will be deemed amended to the minimum extent necessary to avoid application of the 20% excise tax.
New Plan Benefits
As of March 31, 2018, there were 8 executive officers, 877 other employees and
8 non-employee
directors of the Company and its subsidiaries who are eligible to be participants in Amended and Restated 2012 Plan.
On April 2, 2018, the Compensation Committee made the Companys annual equity grants to employees, which grants were made out of the remaining
capacity that then-existed under the 2012 Plan (498,996 shares). Due to
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capacity limitations, the Committee was not able to make all contemplated grants, and at Mr. Masons request, Mr. Masons restricted stock grant was delayed. Such grant to
Mr. Mason was instead made contingent upon the Amended and Restated 2012 Plan being approved by shareholders at the Annual General Meeting.
In July
2018, the Committee contemplates making the Companys annual restricted stock grant to
non-executive
directors, which grant is also contemplated to be made pursuant to the Amended and Restated 2012 Plan,
contingent upon the Amended and Restated 2012 Plan being approved by shareholders at the Annual General Meeting. The number of shares of restricted stock granted will be based on the value of the Companys common stock as of the grant date.
The following table shows these grant amounts, each of which are contingent upon shareholders approving the Amended and Restated 2012 Plan at the Annual
General Meeting:
|
|
|
|
|
|
|
|
|
Name and Position
|
|
Dollar
Value
(1)
|
|
|
Number of Restricted
Stock Awards Granted
Contingent Upon
Approval of Amended
and Restated 2012 Plan
|
|
Bradley R. Mason President and Chief Executive Officer
|
|
$
|
1,054,995
|
|
|
|
18,551
|
|
Douglas C. Rice Chief Financial Officer
|
|
|
|
|
|
|
|
|
Kimberley A. Elting Chief Legal and Administrative Officer
|
|
|
|
|
|
|
|
|
Michael M. Finegan Chief Strategy Officer
|
|
|
|
|
|
|
|
|
Davide Bianchi President, Global Extremity Fixation
|
|
|
|
|
|
|
|
|
All Executive Officers as a Group
|
|
|
|
|
|
|
|
|
All
Non-Executive
Directors as a Group
|
|
$
|
1,455,000
|
|
|
|
26,900
|
(2)
|
All
Non-Executive
Officer Employees as a Group
|
|
|
|
(3)
|
|
|
|
(3)
|
(1)
|
Amounts shown is the aggregate grant date fair value of the awards, as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (formerly known as Statement of
Financial Accounting Standards No. 123(R)), or ASC 718.
|
(2)
|
Number of shares represents an estimate of the number of shares of restricted stock to be granted, based on the closing price of the Companys common stock on May 22, 2018. The actual number of shares granted will
be based on the price of the Companys common stock at the time of grant.
|
(3)
|
On March 15, 2018, the Company, through a wholly owned subsidiary, entered into a definitive merger agreement to acquire Spinal Kinetics Inc., a privately held developer and manufacturer of artificial cervical and
lumbar discs. In connection with the anticipated closing of the transaction, the Company expects to make equity awards to Spinal Kinetics employees at or shortly following the closing. At the present time, the Company expects these grants to be made
as inducement grants in reliance on the Nasdaq exception to shareholder approval for such grants, rather than as grants from the 2012 LTIP. As a result, these grants are not shown in the table.
|
96
|
PROPOSAL 6: APPROVAL OF AMENDMENT NO. 1 TO THE SECOND AMENDED AND RESTATED STOCK PURCHASE PLAN
|
The Companys Second Amended and Restated Stock Purchase Plan (the SPP) is a shareholder approved equity plan
under which most of our employees and directors are eligible to purchase common stock of the Company. On April 23, 2018, the Board adopted Amendment No. 1 to the Companys Second Amended and Restated Stock Purchase Plan, subject to
shareholder approval (the SPP Amendment). The SPP Amendment increases the number of shares subject to awards under the plan from 1,850,000 to 2,350,000. The SPP Amendment does not provide for any other changes to the SPP.
The SPP Amendment will become effective upon approval by the Companys shareholders. If the SPP Amendment is not approved by the Companys
shareholders, the SPP will continue in its current form, but the Company may no longer have sufficient shares to continue offering shares under the plan.
Because participation in the SPP is subject to the discretion of each eligible employee or director and the amounts received by participants under the plan
are subject to the fair market value of our common stock on future dates, the benefits or amounts that will be received by any participant or groups of participants if the SPP is approved are not currently determinable.
Description of the SPP
The following is a brief summary of the material features of the SPP and its operation. A copy of the SPP Amendment, together with the current text of the
SPP, is attached as Annex D to this proxy statement. The description below is qualified in its entirety by the detailed provisions of the SPP, which are set forth in Annex D to this proxy statement/prospectus.
Sponsor
Orthofix International N.V. is the sponsor of
the SPP. (In the event that the domestication to Delaware is consummated, Orthofix Medical Inc. shall become the sponsor of the SPP.)
Purposes and
Eligibility
The purpose of the SPP is to encourage eligible employees and
non-employee
directors of the
Company to become owners of common stock of the Company, thereby giving them a greater interest in the growth and success of its business. As of March 31, 2018, we estimate that approximately 8 directors, 8 executives and 877 employees of
the Company are eligible to purchase shares under the SPP. Currently, there are approximately 380 participants in the SPP.
Number of Shares of
Common Stock Subject to the SPP
The maximum number of shares of our common stock that may be issued pursuant to the SPP, subject to anti-dilution
provision adjustments, is currently 1,850,000
shares. If the SPP Amendment is approved by shareholders, the maximum number of shares of our common stock that may be issued pursuant to the SPP, subject to anti-dilution provision
adjustments, will increase to 2,350,000 shares. As of March 31, 2018, 1,628,005 shares had been issued pursuant to the SPP and 221,995 shares remained available for issuance. Shares purchasable pursuant to the SPP may be authorized
but previously unissued shares or shares of stock held in treasury or purchased in the open market or in privately negotiated transactions.
Participation in the SPP
All eligible employees and
non-employee
directors may participate in the SPP on the first day of any plan year. Eligible employees participate by electing to contribute to the SPP through payroll deductions, which
97
generally may not be more than 25% of an employees compensation. Eligible
non-employee
directors participate by electing to contribute to the
SPP through deductions of their director fees and other compensation that are paid in cash. Eligible participants must elect to participate in the plan prior to the beginning of the plan year.
Participants may withdraw from the SPP
by providing notice to the Companys Compensation Committee before the last day of the plan year. Upon withdrawal from the SPP, all payroll deductions under the SPP cease immediately, and a participant will receive a refund of his or her
contribution, including all accrued interest. An employees participation in the SPP terminates upon his or her termination of employment, and will generally terminate upon his or her leave of absence from active employment only if such
employee does not continue to make contributions to the SPP during such leave of absence.
A
non-employee
directors participation in the SPP terminates upon his or her ceasing to be a member
of the Board.
Participants in
Non-US
Jurisdictions
With respect to participants that are subject to the tax laws of a jurisdiction outside of the US, the SPP allows the Compensation Committee to adopt such
modifications and procedures as it deems necessary or desirable to comply with the provisions of the laws of such
non-U.S.
jurisdictions in order to assure the viability of the benefits paid to such
participants. Further, the Compensation Committee may adopt
sub-plans
applicable to separate classes of eligible employees and
non-employee
directors who are
subject to the laws of jurisdictions outside of the U.S.
Distribution of Common Stock
The SPP provides that as soon as practicable following the last day of the plan year (but in any event, no more than two and
one-half
months thereafter), the Compensation Committee will distribute to each person who was a participant during the plan year a certificate or certificates representing the number of whole shares of
Company common stock determined by dividing (i) the amount of the participants contributions for the plan year plus accrued interest, by (ii) 85% of the lower of the fair market value of the Company common stock on the first and last day
of the plan year.
Under the SPP, fair market value means, as of any date that requires determination of the fair market value, the closing
price of our common stock as quoted on Nasdaq on such date of determination (with other definitions provided under the plan if our common stock is no longer traded on Nasdaq).
The Compensation Committee may, in its discretion, require a participant to pay, prior to the distribution of Company stock, the amount the Compensation
Committee deems necessary to satisfy the Companys obligation to withhold applicable taxes that the participant incurs as a result of his or her participation in the SPP. The participant may deliver sufficient shares of Company stock, cash
or irrevocably elect for the participating employer to withhold from the shares of stock to be distributed a sufficient number of shares of stock. The SPP permits the Company or its subsidiary to deduct from all cash payments made to a
participant any applicable required taxes to be withheld with respect to such payments.
Administration of the SPP
The Compensation Committee oversees and administers the SPP. The Committee has power to determine the amount of benefits payable to participants and
construe and interpret the plan whenever necessary to carry out the SPPs intention and purpose. The Committee is authorized to administer the plan as necessary to take account of tax, securities law and other regulatory requirements of
foreign jurisdictions. The Committee is also generally able to designate one or more of its members or the Chief Executive Officer or Chief Financial Officer of the Company to carry out the Committees responsibilities under such conditions and
limitations as the Committee may determine. The SPP provides indemnity (except in the case of fraud, willful misconduct or failure to act in good faith) to members of the Board, the Committee, the Chief Executive Officer, the Chief Financial Officer
and other officers or employees to whom duties or responsibilities are delegated in connection with the operation, administration or interpretation of the SPP. Any authority or responsibility that may be exercised by the Committee
98
is also exercisable by the Board. The Board or the Committee is able to extend or terminate the benefits of the SPP to any subsidiary of the Company at any time without the approval of the
Companys shareholders.
Amendment and Termination of SPP
The Board may amend or terminate the SPP at any time. Upon the termination of the SPP, each participant will receive a refund of his or her contributions
for the plan year plus accrued interest. However, the Board must obtain shareholder approval to increase the maximum number of shares issuable under the plan (as it is proposing to do now). Also, the Board may not amend or terminate the
SPP if it would decrease the participants accrued benefits as of the effective date of such action, unless the Board determines that amendments to the plan are necessary or appropriate to exempt issuances from or conform the SPP to the
requirements of Section 409A of the Code, in which case the Board may adopt such amendments to the plan, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect) as it deems appropriate
under the circumstances.
Certain U.S. Federal Income Tax Consequences
The following is a general summary of certain U.S. federal income tax consequences to U.S. employees with respect to Company common stock issued under the
SPP. This discussion applies to employees and directors who are citizens or residents of the U.S. and U.S. taxpayers. The information set forth below is a summary only and does not purport to be complete. The information is based upon
current federal income tax rules and therefore is subject to change when those rules change. Because the tax consequences to any participant may depend on his or her particular situation, each participant should consult the participants
tax adviser regarding the federal, state, local, foreign and other tax consequences of the SPP. The SPP is not qualified under the provisions of Section 401(a) of the Code, and is not subject to any of the provisions of the Employee
Retirement Income Security Act of 1974.
All amounts contributed to the SPP are deducted from each participants taxable compensation on an
after-tax
basis. Participants will recognize taxable income on the interest they earn on their contributions to the SPP in the taxable year in which the interest accrues. When shares of Company common
stock are distributed to participants at the end of the plan year, participants will also recognize taxable income on the difference between the fair market value of the Company common stock on that date and the purchase price participants pay for
the shares. If participants sell shares of Company common stock that they received under the SPP, any gain or loss will be taxed as a capital gain or loss. Subject to the applicable provisions of the Code and applicable regulations, the
participants employer will generally be entitled to a federal income tax deduction in an amount equal to the taxable income that each participant recognizes. Each participants employer will be entitled to this deduction for the
taxable year that includes the last day of the taxable year for which a participant recognizes taxable income.
For U.S. income tax purposes, the gross
amount of dividends paid to participants who hold shares of Company common stock will be treated as gross dividend income to such holders in the year in which such dividend is received to the extent paid or deemed paid out of the Companys
current or accumulated earnings and profits as calculated for U.S. federal income tax purposes.
Section 409A
Section 409A of the Code applies to compensation plans providing deferred compensation to employees and directors, and potentially could apply to the
SPP. Failure to comply with Section 409A, with respect to compensation deferred under the SPP, in the absence of an applicable exemption, could result in current income taxation to the recipient for all amounts deferred as well as the
imposition of an additional 20% tax and interest on any underpayment of tax. In general, Section 409A should not apply to the SPP (provided there is no deferral of income beyond the date that is two and one half months after the end of the
plan year).
|
The Board unanimously recommends that you vote FOR the
proposal to approve Amendment
No. 1 to the Second Amended and Restated Stock Purchase
Plan.
|
99
|
PROPOSAL 7: RATIFICATION OF THE SELECTION OF EY AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2018
|
We are asking you to ratify the Audit and Finance Committees selection of Ernst & Young LLP (EY) as
our independent registered public accounting firm for 2018. EY has served as the independent registered public accounting firm of Orthofix since 2002. They have unrestricted access to the Audit and Finance Committee to discuss audit findings
and other financial matters.
We do not anticipate that representatives of EY will be at the Annual General Meeting. The work performed by EY during
2017 and 2016 and related fee information is described below.
Although shareholder ratification is not required, the appointment of EY is being submitted
for ratification as a matter of good corporate practice with a view towards soliciting shareholders opinions that the Audit and Finance Committee will take into consideration in future deliberations. If EYs selection is not ratified at
the Annual General Meeting, the Audit and Finance Committee will reconsider whether to retain EY. Even if the selection is ratified, the Audit and Finance Committee in its discretion may direct the appointment of a different independent registered
public accounting firm at any time during the year if it determines such a change would be in the best interests of the Company and its shareholders.
|
The Board unanimously recommends that you vote FOR
ratification of
the selection of EY as independent registered public accounting firm for
2018.
|
Principal Accountant Fees and Services
The following table sets forth fees for professional services rendered by EY for the audits of the Companys financial statements for the fiscal years
ended December 31, 2017 and December 31, 2016, respectively, and the fees billed for other services rendered by EY during each such fiscal year.
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
Audit Fees
|
|
$
|
2,241,451
|
|
|
$
|
2,357,350
|
|
Audit-Related Fees
|
|
|
348,846
|
|
|
|
63,800
|
|
Tax Fees
|
|
|
1,114,129
|
|
|
|
868,271
|
|
All Other Fees
|
|
|
2,000
|
|
|
|
2,000
|
|
Total
|
|
$
|
3,706,426
|
|
|
$
|
3,291,421
|
|
Audit Fees
Audit fees consisted of the aggregate fees, including expenses, billed in connection with the audits of our annual financial statements and internal controls,
quarterly reviews of the financial information included in our quarterly reports on Form
10-Q,
and statutory audits of our subsidiaries.
Audit-Related Fees
Audit-related fees in 2017 and 2016 consisted of the aggregate fees, including expenses, rendered for professional services, such as accounting consultations
and assurance services in connection with transactions, not reported under Audit Fees.
Tax Fees
Tax fees in 2017 and 2016 consisted of the aggregate fees, including expenses, billed for professional services rendered for income tax compliance, tax advice
and tax planning. These fees included fees billed for federal and state income tax review services, assistance with tax audits and other tax consulting services.
100
All Other Fees
All other fees consisted of aggregate fees billed for products and services other than the services reported above. For fiscal years 2017 and 2016, this
category included fees related to professional reference materials and publications.
Pre-Approval
Policies and Procedures
The Audit and Finance Committee approves all audits, audit-related
services, tax services and other services provided by EY. Any services provided by EY that are not specifically included within the scope of the audit must be either
(i) pre-approved
by the entire
Audit and Finance Committee in advance of any engagement, or
(ii) pre-approved
by the Chair of the Audit and Finance Committee pursuant to authority delegated to him by the other independent members of
the Audit and Finance Committee, in which case the Audit and Finance Committee is then informed of his decision. Under the Sarbanes-Oxley Act of 2002, these
pre-approval
requirements are waived for
non-audit
services where (i) the aggregate of all such services is no more than 5% of the total amount paid to the external auditors during the fiscal year in which such services were provided, (ii) such
services were not recognized at the time of the engagement to be
non-audit
services, and (iii) such services are approved by the Audit and Finance Committee prior to the completion of the audit
engagement. In 2017 and 2016, all fees paid to EY for
non-audit
services were
pre-approved.
101
|
REPORT OF THE AUDIT AND FINANCE COMMITTEE
|
The Audit and Finance Committee oversees the Companys financial reporting process on behalf of the Board. The committee
is responsible for the selection, compensation, and oversight of the Companys independent registered public accounting firm. The committee reviews matters relating to the Companys internal controls, as well as other matters warranting
committee attention. In addition, the committee assists the Board in overseeing the Companys Corporate Compliance and Ethics Program. The committee operates under a written charter adopted by the Board of Directors, a copy of which is
available for review on our website at
www.orthofix.com
.
Management is responsible for Orthofixs internal controls and financial reporting
process. The independent registered public accounting firm is responsible for performing an independent audit of Orthofixs consolidated financial statements in accordance with auditing standards of the Public Company Accounting Oversight
Board and to issue a report thereon. Additionally, the independent registered public accounting firm is also responsible for auditing the effectiveness of Orthofixs internal control over financial reporting. The Audit and Finance
Committees responsibility is to monitor and oversee these processes. The committee relies without independent verification on the information provided to it and on the representations made by management and the independent registered
public accounting firm.
The Audit and Finance Committee held 10 meetings during the 2017 fiscal year. The meetings were designed, among other
things, to facilitate and encourage communication among the committee, management and Orthofixs independent registered public accounting firm, Ernst & Young LLP. The committee reviewed managements assessment of the
effectiveness of the design and operation of Orthofixs disclosure controls over financial reporting. We discussed with Ernst & Young LLP the overall scope and plans for their audit. We met with Ernst & Young LLP,
with and without management present, to discuss the results of their examinations and their evaluations of Orthofixs internal controls.
The Audit
and Finance Committee has reviewed and discussed the audited consolidated financial statements for the fiscal year ended December 31, 2017 with management and Ernst & Young LLP. We also discussed with management and
Ernst & Young LLP managements report and the independent registered public accounting firms report and attestation on Orthofixs internal control over financial reporting in accordance with Section 404 of the
Sarbanes-Oxley Act. We also discussed with Ernst & Young LLP the matters required by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company
Accounting Oversight Board in Rule 3200T.
The Audit and Finance Committee has received the written disclosures and the letter from Ernst & Young
LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountants communications with the Audit and Finance Committee concerning independence, and has discussed with the independent
accountant their independence from Orthofix. When considering Ernst & Young LLPs independence, we considered whether their provision of services to Orthofix beyond those rendered in connection with their audit of Orthofixs
consolidated financial statements was compatible with maintaining their independence. We also reviewed, among other things, the audit and
non-audit
services performed by, and the amount of fees paid for
such services to, Ernst & Young LLP. The committee has determined that Ernst & Young LLP is independent of Orthofix and its management.
Based upon the review and discussions referred to above, we recommended to the Board of Directors, and the Board of Directors has approved, that
Orthofixs audited consolidated financial statements be included in Orthofixs Annual Report on Form
10-K
for the fiscal year ended December 31, 2017.
|
|
|
|
|
|
|
|
|
The Audit and Finance Committee
|
|
|
|
|
James Hinrichs,
Committee Chair
|
|
|
|
|
Luke Faulstick
|
|
|
|
|
Ronald Matricaria
|
102
The consolidated financial statements of Orthofix International N.V. appearing in Orthofix International N.V.s Annual
Report (Form
10-K)
for the year ended December 31, 2017, and the effectiveness of Orthofix International N.V.s internal control over financial reporting as of December 31, 2017, have been
audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
The consolidated financial
statements of Spinal Kinetics, Inc. and its subsidiaries for the year ended December 31, 2017, incorporated in this proxy statement/prospectus by reference to our Current Report on Form 8-K/A, filed with the SEC on May 15, 2018, have been audited by
Ernst & Young LLP, independent auditors, as set forth in the report thereon included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein in reliance upon such report given on the
authority of such firm as experts in auditing and accounting.
Hogan Lovells US LLP has passed upon certain U.S. federal income tax consequences of the domestication and certain other legal
matters related to this proxy statement/prospectus. Potter Anderson & Corroon LLP has passed upon the validity of the securities of Orthofix offered by the proxy statement/prospectus and certain other legal matters related to this proxy
statement/prospectus.
|
INFORMATION ABOUT SHAREHOLDER PROPOSALS
|
If you wish to submit a proposal to be included in our 2019 proxy statement pursuant to Rule
14a-8
of the Securities Exchange Act of 1934, as amended, we must receive your written proposal on or before
. Please address your proposals to: Chairman of the Board, Orthofix
International N.V., 7 Abraham de Veerstraat, Curaçao. Assuming the domestication resolution is adopted by the requisite vote of our shareholders and the Proposed Bylaws are subsequently adopted by the Board, if the date of the 2019 annual
meeting of shareholders is more than 30 days before or more than 60 days after the one-year anniversary of the Annual General Meeting, the shareholder proposal must be received no earlier than the 120th day and no later than the 90th day before the
2019 annual meeting of shareholders or the 10th business day following the day on which public announcement of the date of the 2019 annual meeting of shareholders is first made by the Company.
Pursuant to Rule
14a-4(c)(1)
under the Securities Exchange Act of 1934, as amended, our proxy holders may use
discretionary authority to vote with respect to shareholder proposals presented in person at the 2019 annual meeting of shareholders if the shareholder making the proposal has not notified Orthofix by
of its intent to present a proposal at the 2019 annual meeting of shareholders.
|
MULTIPLE SHAREHOLDERS SHARING ONE ADDRESS
|
The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy the delivery requirements for
proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single annual report or proxy statement, as applicable, addressed to those shareholders. This process, which is commonly referred
to as householding, potentially provides extra convenience for shareholders and cost savings for companies.
Orthofix and some brokers may be
householding proxy materials by delivering proxy materials to multiple shareholders who request a copy and share an address, unless contrary instructions have been received from the
103
affected shareholders. Once you have received notice from your broker or Orthofix that they or we will be householding materials to your address, householding will continue until you are notified
otherwise or until you revoke your consent. If at any time you no longer wish to participate in householding and would prefer to receive a separate proxy statement and annual report, please notify your broker if your shares are held in a brokerage
account or, if you are a shareholder of record of Orthofix, notify Orthofix by sending a written or oral request to Investor Relations, Attention: Mr. Mark Quick, 3451 Plano Parkway, Lewisville, Texas 75056, Tel. (214)
937-2924.
Shareholders of Orthofix who share a single address, but receive multiple copies of Orthofixs proxy statement, may request that in the future they receive a single copy by notifying Orthofix at the
telephone and address set forth in the preceding sentence. In addition, Orthofix will promptly deliver, upon written or oral request made to the address or telephone number above, a separate copy of the proxy statement to a shareholder at a shared
address to which a single copy of the documents was delivered pursuant to a prior request.
|
WHERE YOU CAN FIND MORE INFORMATION AND INCORPORATION BY REFERENCE
|
Orthofix files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and
copy any reports, statements or other information filed at the SECs public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the public reference room. Orthofixs SEC filings are also available to the public from commercial document retrieval services and at the web site
maintained by the SEC at
www.sec.gov
. You also may obtain free copies of the documents filed with the SEC by Orthofix by going to Orthofixs website at
www.orthofix.com
. Orthofixs website address is provided as an inactive
textual reference only. The information provided on Orthofixs website is not part of this proxy statement/prospectus, and is not incorporated by reference into this proxy statement/prospectus.
Orthofix has filed with the SEC a registration statement on Form
S-4
of which this proxy statement/prospectus forms a
part. The registration statement registers the shares of Orthofix Delaware common stock to be issued to its shareholders in the domestication. The registration statement, including the exhibits and schedules thereto, contains additional information
about shares of Orthofix Delaware common stock. The rules and regulations of the SEC allow Orthofix to omit certain information included in the registration statement from this proxy statement/prospectus.
The SEC allows Orthofix to incorporate by reference into this proxy statement/prospectus the information it files with the SEC, which means
Orthofix can disclose important information to you by referring you to those documents. Information incorporated by reference is deemed to be part of this proxy statement/prospectus. Later information filed with the SEC will update and supersede
this information.
This proxy statement/prospectus incorporates by reference the Orthofix documents listed below (other than any portions of the documents
not deemed to be filed), all of which have been previously filed by Orthofix with the SEC:
|
|
|
The Companys Annual Report on
Form 10-K
for the year ended December 31, 2017, as amended by Amendment No. 1 on Form 10-K/A, filed with the SEC on
April 26, 2018;
|
|
|
|
The Companys Quarterly Report on Form 10-Q for the quarter ended March 31, 2018;
|
|
|
|
The Companys Current Reports on Form
8-K
or 8-K/A, as applicable, filed with the SEC on March 13, March 15, April 30 and May 15, 2018; and
|
|
|
|
The description of the Companys common shares contained in the Companys Registration Statement on Form
F-1
filed with the SEC on March 6, 1992.
|
Orthofix also incorporates by reference into this proxy statement/prospectus additional documents that it may file with the SEC under Sections 13(a), 13(c),
14, or 15(d) of the Exchange Act after the date of this proxy statement/
104
prospectus and prior to the date of the Orthofix Annual General Meeting; provided, however that it is not incorporating any information furnished under either Item 2.02 or Item 7.01 of any
Current Report on
Form 8-K.
You may request a copy of these filings, at no cost, by contacting Investor
Relations, Attention: Mr. Mark Quick, 3451 Plano Parkway, Lewisville, Texas 75056, Tel. (214)
937-2924,
or by visiting Orthofixs website,
www.orthofix.com
.
In addition, a copy of the Companys Annual Report on Form
10-K
for the year ended December 31, 2017
accompanies this proxy statement/prospectus.
105
Annex
A
ORTHOFIX MEDICAL INC.
CERTIFICATE OF INCORPORATION
ARTICLE I: NAME
The name of the corporation is Orthofix Medical Inc. (the
Corporation
).
ARTICLE II: AGENT FOR SERVICE OF PROCESS
The address of the Corporations registered office in the State of Delaware is 251 Little Falls Drive, Wilmington, New Castle County, DE
19808. The registered agent at such address is Corporation Service Company.
ARTICLE III: PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General
Corporation Law (the
DGCL
).
ARTICLE IV: AUTHORIZED STOCK
1.
Total Authorized Stock
. The total number of shares of stock that the Corporation has authority to issue is 50,000,000 shares
of common stock, $0.10 par value per share (the
Common Stock
).
2.
Common Stock
.
2.1 Relative Rights
The
Common Stock shall be subject to all of the rights, privileges, preferences, and priorities set forth in this Certificate of Incorporation.
2.2 Dividends
Dividends
may be paid on the Common Stock out of any assets legally available for the payment of dividends thereon, but only when and as declared by the Board of Directors of the Corporation (the
Board
). Any dividends on the Common Stock
will not be cumulative.
