Orthofix Medical Inc DEFR14A, filed Apr 30, 2021

Orthofix Medical Inc. (OFIX)

DEFR14A 2021-04-30

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Added on October 18, 2026

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☐		Preliminary Proxy Statement

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☒		Definitive Proxy Statement

☐		Definitive Additional Materials

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Sincerely,

Ronald A. Matricaria
Chairman of the Board

April 29, 2021



Meeting Date:	June 21, 2021 At 9:00 a.m. CDT
Meeting Place:	Four Seasons Resort and Club Dallas at Las Colinas 4150 North MacArthur Boulevard Irving, Texas 75038

Name	Age	Director Since	Independent	Audit & Finance Committee¹	Compensation Committee¹	Compliance & Ethics Committee¹	Nominating & Governance Committee¹
Catherine Burzik	70	NEW	✓
Jason M. Hannon	49	2020	✓			✓
James F. Hinrichs	53	2014	✓	Chair			✓
Alexis V. Lukianov	65	2016	✓	✓	✓
Lilly Marks	73	2015	✓			✓	Chair
Michael E. Paolucci	61	2016	✓		Chair		✓
Jon Serbousek	60	2019
John E. Sicard	58	2018	✓	✓

About Voting		1

Security Ownership of Certain Beneficial Owners and Management and Related Stockholders	4

Delinquent Section 16(a) Reports	7

Information About Our Executive Officers	8

Information about Directors	10

Certain Relationships and Related Transactions	19

Compensation Discussion and Analysis	20

Report of the Compensation Committee	34

Summary Compensation Table	35

Grants of Plan-Based Awards	37

Outstanding Equity Awards at Fiscal Year-End	39

Option Exercises and Stock Vested	42

Potential Payments upon Termination or Change in Control	43

Pay Ratio Disclosure	47

Director Compensation	48

Equity Compensation Plan Information	51

Proposal 1: Election of Directors	52

Proposal 2: Advisory and Non-Binding Resolution to Approve Executive Compensation	59

Proposal 3: Approval of Amendment No. 2 to the Amended and Restated 2012 LTIP	60

Proposal 4: Approval of SPP Amendment	69

Proposal 5: Ratification of the Selection of EY as Independent Registered Public Accounting Firm for 2021	73

Report of the Audit and Finance Committee	75

Information About Shareholder Proposals	77

Multiple Shareholders Sharing One Address	78

Appendix A – Amended and Restated 2012 Long-Term Incentive Plan, as Amended, and Proposed Amendment No. 2 Thereto	79

Appendix B – Amended and Restated Stock Purchase Plan, as Amended, and Proposed Amendment No. 2 Thereto	108

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class
BlackRock, Inc. 55 East 52nd Street New York, NY 10055		3,088,855	⁽¹⁾	15.8%
Segall Bryant & Hamill, LLC 540 W. Madison Chicago, IL 60661-2551		2,324,699	⁽²⁾	11.9%
The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, PA 19355		1,952,838	⁽³⁾	10.0%
Paradice Investment Management LLC 257 Fillmore Street, Suite 200 Denver, CO 80206		975,695	⁽⁴⁾	5.0%

Name	Age	Position
Jon C. Serbousek	60	President and Chief Executive Officer and Director
Douglas C. Rice	55	Chief Financial Officer
Kimberley A. Elting	56	Chief Legal and Development Officer
Kevin J. Kenny	56	President of Global Spine
Paul W. Gonsalves	55	President of Global Extremities
Davide Bianchi	56	Former President of Global Extremities



	Our People: We demonstrate our commitment to providing equal and equitable opportunities to all employees through training, mentoring, education, and an inclusive culture. We engage our employees through our Moving 4ward Program, which was created to improve diversity, equality and inclusion, and through the Orthofix Women’s Network, which strives to support the women of Orthofix around the globe in the areas of development, mentoring and engagement. This belief extends to our board of directors, where women serve as chairs on two of our four Board committees. We were also happy to recently announce that Cathy Burzik has been nominated to Chair the Orthofix Board of Directors. Additionally we have three women represented on our executive leadership team.

	Community Involvement: We support a variety of charitable organizations through donations, fundraising efforts, educational partnerships with colleges and universities, and local community development. Over the years, we have raised funds and awareness for veteran support groups, food and homebuilding organizations, and health-related institutions. In 2020, we initiated a global food drive in response to food shortages caused by the pandemic. Through employee donations and matching funds we provided meaningful support to 20 food banks around the world. Orthofix also partners with Donate Life America, a U.S.-based nonprofit organization that promotes the importance of organ, eye, and tissue donation. Additionally, we have an ongoing engineering partnership with the University of Texas, Dallas, enabling students to work on real life healthcare solutions as we invest in the next generation of engineers and business leaders.