2.3 Dissolution, Liquidation, Winding Up
In the event of any dissolution, liquidation, or winding up of the Corporation, whether voluntary or involuntary, the holders of the Common
Stock shall be entitled to participate in the distribution of any assets of the Corporation remaining after the Corporation shall have paid, or provided for payment of, all debts and liabilities of the Corporation.
2.4 Voting Rights
Each
holder of shares of the Common Stock shall be entitled to notice of and to attend all special and annual meetings of stockholders. Except as may otherwise be required by law, each holder of Common Stock shall be
entitled to one vote per share of Common Stock held of record by such holder on all matters on which stockholders are entitled to vote generally. Each holder of shares of the Common Stock may
exercise its vote either in person or by proxy, in accordance with the DGCL, this Certificate of Incorporation and the Bylaws of the Corporation.
ARTICLE V: AMENDMENT OF BYLAWS
In furtherance and not in limitation of the powers conferred by the DGCL, the Board is expressly authorized and empowered to adopt, alter,
amend, repeal and rescind the Bylaws of the Corporation and any provision or provisions thereof.
ARTICLE VI: BOARD OF DIRECTORS
1.
Director Powers
. The business and affairs of the Corporation shall be managed by or under the direction of the
Board. In addition to the powers and authority expressly conferred upon them by statute or by this Certificate of Incorporation or the Bylaws of the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and
things as may be exercised or done by the Corporation.
2.
Number of Directors
. The powers of the incorporator are to
terminate upon the filing of this Certificate of Incorporation with the Secretary of State of the State of Delaware. Effective at the time of such filing, the number of directors comprising the entire Board shall be nine (9). Thereafter, the number
of directors comprising the entire Board shall be fixed by or in the manner provided in the Bylaws of the Corporation.
The names and
addresses of the persons who shall serve as directors of the Corporation upon the filing of this Certificate of Incorporation are as follows:
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Bradley R. Mason
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c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
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Ronald A. Matricaria
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c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
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Luke Faulstick
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c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
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James Hinrichs
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c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
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Alexis V. Lukianov
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c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
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Lilly Marks
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c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
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Michael E. Paolucci
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c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
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Maria Sainz
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c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
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John Sicard
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c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
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The foregoing directors shall hold office until the next annual meeting of stockholders and until their
successors shall have been duly elected and qualified, or until their earlier resignations or removal.
3.
No Cumulative
Voting
. No person entitled to vote at an election for directors may cumulate votes to which such person is entitled.
4.
Term and Removal
. Each director shall hold office until such directors successor is elected and qualified, or until such directors earlier death, resignation or removal. Any director may resign at any time upon notice to the
Corporation given in writing or by any electronic transmission permitted in the Corporations Bylaws. Any director or the entire Board may be removed, with or without cause, by the holders of capital stock having a majority in voting power of
the shares entitled to vote in the election of directors. No decrease in the authorized number of directors constituting the Board shall shorten the term of any incumbent director.
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5.
Board Vacancies and Newly Created Directorships
. Any vacancy occurring in the
Board for any reason, and any newly created directorship resulting from any increase in the authorized number of directors, shall, unless (a) the Board determines by resolution that any such vacancies or newly created directorships shall be
filled by the stockholders or (b) as otherwise provided by law, be filled only by the affirmative vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director, and not by the stockholders.
6.
Vote by Ballot
. Election of directors need not be by written ballot unless the Bylaws of the Corporation shall so
provide.
7.
Officers
. Except as otherwise expressly provided in the Bylaws or as delegated by resolution of the Board, the
Board shall have the exclusive power and authority to appoint and remove officers of the Corporation.
ARTICLE VII: DIRECTOR
LIABILITY
1.
Limitation of Liability
. No director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL, as amended from time to time. Without limiting the effect of the
preceding sentence, if the DGCL is hereafter amended to authorize the further elimination or limitation of the liability of a director, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the DGCL, as so amended.
2.
Change in Rights
. Neither any amendment nor repeal of this Article VII, nor the
adoption of any provision of this Certificate of Incorporation inconsistent with this Article VII, shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of a director of the Corporation existing at the time
of such amendment, repeal or adoption of such an inconsistent provision.
ARTICLE VIII: MATTERS RELATING TO STOCKHOLDERS
1.
No Action by Written Consent of Stockholders
. No action shall be taken by the stockholders of the Corporation except at a
duly called annual or special meeting of stockholders and no action shall be taken by the stockholders by written consent.
2.
Annual Meeting of Stockholders
. The annual meeting of stockholders shall be held on such date, at such time, and at such place, if any, within or without the State of Delaware, as shall be fixed by the Board and stated in the
Corporations notice of the meeting. In lieu of holding an annual meeting of stockholders at a designated place, the Board may, in its sole discretion, determine that any annual meeting of stockholders may be held solely by means of remote
communication.
3.
Special Meeting of Stockholders
. Special meetings of the stockholders of the Corporation may be called
only (a) by or at the direction of the Board, pursuant to a resolution approved by a majority of the entire Board or (b) by such other person or persons as may be authorized by the Bylaws of the Corporation. The business permitted to be
conducted at a special meeting of stockholders shall be limited to matters properly brought before the meeting by or at the direction of the Board. Special meetings shall be held on such date, at such time, and at such place, if any, within or
without the State of Delaware as shall be fixed by the Board and stated in the Corporations notice of the meeting. In lieu of holding a special meeting of stockholders at a designated place, the Board may, in its sole discretion, determine
that any special meeting of stockholders may be held solely by means of remote communication.
4.
Advance Notice of Stockholder
Nominations and Business Transacted at Special Meetings
. Advance notice of stockholder nominations for the election of directors of the Corporation and of business to be brought
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by stockholders before any meeting of stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation. Business transacted at special meetings of
stockholders shall be confined to the purpose or purposes stated in the notice of meeting.
ARTICLE IX: CREDITOR AND STOCKHOLDER
COMPROMISES
Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them
and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for the Corporation under the provisions of § 291 of the DGCL or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under § 279
of the DGCL order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the
Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation.
ARTICLE X: AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner prescribed by
the laws of the State of Delaware and all rights conferred upon stockholders are granted subject to this reservation.
ARTICLE XI:
EFFECTIVE DATE AND TIME
The effective date and time of this Certificate of Incorporation shall be at
: [a.m./p.m.] on the [●] day of [Month], 2018.
ARTICLE XII: INCORPORATOR
[ is the sole incorporator and [his/her]
mailing address is Potter Anderson & Corroon LLP, 1313 North Market Street, P.O. Box 951, Wilmington, DE 19899-0951.]
DATED: , 2018
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Annex
B
ORTHOFIX MEDICAL INC.
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B Y L A W S
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ARTICLE I
OFFICES
Section 1.
Offices
.
The registered office of the Corporation shall be in the State of Delaware. The Corporation
may have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or as may be necessary or convenient to the business of the Corporation.
ARTICLE II
MEETINGS OF
STOCKHOLDERS
Section 1.
Annual Meeting
.
The annual meeting of the stockholders of the Corporation shall be held on
such date, at such time, and at such place (if any) within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the Corporations notice of the meeting. In lieu of holding an annual
meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any annual meeting of stockholders may be held solely by means of remote communication.
Section 2.
Special Meetings
.
(a) Special meetings of the stockholders of the Corporation may be called only (i) by or at the direction of the Board of Directors,
pursuant to a resolution approved by a majority of the entire Board of Directors, or (ii) by the Secretary of the Corporation, following his or her receipt at the principal executive offices of the Corporation of one or more written demands to
call a special meeting of the stockholders submitted by or on behalf of the record holder or holders of at least 25% percent of the voting power of the issued and outstanding shares of the Corporation (the
Requisite Percentage
);
provided
,
however
, that such stockholder demand or demands have been submitted in accordance with and in the form required by this Section 2. Special meetings of the stockholders of the Corporation (including those called by the
Secretary following receipt of a written demand or demands from stockholders holding the Requisite Percentage in accordance with clause (ii) of the first sentence of this Section 2(a)) shall be held on such date, at such time, and at such
place (if any) within or without the State of Delaware as shall be designated by the Board of Directors and stated in the Corporations notice of the meeting. In the case of a special meeting called by the Secretary following receipt of a
written demand or demands from stockholders holding the Requisite Percentage in accordance with clause (ii) of the first sentence of this Section 2(a), the date of such special meeting, as fixed by the Board of Directors in accordance with
this Section 2(a), shall not be fewer than thirty (30) nor more than ninety (90) days after the date a demand or demands by stockholders holding the Requisite Percentage have been received by the Secretary of the Corporation at the
principal executive offices of the Corporation in accordance with this Section 2. In lieu of holding a special meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any special meeting
of stockholders may be held solely by means of remote communication.
(b) To be in proper form, a demand submitted by any stockholder or stockholders pursuant to
clause (ii) of the first sentence of Section 2(a) (a
Special Meeting Demand
) shall be in writing and shall set forth:
(i) as to each Demanding Person (as defined below), (A) the name and address of such Demanding Person (including, if
applicable, the name and address that appear on the Corporations books and records) and (B) the class or series and number of shares of capital stock of the Corporation that are, directly or indirectly, owned of record or beneficially
owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Demanding Person (
provided
that for purposes of this Section 2 such Demanding Person shall in all events be deemed to beneficially own any shares of any class or
series and number of shares of capital stock of the Corporation as to which such Demanding Person has a right to acquire beneficial ownership at any time in the future);
(ii) As to each Demanding Person, any Disclosable Interests (as defined in Paragraph (A)(3)(b) of Section 13 of this
Article II, except that for purposes of this Section 2, the term Demanding Person shall be substituted for the term Proposing Person in all places it appears in Paragraph (A)(3)(b) of Section 13 of this Article II
and the disclosure required by clause (vi) of Paragraph (A)(3)(b) of Section 13 of this Article II shall be made with respect to the business proposed to be conducted at the special meeting);
(iii) The purpose or purposes for which the meeting is to be called;
(iv) As to each purpose for which the meeting is to be called, (A) a reasonably brief description of such purpose,
(B) a reasonably brief description of the specific proposal to be made or business to be conducted at the special meeting in connection with such purpose, (C) the text of any proposal or business to be considered at the special meeting in
connection with such purpose (including the text of any resolutions proposed for consideration and if such business includes a proposal to amend the Bylaws of the Corporation, the language of the proposed amendment), (D) the reasons for calling
a special meeting of stockholders for such purpose, and (E) a reasonably brief description of any material interest of each Demanding Person in any proposal or business to be considered at the special meeting in connection with such purpose;
and
(v) If a purpose for which the special meeting is to be called is the election of one or more directors to the Board
of Directors, the name of each person the Demanding Persons propose to nominate at the special meeting for election to the Board of Directors (each, a
nominee
), and as to each such nominee, (A) the name, age, business and
residence address, and principal occupation or employment of the nominee, (B) all other information relating to the nominee that would be required to be disclosed about such nominee if proxies were being solicited for the election of the
nominee as a director in an election contest (whether or not such proxies are or will be solicited), or that is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Exchange Act, (C) such nominees
written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected, and (D) all information with respect to such nominee that would be required to be set forth in a stockholders Special
Meeting Demand pursuant to this subsection (b) if such nominee were a Demanding Person.
The Corporation may require any proposed nominee to furnish
such other information as it may reasonably require to determine (i) the eligibility of such proposed nominee to serve as a director of the Corporation, and (ii) whether such nominee qualifies as an independent director or
audit committee financial expert under applicable law, securities exchange rule or regulation, or any publicly disclosed corporate governance guideline or committee charter of the Corporation.
(c) In the case of a special meeting called by the Secretary following receipt of Special Meeting Demand(s) from stockholders holding the
Requisite Percentage in accordance with clause (ii) of the first sentence of Section 2(a), each Demanding Person shall further update and supplement his or her Special Meeting Demand so that the information provided or required to be
provided in such Special Meeting Demand pursuant to subsection (b) of this Section 2 shall be true and correct both as of the record date for the determination of stockholders entitled to notice of the special meeting and as of the date
that is ten (10) business days before the special meeting or any adjournment or postponement thereof, and such updated and supplemental information shall be
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delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation (i) in the case of information that is required to be updated and supplemented to
be true and correct as of the record date for the determination of stockholders entitled to notice of the special meeting, not later than the later of five (5) business days after such record date or five (5) business days after the public
announcement of such record date, and (ii) in the case of information that is required to be updated and supplemented to be true and correct as of ten (10) business days before the special meeting or any adjournment or postponement
thereof, not later than eight (8) business days before the special meeting or any adjournment or postponement thereof (or if not practicable to provide such updated and supplemental information not later than eight (8) business days before
any adjournment or postponement, on the first practicable date before any such adjournment or postponement).
(d) The Secretary shall not
accept, and shall consider ineffective, a Special Meeting Demand from a stockholder (i) that does not comply with this Section 2, (ii) that relates to an item of business to be transacted at the proposed special meeting that is not a
proper subject for stockholder action under applicable law, or (iii) if the business proposed to be conducted at the special meeting as set forth in such Special Meeting Notice is identical to or substantially similar to an item of business
that will be submitted for stockholder approval or consideration at any meeting of stockholders to be held on or before the ninetieth (90th) day after the Secretary receives such Special Meeting Demand. In addition to the requirements of this
Section 2, each Demanding Person shall comply with all requirements of applicable law, including all requirements of the Exchange Act, with respect to any Special Meeting Demand.
(e) Nothing in this Section 2 shall be deemed or construed to give any stockholder a right to fix the date, time, or place of, or to fix
any record date for, any special meeting of the stockholders of the Corporation. Except as expressly provided in, and in accordance with, this Section 2, stockholders shall not be permitted (i) to call or cause any officer of the
Corporation to call a special meeting of stockholders or (ii) to propose business to be brought before a special meeting of the stockholders, other than the nomination of persons for election to the Board of Directors at a special meeting of
stockholders at which directors are to be elected pursuant to the Corporations notice of meeting, which nominations may be made only in accordance with, and subject to, this Section 2 or Section 13(B) of this Article II. Anything in
Section 13(B) of this Article II to the contrary notwithstanding, in the case of a special meeting called by the Secretary following receipt of Special Meeting Demand(s) from stockholders holding the Requisite Percentage in accordance with
clause (ii) of the first sentence of Section 2(a), if a purpose of such special meeting is to elect directors to the Board of Directors of the Corporation and a Demanding Person has included in his or her Special Meeting Demand the names
of each person the Demanding Person proposes to nominate at the special meeting for election to the Board of Directors, together with all other information required by subsection (b) of this Section 2, and so long as the Demanding Person
has otherwise complied with this Section 2, then the Demanding Persons Special Meeting Demand shall be deemed to be, and shall substitute for, the notice contemplated by Paragraph (B) of Section 13 of this Article II and such
Demanding Person shall be deemed to have given timely notice of such nominations in the proper form for purposes of Paragraph (B) of Section 13 of this Article II and otherwise to have complied with the notice procedures set forth in
Paragraph (B)(2) of Section 13 of this Article II, so long as such Demanding Person provides any updates or supplements to such Special Meeting Demand at such times and in the forms required by subsection (c) of this Section 2.
(f) Anything in this Section 2 to the contrary notwithstanding, in the case of a special meeting called by the Secretary following
receipt of Special Meeting Demand(s) from stockholders holding the Requisite Percentage in accordance with clause (ii) of the first sentence of Section 2(a), the Board of Directors may submit its own proposal or proposals for consideration
at such special meeting, and at the direction of the Board of Directors, such proposal or proposals shall be included in the notice for the special meeting as a purpose or purposes for which the meeting is called.
(g) A stockholder may revoke a Special Meeting Demand by written revocation delivered to, or mailed and received by, the Secretary at the
principal executive office of the Corporation at any time before the special meeting. If any such revocation(s) are delivered to or received by the Secretary after the Secretarys receipt of
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Special Meeting Demands from the holders of the Requisite Percentage, and as a result of such revocation(s), there no longer are unrevoked demands from stockholders holding the Requisite
Percentage, the Board of Directors shall have the discretion to determine whether or not to proceed with the special meeting.
(h) For
purposes of this Section 2, (i)
Demanding Person
shall mean (A) each stockholder making a demand pursuant to the first sentence of subsection (a) of this Section 2, (B) the beneficial owner or beneficial
owners, if different, on whose behalf such notice is given, and (C) any affiliates or associates (each within the meaning of Rule 12b-2 under the Exchange Act) of such stockholder or beneficial owner, (ii)
Exchange Act
shall have the meaning provided in Section 13 of this Article II, and (iii)
publicly announce
shall mean making a public announcement (as defined in Section 13 of this Article II).
Section 3.
Notice of Meetings
.
(a) The Corporation shall give notice of any annual or special meeting of stockholders.
Notices of meetings of the stockholders shall state the place, if any, date, and hour of the meeting, the record date for determining stockholders entitled to vote at the meeting, if such record date is different from the record date for determining
stockholders entitled to notice of the meeting, and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. In the case of a special meeting, the notice shall
state the purpose or purposes for which the meeting is called. No business other than that specified in the notice thereof shall be transacted at any special meeting. Unless otherwise provided by applicable law or the Certificate of Incorporation,
notice shall be given to each stockholder entitled to receive notice of such meeting not fewer than ten (10) days or more than sixty (60) days before the date of the meeting.
(b) Notice to stockholders may be given by personal delivery, mail, or, with the consent of the stockholder entitled to receive notice, by
facsimile or other means of electronic transmission. If mailed, such notice shall be delivered by postage prepaid envelope directed to each stockholder at such stockholders address as it appears in the records of the Corporation and shall be
deemed given when deposited in the United States mail. Notice given by electronic transmission pursuant to this subsection shall be deemed given: (i) if by facsimile telecommunication, when directed to a facsimile telecommunication number at
which the stockholder has consented to receive notice, (ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice, (iii) if by posting on an electronic network together
with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice, and (iv) if by any other form of electronic transmission, when directed to the
stockholder. An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given by personal delivery, by mail, or by a form of electronic transmission shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.
(c) Notice of any meeting of stockholders need not be given to any
stockholder if waived by such stockholder either in a writing signed by such stockholder or by electronic transmission, whether such waiver is given before or after such meeting is held. If such a waiver is given by electronic transmission, the
electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder.
Section 4.
Quorum and Adjournment
.
Except as otherwise required by law, by the Certificate of Incorporation of the
Corporation, or by these Bylaws, the presence, in person or represented by proxy, of the holders of a majority of the aggregate voting power of the stock issued and outstanding, entitled to vote thereat, shall constitute a quorum for the transaction
of business at all meetings of the stockholders. If such majority shall not be present or represented at any meeting of the stockholders, a majority of the stockholders present, although less than a quorum, or the presiding officer of such meeting
shall have the power to adjourn the meeting to another time and place.
Section 5.
Adjourned Meetings
.
When a meeting
is adjourned to another time and place, if any, unless otherwise provided by these Bylaws, notice need not be given of the adjourned meeting if the date, time, and
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place, if any, thereof and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are
announced at the meeting at which the adjournment is taken. At the adjourned meeting, the stockholders may transact any business that might have been transacted at the original meeting. If an adjournment is for more than thirty (30) days or, if
after an adjournment, a new record date is fixed for determining the stockholders entitled to vote at the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.
Section 6.
Vote Required
.
Except as otherwise provided by law, the Certificate of Incorporation, or these Bylaws:
(a) Directors shall be elected by a plurality in voting power of the shares present in person or represented by proxy at a meeting of the
stockholders and entitled to vote in the election of directors; and
(b) Whenever any corporate action other than the election of
directors is to be taken, it shall be authorized by a majority in voting power of the shares present in person or represented by proxy at a meeting of stockholders and entitled to vote on the subject matter.
Section 7.
Manner of Voting; Proxies
.
(a) At each meeting of stockholders, each stockholder having the right to vote
shall be entitled to vote in person or by proxy. Each stockholder shall be entitled to vote each share of stock having voting power and registered in such stockholders name on the books of the Corporation on the record date fixed for
determination of stockholders entitled to vote at such meeting.
(b) Each person entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the
proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. Proxies need not be filed with the
Secretary of the Corporation until the meeting is called to order, but shall be filed before being voted. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following
shall constitute valid means by which a stockholder may grant such authority:
(i) A stockholder may execute a writing
authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or the stockholders authorized officer, director, employee, or agent signing such writing or causing such
persons signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature; and
(ii) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing
the transmission of a telegram, cablegram, or other means of electronic transmission to the person or persons who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization, or like agent duly authorized by
the person who will be the holder of the proxy to receive such transmission;
provided
,
however
, that any such telegram, cablegram, or other means of electronic transmission must either set forth or be submitted with information from
which it can be determined that the telegram, cablegram, or other electronic transmission was authorized by the stockholder. If it is determined that any such telegram, cablegram, or other electronic transmission is valid, the inspectors or, if
there are no inspectors, such other persons making that determination, shall specify the information upon which they relied.
Any copy, facsimile
telecommunication, or other reliable reproduction of a writing or electronic transmission authorizing a person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or electronic transmission for any
and all purposes for which the original writing or electronic transmission could be used;
provided
,
however
, that such copy, facsimile telecommunication, or other reproduction shall be a complete reproduction of the entire original
writing or electronic transmission.
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Section 8.
Remote Communication
.
For the purposes of these Bylaws, if
authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders may, by means of remote communication:
(a) participate in a meeting of stockholders; and
(b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by
means of remote communication,
provided
that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or
proxyholder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an
opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of
such vote or other action shall be maintained by the Corporation.
Section 9.
No Stockholder Action Without a Meeting
.
Stockholder action by written consent in lieu of a meeting is prohibited by the Certificate of Incorporation.
Section 10.
Presiding Officer and Secretary
.
(a) The Chief Executive Officer shall preside at meetings of the stockholders. In the absence of the Chief Executive Officer, the President shall preside at meetings of the stockholders. In the
absence of each of the Chief Executive Officer and the President, any director or officer designated by the Board of Directors shall preside at meetings of the stockholders.
(b) The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but, in the absence of the Secretary, the
Assistant Secretary designated in accordance with Section 11(b) of Article IV of these Bylaws shall act as secretary of meetings of the stockholders. In the absence of the Secretary and any designated Assistant Secretary, the presiding officer
of the meeting may appoint any person to act as secretary of the meeting.
Section 11.
Conduct of Meetings
.
At each
meeting of stockholders, the presiding officer of the meeting shall fix and announce the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting and shall determine the order of
business and all other matters of procedure. The Board of Directors may adopt by resolution such rules, regulations, and procedures for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with
any such rules and regulations adopted by the Board of Directors, the presiding officer of the meeting shall have the right and authority to convene and to adjourn the meeting and to establish rules, regulations, and procedures, which need not be in
writing, for the conduct of the meeting and to maintain order and safety. Without limiting the foregoing, he or she may:
(a) restrict
attendance at any time to bona fide stockholders of record and their proxies and other persons in attendance at the invitation of the presiding officer or Board of Directors;
(b) place restrictions on entry to the meeting after the time fixed for the commencement thereof;
(c) restrict dissemination of solicitation materials and use of audio or visual recording devices at the meeting;
(d) adjourn the meeting without a vote of the stockholders, whether or not there is a quorum present; and
(e) make rules governing speeches and debate, including time limits and access to microphones.
The presiding officer of the meeting shall act in his or her absolute discretion, and his or her rulings shall not be subject to appeal.
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Section 12.
Inspectors of Election
.
The Corporation may, and shall if
required by law, in advance of any meeting of stockholders, appoint one or more inspectors of election, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and to make a written report thereof. The Corporation
may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector so appointed or designated is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or
more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of his or
her ability. The inspector or inspectors so appointed or designated shall (a) ascertain the number of shares of capital stock of the Corporation outstanding and the voting power of each such share, (b) determine the shares of capital stock
of the Corporation represented at the meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any
determination by the inspectors, and (e) certify their determination of the number of shares of capital stock of the Corporation represented at the meeting and such inspectors count of all votes and ballots. Such certification and report
shall specify such other information as may be required by law. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such information as is permitted by
applicable law. No person who is a candidate for an office at an election may serve as an inspector at such election.
Section 13.
Notice of Stockholder Business and Nominations
.
(A)
Annual Meetings of Stockholders
.
(1) Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be
made at an annual meeting of stockholders only (a) pursuant to the Corporations notice of meeting (or any supplement thereto), (b) by or at the direction of the Board of Directors, or (c) by any stockholder of the Corporation
(i) who was a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such business is proposed or such nomination or nominations are made, only if such beneficial owner was the
beneficial owner of shares of the Corporation) both at the time the notice provided for in Paragraphs (A)(2) and (A)(3) of this Section 13 is delivered to the Secretary of the Corporation and on the record date for the determination of
stockholders entitled to vote at the meeting, (ii) who is entitled to vote at the meeting upon such election of directors or upon such business, as the case may be, and (iii) who complies with the notice procedures set forth in Paragraphs
(A)(2) and (A)(3) of this Section 13. Except for proposals properly made in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (as so amended and inclusive of such rules
and regulations, the
Exchange Act
), and included in the notice of meeting given by or at the direction of the Board of Directors, the foregoing clause (c) shall be the exclusive means for a stockholder to propose business to
be brought before an annual meeting of stockholders. In addition, for business (other than the nomination of persons for election to the Board of Directors) to be properly brought before an annual meeting by a stockholder, such business must be a
proper matter for stockholder action pursuant to the Certificate of Incorporation, these Bylaws, and applicable law.
(2) For nominations
or other business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to clause (c) of Paragraph (A)(1) of this Section 13, the stockholder (a) must have given timely notice thereof in writing and
in proper form to the Secretary at the principal executive offices of the Corporation, and (b) must provide any updates or supplements to such notice at such times and in the forms required by this Section 13. To be timely, a
stockholders notice relating to an annual meeting shall be delivered to, or mailed to and received by, the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day
and not earlier than the close of business on the one hundred twentieth (120th) day before the date of the one-year anniversary of the immediately preceding years annual meeting (
provided
,
however
, that if the date of the
annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder must be so delivered, or mailed and received, not earlier than the close of business on the one hundred
twentieth (120th) day before such annual
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meeting and not later than the close of business on the later of the ninetieth (90th) day before such annual meeting or the tenth (10th) day following the day on which public
announcement (as defined below) of the date of such meeting is first made by the Corporation). In no event shall the public announcement of an adjournment or postponement of an annual meeting of stockholders commence a new time period (or extend any
time period) for the giving of a stockholders notice as described above.
(3) To be in proper form for purposes of this
Section 13, a stockholders notice to the Secretary (whether pursuant to this Paragraph (A) or Paragraph (B) of this Section 13) must set forth:
(a) as to each Proposing Person (as defined below), (i) the name and address of such Proposing Person (including, if
applicable, the name and address that appear on the Corporations books and records) and (ii) the class or series and number of shares of capital stock of the Corporation that are, directly or indirectly, owned of record or beneficially
owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Person (
provided
that for purposes of this Section 13, such Proposing Person shall in all events be deemed to beneficially own any shares of any class or
series and number of shares of capital stock of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future);
(b) as to each Proposing Person, (i) any derivative, swap, or other transaction or series of transactions engaged in,
directly or indirectly, by such Proposing Person, the purpose or effect of which is to give such Proposing Person economic risk similar to ownership of shares of any class or series of capital stock of the Corporation, including due to the fact that
the value of such derivative, swap, or other transactions are determined by reference to the price, value, or volatility of any shares of any class or series of capital stock of the Corporation, or which derivative, swap, or other transactions
provide, directly or indirectly, the opportunity to profit from any increase in the price or value of shares of any class or series of capital stock of the Corporation (
Synthetic Equity Interests
), which Synthetic Equity Interests
shall be disclosed without regard to whether (x) the derivative, swap, or other transactions convey any voting rights in such shares to such Proposing Person, (y) the derivative, swap, or other transactions are required to be, or are
capable of being, settled through delivery of such shares, or (z) such Proposing Person may have entered into other transactions that hedge or mitigate the economic effect of such derivative, swap, or other transactions, (ii) any proxy
(other than a revocable proxy or consent given in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a solicitation statement filed on Schedule 14A), agreement, arrangement,
understanding, or relationship pursuant to which such Proposing Person has or shares a right to vote any shares of any class or series of capital stock of the Corporation (including the number of shares and class or series of capital stock of the
Corporation that are subject to such proxy, agreement, arrangement, understanding, or relationship), (iii) any agreement, arrangement, understanding, or relationship, including any repurchase or similar so-called stock borrowing
agreement or arrangement, engaged in, directly or indirectly, by such Proposing Person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of shares of any class or series of capital stock of
the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such Proposing Person with respect to the shares of any class or series of capital stock of the Corporation, or that provides, directly or
indirectly, the opportunity to profit from any decrease in the price or value of the shares of any class or series of capital stock of the Corporation (
Short Interests
), (iv) any rights to dividends on the shares of any class
or series of capital stock of the Corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation, (v) any performance related fees (other than an asset based fee) to which
such Proposing Person is entitled based on any increase or decrease in the price or value of shares of any class or series of the capital stock of the Corporation, or any Synthetic Equity Interests or Short Interests, if any, and (vi) any other
information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the
nominations or business proposed to be brought before the meeting pursuant to Regulation 14A under the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (i) through (vi) are referred to as
Disclosable
Interests
);
provided
,
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however
, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company, or
other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner;
(c) if such notice pertains to the nomination by the stockholder of a person or persons for election to the Board of Directors
(each, a
nominee
), as to each nominee, (i) the name, age, business and residence address, and principal occupation or employment of the nominee, (ii) all other information relating to the nominee that would be required
to be disclosed about such nominee if proxies were being solicited for the election of the nominee as a director in an election contest (whether or not such proxies are or will be solicited), or that is otherwise required, in each case pursuant to
and in accordance with Regulation 14A under the Exchange Act, (iii) such nominees written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected, and (iv) all information with
respect to such nominee that would be required to be set forth in a stockholders notice pursuant to this Section 13 if such nominee were a Proposing Person;
(d) if the notice relates to any business (other than the nomination of persons for election to the Board of Directors) that
the stockholder proposes to bring before the meeting, (i) a reasonably brief description of the business desired to be brought before the meeting, (ii) the text of the proposal or business (including the text of any resolutions proposed
for consideration and if such business includes a proposal to amend the Bylaws of the Corporation, the language of the proposed amendment), (iii) the reasons for conducting such business at the meeting, and (iv) any material interest in
such business of each Proposing Person;
(e) a representation that the stockholder giving the notice is a holder of record
of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination; and
(f) a representation whether any Proposing Person intends or is part of a group that intends (i) to deliver a proxy
statement and/or form of proxy to holders of at least the percentage of the Corporations outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (ii) otherwise to solicit proxies from stockholders
in support of such proposal or nomination.
The Corporation may require any proposed nominee to furnish such other information as it may reasonably
require to determine (i) the eligibility of such proposed nominee to serve as a director of the Corporation, and (ii) whether such nominee qualifies as an independent director or audit committee financial expert
under applicable law, securities exchange rule or regulation, or any publicly disclosed corporate governance guideline or committee charter of the Corporation.
(4) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 13 to the contrary, if the number of directors to
be elected to the Board of Directors of the Corporation at an annual meeting is increased and there is no public announcement by the Corporation naming all of the Board of Directors nominees for director or specifying the size of the increased
Board of Directors at least one hundred (100) days before the first anniversary of the preceding years annual meeting, a stockholders notice required by this Section 13 shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall be delivered to, or mailed to and received by, the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day
following the day on which such public announcement is first made by the Corporation.
(5) Only such persons who are nominated in
accordance with the procedures set forth in Paragraph (A) of this Section 13 (including those persons nominated by or at the direction of the Board of Directors) shall be eligible to be elected at an annual meeting of stockholders of the
Corporation to serve as directors. Only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in Paragraph (A) of this Section 13.
Except as otherwise provided by
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law, the chairman of an annual meeting of stockholders shall have the power and duty (a) if the facts warrant, to determine that a nomination or any business proposed to be brought before
the annual meeting was not made or was not proposed, as the case may be, in accordance with the procedures set forth in Paragraph (A) of this Section 13, and (b) if any proposed nomination or business was not made or was not proposed
in compliance with Paragraph (A) of this Section 13, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted.
(B)
Special Meetings of Stockholders
.
(1) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the
Corporations notice of meeting pursuant to Section 2 of these Bylaws. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the
Corporations notice of meeting only (a) by or at the direction of the Board of Directors or (b) if a purpose for such meeting as stated in the Corporations notice for such meeting is the election of one or more directors, by
any stockholder of the Corporation (i) who was a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such nomination or nominations are made, only if such beneficial owner was the
beneficial owner of shares of the Corporation) both at the time the notice provided for in Paragraph (B)(2) of this Section 13 is delivered to the Secretary of the Corporation and on the record date for the determination of stockholders
entitled to vote at the special meeting, (ii) who is entitled to vote at the meeting and upon such election, and (iii) who complies with the notice procedures set forth in Paragraph (B)(2) of this Section 13;
provided
,
however
, that a stockholder may nominate persons for election at a special meeting only to such position(s) as specified in the Corporations notice of the meeting.
(2) If a special meeting has been called in accordance with Section 2 of this Article II for the purpose of electing one or more
directors to the Board of Directors, then for nominations of persons for election to the Board of Directors to be properly brought before such special meeting by a stockholder pursuant to clause (b) of Paragraph (B)(1) of this Section 13,
the stockholder (a) must have given timely notice thereof in writing and in the proper form to the Secretary of the Corporation at the principal executive offices of the Corporation, and (b) must provide any updates or supplements to such
notice at such times and in the forms required by this Section 13. To be timely, a stockholders notice relating to a special meeting shall be delivered to, or mailed to and received by, the Secretary at the principal executive offices of
the Corporation not earlier than the close of business on the one hundred twentieth (120th) day before such special meeting and not later than the close of business on the later of the ninetieth (90th) day before such special meeting or
the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement
of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholders notice as described above. To be in proper form for purposes of this Paragraph (B) of this
Section 13, such notice shall set forth the information required by clauses (a), (b), (c), (e), and (f) of Paragraph (A)(3) of this Section 13.
(3) Only such persons who are nominated in accordance with the procedures set forth in Paragraph (B) of this Section 13 (including
those persons nominated by or at the direction of the Board of Directors) shall be eligible to be elected at a special meeting of stockholders of the Corporation to serve as directors. Except as otherwise provided by law, the chairman of a special
meeting of stockholders shall have the power and duty (a) if the facts warrant, to determine that a nomination proposed to be made at the special meeting was not made in accordance with the procedures set forth in Paragraph (B) of this
Section 13, and (b) if any proposed nomination was not made in compliance with Paragraph (B) of this Section 13, to declare that such nomination shall be disregarded.
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(C)
General
.
(1) A stockholder providing notice of nominations of persons for election to the Board of Directors at an annual or special meeting of
stockholders or notice of business proposed to be brought before an annual meeting of stockholders shall further update and supplement such notice so that the information provided or required to be provided in such notice pursuant to Paragraph
(A)(3)(a) through Paragraph (A)(3)(f) of this Section 13 shall be true and correct both as of the record date for the determination of stockholders entitled to notice of the meeting and as of the date that is ten (10) business days before
the meeting or any adjournment or postponement thereof, and such updated and supplemental information shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation (a) in the case of
information that is required to be updated and supplemented to be true and correct as of the record date for the determination of stockholders entitled to notice of the meeting, not later than the later of five (5) business days after such
record date or five (5) business days after the public announcement of such record date, and (b) in the case of information that is required to be updated and supplemented to be true and correct as of ten (10) business days before the
meeting or any adjournment or postponement thereof, not later than eight (8) business days before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated and supplemental information not later than
eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement).
(2) Notwithstanding the foregoing provisions of this Section 13, unless otherwise required by law, if the stockholder (or a qualified
representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be
transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 13, to be considered a qualified representative of the stockholder, a person must be authorized by a
writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable
reproduction of the writing or electronic transmission, at the meeting of stockholders.
(3) For purposes of this Section 13,
(a)
public announcement
shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press, or comparable national news service or in a document publicly filed by the Corporation with the
Securities and Exchange Commission pursuant to Section 13, 14, or 15(d) of the Exchange Act, and (b)
Proposing Person
shall mean (i) the stockholder giving the notice required by Paragraph (A) or Paragraph
(B) of this Section 13, (ii) the beneficial owner or beneficial owners, if different, on whose behalf such notice is given, and (iii) any affiliates or associates (each within the meaning of Rule 12b-2 under the Exchange Act for
purposes of these Bylaws) of such stockholder or beneficial owner.
(4) Paragraph (A) of this Section 13 is expressly intended
to apply to any business proposed to be brought before an annual meeting of stockholders other than any proposal made pursuant to Rule 14a-8 under the Exchange Act. Nothing in this Section 13 shall be deemed to (a) affect any rights of
stockholders to request inclusion of proposals in the Corporations proxy statement pursuant to Rule 14a-8 (or any successor thereto) promulgated under the Exchange Act, (b) confer upon any stockholder a right to have a nominee or any
proposed business included in the Corporations proxy statement, or (c) affect any rights of the holders of any class or series of preferred stock of the Corporation to nominate and elect directors pursuant to and to the extent provided in
any applicable provisions of the Certificate of Incorporation.
Section 14.
Record Dates
.
(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof,
the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and
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which record date shall not be more than sixty (60) or fewer than ten (10) days before the date of such meeting. If the Board of Directors so fixes a record date for determining the
stockholders entitled to notice of any meeting of stockholders, such date shall also be the record date for determining the stockholders entitled to vote at such meeting, unless the Board of Directors determines, at the time it fixes the record date
for determining the stockholders entitled to notice of such meeting, that a later date on or before the date of the meeting shall be the record date for determining the stockholders entitled to vote at such meeting. If no record date is fixed by the
Board of Directors, the record date for determining stockholders entitled to notice of and to vote at any meeting of stockholders or any adjournment thereof shall be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of such meeting;
provided
,
however
, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for
stockholders entitled to receive notice of such adjourned meeting the same or an earlier date as that fixed for determining the stockholders entitled to vote at such adjourned meeting in accordance with the foregoing provisions of this subsection
(a) of this Section 14.
(b) In order that the Corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution, or allotment of any rights, or the stockholders entitled to exercise any rights in respect of any change, conversion, or exchange of capital stock, or for the purpose of any other lawful action, except as may
otherwise be provided in these Bylaws, the Board of Directors may fix a record date. Such record date shall not precede the date upon which the resolution fixing such record date is adopted, and shall not be more than sixty (60) days prior to
such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
ARTICLE III
DIRECTORS
Section 1.
Number
.
The number of directors that shall constitute the whole Board of Directors initially shall be
nine (9), and thereafter shall be no fewer than six (6) and no greater than fifteen (15), the exact number of directors to be determined from time to time by resolution adopted by the Board of Directors.
Section 2.
Powers
.
Subject to any limitations set forth in the Certificate of Incorporation and to any provision of the
General Corporation Law of the State of Delaware relating to powers or rights conferred upon or reserved to the stockholders or the holders of any class or series of the Corporations issued and outstanding stock, the business and affairs of
the corporation shall be managed, and all corporate powers shall be exercised, by or under the direction of the Board of Directors.
Section 3.
Resignations and Removal
.
(a) Any director may resign at any time by giving notice in writing or by
electronic transmission to the Board of Directors or the Secretary;
provided
,
however
, that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from
which it can be determined that the electronic transmission was authorized by the director. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein. Acceptance of such resignation shall not be
necessary to make it effective unless the resignation specifies that it will not be effective unless accepted.
(b) Except as otherwise
may be provided in the Certificate of Incorporation, any director or the entire Board of Directors may be removed, with or without cause, by the holders of capital stock having a majority in voting power of the shares entitled to vote in the
election of directors.
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Section 4.
Annual Meetings
.
The Board of Directors shall meet each year
as soon as practicable following the annual meeting of stockholders, at the place where such meeting of stockholders has been held, or at such other place as shall be fixed by the Board of Directors (or if not previously fixed by the Board of
Directors, by the person presiding over the meeting of the stockholders), for the purpose of election of officers and consideration of such other business as the Board of Directors considers relevant to the management of the Corporation.
Section 5.
Regular Meetings
.
Regular meetings of the Board of Directors shall be held on such dates and at such times and
places, within or without the State of Delaware, as shall from time to time be determined by the Board of Directors, such determination to constitute the only notice of such regular meetings to which any director shall be entitled. In the absence of
any such determination, such meetings shall be held, upon notice to each director in accordance with Section 7 of this Article III, at such times and places, within or without the State of Delaware, as shall be designated by the Chairman of the
Board.
Section 6.
Special Meetings
.
Special meetings of the Board of Directors shall be held at the call of the
Chairman of the Board at such times and places, within or without the State of Delaware, as he or she shall designate, upon notice to each director in accordance with Section 7 of this Article III. Special meetings shall be called by the Chief
Executive Officer, President or Secretary on like notice at the written request of any two directors then in office.
Section 7.
Notice
.
Notice of any regular (if required) or special meeting of the Board of Directors may be given by personal delivery, mail, telegram, courier service (including, without limitation, Federal Express), facsimile transmission (directed
to the facsimile transmission number at which the director has consented to receive notice), electronic mail (directed to the electronic mail address at which the director has consented to receive notice), or other form of electronic transmission
pursuant to which the director has consented to receive notice. If notice is given by personal delivery, by facsimile transmission, by telegram, by electronic mail, or by other form of electronic transmission pursuant to which the director has
consented to receive notice, then such notice shall be given on not less than twenty-four (24) hours notice to each director. If written notice is delivered by mail, then it shall be given on not less than four (4) calendar
days notice to each director. If written notice is delivered by courier service, then it shall be given on not less than two (2) calendar days notice to each director.
Section 8.
Waiver of Notice
.
Notice of any meeting of the Board of Directors, or any committee thereof, need not be given
to any member if waived by him or her in writing or by electronic transmission, whether before or after such meeting is held, or if he or she shall sign the minutes of such meeting or attend the meeting, except that if such director attends a
meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, then such director shall not be deemed to have waived notice of such meeting. If
waiver of notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director.
Section 9.
Quorum and Powers of a Majority
.
At all meetings of the Board of Directors and of each committee thereof, a
majority of the total number of directors constituting the whole Board of Directors or such committee shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of a majority of the members present at any
meeting of the Board of Directors or a committee thereof at which a quorum is present shall be the act of the Board of Directors or such committee, unless by express provision of applicable law, the Certificate of Incorporation, or these Bylaws, a
different vote is required, in which case such express provision shall govern and control. In the absence of a quorum, a majority of the members present at any meeting may, without notice other than announcement at the meeting, adjourn such meeting
from time to time until a quorum is present.
Section 10.
Manner of Acting
.
(a) Members of the Board of Directors,
or any committee thereof, may participate in any meeting of the Board of Directors or such committee by means of conference telephone or
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other communications equipment by means of which all persons participating therein can hear each other, and participation in a meeting by such means shall constitute presence in person at such
meeting.
(b) Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken
without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the
minutes of proceedings of the Board of Directors or such committee;
provided
,
however
, that such electronic transmission or transmissions must either set forth or be submitted with information from which it can be determined that the
electronic transmission or transmissions were authorized by the director. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 11.
Organization
.
Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any,
or in his or her absence by a presiding person chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the presiding person at the meeting may appoint any person to act as secretary of the meeting.
Section 12.
Committees
.
The Board of Directors may designate one or more committees, each committee to consist of one or
more directors, which to the extent provided in said resolution or resolutions shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation (including the power and
authority to designate other committees of the Board of Directors);
provided
,
however
, that no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to
the stockholders, any action or matter expressly required by the General Corporation Law of the State of Delaware to be submitted to stockholders for approval (other than recommending the election or removal of directors) or (b) adopting,
amending, or repealing any Bylaw of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member of the committee. In the absence or disqualification
of a member of a committee, the member or members present at any meeting of such committee and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors
to act at the meeting in place of such absent or disqualified director.
Section 13.
Committee Procedure
.
(a) Except as otherwise determined by the Board of Directors or provided by these Bylaws, each committee shall adopt its own rules governing the time, place, and method of holding its meetings and the conduct of its proceedings and shall meet
as provided by such rules or by resolution of the Board of Directors. Unless otherwise provided by these Bylaws or any such rules or resolutions, notice of the time and place of each meeting of a committee shall be given to each member of such
committee as provided in Section 7 of this Article III with respect to notices of meetings of the Board of Directors.
(b) Each
committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required.
(c) Any member of
any committee may be removed from such committee either with or without cause, at any time, by the Board of Directors at any meeting thereof. Any vacancy in any committee may be filled by the Board of Directors in the manner prescribed by the
Certificate of Incorporation or these Bylaws for the original appointment of the members of such committee.
Section 14.
Vacancies and Newly-Created Directorships
.
Unless otherwise provided in the Certificate of Incorporation or in these Bylaws, vacancies and newly-created directorships resulting from any increase in the authorized number of directors may
be filled only by a majority of the directors then in office (and not by stockholders), although less than a quorum, or by a sole remaining director, and directors so chosen shall serve for a term expiring at the annual meeting of stockholders at
which the term of office to which they have been elected expires and until such directors successors have been duly elected and qualified. Unless otherwise
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provided in the Certificate of Incorporation or these Bylaws, when one or more directors shall resign from the Board, effective at a future date, a majority of directors then in office, including
those who have resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective.
Section 15.
Director Compensation
.
(a) The Board of Directors, by a resolution or resolutions, may fix, and from time
to time change, the compensation of Directors.
(b) Each director shall be entitled to reimbursement from the Corporation for his or her
reasonable expenses incurred with respect to duties as a member of the Board of Directors or any committee thereof.
(c) Nothing contained
in these Bylaws shall be construed to preclude any director from serving the Corporation in any other capacity and from receiving compensation from the Corporation for service rendered to it in such other capacity.
ARTICLE IV
OFFICERS
Section 1.
Number
.
The officers of the Corporation shall include a President and a Secretary. The Board of
Directors also shall elect a Chairman of the Board. The Board of Directors also may elect a Chief Executive Officer, a Chief Financial Officer, one or more Vice Presidents (who may have such additional descriptive designations as the Board of
Directors may determine), one or more Assistant Secretaries, one or more Treasurers, one or more Assistant Treasurers, and such other officers as the Board of Directors may from time to time deem appropriate or necessary.
Section 2.
Election of Officers, Term, and Qualifications
.
The officers of the Corporation shall be elected from time to
time by the Board of Directors and shall hold office at the pleasure of the Board of Directors. A vacancy in any office because of death, resignation, removal, disqualification, or any other cause shall be filled in the manner prescribed in this
Section 2 for the regular election to such office. Except for the Chairman of the Board, none of the officers of the Corporation needs to be a director of the Corporation. Any two or more offices may be held by the same person to the extent
permitted by the General Corporation Law of the State of Delaware and other applicable law.
Section 3.
Divisional or
Departmental Vice Presidents
.
The Board of Directors may delegate to the President the power to appoint one or more employees of the Corporation as divisional or departmental vice presidents and fix the duties of such appointees. However, no
such divisional or departmental vice president shall be considered to be an officer of the Corporation, the officers of the Corporation being limited to those officers elected by the Board of Directors in accordance with this Article IV.
Section 4.
Removal
.
Any officer may be removed, either with or without cause, by the Board of Directors at any meeting
thereof, or to the extent delegated to the Chairman of the Board, by the Chairman of the Board.
Section 5.
Resignations
.
Any officer of the Corporation may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the Chairman of the Board;
provided
,
however
, that if such notice
is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the officer. Such resignation shall take
effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective unless the resignation specifies that it
will not be effective unless accepted.
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Section 6.
Compensation of Officers
.
The salaries and other compensation
of all officers of the Corporation shall be fixed by or in the manner directed by the Board of Directors from time to time, and no officer shall be prevented from receiving such salary by reason of the fact that he or she also is a director of the
Corporation.
Section 7.
The Chairman of the Board
.
The Chairman of the Board shall have the powers and duties
customarily and usually associated with the office of the Chairman of the Board, as well as such additional powers and duties as may be from time to time assigned to him or her by the Board of Directors. The Chairman of the Board shall preside at
meetings of the stockholders and of the Board of Directors.
Section 8.
The Chief Executive Officer
.
The Chief
Executive Officer shall have responsibility for implementation of the policies of the Corporation, as determined by the Board of Directors, for the general management and administration of the business affairs of the Corporation, and for the
supervision of other officers, together with any other powers and duties as may be prescribed by the Board of Directors.
Section 9.
The President
.
The President shall have, subject to the supervision, direction, and control of the Board of
Directors and the Chief Executive Officer, the general powers and duties of supervision, direction, and management of the affairs and business of the Corporation customarily and usually associated with the position of President, including, without
limitation, all powers necessary to direct and control the organizational and reporting relationships within the Corporation. The President shall have such additional powers and duties as may be from time to time assigned to him or her by the Board
of Directors or the Chief Executive Officer. In the absence or disability of the President, his or her duties shall be performed by the Chief Executive Officer or such persons as the Board of Directors or the Chief Executive Officer may designate.
Section 10.
The Vice Presidents
.
Each Vice President shall have such powers and perform such duties as may from time
to time be assigned to him or her by the Board of Directors, the Chairman of the Board, the Chief Executive Officer, or the President.
Section 11.
The Secretary and Assistant Secretaries
.
(a) The Secretary shall attend meetings of the Board of Directors
and meetings of the stockholders and record all votes and minutes of all such proceedings in a book or books kept for such purpose. The Secretary shall have all such further powers and duties as are customarily and usually associated with the
position of Secretary or as may from time to time be assigned to him or her by the Board of Directors, the Chairman of the Board, the Chief Executive Officer, or the President.
(b) Each Assistant Secretary shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of
Directors, the Chairman of the Board, the Chief Executive Officer, the President, or the Secretary. In the case of absence or disability of the Secretary, the Assistant Secretary designated by the Chief Executive Officer or the President (or, in the
absence of such designation, by the Secretary) shall perform the duties and exercise the powers of the Secretary.
Section 12.
The Chief Financial Officer
.
The Chief Financial Officer shall have all such powers and duties as are customarily and usually associated with the position of Chief Financial Officer or as may from time to time be assigned to him or her by
the Board of Directors, the Chairman of the Board, the Chief Executive Officer, or the President.
Section 13.
The Treasurer
and Assistant Treasurers
.
(a) The Treasurer shall have custody of the Corporations funds and securities, shall be responsible for maintaining the Corporations accounting records and statements, shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit or cause to be deposited moneys or other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by
the Board of Directors. The Treasurer also shall maintain adequate records of all assets, liabilities, and transactions of the Corporation and shall assure that adequate audits thereof are currently and regularly made. The Treasurer shall have all
such further powers and
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duties as are customarily and usually associated with the position of Treasurer or as may from time to time be assigned to him or her by the Board of Directors, the Chairman of the Board, the
Chief Executive Officer, the President, or the Chief Financial Officer. In the absence of a designation of a Chief Financial Officer by the Board of Directors, the Treasurer shall be the Chief Financial Officer of the Corporation unless the Board of
Directors designates another person to be Treasurer.
(b) Each Assistant Treasurer shall have such powers and perform such duties as may
from time to time be assigned to him or her by the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President, or the Treasurer. In the case of absence or disability of the Treasurer, the Assistant Treasurer
designated by the Chief Executive Officer or the President (or, in the absence of such designation, by the Treasurer) shall perform the duties and exercise the powers of the Treasurer.
ARTICLE V
STOCK
Section 1.
Certificates
.
The shares of capital stock of the Corporation shall be represented by certificates,
unless the Certificate of Incorporation otherwise provides or unless the Board of Directors provides by resolution or resolutions that some or all of the shares of any class or classes, or series thereof, of the Corporations capital stock
shall be uncertificated. Every holder of capital stock of the Corporation represented by certificates shall be entitled to a certificate representing such shares. Certificates for shares of stock of the Corporation shall be issued under the seal of
the Corporation, or a facsimile thereof, and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall bear a serial number, shall exhibit the holders name and the number of shares
evidenced thereby, and shall be signed by the Chairman of the Board or the Chief Executive Officer, or the President or any Vice President, and by the Secretary or an Assistant Secretary, or the Chief Financial Officer, or the Treasurer or an
Assistant Treasurer. Any or all of the signatures on the certificate may be a facsimile. If any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is issued, the certificate may be issued by the Corporation with the same effect as if such person or entity were such officer, transfer agent, or registrar at the date of issue.
Section 2.
Transfers
.
Transfers of stock of the Corporation shall be made on the books of the Corporation only upon
surrender to the Corporation (or a transfer agent designed to transfer shares of stock of the Corporation) of a certificate (if any) for the shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer;
provided
,
however
, that such succession, assignment, or transfer is not prohibited by the Certificate of Incorporation, these Bylaws, applicable law, or contract. Thereupon, the Corporation shall issue a new certificate (if requested)
to the person entitled thereto, cancel the old certificate (if any), and record the transaction upon its books.
Section 3.
Lost, Stolen, or Destroyed Certificates
.
Any person claiming a certificate of stock to be lost, stolen, or destroyed shall make an affidavit or an affirmation of that fact, and shall give the Corporation a bond of indemnity in
satisfactory form and with one or more satisfactory sureties, whereupon a new certificate (if requested) may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen, or destroyed.
Section 4.
Registered Stockholders
.