	Environmental Responsibility: We are committed to transitioning to lower carbon operations. We have begun to explore a decrease in our carbon footprint for the manufacturing and supply of our surgical instruments via single-use sterile packed instruments, and in 2020 launched a partnership with Neo Medical to distribute single-use sterile packed instrumentation for certain spine surgeries, and to develop single-use solutions for other procedures. These single-use sterile packed instruments eliminate high carbon cost of repeated shipping and sterilization, reducing our carbon footprint and improving the spinal surgery ecosystem with value-based care and sustainable technology solutions. In addition, Orthofix recently launched a free recycling program for our patients using Bone Growth Stimulators in order to reduce the number of devices that end up in landfills after use, the first program of its kind for bone growth therapy devices. We also embed the principles of advancing a circular economy into our ESG practices globally through our in-office recycling program, including recycle/reuse and a commitment to eliminate Styrofoam. Additionally, our facilities have energy efficient HVAC systems and we transitioned our Lewisville, Texas location to 100 percent sustainable energy in March 2020.

	Governance: It is our fundamental policy to conduct business in accordance with the highest ethical and legal standards. We have a comprehensive compliance and ethics program to promote lawful and ethical business practices throughout our domestic and international businesses and offer compliance education training to all of our employees. Similarly, we require that our suppliers adopt sound human rights practices designed to treat workers fairly and with dignity and respect. We responsibly manage and influence the impacts of our distributors through our robust compliance and governance training.


	Conflict Minerals Report: We maintain a Conflict Minerals Report to ensure high standards of corporate responsibility, and we take seriously the ending of the violence and human rights violations currently taking place in the Democratic Republic of the Congo (“DRC”) and surrounding countries.
	Environmental, Health and Safety: We maintain an environmental, health and safety policy, communicated within our Corporate Code of Conduct, that seeks to promote the operation of our business in a manner that is environmentally responsible and protective of the health and safety of both our employees and the public. As a result of these policies, the Company reported zero work related injuries in the U.S. in 2020, which is lower than the industry average reported by the Occupational Safety and Health Administration (“OSHA”).



	Code of Conduct: We maintain a Corporate Code of Conduct that is applicable to all our directors, officers, and employees. The Code of Conduct sets forth our policies and expectations on several topics, including conflicts of interest, compliance with laws, human rights, use of our assets, business conduct and fair dealing. All employees, directors and our sales distributors participate in annual training on the Corporate Code of Conduct and related Company policies.
	Sustainability: We maintain comprehensive policies that guide our approach to environmental and social risk management within our Corporate Code of Conduct. Areas of focus include our corporate compliance with responsible hazardous waste protocols, recycling, emergency preparedness, and programs to enhance and promote environmental stewardship.
	COVID-19 Response We recognize that as a responsible global operator, it is our obligation to ensure the safety of our stakeholders. In addition to our above principles, in 2020: • We assessed and managed the risks associated with our activities to protect our employees and ensure product availability for our surgeon customers and their patients during the COVID-19 pandemic. •We committed to the responsible oversight of our workforce and their safety as evidenced by our implementation of health pre-screens for our facilities and patient and customer interactions, the transition of many of our employees to remote work from home arrangements, upgrades to HVAC filters, installation of plastic shields for office cubes, required use of a mask in common areas and social-distancing protocols in offices and meeting rooms, the launch of a communications campaign to promote safe practices and keep our employees informed, and other initiatives. •We continue to engage our employees globally through structured confidential surveys to identify current COVID-19 concerns and provide communication updates on a regular basis. •We have successfully engaged our surgeon customers and other stakeholders through the offering of virtual training sessions on the safe and effective use of our products. In 2020, more than 12,000 surgeons, healthcare providers, distributors and employees were trained via these offerings.


Engagement with Shareholders
Orthofix routinely engages with our shareholders to better understand their views, carefully considering the feedback we receive and acting when appropriate. We review the results of the annual advisory vote on executive compensation in making determinations about the structure of Orthofix’s pay program, or whether any changes to the program should be considered.

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CONMED Corporation	Natus Medical Inc.

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Haemonetics Corporation	RTI Surgical Inc.

ICU Medical Inc.	Wright Medical Group N.V.