The names and addresses of the holders of record of the shares of each class and series
of the Corporations capital stock, together with the number of shares of each class and series held by each record holder and the date of issue of such shares, shall be entered on the books of the Corporation. Except as otherwise required by
the General Corporation Law of the State of Delaware or other applicable law, the Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares of capital stock of the Corporation as the
person entitled to exercise the rights of a stockholder,
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including, without limitation, the right to vote in person or by proxy at any meeting of the stockholders of the Corporation. The Corporation shall not be bound to recognize any equitable or
other claim to or interest in any such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly required by the General Corporation Law of the State of Delaware or other
applicable law.
Section 5.
Fractional Shares
.
The Corporation may, but shall not be required to, issue fractional
shares of its capital stock if necessary or appropriate to effect authorized transactions. If the Corporation does not issue fractional shares, it shall (a) arrange for the disposition of fractional interests on behalf of those that otherwise
would be entitled thereto, (b) pay in cash the fair value of fractions of a share as of the time when those who otherwise would be entitled to receive such fractions are determined, or (c) issue scrip or warrants in registered form (either
represented by a certificate or uncertificated) or in bearer form (represented by a certificate), which scrip or warrants shall entitle the holder to receive a full share upon surrender of such scrip or warrants aggregating a full share. Fractional
shares shall, but scrip or warrants for fractional shares shall not (unless otherwise expressly provided therein), entitle the holder to exercise voting rights, to receive dividends thereon, to participate in the distribution of any assets in the
event of liquidation, and otherwise to exercise rights as a holder of capital stock of the class or series to which such fractional shares belong.
Section 6.
Additional Powers of the Board
.
(a) In addition to, and without limiting, those powers set forth in
Section 2 of Article III, the Board of Directors shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the
Corporation, including the use of uncertificated shares of stock, subject to the provisions of the General Corporation Law of the State of Delaware, other applicable law, the Certificate of Incorporation, and these Bylaws.
(b) The Board of Directors may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear
the signature of any such transfer agent and/or any such registrar of transfers.
ARTICLE VI
INDEMNIFICATION
Section 1.
Indemnification
.
(a) Subject to Section 3 of this Article VI, the Corporation shall indemnify, to the
full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person who is made or threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter, a
Proceeding
), by reason of the fact that such person is or was a director or officer of the Corporation, or while
serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, including service
with respect to an employee benefit plan (collectively,
Another Enterprise
), against expenses (including attorneys fees), judgments, fines (including ERISA excise taxes or penalties) and amounts paid in settlement actually
and reasonably incurred by him or her in connection with such Proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
(b) The Corporation may indemnify, to
the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person who is made or threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending,
or completed Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or while not serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director,
officer, employee, or agent of Another Enterprise, against expenses (including attorneys fees), judgments, fines (including ERISA
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excise taxes or penalties) and amounts paid in settlement actually and reasonably incurred by him or her in connection with such Proceeding if he or she acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
(c) To the extent that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of
any threatened, pending, or completed Proceeding referred to in Section 145(a) or (b) of the General Corporation Law of the State of Delaware, or in defense of any claim, issue, or matter therein, he or she shall be indemnified against
expenses (including attorneys fees) actually and reasonably incurred by him or her in connection therewith.
(d) The termination of
any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendre or its equivalent, shall not, of itself, create a presumption that the person seeking indemnification did not act in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.
Section 2.
Advancement of Expenses
.
(a) Subject to Section 3 of this Article VI, with respect to any person who
is made or threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending, or completed Proceeding, by reason of the fact that such person is or was a director or officer of the Corporation or while
serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise, the Corporation shall pay the expenses (including attorneys fees)
incurred by such person in defending any such Proceeding in advance of its final disposition (hereinafter an
advancement of expenses
);
provided
,
however
, that any advancement of expenses shall be made only upon
receipt of an undertaking (hereinafter an
undertaking
) by such person to repay all amounts advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such person is
not entitled to be indemnified for such expenses under this Article VI or otherwise.
(b) With respect to any person who is made or
threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending, or completed Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or while not serving
as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise, the Corporation may, in its discretion and upon such terms and conditions, if any, as
the Corporation deems appropriate, pay the expenses (including attorneys fees) incurred by such person in defending any such Proceeding in advance of its final disposition.
Section 3.
Actions Initiated Against The Corporation
.
Anything in Section 1(a) or Section 2(a) of this Article VI
to the contrary notwithstanding, except as provided in Section 5(b) of this Article VI, with respect to a Proceeding initiated against the Corporation by a person who is or was a director or officer of the Corporation (whether initiated by such
person in or by reason of such capacity or in or by reason of any other capacity, including as a director, officer, employee, or agent of Another Enterprise), the Corporation shall not be required to indemnify or to advance expenses (including
attorneys fees) to such person in connection with prosecuting such Proceeding (or part thereof) or in defending any counterclaim, cross-claim, affirmative defense, or like claim of the Corporation in such Proceeding (or part thereof) unless
such Proceeding was authorized by the Board of Directors of the Corporation.
Section 4.
Contract Rights
.
The rights to
indemnification and advancement of expenses conferred upon any current or former director or officer of the Corporation pursuant to this Article VI (whether by reason of the fact that such person is or was a director or officer of the Corporation,
or while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise) shall be contract rights, shall vest when such person becomes a
director or officer of the
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Corporation, and shall continue as vested contract rights even if such person ceases to be a director or officer of the Corporation. Any amendment, repeal, or modification of, or adoption of any
provision inconsistent with, this Article VI (or any provision hereof) shall not adversely affect any right to indemnification or advancement of expenses granted to any person pursuant hereto with respect to any act or omission of such person
occurring prior to the time of such amendment, repeal, modification, or adoption (regardless of whether the Proceeding relating to such acts or omissions, or any proceeding relating to such persons rights to indemnification or to advancement
of expenses, is commenced before or after the time of such amendment, repeal, modification, or adoption), and any such amendment, repeal, modification, or adoption that would adversely affect such persons rights to indemnification or
advancement of expenses hereunder shall be ineffective as to such person, except with respect to any threatened, pending, or completed Proceeding that relates to or arises from (and only to the extent such Proceeding relates to or arises from) any
act or omission of such person occurring after the effective time of such amendment, repeal, modification, or adoption.
Section 5.
Claims
.
(a) If (i) a claim under Section 1(a) of this Article VI with respect to any right to
indemnification is not paid in full by the Corporation within sixty (60) days after a written demand has been received by the Corporation or (ii) a claim under Section 2(a) of this Article VI with respect to any right to the
advancement of expenses is not paid in full by the Corporation within twenty (20) days after a written demand has been received by the Corporation, then the person seeking to enforce a right to indemnification or to an advancement of expenses,
as the case may be, may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim.
(b) If
successful in whole or in part in any suit brought pursuant to Section 5(a) of this Article VI, or in a suit brought by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the
person seeking to enforce a right to indemnification or an advancement of expenses hereunder or the person from whom the Corporation sought to recover an advancement of expenses, as the case may be, shall be entitled to be paid by the Corporation
the reasonable expenses (including attorneys fees) of prosecuting or defending such suit.
(c) In any suit brought by a person
seeking to enforce a right to indemnification hereunder (but not a suit brought by a person seeking to enforce a right to an advancement of expenses hereunder), it shall be a defense that the person seeking to enforce a right to indemnification has
not met any applicable standard for indemnification under applicable law. With respect to any suit brought by a person seeking to enforce a right to indemnification or right to advancement of expenses hereunder or any suit brought by the Corporation
to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), neither (i) the failure of the Corporation to have made a determination prior to commencement of such suit that indemnification of such person
is proper in the circumstances because such person has met the applicable standards of conduct under applicable law, nor (ii) an actual determination by the Corporation that such person has not met such applicable standards of conduct, shall
create a presumption that such person has not met the applicable standards of conduct or, in a case brought by such person seeking to enforce a right to indemnification, be a defense to such suit.
(d) In any suit brought by a person seeking to enforce a right to indemnification or to an advancement of expenses hereunder, or by the
Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the burden shall be on the Corporation to prove that the person seeking to enforce a right to indemnification or to an advancement of
expenses or the person from whom the Corporation seeks to recover an advancement of expenses is not entitled to be indemnified, or to such an advancement of expenses, under this Article VI or otherwise.
Section 6.
Determination of Entitlement to Indemnification
.
Any indemnification required or permitted under this Article VI
(unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because he or
she has met all applicable standards of conduct set forth in this
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Article VI and Section 145 of the General Corporation Law of the State of Delaware. Such determination shall be made, with respect to a person who is a director or officer of the Corporation
at the time of such determination, (a) by a majority vote of the directors who are not parties to such Proceeding, even though less than a quorum, (b) by a committee of such directors designated by majority vote of such directors, even
though less than a quorum, (c) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (d) by the stockholders. Such determination shall be made, with respect to any person who
is not a director or officer of the Corporation at the time of such determination, in the manner determined by the Board of Directors (including in such manner as may be set forth in any general or specific action of the Board of Directors
applicable to indemnification claims by such person) or in the manner set forth in any agreement to which such person and the Corporation are parties.
Section 7.
Non-Exclusive Rights
.
The indemnification and advancement of expenses provided in this Article VI shall not be
deemed exclusive of any other rights to which any person may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in such persons official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has ceased to be such director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such person.
Section 8.
Insurance
.
The Corporation may purchase and maintain insurance on behalf of any person who is or was a director,
officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise against any liability asserted against such person and incurred by such person in
any such capacity, or arising out of such persons status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VI or otherwise.
Section 9.
Severability
.
If any provision or provisions of this Article VI shall be held to be invalid, illegal, or
unenforceable for any reason whatsoever: (a) the validity, legality, and enforceability of the remaining provisions of this Article VI (including, without limitation, each portion of any paragraph or clause containing any such provision held to
be invalid, illegal, or unenforceable, that is not itself held to be invalid, illegal, or unenforceable) shall not in any way be affected or impaired thereby and (b) to the fullest extent possible, the provisions of this Article VI (including,
without limitation, each such portion of any paragraph or clause containing any such provision held to be invalid, illegal, or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal, or
unenforceable.
Section 10.
Miscellaneous
.
For purposes of this Article VI: (a) references to serving at the
request of the Corporation as a director or officer of Another Enterprise shall include any service as a director or officer of the Corporation that imposes duties on, or involves services by, such director or officer with respect to an employee
benefit plan, (b) references to serving at the request of the Corporation as an employee or agent of Another Enterprise shall include any service as an employee or agent of the Corporation that imposes duties on, or involves services by, such
employee or agent with respect to an employee benefit plan, (c) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner not opposed to the best interests of the Corporation, and (d) references to a director of Another Enterprise shall include, in the case of any entity that is not managed by a board of directors, such other
position, such as manager or trustee or member of the governing body of such entity, that entails responsibility for the management and direction of such entitys affairs, including, without limitation, general partner of any partnership
(general or limited) and manager or managing member of any limited liability company.
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ARTICLE VII
MISCELLANEOUS
Section 1.
Books and Records
.
(a) Any books or records maintained by the Corporation in the regular course of its
business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method;
provided
,
however
, that the books and records so kept can be
converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any books or records so kept upon the request of any person entitled to inspect such records pursuant to the Certificate of Incorporation, these
Bylaws, or the provisions of the General Corporation Law of the State of Delaware.
(b) It shall be the duty of the Secretary or other
officer of the Corporation who shall have charge of the stock ledger to prepare and make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares registered in the stockholders name;
provided
,
however
, if the record date for determining the stockholders entitled to vote at the meeting is fewer than
ten (10) days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date. Nothing contained in this subsection (b) shall require the Corporation to include electronic mail
addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (i) on a
reasonably accessible electronic network,
provided
that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the
Corporation. If the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be
held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote
communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible network, and the information required to access such list shall be provided with the notice of the
meeting. The stock ledger shall be the only evidence of the identity of the stockholders entitled to examine such list.
(c) Except to the
extent otherwise required by law, or by the Certificate of Incorporation, or by these Bylaws, the Board of Directors shall determine from time to time whether and, if allowed, when and under what conditions and regulations the stock ledger, books,
records, and accounts of the Corporation, or any of them, shall be open to inspection by the stockholders and the stockholders rights, if any, in respect thereof. Except as otherwise provided by law, the stock ledger shall be the only evidence
of the identity of the stockholders entitled to examine the stock ledger, the books, records, or accounts of the Corporation.
Section 2.
Voting Shares in Other Business Entities
.
The Chief Executive Officer, the President, any Vice President, or any
other officer or officers of the Corporation designated by the Board of Directors, the Chief Executive Officer or the President may vote, and otherwise exercise on behalf of the Corporation any and all rights and powers incident to the ownership of,
any and all shares of stock or other equity interest held by the Corporation in any other corporation or other business entity. The authority herein granted may be exercised either by any such officer in person or by any other person authorized to
do so by proxy or power of attorney duly executed by any such officer.
Section 3.
Execution of Corporate Instruments
.
(a) The Board of Directors may in its discretion determine the method and designate the signatory officer or officers, or other person or
persons, to execute, sign, or endorse any corporate instrument or document, or to sign the corporate name without limitation, except where otherwise provided by law, and such execution or signature shall be binding upon the Corporation.
B-22
(b) Unless otherwise specifically determined by the Board of Directors or otherwise required
by law, formal contracts of the Corporation, promissory notes, deeds of trust, mortgages, and other evidences of indebtedness of the Corporation, and other corporate instruments or documents requiring the corporate seal, shall be executed, signed,
or endorsed by the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary, the Chief Financial Officer, the Treasurer, or any Assistant Secretary or Assistant Treasurer. All other instruments and
documents requiring a corporate signature but not requiring the corporate seal may be executed as aforesaid or in such other manner and by such other person or persons as may be determined from time to time by the Board of Directors or the
President.
(c) All checks and drafts drawn on banks or other depositaries on funds to the credit of the Corporation or in special
accounts of the Corporation shall be executed, signed, or endorsed by the Chief Financial Officer, the Treasurer, any Assistant Treasurer, or in such other manner and by such other person or persons as may be determined from time to time by the
Board of Directors.
(d) Unless otherwise specifically determined by the Board of Directors or otherwise required by law, the execution,
signing, or endorsement of any corporate instrument or document may be effected manually, by facsimile, or (to the extent permitted by applicable law and subject to such policies and procedures as the Corporation may have in effect from time to
time) by electronic signature.
Section 4.
Fiscal Year
.
The fiscal year of the Corporation shall be such fiscal year as
the Board of Directors from time to time by resolution shall determine.
Section 5.
Gender/Number
.
As used in these
Bylaws, the masculine, feminine, or neuter gender, and the singular and plural number, shall each include the other whenever the context so indicates.
Section 6.
Section Titles
.
The titles of the sections and subsections have been inserted as a matter of reference only and
shall not control or affect the meaning or construction of any of the terms and provisions hereof.
Section 7.
Electronic
Transmission
.
For purposes of these Bylaws, electronic transmission means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed
by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
Section 8.
Amendment
.
These Bylaws, or any of them, may be altered, amended, or repealed, and new Bylaws may be made,
(a) at any annual or regular meeting of the Board of Directors or at any special meeting of the Board of Directors if notice of the proposed alteration, amendment, or repeal be contained in written notice of such special meeting or (b) at
any annual meeting of the stockholders (subject to Section 13 of Article II of these Bylaws) or at any special meeting of the stockholders of the Corporation if noticed of the proposed alteration, amendment, or repeal is contained in the
Corporations notice of such special meeting of stockholders (and subject to Section 2 of Article II of these Bylaws). Anything herein to the contrary notwithstanding, any alteration, amendment, or repeal of these Bylaws, or the making of
any new Bylaw, by the stockholders shall require the affirmative vote of the holders of not less than a majority of the voting power represented by the issued and outstanding shares of the Corporation entitled to vote thereon. Any Bylaws altered,
amended, or made by the stockholders may be altered, amended, or repealed by either the Board of Directors or the stockholders, in the manner set forth in this Section 8, except a Bylaw amendment adopted by the stockholders that specifies the
votes that shall be necessary for the election of directors shall not be amended or repealed by the Board of Directors.
Section 9.
Certificate of Incorporation
.
Anything herein to the contrary notwithstanding, if any provision contained in
these Bylaws is inconsistent with or conflicts with a provision of the Certificate of Incorporation, such provision of these Bylaws shall be superseded by the inconsistent provision in the Certificate of Incorporation to the extent necessary to give
effect to such provision in the Certificate of Incorporation.
B-23
Section 10.
Forum
.
Unless the Corporation consents in writing to the
selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, the Superior Court of the State of Delaware, or, if and only if
both the Court of Chancery of the State of Delaware and the Superior Court of the State of Delaware lack subject matter jurisdiction, the United States District Court for the District of Delaware) and any state (or, if applicable, federal) appellate
court therefrom shall, to the fullest extent permitted by law, be the sole and exclusive forum for (a) any derivative action, suit, or proceeding brought on behalf of the Corporation, (b) any action, suit, or proceeding asserting a claim
of breach of fiduciary duty owed by any director, officer, or other employee of the Corporation to the Corporation or the Corporations stockholders, (c) any action, suit, or proceeding asserting a claim against the Corporation or any
director, officer, or other employee of the Corporation arising pursuant to, or seeking to enforce any right, obligation, or remedy under, any provision of the DGCL or the Certificate of Incorporation or the Corporations Bylaws (in each case,
as may be amended from time to time), (d) any action, suit, or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (e) any action, suit, or proceeding asserting a claim governed by the
internal affairs doctrine, in all cases subject to the courts having personal jurisdiction over the indispensable parties named as defendants (including personal jurisdiction by reason of any such indispensable partys consent to personal
jurisdiction in the State of Delaware or such court).
END OF BYLAWS
B-24
ORTHOFIX INTERNATIONAL N.V.
AMENDED AND RESTATED 2012 LONG-TERM INCENTIVE PLAN
C-1
ORTHOFIX INTERNATIONAL N.V.
AMENDED AND RESTATED 2012 LONG-TERM INCENTIVE PLAN
The Plan is intended to (a) provide eligible persons with an incentive to
contribute to the success of the Company and to operate and manage the Companys business in a manner that will provide for the Companys long-term growth and profitability, and (b) provide a means of obtaining, rewarding and
retaining key personnel. To this end, the Plan provides for the grant of options, stock appreciation rights, restricted stock, stock units (including deferred stock units), unrestricted stock, dividend equivalent rights, other equity-based awards
and cash bonus awards. Any of these Awards may, but need not, be made as performance incentives to reward the holders of such Awards for the achievement of annual or long-term performance goals in accordance with the terms of the Plan. Options
granted under the Plan may be
Non-qualified
Stock Options or Incentive Stock Options, as provided herein.
For purposes of interpreting the Plan and related documents (including
Award Agreements), the following definitions shall apply, unless the context clearly indicates otherwise:
2.1
Affiliate
means any company or other trade or business that controls, is controlled by or is under common control with the Company within the meaning of Rule 405 of Regulation C under the Securities Act, including any
Subsidiary. For purposes of grants of Options or Stock Appreciation Rights, an entity may not be considered an Affiliate unless the Company holds a controlling interest in such entity within the meaning of Treasury Regulation
Section 1.414(c)-2(b)(2)(i),
provided,
that (a) except as specified in clause (b) below, an interest of at least 50 percent shall be used instead of an interest of at
least 80 percent in each case where at least 80 percent appears in Treasury Regulation
Section 1.414(c)-2(b)(2)(i)
and (b) where the grant of Options or Stock Appreciation
Rights is based upon a legitimate business criterion, an interest of at least 20 percent shall be used instead of an interest of at least 80 percent in each case where at least 80 percent appears in
Treasury Regulation
Section 1.414(c)-2(b)(2)(i).
2.2
Annual Incentive
Award
means an Award, denominated in cash, made subject to the attainment of performance goals (as provided in
Section
14
) over a Performance Period of up to one (1) year, which shall be the Companys
fiscal year, unless otherwise specified by the Committee.
2.3
Applicable Laws
means the legal requirements
relating to the Plan and the Awards under (a) applicable provisions of the Code, the Securities Act, the Exchange Act, any rules or regulations thereunder, and any other laws, rules, regulations, and government orders of any jurisdiction
applicable to the Company or its Affiliates, (b) applicable provisions of the corporate, securities, tax, and other laws, rules, regulations, and government orders of any jurisdiction applicable to Awards granted to residents thereof, and
(c) the rules of any Stock Exchange or Securities Market on which the Stock is listed.
2.4
Award
means a
grant under the Plan of an Option, a Stock Appreciation Right, Restricted Stock, a Stock Unit, Unrestricted Stock, a Dividend Equivalent Right, a Performance Award, an Other Equity-Based Award, an Annual Incentive Award or cash.
2.5
Award Agreement
means the agreement, in such paper, electronic or other form as determined by the Committee,
between the Company and a Grantee that evidences and sets out the terms and conditions of an Award.
2.6
Benefit
Arrangement
shall have the meaning set forth in
Section
15
.
2.7
Board
means
the Board of Directors of the Company.
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2.8
Cause
shall have the meaning set forth in the applicable
agreement between the Grantee and the Company or an Affiliate, and in the absence of such agreement, means, as determined by the Committee, (i) gross negligence or willful misconduct in connection with the performance of duties;
(ii) conviction of a criminal offense (other than minor traffic offenses); or (iii) material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or
non-competition
agreements, if any, between the Service Provider and the Company or an Affiliate. Any determination by the Committee regarding whether an event constituting Cause shall have occurred shall be
finding, binding and conclusive.
2.9
Code
means the Internal Revenue Code of 1986, as amended, as now in effect
or as hereafter amended, and any successor thereto. References in the Plan to any Code Section shall be deemed to include, as applicable, regulations and guidance promulgated under such Code Section.
2.10
Committee
means a committee of, and designated from time to time by resolution of, the Board, which shall be
constituted as provided in
Section
3.1
(or, if no Committee has been so designated, the entire Board itself).
2.11
Company
means Orthofix International N.V. and any successor thereto.
2.12
Corporate Transaction
means, subject to
Section
18.10
, (a) a Person or
group (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the beneficial owner (as defined in Rule
13d-3
under the Exchange Act) of more than fifty percent
(50%) of the total voting power of all classes of stock of the Company; (b) individuals who on the Effective Date constitute the Board (together with any new Directors whose election by such Board or whose nomination by such Board for election
by the shareholders of the Company was approved by a vote of at least a majority of the members of such Board then in office who either were members of such Board on the Effective Date or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the members of such Board then in office; (c) the Company consummates a transaction with, or merger with or into, any Person, or any Person consummates a transaction with, or merger
with or into, the Company, other than any such transaction in which the holders of securities that represented one hundred percent (100%) of the voting stock of the Company immediately prior to such transaction (or other securities into which such
securities are converted as part of such merger or consolidation transaction) own directly or indirectly at least a majority of the voting power of the surviving Person in such merger or consolidation transaction immediately after such transaction;
(d) there is consummated any direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one transaction or a series of related transactions, of all or substantially all of the
assets of the Company and its Subsidiaries, taken as a whole, to any Person or group (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act); or (e) the shareholders of the Company adopt a plan or
proposal for the liquidation, winding up or dissolution of the Company. The Board shall have full and final authority, in its sole discretion, to determine conclusively whether a Corporate Transaction has occurred pursuant to the above definition,
the date of the occurrence of such Corporate Transaction, and any incidental matters relating thereto.
2.13
Disability
means the Grantee is unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12 months.
2.14
Dividend Equivalent Right
means
a right, granted to a Grantee pursuant to
Section
13
, to receive cash, Stock, other Awards or other property equal in value to dividends or other periodic payments paid or made with respect to a specified number of shares
of Stock.
2.15
Effective Date
means June 18, 2018, the date of the approval of the Plan, as amended and
restated, by the Companys shareholders, the Plan, as amended and restated, having been approved by the Board on April 23, 2018.
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2.16
Exchange Act
means the Securities Exchange Act of 1934, as
amended, as now in effect or as hereafter amended.
2.17
Fair Market Value
means the fair market
value of a share of Stock for purposes of the Plan, which shall be determined as follows, subject to
Section
18.3
:
(a) If on the Grant Date or other determination date the shares of Stock are listed on an established national or regional stock exchange (a
Stock Exchange
), or are publicly traded on an established securities market (a
Securities Market
), the Fair Market Value of a share of Stock shall be the closing price of the Stock as reported on such Stock
Exchange or Securities Market (provided that if there is more than one such Stock Exchange or Securities Market, the Committee shall designate the appropriate Stock Exchange or Securities Market for purposes of the Fair Market Value determination)
on the Grant Date or other determination date. If there is no such reported closing price on such date, the Fair Market Value of a share of Stock shall be, as determined by the Committee, the mean between (i) the highest bid price and the
lowest asked price of the Stock as reported on such Stock Exchange or such Securities Market on such date or (ii) the high and low sale prices of the Stock as reported on such Stock Exchange or such Securities Market on such date, or if no sale
of Stock shall have been so reported for such date, on the immediately preceding day on which any sale of Stock shall have been reported on such Stock Exchange or Securities Market.
(b) If on such Grant Date or other determination date the shares of Stock are not listed on a Stock Exchange or publicly traded on a
Securities Market, the Fair Market Value of a share of Stock shall be the value of the Stock as determined by the Committee by the reasonable application of a reasonable valuation method, in a manner consistent with Code Section 409A.
2.18
Family Member
means, with respect to any Grantee as of any date of determination, (a) a person who is a
spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, niece, nephew,
mother-in-law,
father-in-law,
son-in-law,
daughter-in-law,
brother, sister,
brother-in-law,
or
sister-in-law,
including adoptive relationships, of
such Grantee, (b) any person sharing such Grantees household (other than a tenant or employee), (c) a trust in which any one or more of the persons specified in clauses (a) and (b) above (and such Grantee) own more than
fifty percent (50%) of the beneficial interest, (d) a foundation in which any one or more of the persons specified in clauses (a) and (b) above (and such Grantee) control the management of assets, and (e) any other entity in
which one or more of the persons specified in clauses (a) and (b) above (and such Grantee) own more than fifty percent (50%) of the voting interests.
2.19
Grant Date
means, as determined by the Committee, the later to occur of (a) the date as of
which the Company completes the corporate action constituting the Award, or (b) such date subsequent to the date specified in clause (a) as may be specified by the Committee.
2.20
Grantee
means a person who receives or holds an Award under the Plan.
2.21
Incentive Stock Option
means an incentive stock option within the meaning of Code Section 422.
2.22
Non-qualified
Stock Option
means an Option that is not an
Incentive Stock Option.
2.23
Option
means an option to purchase one or more shares of Stock at a specified
Option Price pursuant to
Section
8
.
2.24
Option Price
means the exercise price for
each share of Stock subject to an Option.
2.25
Original Effective Date
means April 13, 2012.
2.26
Other Agreement
shall have the meaning set forth in
Section
15
.
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2.27
Other Equity-Based Award
means an Award representing a right
or other interest that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, other than an Option, a Stock Appreciation Right, Restricted Stock, a Stock Unit, Unrestricted Stock, a
Dividend Equivalent Right, a Performance Award or an Annual Incentive Award.
2.28
Outside Director
means a
member of the Board who is not an officer or employee of the Company or any Subsidiary.
2.29
Parachute Payment
shall have the meaning set forth in
Section
15
.
2.30
Performance Award
means an Award
made subject to the attainment of performance goals (as provided in
Section
14
) over a Performance Period of up to ten (10) years.
2.31
Performance Measures
means objective performance criteria on which performance goals under
Performance Awards are based, such as: (a) net earnings or net income; (b) operating earnings; (c) pretax earnings; (d) earnings per share; (e) share price, including growth measures and total shareholder return;
(f) earnings before interest and taxes; (g) earnings before interest, taxes, depreciation and/or amortization; (h) earnings before interest, taxes, depreciation and/or amortization as adjusted to exclude any one or more of the
following: stock-based compensation expense; income from discontinued operations; gain on cancellation of debt; debt extinguishment and related costs; restructuring, separation and/or integration charges and costs; reorganization and/or
recapitalization charges and costs; impairment charges; gain or loss related to investments; sales and use tax settlement; and gain on
non-monetary
transactions; (i) sales or revenue growth, whether in
general, by type of product or service, or by type of customer; (j) gross or operating margins; (k) return measures, including return on assets, capital, investment, equity, sales or revenue; (l) cash flow, including: operating cash
flow; free cash flow, defined as earnings before interest, taxes, depreciation and/or amortization (as adjusted to exclude any one or more of the items that may be excluded pursuant to the Performance Measure specified in clause (h) above) less
capital expenditures; levered free cash flow, defined as free cash flow less interest expense; cash flow return on equity; and cash flow return on investment; (m) productivity ratios; (n) expense targets; (o) market share;
(p) financial ratios as provided in credit agreements of the Company and its Subsidiaries; (q) working capital targets; (r) completion of acquisitions of businesses or companies; (s) completion of divestitures and asset sales;
and (t) any combination of the foregoing business criteria.
2.32
Performance Period
means the period of
time during which the performance goals under Performance Awards and Annual Incentive Awards must be met in order to determine the degree of payout and/or vesting with respect to any such Performance Awards or Annual Incentive Awards.
2.33
Plan
means this Orthofix International N.V. Amended and Restated 2012 Long-Term Incentive Plan, as it may be
further amended from time to time.
2.34
Prior Plan
means the Orthofix International N.V. Amended and Restated
2004 Long-Term Incentive Plan.
2.35
Purchase Price
means the purchase price, if any, for each share of Stock
subject to an Award of Restricted Stock, Stock Units or Unrestricted Stock.
2.36
Restricted Stock
means shares
of Stock awarded to a Grantee pursuant to
Section
10
.
2.37
SAR Exercise Price
means
the per share exercise price of a SAR granted to a Grantee pursuant to
Section
9
.
2.38
Securities Act
means the Securities Act of 1933, as amended, as now in effect or as hereafter amended.
C-8
2.39
Service
means service of a Grantee as a Service Provider to
the Company or any Affiliate. Unless otherwise provided in the applicable Award Agreement, a Grantees change in position or duties with the Company or any Affiliate shall not result in interrupted or terminated Service, so long as the Grantee
continues to be a Service Provider to the Company or any Affiliate. If a Service Providers employment or other Service relationship is with an Affiliate and the applicable entity ceases to be an Affiliate, a termination of Service shall be
deemed to have occurred when such entity ceases to be an Affiliate unless the Service Provider transfers his or her employment or other Service relationship to the Company or any other Affiliate. Any determination by the Committee whether a
termination of Service shall have occurred for purposes of the Plan shall be final, binding and conclusive.
2.40
Service
Provider
means, as of any date of determination, (a) an employee, officer, or director of the Company or an Affiliate, or (b) a consultant (who is a natural person) or adviser (who is a natural person) of the Company or any
Affiliate who provides bona fide services to the Company or any Affiliate and whose services are not in connection with the Companys sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a
market for the Companys stock.
2.41
Share Limit
shall have the meaning set forth in
Section
4.1(a)
.
2.42
Stock
means the common stock, par value $0.01 per share,
of the Company, or any security for which the shares of Stock may be exchanged or into which the shares of Stock may be converted.
2.43
Stock Appreciation Right
or
SAR
means a right granted to a Grantee pursuant to
Section
9
.
2.44
Stock Unit
means a bookkeeping entry representing the equivalent of one
share of Stock awarded to a Grantee pursuant to
Section
10
that may be settled, subject to the terms and conditions of the applicable Award Agreement, in shares of Stock, cash or a combination thereof.
2.45
Subsidiary
means any corporation (other than the Company) or
non-corporate
entity with respect to which the Company and Subsidiaries collectively own, directly or indirectly, fifty percent (50%) or more of the total combined voting power of all classes of stock,
membership interests or other ownership interests of any class or kind ordinarily having the power to vote for the directors, managers or other voting members of the governing body of such corporation or
non-corporate
entity. In addition, any
other entity may be designated by the Committee as a Subsidiary,
provided
that (a) such entity could be considered as a subsidiary according to generally accepted accounting principles in the United States of America and (b) in the case of an Award of Options or Stock Appreciation Rights, such
Award would be considered to be granted in respect of service recipient stock under Code Section 409A.
2.46
Substitute Award
means an Award granted upon assumption of, or in substitution for, outstanding awards previously granted under a compensatory plan by a business entity acquired or to be acquired by the Company or an Affiliate or
with which the Company or an Affiliate has combined or will combine.
2.47
Ten Percent Shareholder
means a
natural person who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding voting securities of the Company, the Companys parent (if any) or any of the Companys Subsidiaries. In determining stock
ownership, the attribution rules of Code Section 424(d) shall be applied.
2.48
Unrestricted Stock
shall
have the meaning set forth in
Section
11
.
Unless the context otherwise requires, all references in the Plan to
including shall mean including without limitation.
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3.
|
ADMINISTRATION OF THE PLAN
|
3.1
Committee.
(a) The Committee shall administer the Plan and shall have such powers and authorities related to the administration of the Plan as are
consistent with the Companys articles of incorporation and bylaws and Applicable Laws. Without limiting the generality of the foregoing, the Committee shall have full power and authority to take all actions and to make all determinations
required or provided for under the Plan, any Award or any Award Agreement, and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and provisions of the
Plan which the Committee deems to be necessary or appropriate to the administration of the Plan, any Award or any Award Agreement. All such actions and determinations shall be made by (i) the affirmative vote of a majority of the members of the
Committee present at a meeting at which a quorum is present, or (ii) the unanimous consent of the members of the Committee executed in writing or evidenced by electronic transmission in accordance with the Companys articles of
incorporation and bylaws and Applicable Laws. Unless otherwise expressly determined by the Board, the interpretation and construction by the Committee of any provision of the Plan, any Award or any Award Agreement shall be final, binding and
conclusive whether or not expressly provided for in any provision of the Plan, such Award or such Award Agreement.
(b) In the event that
the Plan, any Award or any Award Agreement provides for any action to be taken by or any determination to be made by the Board, such action may be taken or such determination may be made by the Committee or another committee constituted in
accordance with this
Section
3.1
if the Board has delegated the power and authority to do so to the Committee or such other committee pursuant to this
Section
3.1
. Unless otherwise expressly
determined by the Board, any such action or determination by the Committee or other committee shall be final, binding and conclusive whether or not expressly provided for in any provision of the Plan, such Award or such Award Agreement.
(c) Except as provided in
Section
3.2
and except as the Board may otherwise determine, the Committee shall consist
of two or more Outside Directors of the Company who: (a) meet such requirements as may be established from time to time by the Securities and Exchange Commission for plans intended to qualify for exemption under
Rule 16b-3
(or its successor) under the Exchange Act, and (b) comply with the independence requirements of the Stock Exchange or Securities Market on which the Stock is listed or publicly traded;
provided,
that any action taken by the Committee shall be valid and effective whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this
Section
3.1
or otherwise provided in any charter of the Committee;
provided, further
that, notwithstanding anything in the Plan to the contrary, to the extent necessary to satisfy any transition rule or applicable
transition guidance pertaining to Awards intended to satisfy the criteria for performance-based compensation under Code Section 162(m), the Committee administering such Awards shall consist of two or more Outside Directors who qualify as
outside directors within the meaning of Code Section 162(m) and the applicable guidance thereunder. Without limiting the generality of the foregoing, the Committee may be the Compensation Committee of the Board or a subcommittee
thereof if the Compensation Committee of the Board or such subcommittee satisfies the foregoing requirements.
(d) The Board may also
appoint one or more committees of the Board, each composed of one or more directors of the Company who need not be Outside Directors, who may administer the Plan with respect to employees or other Service Providers who are not executive
officers as defined in
Rule 3b-7
under the Exchange Act or directors of the Company, may grant Awards under the Plan to such employees or other Service Providers, and may determine all terms of such
Awards, subject to the requirements of
Rule 16b-3
under the Exchange Act and any Stock Exchange or Securities Market on which the Stock is listed or publicly traded. Any reference to Committee
in the Plan, any Award or any Award Agreement shall be deemed, as applicable, to refer to any committee appointed by the Board pursuant to this
Section
3.1
.
C-10
(e) To the extent permitted by Applicable Laws, the Committee may, by resolution, delegate
some or all of its authority with respect to the Plan and Awards to the Chief Executive Officer of the Company and/or any other officer of the Company designated by the Committee, provided that the Committee may not delegate its authority hereunder
(i) to make Awards to directors of the Company, (ii) to make Awards to employees who are (A) executive officers as defined in
Rule 3b-7
under the Exchange Act, or (B) officers
of the Company who are delegated authority by the Committee pursuant to this
Section
3.1
, or (iii) to interpret the Plan, any Award or any Award Agreement. Any delegation hereunder will be subject to the restrictions
and limits that the Committee specifies at the time of such delegation or thereafter. Nothing in the Plan will be construed as obligating the Committee to delegate authority to any officer of the Company, and the Committee may at any time rescind
the authority delegated to an officer of the Company appointed hereunder and delegate authority to one or more other officers of the Company. At all times, an officer of the Company delegated authority pursuant to this
Section
3.1
will serve in such capacity at the pleasure of the Committee. Any action undertaken by any such officer of the Company in accordance with the Committees delegation of authority will have the same force and
effect as if undertaken directly by the Committee, and any reference to the Committee in the Plan, any Award or any Award Agreement shall be deemed, to the extent consistent with the terms and limitations of such delegation, to refer to
each officer delegated authority by the Committee pursuant to this
Section
3.1
.
3.2
Board.
The Board from time to time may exercise any or all of the powers and authorities related to the administration and implementation of the
Plan, as set forth in
Section
3.1
and other applicable provisions of the Plan, as the Board shall determine, consistent with the Companys articles of incorporation and bylaws and Applicable Laws.
3.3
Terms of Awards.
Subject to the other terms and conditions of the Plan, the Committee shall have full and final authority to:
(a) designate Grantees;
(b)
determine the type or types of Awards to be made to a Grantee;
(c) determine the value or number of shares of Stock to be subject to an
Award;
(d) establish the terms and conditions of each Award (including the Option Price of any Option, the SAR Exercise Price of any SAR,
and the Purchase Price of shares of Restricted Stock or vested Stock Units, the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or the shares
of Stock subject thereto, the treatment of an Award in the event of a Corporate Transaction (subject to applicable agreements), and any terms or conditions that may be necessary to qualify Options as Incentive Stock Options);
(e) prescribe the form of each Award Agreement evidencing an Award;
(f) amend, modify, reprice (except as such practice is prohibited by
Section
3.5
herein), or supplement the terms of
any outstanding Award, which authority shall include the authority, in order to effectuate the purposes of the Plan but without amending the Plan, to make Awards or to modify outstanding Awards made to eligible natural persons who are foreign
nationals or are natural persons who are employed outside the United States to reflect differences in local law, tax policy, or custom,
provided
that, notwithstanding the foregoing, no amendment, modification or supplement of the terms of any
outstanding Award shall, without the consent of the Grantee thereof, materially impair the Grantees rights under such Award; and
(g) make Substitute Awards.
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3.4 Forfeiture; Recoupment.
(a) The Committee may reserve the right in an Award Agreement to cause a forfeiture of the gain realized by a Grantee with respect to an Award
thereunder on account of actions taken by, or failed to be taken by, such Grantee in violation or breach of, or in conflict with, any (i) employment agreement,
(ii) non-competition
agreement,
(iii) agreement prohibiting solicitation of Employees or clients of the Company or an Affiliate, (iv) confidentiality obligation with respect to the Company or an Affiliate, (v) Company or Affiliate policy or procedure,
(vi) other agreement, or (vii) other obligation of such Grantee to the Company or an Affiliate, as and to the extent specified in such Award Agreement. If the Grantee of an outstanding Award is an employee of the Company or an Affiliate
and such Grantees Service is terminated for Cause, the Committee may annul such Grantees outstanding Award as of the date of the Grantees termination of Service for Cause.
(b) Any Award granted pursuant to the Plan, to the extent provided in any Award Agreement relating thereto, shall be subject to mandatory
repayment by the Grantee of such Award to the Company to the extent that such Grantee is or in the future becomes subject to (i) any Company or Affiliate clawback or recoupment policy or (ii) any Applicable Laws, in each case
that require the repayment by such Grantee to the Company or Affiliate of compensation paid to such Grantee by the Company or an Affiliate in the event that such Grantee fails to comply with, or violates, the terms or requirements of such policy.
(c) If the Company is required to prepare an accounting restatement due to the material noncompliance by the Company, as a result of
misconduct, with any financial reporting requirement under the federal securities laws, any Grantee of an Award under such Award Agreement who knowingly engaged in such misconduct, was grossly negligent in engaging in such misconduct, knowingly
failed to prevent such misconduct or was grossly negligent in failing to prevent such misconduct, shall reimburse the Company the amount of any payment in settlement of such Award earned or accrued during the period of twelve (12) months
following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document that contained information affected by such material noncompliance.
(d) Notwithstanding any other provision of the Plan or any provision of any Award Agreement, if the Company is required to prepare an
accounting restatement, then Grantees shall forfeit any cash or Stock received in connection with an Award (or an amount equal to the Fair Market Value of such Stock on the date of delivery thereof to the Grantee if the Grantee no longer holds the
shares of Stock) if pursuant to the terms of the Award Agreement for such Award, the amount of the Award earned or the vesting in the Award was expressly based on the achievement of
pre-established
performance
goals set forth in the Award Agreement (including earnings, gains, or other performance goals) that are later determined, as a result of the accounting restatement, not to have been achieved.
3.5
No Repricing.
Notwithstanding anything in the Plan to the contrary, except in connection with a Corporate Transaction involving the Company (including,
without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation,
split-up,
spin-off,
combination, or exchange of shares), the Company may not (a) amend the terms of outstanding Options or SARs to reduce the Option Price or SAR Price, as applicable, of such outstanding Options or SARs; (b) cancel or assume outstanding
Options or SARs in exchange for or substitution of Options or SARs with an Option Price or SAR Price, as applicable, that is less than the Option Price or SAR Price, as applicable, of the original Options or SARs; or (c) cancel or assume
outstanding Options or SARs with an Option Price or SAR Price, as applicable, above the current Fair Market Value in exchange for cash, Awards, or other securities, in each case, unless such action (i) is subject to and approved by the
Companys shareholders, or (ii) is an appropriate adjustment pursuant
Section
17
.
3.6
Deferral Arrangement.
The Committee may permit or require the deferral of any payment pursuant to any Award into a deferred compensation arrangement, subject to
such rules and procedures as it may establish, which may include
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provisions for the payment or crediting of interest or Dividend Equivalent Rights and, in connection therewith, provisions for converting such credits into deferred Stock equivalents and for
restricting deferrals to comply with hardship distribution rules affecting
tax-qualified
retirement plans subject to Code Section 401(k)(2)(B)(IV),
provided
that no Dividend Equivalent
Rights may be granted in connection with, or related to, an Award of Options or SARs. Any such deferrals shall be made in a manner that complies with Code Section 409A.
3.7
No Liability.
No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan, any
Award, or any Award Agreement. Notwithstanding any provision of the Plan to the contrary, neither the Company, an Affiliate, the Board, the Committee, nor any person acting on behalf of the Company, an Affiliate, the Board, or the Committee will be
liable to any Grantee or to the estate or beneficiary of any Grantee or to any other holder of an Award under the Plan by reason of any acceleration of income, or any additional tax (including any interest and penalties), asserted by reason of the
failure of an Award to satisfy the requirements of Code Section 422 or Code Section 409A or by reason of Code Section 4999, or otherwise asserted with respect to the Award;
provided
, that this
Section
3.7
shall not affect any of the rights or obligations set forth in an applicable agreement between the Grantee and the Company or an Affiliate.
3.8
Stock Issuance; Book-Entry.
Notwithstanding any provision of the Plan to the contrary, the ownership of the shares of Stock issued under the Plan may be evidenced in such
a manner as the Committee, in its discretion, deems appropriate, including by book-entry or direct registration or by the issuance of one or more stock certificates.
4.
|
STOCK SUBJECT TO THE PLAN
|
4.1
Number of Shares
of Stock Available for Awards.
(a) Subject to adjustment pursuant to
Section
17
, the maximum number of
shares of Stock reserved for issuance under the Plan shall be equal to the sum of (i)
Four Million Seven Hundred Fifty Thousand (4,750,000) shares, plus (ii)
the number of shares of Stock available for awards under the Prior
Plan as of the Original Effective Date, plus (iii)
the number of shares of Stock subject to awards outstanding under the Prior Plan as of the Original Effective Date which thereafter (A)
terminate by expiration, forfeiture,
cancellation, or otherwise without the issuance of such shares, (B)
are settled in cash in lieu of such shares or (C)
are exchanged with the Committees permission, before the issuance of such shares, for compensatory
awards not involving shares (the
Share Limit
).
(b) Any of the shares of Stock reserved and available for issuance
under the Plan may be used for any type of Award under the Plan, and any or all of the shares of Stock reserved for issuance under the Plan shall be available for issuance pursuant to Incentive Stock Options.
(c) Shares of Stock to be issued under the Plan shall be authorized but unissued shares, or, to the extent permitted by Applicable Laws,
shares of treasury stock and issued shares that have been reacquired by the Company.
4.2
Adjustments in Authorized Shares of Stock.
In connection with mergers, reorganizations, separations, or other transactions
involving the Company or a Subsidiary to which Code Section 424(a) applies, the Committee shall have the right to cause the Company to assume awards previously granted under a compensatory plan by another business entity that is a party to such
transaction and to grant Substitute Awards under the Plan therefor. The Share Limit shall not be increased by the number of shares of Stock subject to any such assumed awards and Substitute Awards. Shares available for
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issuance under a shareholder-approved plan of a business entity that is a party to such transaction (as appropriately adjusted to reflect such transaction) may be used for Awards under the Plan
and shall not reduce the number of shares of Stock otherwise available for issuance under the Plan, subject to applicable rules of any Stock Exchange or Securities Market on which the Stock is listed or publicly traded.
4.3
Share Usage.
(a) Shares of Stock subject to an Award shall be counted against the Share Limit as used as of the Grant Date.
(b) Any shares of Stock that are subject to Awards of Options and SARs shall be counted against the Share Limit set forth in
Section
4.1(a)
as one (1)
share of Stock for every one (1)
share of Stock subject to such Award. Any shares of Stock that are subject to Awards other than Options or SARs shall be counted against the
Share Limit set forth in
Section
4.1(a)
as 1.84 shares for every one (1)
share of Stock subject to such Award. With respect to SARs, the number of shares of Stock subject to an award of SARs shall be
counted against the Share Limit under the Plan regardless of the number of shares of Stock actually issued to settle such SARs upon exercise. With respect to Performance Awards and Annual Incentive Awards, a number of shares of Stock at least equal
to the target number of shares issuable under such Award, and with giving effect to the share counting rules set forth in this section, shall be counted against the Share Limit as of the Grant Date, but such number shall be adjusted to equal the
actual number of shares issued, with giving effect to the share counting rules set forth in this section, upon settlement of the Performance Awards and Annual Incentive Awards, to the extent different from such number of shares.
(c) Any shares of Stock related to Awards under the Plan or awards outstanding under Prior Plan as of the Original Effective Date which
thereafter terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such shares or is settled in cash in lieu of shares shall be available again for grant under the Plan in an amount determined in accordance with the
methodology set forth in
Section
4.3(b)
.
(d) The number of shares of Stock available for issuance under
the Plan shall not be increased by the number of shares of Stock (i) tendered or withheld or subject to an Award surrendered in connection with the purchase of shares of Stock upon exercise of an Option or Stock Appreciation Right,
(ii)
that were not issued upon the net settlement or net exercise of an Option or Stock-settled SAR granted under the Plan, (iii)
deducted or delivered from payment of an Award in connection with the Companys tax
withholding obligations as provided in
Section
18.3
or (iv)
purchased by the Company with proceeds from Option or Stock Appreciation Right exercises.
5.
|
EFFECTIVE DATE, DURATION AND AMENDMENTS
|
5.1
Effective Date.
The Plan became effective on the Original Effective Date. The Plan, as amended and restated, shall be effective as
of the Effective Date. The Plan as in effect prior to its amendment and restatement shall apply to all awards granted on and after the Original Effective Date and prior to the Effective Date. Following the Original Effective Date, no awards shall be
made under the Prior Plan. Notwithstanding the foregoing, shares of Stock reserved under the Prior Plans to settle awards which are made under the Prior Plans prior to the Effective Date may be issued and delivered following the Effective Date to
settle such awards.
Notwithstanding any other provision of the Plan or any Award, each Award made under the Plan prior to
November 2, 2017 that was intended to qualify as performance-based compensation within the meaning of Section 162(m)(4)(C) of the Code prior to its repeal (
162(m) Awards
) and each Award which was otherwise
not subject to the deduction limitation of Section 162(m) of the Code shall be subject to any additional limitations as the Committee determines necessary for such 162(m) Award to qualify as performance-based
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compensation as described in Section 162(m)(4)(C) of the Code prior to its repeal (or to be so exempt) pursuant to the transition relief rules in the Tax Cuts and Jobs Act of 2017, and
to the extent any of the provisions of the Plan or any Award (or any amendments hereto pursuant to this amendment and restatement of the Plan) would cause any 162(m) Awards to fail to so qualify or other Awards to be so exempt, any such provisions
shall not apply to such Awards to the extent necessary to ensure the continued qualification or exemption of such Awards. To the extent permitted by Applicable Law, the Plan and any such Awards shall be deemed amended to the extent necessary to
conform to such requirements.
5.2 Term.
The Plan shall terminate automatically on the first to occur of (a) the day before the tenth (10th) anniversary of the Effective
Date, (b) the date determined in accordance with
Section
5.3
, and (c) the date determined in accordance with
Section
17.3
. Upon such termination of the Plan, all outstanding Awards shall
continue to have full force and effect in accordance with the provisions of the terminated Plan and the applicable Award Agreement (or other documents evidencing such Awards).
5.3 Amendment, Suspension and Termination.
The Board may, at any time and from time to time, amend, suspend or terminate the Plan,
provided
,
that with respect to Awards
theretofore granted under the Plan, no amendment, suspension, or termination of the Plan shall, without the consent of the Grantee, materially impair the Grantees rights under any such Award. The effectiveness of any amendment to the Plan
shall be contingent on approval of such amendment by the Companys shareholders to the extent provided by the Board or required by Applicable Laws (including the rules of any Stock Exchange or Securities Market on which the Stock is then listed
or publicly traded),
provided
that no amendment shall be made to the
no-repricing
provisions of
Section
3.5
, the Option Price provisions of
Section
8.1
, or the SAR Exercise Price provisions of
Section
9.1
without the approval of the Companys shareholders.
6.
|
AWARD ELIGIBILITY AND LIMITATIONS
|
6.1 Eligible
Grantees.
Subject to this
Section
6
, Awards may be made under the Plan to any Service Provider, as the
Committee shall determine and designate from time to time.
6.2 Limitation on Shares of Stock Subject to
Awards and Cash Awards.
During any time when the Company has a class of equity securities registered under Section 12 of the
Exchange Act:
(a) The maximum number of shares of Stock subject to Options or SARs that may be granted under the Plan to a Grantee other
than an Outside Director is 400,000 shares per fiscal year;
provided, however
, the maximum number of shares of Stock subject to Options or SARs that can be granted under the Plan to a Grantee other than an Outside Director in the fiscal year
that the person is first employed by the Company or its Affiliates is 800,000 shares.
(b) The maximum number of shares of Stock that may
be granted under the Plan, other than pursuant to Options or SARs, to a Grantee other than an Outside Director is 200,000 shares per fiscal year;
provided, however
, the maximum number of shares of Stock subject to Awards other than Options or
SARs that can be granted under the Plan to a Grantee other than an Outside Director in the fiscal year that the person is first employed by the Company or its Affiliates is 400,000 shares.
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(c) The maximum amount that may be paid as a cash-denominated Annual Incentive Award
(whether or not cash-settled) in respect of a Performance Period of 12 months or less to a Grantee other than an Outside Director shall be $3,000,000, and the maximum amount that may be paid as a cash- denominated Performance Award (whether or not
cash-settled) in respect of a Performance Period greater than 12 months to a Grantee other than an Outside Director shall be $6,000,000.
(d) The maximum total compensation (including cash payments and the aggregate Grant Date fair value of Awards (computed in accordance with
Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or its successors)) that may be granted under the Plan) that may be paid to or granted in a fiscal year to an Outside Director for his or her service as a member of
the Board or a committee of the Board is $1,000,000.
The preceding limitations in this
Section
6.2
are subject to adjustment as
provided in
Section
17
.
6.3 Stand-Alone, Additional, Tandem and Substitute
Awards.
Subject to
Section
3.5
, Awards granted under the Plan may, in the discretion of the Committee, be
granted either alone or in addition to, in tandem with, or in substitution or exchange for, (a) any other Award, (b) any award granted under another plan of the Company, any Affiliate, or any business entity to be acquired by the Company
or any Affiliate, or (c) any other right of a Grantee to receive payment from the Company or any Affiliate. Such additional, tandem and substitute or exchange Awards may be granted at any time. Subject to
Section
3.5,
if an Award is granted in substitution or exchange for another Award, or for an award granted under another plan of the Company, any Affiliate, or any business entity acquired by the Company or any Affiliate, the Committee shall require the
surrender of such other Award or award under such other plan in consideration for the grant of such substitute or exchange Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash payments under other plans
of the Company or any Affiliate. Notwithstanding
Section
8.1
and
Section
9.1
, but subject to
Section
3.5
, the Option Price of an Option or the grant price of an SAR that
is a Substitute Award may be less than one hundred percent (100%) of the Fair Market Value of a share of Stock on the original Grant Date;
provided
that, the Option Price or grant price is determined in accordance with the principles of Code
Section 424 for any Incentive Stock Option and consistent with Code Section
409A for any other Option or SAR.
6.4 Minimum Vesting Requirements.
Except with respect to a maximum of five percent (5%) of the Share Limit, (a) no portion of any Award (other than Substitute Awards) that
vests on the basis of the Grantees continued Service shall be granted with vesting conditions under which vesting occurs earlier than the one (1) year anniversary of the Grant Date, and (b) no portion of any Award (other than
Substitute Awards) that vests upon the attainment of Performance Measures shall be granted with a Performance Period of less than twelve (12) months. Notwithstanding the preceding, the Committee may provide for the earlier vesting,
exercisability, and/or settlement under any such Award (i) in the event of the Grantees death, Disability or retirement, or (ii) in connection with a Corporate Transaction. The foregoing five percent (5%) limit shall be subject to
adjustment consistent with the share usage rules of
Section
4.3
and the adjustment provisions of
Section
17
.
Each Award granted pursuant to the Plan shall be evidenced by an
Award Agreement, which shall be in such form or forms as the Committee shall from time to time determine. Award Agreements employed under the Plan from time to time or at the same time need not contain similar provisions but shall be consistent with
the terms of the Plan. Each Award Agreement evidencing an Award of Options shall specify whether such Options are intended to be
Non-qualified
Stock Options or Incentive Stock Options, and in the absence of
such specification, such Options shall be deemed to constitute Non- qualified Stock Options. In the event of any inconsistency between the Plan and an Award Agreement, the provisions of the Plan shall control.
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8.
|
TERMS AND CONDITIONS OF OPTIONS
|
8.1 Option
Price.
The Option Price of each Option shall be fixed by the Committee and stated in the Award Agreement evidencing such Option.
Except in the case of Substitute Awards, the Option Price of each Option shall be at least the Fair Market Value of a share of Stock on the Grant Date;
provided,
that in the event that a Grantee is a Ten Percent Shareholder, the Option Price
of an Option granted to such Grantee that is intended to be an Incentive Stock Option shall be not less than one hundred ten percent (110%) of the Fair Market Value of a share of Stock on the Grant Date. In no case shall the Option Price of any
Option be less than the par value of a share of Stock.
8.2 Vesting and Exercisability.
Subject to
Sections 6.4, 8.3
and
17.3
, each Option granted under the Plan shall become exercisable at such times and under such
conditions as shall be determined by the Committee and stated in the Award Agreement;
provided,
that no Option relying on the five percent (5%) exception set forth in
Section
6.4
shall be granted to Grantees who are
entitled to overtime under Applicable Laws that will vest or be exercisable within a six (6)-month period starting on the Grant Date. For purposes of this
Section
8.2
, fractional numbers of shares of Stock subject to an
Option shall be rounded down to the next nearest whole number.
8.3 Term.
Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stock thereunder shall cease, on the day before the
tenth (10
th
) anniversary of the Grant Date of such Option, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Committee and stated in
the Award Agreement relating to such Option;
provided,
that in the event that the Grantee is a Ten Percent Shareholder, an Option granted to such Grantee that is intended to be an Incentive Stock Option shall not be exercisable after the day
before the fifth (5
th
) anniversary of the Grant Date of such Option; and
provided, further
, that, to the extent deemed necessary or appropriate by the Committee to reflect differences in
local law, tax policy or custom with respect to any Option granted to a Grantee who is a foreign national or is a natural person who is employed outside the United States, such Option may terminate, and all rights to purchase shares of Stock
thereunder may cease, upon the expiration of a period longer than ten (10) years from the Grant Date of such Option as the Committee shall determine.
8.4 Termination of Service.
Each Award Agreement with respect to the grant of an Option shall set forth the extent to which the Grantee thereof, if at all, shall have the
right to exercise such Option following termination of such Grantees Service. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of Service.
8.5 Limitations on Exercise of Option.
Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in whole or in part, prior to the date on
which the Plan is approved by the shareholders of the Company as provided herein or after the occurrence of an event referred to in
Section
17
which results in the termination of such Option.
8.6 Method of Exercise.
Subject to the terms of
Sections
12
and
18.3
, an Option that is exercisable may be exercised by the
Grantees delivery to the Company or its designee or agent of notice of exercise on any business day, at the
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Companys principal office or the office of such designee or agent, on the form specified by the Company and in accordance with any additional procedures specified by the Committee. Such
notice shall specify the number of shares of Stock with respect to which such Option is being exercised and shall be accompanied by payment in full of the Option Price of the shares of Stock for which such Option is being exercised, plus the amount
(if any) of federal and/or other taxes which the Company may, in its judgment, be required to withhold with respect to the exercise of such Option.
8.7 Rights of Holders of Options.
A Grantee or other person holding or exercising an Option shall have none of the rights of a shareholder of the Company (for example, the
right to receive cash or dividend payments or distributions attributable to the shares of Stock subject to such Option, to direct the voting of the shares of Stock subject to such Option, or to receive notice of any meeting of the Companys
shareholders) until the shares of Stock subject thereto are fully paid and issued to such Grantee or other person. Except as provided in
Section
17
, no adjustment shall be made for dividends, distributions or other rights
with respect to any shares of Stock subject to an Option for which the record date is prior to the date of issuance of such shares of Stock.
8.8 Delivery of Stock.
Promptly after the exercise of an Option by a Grantee and the payment in full of the Option Price with respect thereto, such Grantee shall be
entitled to receive such evidence of such Grantees ownership of the shares of Stock subject to such Option as shall be consistent with
Section
3.8
.
8.9 Transferability of Options.
Except as provided in
Section
8.10
, during the lifetime of a Grantee of an Option, only such Grantee (or, in the
event of such Grantees legal incapacity or incompetency, such Grantees guardian or legal representative) may exercise such Option. Except as provided in
Section
8.10
, no Option shall be assignable or
transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.
8.10 Family Transfers.
If authorized in the applicable Award Agreement and by the Committee, in its sole discretion, a Grantee
may transfer, not for value, all or part of an Option which is not an Incentive Stock Option to any Family Member. For the purpose of this
Section
8.10
, a transfer not for value is a transfer which is (a) a
gift, (b) a transfer under a domestic relations order in settlement of marital property rights, or (c) unless Applicable Laws do not permit such transfer, a transfer to an entity in which more than fifty percent (50%) of the voting
interests are owned by Family Members (and/or the Grantee) in exchange for an interest in such entity. Following a transfer under this
Section
8.10
, any such Option shall continue to be subject to the same terms and
conditions as were applicable immediately prior to such transfer, and the shares of Stock acquired pursuant to such Option shall be subject to the same restrictions with respect to transfers of shares as would have applied to the Grantee thereof.
Subsequent transfers of transferred Options shall be prohibited except to Family Members of the original Grantee in accordance with this
Section
8.10
or by will or the laws of descent and distribution. The provisions of
Section
8.4
relating to termination of Service shall continue to be applied with respect to the original Grantee of the Option, following which such Option shall be exercisable by the transferee only to the extent, and for
the periods specified, in
Section
8.4
.
8.11 Limitations on Incentive Stock
Options.
An Option shall constitute an Incentive Stock Option only (a) if the Grantee of such Option is an employee of the
Company or any corporate Subsidiary, (b) to the extent specifically provided in the related Award
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Agreement and (c) to the extent that the aggregate Fair Market Value (determined at the time such Option is granted) of the shares of Stock with respect to which all Incentive Stock Options
held by such Grantee become exercisable for the first time during any calendar year (under the Plan and all other plans of the Company and its Affiliates) does not exceed one hundred thousand dollars ($100,000). Except to the extent provided in the
regulations under Code Section 422, this limitation shall be applied by taking Options into account in the order in which they were granted.
8.12 Notice of Disqualifying Disposition.
If any Grantee shall make any disposition of shares of Stock issued pursuant to the exercise of an Incentive Stock Option under the
circumstances provided in Code Section 421(b) (relating to certain disqualifying dispositions), such Grantee shall notify the Company of such disposition immediately but in no event later than ten (10) days thereafter.
9.
|
TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
|
9.1 Right to Payment and SAR Exercise Price.
A SAR shall confer on the Grantee to whom it is granted a right to receive, upon exercise thereof, the excess of (a) the Fair Market
Value of one share of Stock on the date of exercise over (b) the SAR Exercise Price as determined by the Committee. The Award Agreement for a SAR shall specify the SAR Exercise Price, which shall be no less than the Fair Market Value of a share
of Stock on the Grant Date of such SAR. SARs may be granted in tandem with all or part of an Option granted under the Plan or at any subsequent time during the term of such Option, in combination with all or part of any other Award or without regard
to any Option or other Award;
provided,
that a SAR that is granted subsequent to the Grant Date of a related Option must have a SAR Exercise Price that is no less than the Fair Market Value of one share of Stock on the Grant Date of such SAR.
9.2 Other Terms.
Subject to
Sections 6.4
,
9.3
and
17.3
, the Committee shall determine, on the Grant Date or thereafter, the time or times
at which and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future Service requirements), the time or times at which SARs shall cease to be or become exercisable
following termination of Service or upon other conditions, the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which shares of Stock shall be delivered or deemed to be delivered to
Grantees, whether or not a SAR shall be granted in tandem or in combination with any other Award, and any and all other terms and conditions of any SAR;
provided
, that no SARs relying on the five percent (5%) exception set forth in
Section
6.4
shall be granted to Grantees who are entitled to overtime under Applicable Laws that will vest or be exercisable within a six (6)-month period starting on the Grant Date.
9.3 Term.
Each SAR granted under the Plan shall terminate, and all rights thereunder shall cease, on the day before the tenth (10
th
) anniversary of the Grant Date of such SAR, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Committee and stated in the Award
Agreement relating to such SAR.
9.4 Rights of Holders of SARs.
A Grantee or other person holding or exercising a SAR shall have none of the rights of a shareholder of the Company (for example, the right to
receive cash or dividend payments or distributions attributable to the shares
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of Stock underlying such SAR, to direct the voting of the shares of Stock underlying such SAR, or to receive notice of any meeting of the Companys shareholders) until the shares of Stock
underlying such SAR, if any, are issued to such Grantee or other person. Except as provided in
Section
17
, no adjustment shall be made for dividends, distributions or other rights with respect to any shares of Stock
underlying a SAR for which the record date is prior to the date of issuance of such shares of Stock, if any.
9.5 Transferability of SARs.
Except as provided in
Section
9.6
, during the lifetime of a Grantee of a SAR, only the Grantee (or, in the event of
such Grantees legal incapacity or incompetency, such Grantees guardian or legal representative) may exercise such SAR. Except as provided in
Section
9.6
, no SAR shall be assignable or transferable by the Grantee
to whom it is granted, other than by will or the laws of descent and distribution.
9.6 Family Transfers.
If authorized in the applicable Award Agreement and by the Committee, in its sole discretion, a Grantee may transfer, not for value,
all or part of a SAR to any Family Member. For the purpose of this
Section
9.6
, a transfer not for value is a transfer which is (a) a gift, (b) a transfer under a domestic relations order in settlement
of marital property rights or (c) unless Applicable Laws do not permit such transfers, a transfer to an entity in which more than fifty percent (50%) of the voting interests are owned by Family Members (and/or the Grantee) in exchange for an
interest in such entity. Following a transfer under this
Section
9.6
, any such SAR shall continue to be subject to the same terms and conditions as were in effect immediately prior to such transfer, and shares of Stock
acquired pursuant to a SAR shall be subject to the same restrictions on transfers of shares as would have applied to the Grantee or such SAR. Subsequent transfers of transferred SARs shall be prohibited except to Family Members of the original
Grantee in accordance with this
Section
9.6
or by will or the laws of descent and distribution.
10.
|
TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS
|
10.1 Grant of Restricted Stock or Stock Units.
Awards of Restricted Stock or Stock Units may be made for consideration or for no
consideration (other than the par value of the shares of Stock, which shall be deemed paid by past or future Services by the Grantee to the Company or an Affiliate).
10.2 Restrictions.
Subject to
Sections 6.4 and 17.3
, at the time a grant of Restricted Stock or Stock Units is made, the Committee may, in its sole
discretion, (a) establish a period of time (a
restricted period
) applicable to such Restricted Stock or Stock Units and (b) prescribe restrictions in addition to or other than the expiration of the restricted period,
including the satisfaction of corporate or individual performance goals, which may be applicable to all or any portion of such Restricted Stock or Stock Units as provided in
Section
14
. Awards of Restricted Stock or Stock
Units may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the restricted period or prior to the satisfaction of any other restrictions prescribed by the Committee with respect to such Awards.
10.3 Restricted Stock Certificates; Book-Entry Registration.
Subject to
Section
3.8
and the immediately following sentence, the Company may issue, in the name of each Grantee to
whom Restricted Stock has been granted, stock certificates representing the total number of shares of Restricted Stock granted to the Grantee, as soon as reasonably practicable after the Grant Date of such
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Restricted Stock. The Committee may provide in an Award Agreement that either (a) the Secretary of the Company shall hold such certificates for such Grantees benefit until such time as
such shares of Restricted Stock are forfeited to the Company or the restrictions applicable thereto lapse and such Grantee shall deliver a stock power to the Company with respect to each certificate, or (b) such certificates shall be delivered
to such Grantee,
provided,
that such certificates shall bear legends that comply with applicable securities laws and regulations and make appropriate reference to the restrictions imposed on such Award of Restricted Stock under the Plan and
such Award Agreement. Pursuant to
Section
3.8
, to the extent Restricted Stock is represented by a book-entry, such book entry shall be notated to evidence the restrictions imposed on such Award of Restricted Stock under the
Plan and the applicable Award Agreement.
10.4 Rights of Holders of Restricted Stock.
Holders of Restricted Stock shall have the right to vote such shares of Restricted Stock and the right to receive any dividends declared or
paid with respect to such shares of Restricted Stock. Notwithstanding the foregoing, cash dividends declared or paid on shares of Restricted Stock (i) shall not be paid currently but instead shall be accrued, (ii) shall be subject to the
same vesting conditions and restrictions applicable to such underlying shares of Restricted Stock, and (iii) shall not vest or become payable unless and until the shares of Restricted Stock to which the dividends apply become vested and
nonforfeitable. All stock distributions, if any, received by a Grantee with respect to Restricted Stock as a result of any stock split, stock dividend, combination of stock, or other similar transaction shall be subject to the same vesting
conditions and restrictions applicable to such underlying shares of Restricted Stock.
10.5 Rights of
Holders of Stock Units.
10.5.1 Voting and Dividend Rights.
Holders of Stock Units shall have no rights as shareholders of the Company (for example, the right to receive cash or dividend payments or
distributions attributable to the shares of Stock subject to such Stock Units, to direct the voting of the shares of Stock subject to such Stock Units, or to receive notice of any meeting of the Companys shareholders). Subject to the
restrictions on Dividend Equivalent Rights set forth in
Section
13
, the Committee may provide in an Award Agreement evidencing a grant of Stock Units that the holder of such Stock Units shall be entitled to receive Dividend
Equivalent Rights.
10.5.2 Creditors Rights.
A holder of Stock Units shall have no rights other than those of a general unsecured creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Award Agreement.
10.6 Termination of Service.
Unless the Committee provides otherwise in an Award Agreement or in writing after such Award
Agreement is issued, but prior to termination of Grantees Service, upon the termination of such Grantees Service, any Restricted Stock or Stock Units held by such Grantee that have not vested, or with respect to which all applicable
restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of such Restricted Stock or Stock Units, the Grantee thereof shall have no further rights with respect thereto, including any right to vote such
Restricted Stock or any right to receive dividends or Dividend Equivalent Rights, as applicable, with respect to such Restricted Stock or Stock Units.
10.7 Purchase of Restricted Stock and Shares of Stock Subject to Stock Units.
The Grantee shall be required, to the extent required by Applicable Laws, to purchase the Restricted Stock or shares of Stock subject to
vested Stock Units from the Company at a Purchase Price equal to the greater of
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(a) the aggregate par value of the shares of Stock represented by such Restricted Stock or Stock Units or (b) the Purchase Price, if any, specified in the Award Agreement relating to
such Restricted Stock or Stock Units. The Purchase Price shall be payable in a form provided in
Section
12
or, in the sole discretion of the Committee, in consideration for past or future Services rendered to the Company or
an Affiliate.
10.8 Delivery of Shares of Stock.
Upon the expiration or termination of any restricted period and the satisfaction of any other conditions prescribed by the Committee, the
restrictions applicable to Restricted Stock or Stock Units settled in shares of Stock shall lapse, and, unless otherwise provided in the applicable Award Agreement, a book-entry or direct registration or a stock certificate evidencing ownership of
such shares of Stock shall, consistent with
Section
3.8
, be issued, free of all such restrictions, to the Grantee thereof or such Grantees beneficiary or estate, as the case may be. Neither the Grantee, nor the
Grantees beneficiary or estate, shall have any further rights with regard to a Stock Unit once the shares of Stock represented by the Stock Unit have been delivered in accordance with this
Section
10.8
.
11.
|
TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS AND OTHER EQUITY- BASED AWARDS
|
(a) In
each case subject to the five percent (5%) limit set forth in
Section
6.4
, the Committee may, in its sole discretion, grant (or sell at the par value of a share of Stock or at such other higher purchase price determined by
the Committee) an Award to any Grantee pursuant to which such Grantee may receive shares of Stock free of any restrictions (
Unrestricted Stock
) under the Plan. Awards of Unrestricted Stock may be granted or sold to any Grantee as
provided in the immediately preceding sentence in respect of past or future Service and other valid consideration, or in lieu of, or in addition to, any cash compensation due to such Grantee.
(b) The Committee may, in its sole discretion, grant Awards in the form of Other Equity-Based Awards, as deemed by the Committee to be
consistent with the purposes of the Plan. Subject to
Section
6.4
, Awards granted pursuant to this
Section
11(b)
may be granted with vesting, value and/or payment contingent upon the achievement of
one or more performance goals. The Committee shall determine the terms and conditions of Other Equity-Based Awards at the Grant Date or thereafter. Unless the Committee otherwise provides in an Award Agreement or in writing after such Award
Agreement is issued, upon the termination of a Grantees Service, any Other Equity-Based Awards held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be
deemed forfeited. Upon forfeiture of any Other Equity-Based Award, the Grantee thereof shall have no further rights with respect to such Other Equity-Based Award.
12.
|
FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK
|
12.1 General Rule.
Payment of the Option Price for the shares of Stock purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock
or vested Stock Units shall be made in cash or in cash equivalents acceptable to the Company.
12.2
Surrender of Shares of Stock.
To the extent that the applicable Award Agreement so provides, payment of the Option Price for shares
of Stock purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock or vested Stock Units may be made all or in part through the tender or attestation to the Company of shares of Stock, which shall be valued, for
purposes of determining the extent to which such Option Price or Purchase Price has been paid thereby, at their Fair Market Value on the date of such tender or attestation.
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12.3 Cashless Exercise.
With respect to an Option only (and not with respect to Restricted Stock or Stock Units), to the extent permitted by Applicable Laws and to
the extent the Award Agreement so provides, payment of the Option Price for shares of Stock purchased pursuant to the exercise of an Option may be made all or in part by delivery (on a form acceptable to the Committee) of an irrevocable direction to
a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the proceeds of such sale to the Company in payment of such Option Price and any withholding taxes described in
Section
18.3
.
12.4 Other Forms of Payment.
To the extent the Award Agreement so provides and/or unless otherwise specified in an Award Agreement, payment of the Option Price for shares
of Stock purchased pursuant to exercise of an Option or the Purchase Price for Restricted Stock or vested Stock Units may be made in any other form that is consistent with Applicable Laws, including (a) Service to the Company or an Affiliate
and (b) net exercise, net settlement or share withholding.
13.
|
TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS
|
13.1
Dividend Equivalent Rights.
A Dividend Equivalent Right is an Award entitling the recipient thereof to receive credits based on cash
distributions that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other Award to which such Dividend Equivalent Right relates) if such shares of Stock had been issued to and held by the recipient of such
Dividend Equivalent Right as of the record date (with or without being subject to forfeiture or a repayment obligation). A Dividend Equivalent Right may be granted hereunder to any Grantee,
provided
that no Dividend Equivalent Rights may be
granted in connection with, or related to, an Award of Options or SARs. Subject to this
Section
13
, the terms and conditions of Dividend Equivalent Rights shall be specified in the Award Agreement therefor. Dividend
equivalents credited to the holder of a Dividend Equivalent Right may be paid currently (with or without being subject to forfeiture or a repayment obligation) or may be deemed to be reinvested in additional shares of Stock or Awards, which may
thereafter accrue additional Dividend Equivalent Rights. Any such reinvestment in additional shares of Stock shall be at the Fair Market Value thereof on the date of such reinvestment. Dividend Equivalent Rights may be settled in cash or shares of
Stock or a combination thereof, in a single installment or in multiple installments, all as determined in the sole discretion of the Committee. Notwithstanding the foregoing, a Dividend Equivalent Right granted as a component of another Award
(i) shall not be paid currently but instead shall be accrued, (ii) shall be subject to the same vesting conditions and restrictions applicable to the Award to which the Dividend Equivalent Rights correspond, and (iii) shall not vest
or become payable unless and until the Award to which the Dividend Equivalent Rights correspond becomes vested and settled.
13.2 Termination of Service.
Unless the Committee otherwise provides in an Award Agreement or in writing after such Award
Agreement is issued, a Grantees rights in all Dividend Equivalent Rights shall automatically terminate upon the Grantees termination of Service for any reason.
14.
|
TERMS AND CONDITIONS OF PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS
|
14.1 Grant of Performance Awards and Annual Incentive Awards.
Subject to the terms and provisions of the Plan, the Committee, at
any time and from time to time, may grant Performance Awards and/or Annual Incentive Awards to a Grantee in such amounts and upon such terms as the Committee shall determine.
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14.2 Value of Performance Awards and Annual Incentive
Awards.
Each Performance Award and Annual Incentive Award shall have an initial cash value or an actual or target number of shares of
Stock that is established by the Committee at the time of grant. The Committee shall set performance goals in its discretion which, depending on the extent to which they are achieved, shall determine the value and/or the number shares of Stock
subject to Performance Awards and Annual Incentive Awards that will be paid out to the Grantee thereof.
14.3 Earning of Performance Awards and Annual Incentive Awards.
Subject to the terms of the Plan, after the applicable Performance Period has ended, the Grantee of Performance Awards or Annual Incentive
Awards shall be entitled to receive a payout of the value and/or the number shares of Stock subject to Performance Awards and Annual Incentive Awards earned by the Grantee over such Performance Period.
14.4 Form and Timing of Payment of Performance Awards and Annual Incentive Awards.
Payment of earned Performance Awards and Annual Incentive Awards shall be made, as determined by the Committee, in the form, at the time, and
in the manner described in the applicable Award Agreement. Subject to the terms of the Plan, the Committee, in its sole discretion, (a) may pay earned Performance Awards in the form of cash, shares of Stock, other Awards, other property or a
combination thereof and (b) shall pay the value of the earned Performance Awards and Annual Incentive Awards at the close of the applicable Performance Period, or as soon as reasonably practicable after the Committee has determined that the
performance goal or goals have been achieved;
provided
that, unless specifically provided in the Award Agreement for such Awards, such payment shall occur no later than the fifteenth
(15
th
) day of the third (3
rd
) month following the end of the calendar year in which such Performance Period ends. Any shares of Stock paid
out under such Awards may be granted subject to any restrictions deemed appropriate by the Committee. The determination of the Committee with respect to the form of payout of such Awards shall be set forth in the Award Agreement for the Awards.
14.5 Performance Conditions.
The right of a Grantee to exercise or receive a grant or settlement of any Performance Award or Annual Incentive Award, and the timing
thereof, may be subject to the achievement of such Performance Measures as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance
conditions. Performance under any of the Performance Measures (i) may be used to measure the performance of (A) the Company, its Subsidiaries and other Affiliates as a whole, (B) the Company, any Subsidiary, and/or any other Affiliate
or any combination thereof, or (C) any one or more business units or operating segments of the Company, any Subsidiary, and/or any other Affiliate, in each case as the Committee, in its sole discretion, deems appropriate and (ii) may be
compared to the performance of one or more other companies, or one or more published or special indices designated or approved by the Committee for such comparison, as the Committee, in its sole discretion, deems appropriate. In addition, the
Committee, in its sole discretion, may select Performance Measure specified in
Section
2.31(e)
for comparison to performance under one or more stock market indices designated or approved by the Committee. The Committee also
shall have the authority to provide for accelerated vesting of any Performance Award or Annual Incentive Award based on the achievement of performance goals pursuant to the Performance Measures specified in this
Section
14
.
For the avoidance of doubt, nothing herein is intended to prevent the Committee from granting Awards subject to subjective performance conditions (including individual performance conditions);
provided,
that such Awards shall not be
considered Performance Awards under the Plan.
14.5.1 Evaluation of Performance.
The Committee may provide in any Performance Award or Annual Incentive Award that any evaluation of performance may include or exclude any of
the following events that occur during a Performance Period:
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(a) asset write-downs; (b) litigation or claims, judgments or settlements; (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting
reported results; (d) any reorganization or restructuring events or programs; (e) extraordinary,
non-core,
non-operating,
or
non-recurring
items and items that are either of an unusual nature or of a type that indicates infrequency of occurrence as a separate component of income from continuing operations; (f) acquisitions or
divestitures; (g) foreign exchange gains and losses; (h) impact of shares of Stock purchased through share repurchase programs; (i) tax valuation allowance reversals; (j) impairment expense; and (k) environmental expense.
15.
|
PARACHUTE LIMITATIONS
|
If any Grantee is a disqualified individual,
as defined in Code Section 280G(c), then, notwithstanding any other provision of the Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by such Grantee with the Company or an Affiliate, except an
agreement, contract, or understanding that expressly addresses Code Section 280G or Code Section 4999 (an
Other Agreement
), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect
provision of compensation to the Grantee (including groups or classes of Grantees or beneficiaries of which the Grantee is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a
Benefit Arrangement
), any right of the Grantee to any exercise, vesting, payment or benefit under the Plan shall be reduced or eliminated:
(a) to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or
for the Grantee under the Plan, all Other Agreements, and all Benefit Arrangements, would cause any exercise, vesting, payment, or benefit to the Grantee under the Plan to be considered a parachute payment within the meaning of Code
Section
280G(b)(2) as then in effect (a
Parachute Payment
); and
(b) if, as a result of receiving such
Parachute Payment, the aggregate
after-tax
amounts received by the Grantee from the Company under the Plan, all Other Agreements, and all Benefit Arrangements would be less than the maximum
after-tax
amount that could be received by the Grantee without causing any such payment or benefit to be considered a Parachute Payment.
Except as required by Code Section 409A or to the extent that Code Section 409A permits discretion, the Committee shall have the
right, in the Committees sole discretion, to designate those rights, payments, or benefits under the Plan, all Other Agreements, and all Benefit Arrangements that should be reduced or eliminated so as to avoid having such rights, payments, or
benefits be considered a Parachute Payment;
provided, however,
to the extent any payment or benefit constitutes deferred compensation under Code Section 409A, in order to comply with Code Section 409A, the Company shall instead
accomplish such reduction by first reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any accelerated vesting of Options or SARs, then by reducing or
eliminating any accelerated vesting of Restricted Stock or Stock Units, then by reducing or eliminating any other remaining Parachute Payments.
16.1 General.
The Company shall not be required to offer, sell or issue any shares of Stock under any Award, whether pursuant to the exercise of an Option
or SAR or otherwise, if the offer, sale or issuance of such shares of Stock would constitute a violation by the Grantee, the Company or an Affiliate, or any other person of any provision of the Companys articles of incorporation or bylaws or
of Applicable Laws, including any federal or state securities laws or regulations. If at any time the Company shall determine, in its discretion, that the listing, registration or qualification of any shares of Stock subject to an Award upon any
Stock Exchange or Securities
C-25
Market or under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the offering, issuance, sale or purchase of shares of Stock in connection with
any Award, no shares of Stock may be offered, issued or sold to the Grantee or any other person under such Award, whether pursuant to the exercise of an Option or SAR or otherwise, unless such listing, registration or qualification shall have been
effected or obtained free of any conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the date of termination of such Award. Without limiting the generality of the foregoing, upon the exercise of any Option
or any SAR that may be settled in shares of Stock or the delivery of any shares of Stock underlying an Award, unless a registration statement under the Securities Act is in effect with respect to the shares of Stock subject to such Award, the
Company shall not be required to offer, sell or issue such shares of Stock unless the Committee shall have received evidence satisfactory to it that the Grantee or any other person exercising such Option or SAR or accepting delivery of such shares
may acquire such shares of Stock pursuant to an exemption from registration under the Securities Act. Any determination by the Committee in connection with the foregoing shall be final, binding, and conclusive. The Company may register, but shall in
no event be obligated to register, any shares of Stock or other securities issuable pursuant to the Plan pursuant to the Securities Act. The Company shall not be obligated to take any affirmative action in order to cause the exercise of an Option or
a SAR or the issuance of shares of Stock or other securities issuable pursuant to the Plan or any Award to comply with any Applicable Laws. As to any jurisdiction that expressly imposes the requirement that an Option or SAR that may be settled in
shares of Stock shall not be exercisable until the shares of Stock subject to such Option or SAR are registered under the securities laws thereof or are exempt from such registration, the exercise of such Option or SAR under circumstances in which
the laws of such jurisdiction apply shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption.
16.2
Rule 16b-3.
During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, it is the intention of
the Company that Awards pursuant to the Plan and the exercise of Options and SARs granted hereunder that would otherwise be subject to Section 16(b) of the Exchange Act shall qualify for the exemption provided by
Rule 16b-3
under the Exchange Act. To the extent that any provision of the Plan or action by the Committee does not comply with the requirements of such
Rule 16b-3,
such provision or action shall be deemed inoperative with respect to such Awards to the extent permitted by Applicable Laws and deemed advisable by the Committee, and shall not affect the
validity of the Plan. In the event that such
Rule 16b-3
is revised or replaced, the Board may exercise its discretion to modify the Plan in any respect necessary or advisable in its judgment to satisfy
the requirements of, or to permit the Company to avail itself of the benefits of, the revised exemption or its replacement.
17.
|
EFFECT OF CHANGES IN CAPITALIZATION
|
17.1 Changes
in Stock.
If the number of outstanding shares of Stock is increased or decreased or the shares of Stock are changed into or exchanged
for a different number of shares or kind of capital stock or other securities of the Company on account of any recapitalization, reclassification, stock split, reverse stock split,
spin-off,
combination of
stock, exchange of stock, stock dividend or other distribution payable in capital stock, or other increase or decrease in such shares of Stock effected without receipt of consideration by the Company occurring after the Effective Date, the number
and kinds of shares of stock for which grants of Options and other Awards may be made under the Plan, including the Share Limit set forth in
Section
4.1(a)
, the individual share limits set forth in
Section
6.2,
and the five percent (5%) limit set forth in
Section
6.4
shall be adjusted proportionately and accordingly by the Committee. In addition, the number and kind of shares of stock for
which Awards are outstanding shall be adjusted proportionately and accordingly by the Committee so that the proportionate interest of the Grantee therein immediately following such event shall, to the extent practicable, be the same as immediately
before such event. Any such adjustment in outstanding Options or SARs shall not change the aggregate Option Price or SAR Exercise Price payable with respect to shares that are subject to the unexercised portion of such outstanding
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Options or SARs, as applicable, but shall include a corresponding proportionate adjustment in the per share Option Price or SAR Exercise Price, as the case may be. The conversion of any
convertible securities of the Company shall not be treated as an increase in shares effected without receipt of consideration. Notwithstanding the foregoing, in the event of any distribution to the Companys shareholders of securities of any
other entity or other assets (including an extraordinary dividend, but excluding a
non-extraordinary
dividend, declared and paid by the Company) without receipt of consideration by the Company, the Committee
shall, in such manner as it deems appropriate, adjust (a) the number and kind of shares of stock subject to outstanding Awards and/or (b) the aggregate and per share Option Price of outstanding Options and the aggregate and per share SAR
Exercise Price of outstanding SARs as required to reflect such distribution.
17.2
Reorganization
in Which the Company Is the Surviving Entity Which Does not Constitute a Corporate Transaction.
Subject to
Section
17.3
, if the Company shall be the surviving entity in any reorganization, merger, or consolidation of the Company with one or more other entities which does not constitute a Corporate Transaction, any Award
theretofore granted pursuant to the Plan shall pertain to and apply to the securities to which a holder of the number of shares of Stock subject to such Award would have been entitled immediately following such reorganization, merger, or
consolidation, with a corresponding proportionate adjustment of the per share Option Price or SAR Exercise Price, if applicable, so that the aggregate Option Price or SAR Exercise Price thereafter shall be the same as the aggregate Option Price or
SAR Exercise Price of the shares of Stock remaining subject to the Option or SAR as in effect immediately prior to such reorganization, merger, or consolidation. Subject to any contrary language in an Award Agreement, any restrictions applicable to
such Award shall apply as well to any replacement shares received by the Grantee as a result of such reorganization, merger, or consolidation. In the event of any reorganization, merger, or consolidation of the Company referred to in this
Section
17.2
, Performance Awards and Annual Incentive Awards shall be adjusted (including any adjustment to performance goals applicable to such Awards deemed appropriate by the Committee) so as to apply to the securities
that a holder of the number of shares of Stock subject to the Performance Awards or Annual Incentive Awards would have been entitled to receive immediately following such reorganization, merger, or consolidation.
17.3
Corporate Transaction in which Awards are not Assumed.
Except as otherwise provided in the applicable Award Agreement or with respect to Performance Awards and Annual Incentive Awards, in another
agreement with the Grantee, or as otherwise set forth in writing, upon the occurrence of a Corporate Transaction in which outstanding Awards are not being assumed, continued, or substituted for, the following provisions shall apply to such Award, to
the extent not assumed, continued, or substituted for:
(a) All Grantees of shares of Restricted Stock, Stock Units, and Dividend
Equivalent Rights shall become vested in their Awards as of immediately prior to the occurrence of a Corporate Transaction and any shares of Stock or cash that become vested pursuant to the operation of this
Section
17.3(a)
shall be delivered, immediately prior to the occurrence of such Corporate Transaction;
(b) All Grantees of Options and SARs shall become immediately vested in their Awards as of immediately prior to the occurrence of a Corporate
Transaction; and
(c) Either or both of the following two actions may be taken:
(i) At least fifteen (15) days prior to the scheduled consummation of such a Corporate Transaction, notice shall be given to all Grantees
of vested Options and SARs outstanding hereunder (including Options and SARs that become vested pursuant to the operation of
Section
17.3(b))
that such Options and SARs shall remain exercisable for a period of fifteen
(15) days and shall thereafter be terminated. With respect to the Companys establishment of an exercise window, (A) any exercise of an Option or SAR during the fifteen
(15)-day
period referred
to above shall be conditioned upon the consummation of the applicable Corporate
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Transaction and shall be effective only immediately before the consummation thereof, and (B) upon consummation of any Corporate Transaction, the Plan and all outstanding but unexercised Options
and SARs shall terminate. The Committee shall send notice of an event that shall result in such a termination to all natural persons and entities who hold Options and SARs not later than the time at which the Company gives notice thereof to its
shareholders.
and/or
(ii) The Committee may elect, in its sole discretion, to cancel any outstanding Awards of Options, SARs, Restricted Stock, Stock Units,
and/or Dividend Equivalent Rights and pay or deliver, or cause to be paid or delivered, to the holder thereof an amount in cash or securities having a value (as determined by the Committee acting in good faith), in the case of Restricted Stock or
Stock Units, equal to the formula or fixed price per share paid to holders of shares of Stock pursuant to such Corporate Transaction and, in the case of Options or SARs, equal to the product of the number of shares of Stock subject such Options or
SARs multiplied by the amount, if any, by which (A) the formula or fixed price per share paid to holders of shares of Stock pursuant to such transaction exceeds (B) the Option Price or SAR Exercise Price applicable to such Awards.
(d) For Performance Awards and Annual Incentive Awards denominated in Stock or Stock Units, if less than half of the Performance Period has
lapsed, such Performance Awards and Annual Incentive Awards shall be converted into Restricted Stock or Stock Units assuming target performance has been achieved (or into Unrestricted Stock if no further restrictions apply). If more than half the
Performance Period has lapsed, such Performance Awards and Annual Incentive Awards shall be converted into Restricted Stock or Stock Units based on actual performance to date (or into Unrestricted Stock if no further restrictions apply). If actual
performance is not determinable, such Performance Awards and Annual Incentive Awards shall be converted into Restricted Stock or Stock Units assuming target performance has been achieved, based on the discretion of the Committee (or into
Unrestricted Stock if no further restrictions apply).
(e) Other-Equity Based Awards shall be governed by the terms of the applicable
Award Agreement.
17.4 Corporate Transaction in which Awards are Assumed.
Except as otherwise provided in the applicable Award Agreement, in another agreement with the Grantee, or as otherwise set forth in writing,
upon the occurrence of a Corporate Transaction in which outstanding Awards are being assumed, continued, or substituted for, the following provisions shall apply to such Award, to the extent assumed, continued, or substituted for:
(a) The Plan and the Awards theretofore granted under the Plan shall continue in the manner and under the terms so provided in the event of any
Corporate Transaction to the extent that provision is made in writing in connection with such Corporate Transaction for the assumption or continuation of such Awards, or for the substitution for such Awards of new common stock options, stock
appreciation rights, restricted stock, common stock units, dividend equivalent rights and other equity-based awards relating to the stock of a successor entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number of
shares (disregarding any consideration that is not common stock) and option and stock appreciation rights exercise prices.
(b) In the
event an Award is assumed, continued or substituted upon the consummation of any Corporate Transaction and the employment of such Grantee with the Company or an Affiliate is terminated without Cause within one year following the consummation of such
Corporate Transaction, such Award shall be fully vested and may be exercised in full, to the extent applicable, beginning on the date of such termination and for the
one-year
period immediately following such
termination or for such longer period as the Committee shall determine.
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17.5 Adjustments
Adjustments under this
Section
17
related to shares of Stock or securities of the Company shall be made by the
Committee, whose determination in that respect shall be final, binding and conclusive. No fractional shares or other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated
in each case by rounding downward to the nearest whole share. The Committee may provide in the applicable Award Agreements at the time of grant, or any time thereafter with the consent of the Grantee, for different provisions to apply to an Award in
place of those provided in
Sections
17.1, 17.2, 17.3
and
17.4
. This
Section
17
shall not limit the Companys ability to provide for alternative treatment of Awards outstanding under the
Plan in the event of change in control events that are not Corporate Transactions.
17.6 No Limitations on
Company.
The making of Awards pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets (including all or any part of the
business or assets of any Subsidiary or other Affiliate) or to engage in any other transaction or activity.
18.1 Disclaimer of
Rights.
No provision in the Plan or in any Award or Award Agreement shall be construed to confer upon any individual the right to
remain in the employ or Service of the Company or an Affiliate, or to interfere in any way with any contractual or other right or authority of the Company or an Affiliate either to increase or decrease the compensation or other payments to any
natural person or entity at any time, or to terminate any employment or other relationship between any natural person or entity and the Company or an Affiliate. In addition, notwithstanding anything contained in the Plan to the contrary, unless
otherwise stated in the applicable Award Agreement, no Award granted under the Plan shall be affected by any change of duties or position of the Grantee thereof, so long as such Grantee continues to provide Service. The obligation of the Company to
pay any benefits pursuant to the Plan shall be interpreted as a contractual obligation to pay only those amounts provided herein, in the manner and under the conditions prescribed herein. The Plan and Awards shall in no way be interpreted to require
the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under the terms of the Plan.
18.2 Nonexclusivity of the Plan.
Neither the adoption of the Plan nor the submission of the Plan to the shareholders of the Company for approval shall be construed as creating
any limitations upon the right and authority of the Board or the Committee to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to a class or classes of individuals or specifically to a
particular individual or particular individuals) as the Board or the Committee, in its discretion, determines desirable.
18.3 Withholding Taxes.
(a) The Company or an Affiliate, as the case may be, shall have the right to deduct from payments of
any kind otherwise due to a Grantee any federal, state, or local taxes of any kind required by Applicable Laws to be withheld with respect to the vesting of or other lapse of restrictions applicable to an Award or upon the issuance of any shares of
Stock upon the exercise of an Option or pursuant to any other Award. At the time of such vesting, lapse, or exercise, the Grantee shall pay in cash to the Company or an Affiliate, as the case may be, any amount that the Company or such Affiliate may
reasonably determine to be necessary to satisfy such
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withholding obligation;
provided, however,
that if there is a same day sale of shares of Stock subject to an Award, the Grantee shall pay such withholding obligation on the day on which
the
same-day
sale is completed. Subject to the prior approval of the Company or an Affiliate, which may be withheld by the Company or such Affiliate, as the case may be, in its sole discretion, the Grantee may
elect to satisfy such withholding obligation, in whole or in part, (a) by causing the Company or such Affiliate to withhold shares of Stock otherwise issuable to the Grantee or (b) by delivering to the Company or such Affiliate shares of
Stock already owned by the Grantee. The shares of Stock so withheld or delivered shall have an aggregate Fair Market Value equal to such withholding obligation. The Fair Market Value of the shares of Stock used to satisfy such withholding obligation
shall be determined by the Company or such Affiliate as of the date on which the amount of tax to be withheld is to be determined. A Grantee who has made an election pursuant to this
Section
18.3
may satisfy such
Grantees withholding obligation only with shares of Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.
(b) The maximum number of shares of Stock that may be withheld from any Award to satisfy any federal, state, or local tax withholding
requirements upon the exercise, vesting, or lapse of restrictions applicable to any Award or payment of shares of Stock pursuant to such Award, as applicable, may not exceed such number of shares of Stock having a Fair Market Value equal to the
minimum statutory amount required by the Company or the applicable Affiliate to be withheld and paid to any such federal, state, or local taxing authority with respect to such exercise, vesting, lapse of restrictions, or payment of shares of Stock;
provided, however
, for so long as Accounting Standards Update
2016-09
or a similar rule remains in effect, the Board or the Committee has full discretion to choose, or to allow a Grantee to elect, to
withhold a number of shares of Stock having an aggregate Fair Market Value that is greater than the applicable minimum required statutory withholding obligation (but such withholding may in no event be in excess of the maximum required statutory
withholding amount(s) in such Grantees relevant tax jurisdiction).
(c) Notwithstanding
Section
2.17
or
this
Section
18.3
, for purposes of determining taxable income and the amount of the related tax withholding obligation pursuant to this
Section
18.3
, the Fair Market Value will be determined by the
Committee in good faith using any reasonable method as it deems appropriate, to be applied consistently with respect to Grantees;
provided, further
, that the Committee shall determine the Fair Market Value of shares of Stock for tax
withholding obligations due in connection with sales, by or on behalf of a Grantee, of such shares of Stock subject to an Award to pay the Option Price, SAR Exercise Price, and/or any tax withholding obligation on the same date on which such shares
may first be sold pursuant to the terms of the applicable Award Agreement (including broker- assisted cashless exercises of Options and Stock Appreciation Rights and
sell-to-cover
transactions) in any manner consistent with applicable provisions of the Code, including but not limited to using the sale price of such shares on such
date (or if sales of such shares are effectuated at more than one sale price, the weighted average sale price of such shares on such date) as the Fair Market Value of such shares, so long as such Grantee has provided the Company, or its designee or
agent, with advance written notice of such sale.
18.4 Captions.
The use of captions in the Plan or any Award Agreement is for the convenience of reference only and shall not affect the meaning of any
provision of the Plan or such Award Agreement.
18.5 Other Provisions.
Each Award granted under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the
Committee, in its sole discretion.
18.6 Number and Gender.
With respect to words used in the Plan, the singular form shall include the plural form, and the masculine gender shall include the feminine
gender, as the context requires.
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18.7 Severability.
If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.
18.8 Governing Law
The validity and construction of the Plan and the instruments evidencing the Awards hereunder shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan and the instruments evidencing the Awards granted
hereunder to the substantive laws of any other jurisdiction.
18.9 Foreign Jurisdictions.
To the extent the Committee determines that the terms set by the Committee imposed by the Plan preclude the achievement of the purposes of the
Plan in jurisdictions outside the United States, the Committee will have the authority and discretion to modify those terms and provide for such additional terms and conditions as the Committee determines to be necessary, appropriate, or desirable
to accommodate differences in local law, policy, or custom or to facilitate administration of the Plan. The Committee may adopt or approve
sub-plans,
appendices, or supplements to, or amendments, restatements,
or alternative versions of the Plan as in effect for any other purposes. The special terms and any
sub-plans,
appendices, supplements, amendments, restatements, or alternative versions, however, shall not
include any provisions that are inconsistent with the terms of the Plan as in effect, unless the Plan could have been amended to eliminate such inconsistency without further approval by the Companys shareholders.
18.10 Section 409A of the Code.
The Plan is intended to comply with Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted,
the Plan will be interpreted and administered to be in compliance with Code Section 409A. Any payments described in the Plan that are due within the short-term deferral period within the meaning of Code Section 409A will not be
treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding any provision of the Plan to the contrary, to the extent required to avoid accelerated taxation and tax penalties under Code Section 409A, amounts that
would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6)-month period immediately following the Grantees separation from service within the meaning of Code Section 409A
will instead be paid on the first payroll date after the six (6)-month anniversary of the Grantees Separation from Service (or the Grantees death, if earlier).
Furthermore, notwithstanding anything in the Plan to the contrary, in the case of an Award that is characterized as deferred compensation
under Code Section 409A, and pursuant to which settlement and delivery of the cash or shares of Stock subject to the Award is triggered based on a Corporate Transaction, in no event will a Corporate Transaction be deemed to have occurred for
purposes of such settlement and delivery of cash or shares of Stock if the transaction is not also a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets
of the Company as determined under Treasury Regulation
Section 1.409A-3(i)(5)
(without regard to any alternative definition thereunder). If an Award characterized as deferred compensation under Code
Section 409A is not settled and delivered on account of the provision of the preceding sentence, the settlement and delivery shall occur on the next succeeding settlement and delivery triggering event that is a permissible triggering event
under Code Section 409A. No provision of this paragraph shall in any way affect the determination of a Corporate Transaction for purposes of vesting in an Award that is characterized as deferred compensation under Code Section 409A.
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Notwithstanding the foregoing, neither the Company nor the Committee will have any
obligation to take any action to prevent the assessment of any excise tax or penalty on any Grantee under Code Section 409A, and neither the Company or an Affiliate nor the Board or the Committee will have any liability to any Grantee for such
tax or penalty.
To the extent that the Company determines that a Grantee would be subject to the additional twenty percent (20%) tax
imposed on certain nonqualified deferred compensation plans pursuant to Code Section 409A as a result of any provision of any Award granted under the Plan, such provision shall be deemed amended to the minimum extent necessary to avoid
application of such additional tax. The nature of any such amendment shall be determined by the Committee.
18.11 Non-Payment of Dividends or Dividend Equivalent Rights on Unvested Awards
For the avoidance of doubt, and notwithstanding anything in the Plan or any Award Agreement to the contrary, no dividends or Dividend
Equivalent Rights shall be paid on any unvested Award and any dividends or Dividend Equivalent Rights granted in respect to any Award shall be paid at the time, if at all, that the Award to which it relates become vested.
* * *
To record adoption of the
Plan by the Board as of April 23, 2018 and approval of the Plan by the shareholders on June 18, 2018 the Company has caused its authorized officer to execute the Plan.
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ORTHOFIX INTERNATIONAL N.V.
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By:
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Name:
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Title:
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Signature Page to the
Orthofix International N.V. 2018 Omnibus Incentive Plan
C-32
(Proposed Amendment)
AMENDMENT NO. 1 TO
ORTHOFIX INTERNATIONAL N.V.
SECOND AMENDED AND RESTATED
STOCK PURCHASE PLAN
WHEREAS
, Orthofix International N.V. (the Company) has established and maintains the Second Amended and Restated Stock
Purchase Plan (the Plan); and
WHEREAS
, the Companys Board of Directors desires to amend the Plan, subject to the
approval of the Companys shareholders, to increase the number of shares of common stock of the Company reserved and available for issuance pursuant to the Plan from 1,850,000 to 2,350,000.
NOW, THEREFORE
, by virtue and in exercise of the power reserved to the Companys Board of Directors by Section 9 of the Plan,
the Plan be and hereby is amended, subject to approval by the Companys shareholders, in the following particulars, to be effective as of the date the Companys shareholders approve the Amendment:
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1.
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By substituting the phrase 2,350,000 shares for the phrase 1,850,000 shares in Section 3(a) of the Plan.
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D-1
(Current Text of Second Amended and Restated Stock Purchase Plan)
ORTHOFIX INTERNATIONAL N.V.
SECOND AMENDED AND RESTATED
STOCK PURCHASE PLAN
The
Orthofix International N.V. Amended and Restated Stock Purchase Plan is hereby amended, restated and renamed the Orthofix International N.V. Second Amended and Restated Stock Purchase Plan, and adopted by the Company, effective as of the
Effective Date.
The purpose of the Plan is to encourage eligible employees and directors to
become owners of common stock of Orthofix International N.V., thereby giving them a greater interest in the growth and success of its business.
The following definitions are used throughout the Plan:
(a)
Board of Directors
means the Board of Directors of the Company.
(b)
Code
means the Internal Revenue Code of 1986, as amended.
(c)
Committee
means the Compensation Committee of the Board of Directors. If, at any time, there is no acting Compensation
Committee of the Board of Directors, the term Committee shall mean the Board of Directors.
(d)
Company
means Orthofix International N.V., or any successor to substantially all of its business.
(e)
Director
means a member
of the Board of Directors who is not also an employee of the Company or of a Subsidiary and is not an Employee for purposes of this Plan.
(f)
Effective Date
means the date determined in accordance with Section 11.
(g)
Employee
means a full-time or part-time employee of the Company or of a Subsidiary that has been designated as a
participating employer under the Plan. Notwithstanding the foregoing, unless otherwise prohibited by the laws of the local jurisdiction, Employee shall not mean a temporary employee.
(h) Fair Market Value means, as of any date that requires the determination of the Fair Market Value of Orthofix Stock under this
Plan, the value of a share of Orthofix Stock on such date of determination, calculated as follows:
(i) If shares of Orthofix Stock 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 share is 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 share on such Nasdaq market system or such exchange on the next preceding day on
which a closing sale price is reported;
(ii) If shares of Orthofix Stock 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 share in the
over-the-counter
market on such date, or, if no closing bid and asked prices are reported on such day, then the Fair Market Value shall be the average of the closing bid
and asked prices of the share in the
over-the-counter
market on the next preceding day on which closing bid and asked prices are reported; or
D-2
(iii) If neither (i) nor (ii) 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.
(i)
Orthofix Stock
means the Common Stock of the Company, $.10 par value. Unless the context indicates otherwise, the terms
share or shares shall refer to a share or shares of Orthofix Stock.
(j)
Participant
means an
Employee or Director who elects to participate in the Plan; provided, however, that no employee shall be allowed to be a Participant at any time if such employee, after exercising his or her rights to purchase shares under the Plan, would
beneficially own shares of the Companys Common Stock (including shares that may be acquired under any outstanding options) representing five percent or more of the total combined voting power of all classes of stock of the Company. For
purposes of the foregoing sentence, (i) an individual shall be considered as beneficially owning the stock owned, directly or indirectly, by or for his brothers and sisters (whether by the whole or half blood), spouse, ancestors, and lineal
descendants, and (ii) stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust, shall be considered as being beneficially owned proportionately by or for its shareholders, partners, or beneficiaries.
(k)
Plan
means the Orthofix International N.V. Second Amended and Restated Stock Purchase Plan, as further amended from
time to time.
(l)
Plan Year
means the
12-month
period beginning on
January 1 and ending on December 31; provided, that, pursuant to Section 7, the Committee may change the duration, frequency, start and end dates of future Plan Years.
(m)
Subsidiary
means (i) a domestic or foreign corporation, limited liability company, partnership 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 entitys board of directors or analogous
governing body or (ii) any other domestic or foreign corporation, limited liability company, partnership or other entity in which the Company, directly or indirectly, has an equity or similar interest and which the Committee designates as a
Subsidiary for purposes of the Plan.
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3.
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Shares Subject to the Plan
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(a) The total number of shares of Orthofix Stock reserved
and available for issuance pursuant to the Plan shall not exceed 1,850,000 shares. The shares of Orthofix Stock purchasable pursuant to the Plan may be authorized but previously unissued shares of Orthofix Stock or shares of Orthofix Stock held in
treasury or purchased in the open market or in privately negotiated transactions. The Company shall bear all costs in connection with issuance or transfer of any shares and all commissions, fees and other charges incurred in purchasing shares for
distribution pursuant to the Plan.
(b) A Participant shall have no rights as a shareholder with respect to shares of Orthofix Stock
purchasable pursuant to the Plan until the date the Participant or his nominee becomes the holder of record of such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to such date.
(c) If the Committee determines that the total number of shares of Orthofix Stock to be purchased pursuant to the Plan on any particular date
exceeds the number of shares then available for issuance under the Plan, the Committee shall make a pro rata allocation of the available shares on a uniform and
non-discriminatory
basis, and the payroll and
other deductions of each Participant, to the extent in excess of the aggregate purchase price payable for the Orthofix Stock
pro-rated
to such individual, shall be refunded pursuant to Section 6.
D-3
Each Employee and Director (subject to Section 5(b) hereof) shall be
eligible to participate in the Plan on the first day of any Plan Year, provided that he or she is actively employed or is a Director of the Company on such day.
(a) An eligible Employee shall become a Participant for any Plan Year by
electing to contribute to the Plan, through payroll deductions, either a fixed amount or a percentage of his or her compensation for the Plan Year; provided, however, that such fixed amount or percentage shall not be less than 1% nor more than 25%
(or such other percentage as the Committee may determine) of his or her compensation for the Plan Year. For purposes of the Plan, an Employees compensation shall mean (i) for
non-commissioned
employees, his or her regular salary or straight-time wages, overtime, bonuses, and all other forms of compensation, excluding any car allowance or relocation expense reimbursements; and (ii) for commissioned employees, his or her commissions,
guaranteed payments, overtime, bonuses, and all other forms of compensation, excluding any car allowance or relocation expense reimbursements. An Employees election to participate in the Plan for any Plan Year shall be made prior to the
beginning of such Plan Year on an authorized form and shall be made in accordance with procedures established by the Committee from time to time.
(b) An eligible Director shall become a Participant for any Plan Year by electing to contribute to the Plan, through a deduction of his or her
annual director or other compensation paid in cash, either a fixed amount or a percentage of such director compensation for the Plan Year. A Directors election to participate in the Plan for any Plan Year shall be made prior to the beginning
of such Plan Year or, if later, within 30 days after the date on which such individual first becomes an eligible Director, on an authorized form and shall be made in accordance with procedures established by the Committee from time to time.
Notwithstanding the foregoing, a Directors election to participate in the Plan for the Plan Year in which he or she first becomes eligible to participate may be made within 30 days after the date on which such individual first becomes eligible
to participate; provided, however, such election shall apply only to an amount of his or her annual or other director compensation paid in cash for such Plan Year equal to the total amount of the Directors annual or other compensation paid in
cash for such Plan Year multiplied by the ratio of the number of days remaining in the Plan Year after such election is made over the total number of days in the Plan Year for which such Director receives annual director or other compensation.
(c) A Participant must complete a new election with respect to each Plan Year in order to participate in the Plan for such Plan Year. During
any Plan Year, a Participant may make a
one-time
election to decrease (including to zero) his or her rate of payroll deductions applicable to such Plan Year. Such
one-time
decrease shall not limit Participants ability to withdraw from the Plan pursuant to Section 5(e) below. To make such
one-time
decrease, the
Participant may submit a new election authorizing the new rate of payroll deductions at any time but no later than thirty (30) days before the last day of the Plan Year and in accordance with such other procedures as are established by the Committee
from time to time.
(d) Participant contributions (i) in the case of Employees, shall be credited or deposited as soon as practicable
following each payday, and (ii) in the case of Directors, shall be credited or deposited as soon as practicable following the Companys deduction of all or a portion of the Directors annual or other compensation. The Company shall
maintain bookkeeping accounts of all Participant contributions but shall have no obligation to pay interest or to hold such amounts in a separate interest-bearing account at a bank or other financial institution (except as required by applicable
law). To the extent separate interest-bearing accounts at a bank or other financial institution are required by applicable law, each such account shall be maintained in the name of the Plan for the benefit of Participants, and the balance of each
such account shall remain the property of the Participants until transferred to the Company pursuant to Section 6. After the close of each Plan Year, the balance of the account will be used by (or transferred to) the Company to purchase
Orthofix Stock for distribution to Participants and to pay cash in lieu of fractional shares as provided in Section 6.
D-4
(e) A Participant may elect to withdraw from the Plan by providing notice to the Committee
before the last day of the Plan Year. Upon withdrawal from the Plan, all payroll and other deductions under the Plan shall immediately cease, and a Participant shall receive, in lieu of any other benefits under the Plan, the following: (i) a refund
of his or her contributions as soon as practicable following the date of withdrawal from the Plan, and in any event no later than the date that is two and
one-half
months following the last day of the Plan
Year in which such Participant withdrew from the Plan, and (ii) to the extent a separate interest-bearing account at a bank or other financial institution was required by applicable law, a refund of the interest, if any, accrued through the
date of payment at the rate in effect at the bank or other financial institution holding Participant contributions, which refund of accrued interest, if any, shall be paid immediately following the end of the Plan Year in which such Participant
withdrew from the Plan, and in any event no later than the date that is two and
one-half
months following the last day of such Plan Year.
(f) An Employees participation in the Plan shall terminate upon his or her termination of employment. An Employees participation
in the Plan shall, unless otherwise required by applicable law, terminate upon his or her leave of absence or absence from active employment for any other reason only if such Employee does not continue to make contributions to the Plan during such
leave in accordance with procedures established by the Committee. An Employee whose participation in the Plan has terminated pursuant to this Section 5(f) shall be deemed to have withdrawn from the Plan for purposes of this Section 5.
(g) A Directors participation in the Plan shall terminate if, during any Plan Year, such Director ceases to be a member of the Board of
Directors for any reason. A Director whose participation in the Plan has terminated pursuant to this Section 5(g) shall be deemed to have withdrawn from the Plan for purposes of this Section 5.
(h) A Participant who withdraws his or her contributions or otherwise ceases participation before the last day of the Plan Year may again
participate in the Plan for any subsequent Plan Year, provided he or she satisfies the eligibility requirements of Section 4 and makes a timely election to contribute for such Plan Year.
(i) If any law, rule, or regulation applicable to an eligible Employee or Director prohibits the use of payroll or other deductions for
purposes of the Plan, or if such deductions impair or hinder the operation of the Plan or affect the composition of the Board of Directors or any committee thereof, an alternative method of payment approved by the Committee may be substituted for
such eligible Employee or Director, as applicable; provided, however, that if any law, rule or regulation relating to a Director participating in the Plan, in the sole discretion of the Board of Directors, would affect the composition of the Board
of Directors or any committee thereof, the Board of Directors may terminate such Directors participation in the Plan.
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6.
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Distribution of Common Stock
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(a) As soon as practicable following the last day of each
Plan Year, but in any event no later than the date that is two and
one-half
months following the last day of such Plan Year, the Committee shall distribute to each Employee and Director who was a Participant
for the entire Plan Year (or, in the event of the death of an Employee or Director prior to such distribution, to the Employees or Directors beneficiary, as applicable) a certificate or certificates representing the number of whole
shares of Orthofix Stock determined by dividing (i) the amount of the Participants contributions for the Plan Year (plus interest, if any, accrued to the extent required by applicable law on such contributions through the end of the Plan Year)
by (ii) 85% of the Fair Market Value of the Orthofix Stock on the first day of the Plan Year or, if lower, on the last day of the Plan Year. Cash in the amount of any fractional share shall be paid to the Participant by check as soon as practicable
following the last day of each Plan Year, but in any event, no later than the date that is two and
one-half
months following the last day of such Plan Year.
(b) The Committee may, in its discretion, require a Participant to pay to the Company or its Subsidiary, as appropriate, prior to the
distribution of the Orthofix Stock, the amount that the Committee deems necessary to
D-5
satisfy the Companys obligation to withhold applicable taxes, at the minimum statutory rate, that the Participant incurs as a result of the Participants participation in the Plan. To
satisfy the minimum statutory tax withholding requirements, a Participant may (i) deliver to the Company or its Subsidiary, as appropriate, sufficient shares of Orthofix Stock (based upon the Fair Market Value of the Orthofix Stock at the date
of withholding) to satisfy the Companys tax withholding obligations, (ii) deliver sufficient cash to the Company or its Subsidiary, as appropriate, to satisfy tax withholding obligations, or (iii) irrevocably elect for the Company or
its Subsidiary, as appropriate, to withhold from the shares of Orthofix Stock to be distributed to the Participant the number of shares necessary (based upon the Fair Market Value of the Orthofix Stock at the date of withholding) to satisfy the
Companys tax withholding obligations. In the event the Committee subsequently determines that the aggregate Fair Market Value (on the date of withholding) of shares of Orthofix Stock withheld as payment of any tax withholding obligation is
insufficient to discharge that tax withholding obligation, then the Participant shall pay to the Company, or its Subsidiary, as appropriate, immediately upon the Committees request, the amount of that deficiency. The Company or its Subsidiary,
as appropriate, shall also have the right to deduct from all cash payments made to a Participant (whether or not such payment is made in connection with the Plan) any applicable taxes required to be withheld with respect to such payments.
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7.
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Administration of the Plan
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(a) The Committee shall administer the Plan and shall keep a
written record of its actions and proceedings regarding the Plan and all dates, records and documents relating to its administration of the Plan. The Committee is authorized to interpret the Plan, to make, amend and rescind such rules as it deems
necessary for the proper administration of the Plan, to make all other determinations necessary or advisable for the administration of the Plan and to correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner
and to the extent that the Committee deems desirable to carry the Plan into effect. The powers and duties of the Committee shall include, without limitation, the following:
(i) Determining the amount of benefits payable to Participants and authorizing and directing the Company with respect to the payment of
benefits under the Plan;
(ii) Determining the duration, frequency, start and end dates of future Plan Years;
(iii) Construing and interpreting the Plan in its sole discretion whenever necessary to carry out its intention and purpose and making and
publishing such rules for the regulation of the Plan as are not inconsistent with the terms of the Plan;
(iv) Compiling and maintaining
all records it determines to be necessary, appropriate or convenient in connection with the administration of the Plan; and
(v)
Administering the Plan as necessary to take account of tax, securities law and other regulatory requirements of foreign jurisdictions.
(b) Any action taken or determination made by the Committee shall, except as otherwise provided in Section 8 below, be conclusive on all
parties. No member of the Committee shall vote on any matter relating specifically to such member. In the event that a majority of the members of the Committee would be specifically affected by any action proposed to be taken (as opposed to being
affected in the same manner as each other Participant in the Plan), such action shall be taken by the Board of Directors.
(c) The
Committee may designate one or more of its members or the Chief Executive Officer or the Chief Financial Officer to carry out its responsibilities under such conditions or limitations as it may set, except that the Committee may not delegate its
authority with regard to participation in the Plan by eligible Directors or by eligible Employees who are officers for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended.
D-6
(d) No member of the Board of Directors or the Committee, the Chief Executive Officer, the
Chief Financial Officer, or any other officer or employee of the Company or any of its Subsidiaries 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 the Plan, and the Company shall indemnify, defend and hold harmless each such person from any liability arising from or in connection with the Plan, except where such liability results directly from such
persons fraud, willful misconduct or failure to act in good faith. In the performance of its responsibilities with respect to the Plan, the Committee shall be entitled to rely upon information and advice furnished by the Companys
officers, the Companys accountants, the Companys counsel and any other person 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.
(e) Anything in the Plan to the contrary notwithstanding, any authority or responsibility that, under the terms of the Plan, may be exercised
by the Committee may alternatively be exercised by the Board of Directors.
(a) If a Participant does not receive the timely payment of the
benefits which the Participant believes are due under the Plan, the Participant may make a claim for benefits in the manner hereinafter provided.
(i) All claims for benefits under the Plan shall be made in writing and shall be signed by the Participant. Claims shall be submitted to the
Committee, or to a representative designated by the Committee. If the Participant does not furnish sufficient information with the claim for the Committee to determine the validity of the claim the Committee shall indicate to the Participant any
additional information which is necessary for the Committee to determine the validity of the claim.
(ii) Each claim hereunder shall be
acted on and approved or disapproved by the Committee within 90 days following the receipt by the Committee of the information necessary to process the claim.
(iii) In the event the Committee denies a claim for benefits in whole or in part, the Committee shall notify the Participant in writing of
the denial of the claim and notify the Participant of his or her right to a review of the Committees decision. Such notice by the Committee shall also set forth, in a manner calculated to be understood by the Participant, the specific reason
for such denial, the specific provisions of the Plan on which the denial is based and a description of any additional material or information necessary to perfect the claim with an explanation of the Plans appeals procedure as set forth in
this Section.
(iv) If no action is taken by the Committee on a Participants claim within 90 days after receipt by the Committee,
such claim shall be deemed to be denied for purposes of the following appeals procedure.
(b) Any Participant whose claim for benefits is
denied in whole or in part may appeal for a review of the decision by the full Committee. Such appeal must be made within three months after the Participant has received actual or constructive notice of the denial as provided above. An appeal must
be submitted in writing within such period and must:
(i) request a review by the full Committee of the claim for benefits under the Plan;
(ii) set forth all of the grounds upon which the Participants request for review is based and any facts in support thereof; and
(iii) set forth any issues or comments which the Participant deems pertinent to the appeal.
(c) The Committee shall regularly review appeals by Participants. The Committee shall act upon each appeal within 60 days after receipt
thereof unless special circumstances require an extension of the time for processing, in which case a decision shall be rendered by the Committee as soon as possible but not later than 120 days after the appeal is received by the Committee.
D-7
(d) The Committee shall make a full and fair review of each appeal and any written materials
submitted by the Participant in connection therewith. The Committee may require the Participant to submit such additional facts, documents or other evidence as the Committee in its discretion deems necessary or advisable in making its review. The
Participant shall be given the opportunity to review pertinent documents or materials upon submission of a written request to the Committee, provided the Committee finds the requested documents or materials are pertinent to the appeal.
(e) On the basis of its review, the Committee shall make an independent determination of the Participants eligibility for benefits under
the Plan. The decision of the Committee on any claim for benefits shall be final and conclusive upon all parties thereto.
(f) In the
event the Committee denies an appeal in whole or in part, the Committee shall give written notice of the decision to the Participant, which notice shall set forth, in a manner calculated to be understood by the Participant, the specific reasons for
such denial and which shall make specific reference to the pertinent provisions of the Plan on which the Committees decision is based.
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9.
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Amendment and Termination
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(a) The Plan may be amended or terminated by the Board of
Directors at any time, provided that no such action shall have the effect of decreasing a Participants accrued benefits as of the effective date of such action. Upon termination of the Plan, each Participant shall receive a refund of his or
her contributions for the Plan Year (plus interest, if any, accrued to the extent required by applicable law through the date of termination).
(b) Without shareholder consent and without regard to whether any Participant rights may be considered to have been decreased, the
Committee shall be entitled to establish the exchange ratio applicable to payroll and other deductions, in a currency other than United States Dollars, permit payroll and other deductions in excess of the amount designated by a Participant in order
to adjust for delays or mistakes in the Companys processing of properly completed payroll and other deduction elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of shares of Orthofix Stock for each Participant properly correspond with amounts deducted from the Participants compensation, and establish such other limitations or procedures as the Committee determines in its
sole discretion advisable which are consistent with the Plan.
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10.
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Beneficiary Designation
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A Participant may file a written designation of a beneficiary
who is to receive any Orthofix Stock or cash under the Plan in the event of such Participants death prior to delivery to such Participant of such Orthofix Stock or cash. If a Participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective to the extent required by applicable law. Such beneficiary designation may be changed by the Participant at any time by written notice to the Committee. All beneficiary
designations shall be made in such form and manner as the Committee may prescribe from time to time.
The Plan, as amended and restated herein, shall become effective on the
first day of the Plan Year following the date it is approved by the Board of Directors.
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12.
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Participants in
Non-U.S.
Jurisdictions
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(a) To
the extent that Participants are domiciled or resident outside of the U.S. or are domiciled or resident in the U.S. but are subject to the tax laws of a jurisdiction outside of the U.S., the Committee shall have the authority and discretion to adopt
such modifications and procedures as it shall deem necessary or desirable to comply with the provisions of the laws of such
non-U.S.
jurisdictions in order to assure the viability of the benefits paid to such
Participants. The authority granted under the previous sentence shall include the discretion for the Committee to adopt, on behalf of the Company, one or more sub-plans applicable to separate classes of eligible Employees and Directors who are
subject to the laws of jurisdictions outside of the U.S.
D-8
(b) Notwithstanding any other provision of the Plan to the contrary, to the extent the
Company is required to comply with the EU Prospectus Directive in any jurisdiction with respect to awards made to eligible Employees or Directors in such jurisdiction, the Committee may suspend the right of all eligible Employees and Directors in
such jurisdiction to participate in the Plan.
(a) Nothing in the Plan shall confer upon a Participant the right to
continue in the employ or continue to be a Director of the Company or a Subsidiary or shall limit or restrict the right of the Company or a Subsidiary to terminate the employment of a Participant at any time with or without cause.
(b) No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any
attempt to anticipate, alienate, sell, assign, pledge, encumber or charge such right or benefit shall be void. No such right or benefit shall in any manner be liable for or subject to the debts, liabilities or torts of a Participant.
(c) Neither the Company nor any Subsidiary shall be under any obligation to issue or deliver certificates for shares of Orthofix Stock
pursuant to the Plan if such issuance or delivery would, in the opinion of the Committee, cause the Company to violate any provision of applicable law. The Company and its subsidiaries will use their best efforts to comply with applicable laws but
will not be liable for any failure to comply.
(d) If any provision in the Plan is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated in any way.
(e) The Plan shall be construed and governed in accordance with the law of the State of New York and without giving effect to principles of
conflicts of laws.
(f) All notices or other communications by a Participant to the Committee, the Company, or any Subsidiary under or in
connection with the Plan shall be deemed to have been duly given when received in the form specified by the Committee at the location, or by the person, designated by the Committee for the receipt thereof.
(g) Notwithstanding anything to the contrary contained in the Plan, notices and other elections under this Plan may be delivered or made
electronically, in the discretion of the Committee. In addition, in the discretion of the Committee, shares otherwise deliverable under the Plan may be delivered or otherwise evidenced through book entry or other electronic format without the need
to deliver an actual share certificate; provided, however, an actual share certificate shall be delivered if requested by the Participant.
(h) The Board of Directors or the Committee may extend or terminate the benefits of the Plan to any Subsidiary at any time without the
approval of the shareholders of the Company.
(i) The proceeds received by the Company from the sale of Orthofix Stock pursuant to the
Plan shall be used for general corporate purposes.
(j) No shares of Orthofix Stock may be issued under this Plan unless the issuance of
such shares has been registered under the Securities Act of 1933, as amended, and qualified under applicable state blue sky laws and any applicable
non-U.S.
securities laws, or the Company has
determined that an exemption from registration and from qualification under such state blue sky laws and applicable
non-U.S.
securities laws is available. The Committee may require each Participant
purchasing shares under the Plan to represent to and agree with the Company in writing that such eligible Employee or Director, as applicable, is acquiring the shares for investment purposes and not with a view to the distribution thereof. All
certificates for shares delivered under
D-9
the Plan 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 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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14.
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Compliance with Code Section 409A
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The Plan and any options granted hereunder are
intended to meet the short term deferral exemption from Code Section 409A and shall be interpreted and construed consistent with this intent. Notwithstanding any provision of the Plan to the contrary, in the event that the Board of Directors
determines that the Plan or any option granted hereunder may be subject to Code Section 409A, the Board of Directors may, without the consent of Participants, including the affected Participant, adopt such amendments to the Plan or adopt other
policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Board of Directors determines are necessary or appropriate to (i) exempt the Plan or any option granted
hereunder 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. Notwithstanding the foregoing, the Company shall not
be required to assume any increased economic burden in connection therewith.
D-10
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers
Before Domestication.
Book 2 of the Curaçao Civil Code does not limit the extent to which a companys articles of association may provide
for indemnification of officers and directors. However, such provision may be held by the Curaçao courts to be unenforceable, to the extent it seeks to indemnify or exculpate a fiduciary in respect of their internal liability towards the
Company for mismanagement or for external liability caused by such fiduciaries, actual fraud or willful default, or for the consequences of committing a crime.
Article 11 of Orthofix International N.V.s articles of association provides, in relevant part, that the company shall promptly indemnify, to the full
extent permitted by law, any person made or threatened to be made a party to a threatened, pending or completed action, claim, litigation, suit or proceeding, by reason of the fact that the person, or his or her testator or intestate, is or was a
director or officer of the company. Orthofix International N.V. shall from time to time pay to or reimburse a director or officer any and all other reasonable direct and indirect costs of any type or nature whatsoever incurred by or on behalf of
such director or officer in connection with any action, in advance of the final disposition or conclusion of any such action, within 10 days after the receipt of the directors or officers written request therefore.
Orthofix International N.V. has generally entered into standard indemnity agreements with its officers and directors, which further outline the companys
mandatory and permissive indemnity and insurance obligations. These indemnity agreements in some cases limit the directors or officers rights to indemnification in specific circumstances.
The Company has the power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the Company, and/or is or was
serving as a director or officer of an affiliate, against any liability asserted against him or her and/or incurred by or on behalf of him or her in any such capacity, or arising out of his or her status as such a director or officer, whether or not
the Company would have the power to indemnify him or her against such liabilities under this Article 11 or under applicable law. The purchase and maintenance of such insurance shall not in any way limit or affect the rights and obligations of the
Company and/or any director or officer under Article 11.
Each of the directors and officers have entered into an indemnification agreement with the
Company.
After Domestication
. If the domestication is completed, the following provisions and laws will apply to Orthofix Medical Inc. (as a
Delaware corporation) and its directors and officers.
Section 102(b)(7) of the DGCL permits a corporation, in its certificate of incorporation, to
limit or eliminate, subject to certain statutory limitations, the liability of directors to the corporation or its stockholders for monetary damages for breaches of fiduciary duty, except for liability (i) for any breach of the directors
duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any
transaction from which the director derived an improper personal benefit.
Section 145(a) of the DGCL empowers a corporation to indemnify any
director, officer, employee or agent, or former director, officer, employee or agent, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the corporation) by reason of his service as a director, officer, employee or agent of the corporation, or his service, at the corporations request, as a director,
officer, employee or agent of another corporation or enterprise, against expenses (including attorneys fees), judgments,
II-1
fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding provided that such director or officer acted in good faith
and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, provided that such director or officer had no reasonable cause to believe his conduct was
unlawful.
Section 145(b) of the DGCL empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of another enterprise, against expenses (including attorneys fees) actually and reasonably incurred in connection with the defense or settlement of such action or suit
provided that such director or officer acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect of any claim, issue or matter
as to which such director or officer shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances of the case, such director or officer is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in Section 145(a) or Section 145(b) of the DGCL or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred
by him in connection therewith, provided that indemnification provided for by Section 145 of the DGCL or granted pursuant thereto shall not be deemed exclusive of any other rights to which the indemnified party may be entitled, and empowers the
corporation to purchase and maintain insurance on behalf of a director or officer of the corporation against any liability asserted against him or incurred by him in any such capacity or arising out of his status as such whether or not the
corporation would have the power to indemnify him against such liabilities under Section 145 of the DGCL.
The proposed new Orthofix Medical Inc.
certificate of incorporation provides that no director of Orthofix Medical Inc. shall be liable to Orthofix Medical Inc. or its stockholders for monetary damages for breach of fiduciary duty as a director except to the extent that such exemption
from liability or limitation thereof is not permitted under the DGCL as currently in effect or as the same may hereafter be amended. This provision in the certificate of incorporation does not eliminate the directors fiduciary duties, and in
appropriate circumstances, equitable remedies such as injunctive or other forms of nonmonetary relief will remain available under Delaware law. In addition, each director will be subject to liability for breach of the directors duty of loyalty
to Orthofix Medical Inc., for acts or omissions not in good faith or involving intentional misconduct, for knowing violations of law, for actions leading to improper personal benefit to the director, and for payment of dividends or approval of stock
repurchases or redemptions that are unlawful under Delaware law. The provision also does not affect a directors responsibilities under any other law, such as the federal securities laws or state or federal environmental laws.
The new Orthofix Medical Inc. bylaws also provide that Orthofix Medical Inc. shall indemnify and advance expenses to its officers and directors to the fullest
extent permitted by applicable law.
As permitted by the DGCL, we intend to enter into indemnification agreements with our directors and executive
officers in connection with the domestication. These agreements, among other things, will require us to indemnify each director and officer of Orthofix Medical Inc. to the fullest extent permitted by law and advance expenses to each indemnitee in
connection with any proceeding in which indemnification is available.
II-2
Item 21. Exhibits and Financial Statements
The exhibits listed below are part of this Registration Statement and numbered in accordance with Item 601 of Regulation
S-K.
*
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Previously filed as an exhibit to the Registration Statement on Form S-4 filed with the SEC on April 23, 2018.
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Item 22. Undertakings
(A)
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The undersigned registrant hereby undertakes:
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(1) To file, during any
period in which offers or sales are being made, a post-effective amendment to this registration statement:
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(i)
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To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
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(ii)
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To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement; and
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II-3
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(iii)
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To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
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(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the
registrants annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plans annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(5) That, for the purpose of determining liability under the Securities Act of 1933 to any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed
to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities
to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such
purchaser:
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(i)
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Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
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(ii)
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Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
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(iii)
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The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
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(iv)
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Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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(7) To deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report,
to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule
14a-3
or Rule
14c-3
under the
Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation
S-X
is not set forth in the prospectus, to deliver, or cause to be delivered to
each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.
II-4
(8) That, prior to any public reoffering of the securities registered hereunder through use
of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called
for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
(9) That every prospectus: (i) that is filed pursuant to the immediately preceding paragraph, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide offering thereof.
(10) To respond to requests for information
that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
(11) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in the registration statement when it became effective.
(B) Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final adjudication of such issue.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lewisville, Texas on May 24, 2018.
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ORTHOFIX INTERNATIONAL N.V.
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By:
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/s/ BRADLEY R. MASON
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Name:
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Bradley R. Mason
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Title:
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President and Chief Executive Officer, Director
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Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the
following persons in the capacities indicated.
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Name
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Title
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Date
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/s/ BRADLEY R. MASON
Bradley R. Mason
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President and Chief Executive Officer, Director
(Principal Executive Officer)
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May 24, 2018
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/s/ DOUGLAS C. RICE
Douglas C. Rice
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Chief Financial Officer
(Principal Financial
and Accounting Officer)
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May 24, 2018
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*
Ronald A. Matricaria
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Chairman of the Board of Directors
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May 24, 2018
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*
Luke Faulstick
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Director
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May 24, 2018
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*
James Hinrichs
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Director
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May 24, 2018
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*
Alexis V. Lukianov
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Director
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May 24, 2018
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*
Lilly Marks
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Director
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May 24, 2018
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*
Michael E. Paolucci
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Director
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May 24, 2018
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*
Maria Sainz
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Director
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May 24, 2018
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*
John Sicard
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Director
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May 24, 2018
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* By:
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/s/ Bradley R. Mason
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Attorney-in-fact
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