Name	Title	2019 Annual Base Salary			2020 Annual Base Salary⁽¹⁾			Percentage Increase
Jon C. Serbousek	President and Chief Executive Officer	$	750,000	⁽²⁾	$	750,000		0.0%
Douglas C. Rice	Chief Financial Officer	$	432,600		$	450,000		4.0%
Kimberley A. Elting	Chief Legal and Development Officer	$	426,400		$	450,000		5.5%
Kevin J. Kenny	President of Global Spine	N/A			$	440,000			—
Paul W. Gonsalves	President of Global Extremities⁽²⁾	N/A			$	400,000	⁽³⁾		—
Davide Bianchi	Former President of Global Extremities⁽⁴⁾	CHF 412,000		⁽⁴⁾	⁽⁴⁾				—

Name	2020 Base Salary Amount	Target Bonus Percentage of Salary	Weighted Percent Achievement	Total Annual Incentive Plan Bonus
Jon C. Serbousek	$ 750,000	100%	100.0%	$750,000
Douglas C. Rice	$ 450,000	70%	100.0%	$315,000
Kimberley A. Elting	$ 450,000	70%	100.0%	$315,000
Kevin J. Kenny	$ 440,000	70%	100.0%	$308,000
Paul W. Gonsalves	$ 400,000	70%	100.0%	$85,918	⁽¹⁾
Davide Bianchi	CHF 310,108	70%	100.0%	CHF 216,300	⁽²⁾



	Stock Options	RSUs	Performance Stock Units
Value Weighting	25%	25%	50%

Performance Conditions	Stock price appreciation	N/A	Total shareholder return (“TSR”) relative to the S&P Healthcare Equipment Select Industry Index

Term/Length	Ten years	Four years	Three-year performance period with additional one-year holding period

Vesting	Vest in four equal installments on the first, second, third, and fourth anniversaries of the grant date	Vest in four equal installments on the first, second, third, and fourth anniversaries of the grant date	Cliff vest after three years upon certification of results; subject to additional one-year holding period following vesting

Company's TSR Percentile Rank	Vesting Percentage
Below 25th Percentile	0%
25th Percentile	50% (threshold)
50th Percentile	100% (target)
75th Percentile	200% (maximum)

Name and Principal Position	Year	Salary ($)⁽¹⁾			Bonus ($)			Stock Awards ($)⁽²⁾		Option Awards ($)⁽²⁾		Non-Equity Incentive Plan Compensation ($)⁽³⁾			All Other Compensation ($)			Total ($)
Jon C. Serbousek - President	2020		726,923			—			2,893,374		875,004		750,000			92,560	⁽⁴⁾		5,337,861
and Chief Executive Officer	2019		241,346			304,110			1,749,865		1,750,005		—			30,876			4,076,202
Douglas C. Rice - Chief	2020		432,129			—			760,561		229,998		315,000			17,337	⁽⁵⁾		1,755,025
Financial Officer	2019		432,600			—			1,163,649		220,004		70,081			12,502			1,898,836
	2018		420,000			—			715,007		209,868		166,320			12,299			1,523,494
Kimberley A. Elting - Chief	2020		430,708			—			727,487		219,998		315,000			15,900	⁽⁶⁾		1,709,093
and Development Officer	2019		426,400			—			1,099,214		202,500		69,077			12,570			1,809,761
	2018		410,000			—			859,696		193,634		162,360			12,297			1,637,987
Kevin J. Kenny - President	2020		426,462			100,000	⁽⁷⁾		661,346		200,001		308,000			47,680	⁽⁸⁾		1,743,489
of Global Spine
Paul W. Gonsalves - President	2020		116,923	⁽⁹⁾		—			300,022		300,005		85,918	⁽⁹⁾		106,811	⁽¹⁰⁾		909,679
of Global Extremities
Davide Bianchi - Former	2020		310,108			—			—		—		216,300			869,729	⁽¹²⁾		1,396,137
President of Global	2019		414,618			—			995,478		175,007		23,335			89,364			1,697,802
Extremities⁽¹¹⁾	2018		398,598			—			489,428		143,652		150,552			81,764			1,263,994

			Estimated Future Payouts Under Non-Equity Incentive Plan Awards						Estimated Future Payouts Under Equity Incentive Plan Awards
Name	Grant Date		Threshold ($)(1)		Target ($)(1)		Maximum ($)(1)		Threshold (#)(2)		Target (#)(3)		Maximum (#)(2)		All Other Stock Awards (#4)		All Other Option Awards (#)(5)		Equity Exercise or Base Price of Option Awards ($/Sh)(6)		Grant Date Fair Value of Stock and Option Awards ($)(7)
Jon C.				375,000		750,000		1,125,000		—		—		—		—		—		—		—
Serbousek	06/08/2020			—		—		—		22,936		45,872		91,744		—		—		—		2,018,368
	04/01/2020			—		—		—		—		—		—		33,538		—		—		875,006
	04/01/2020			—		—		—		—		—		—		—		107,372		26.09		875,004
Douglas C.				157,500		315,000		472,500		—		—		—		—		—		—		—
Rice	06/08/2020			—		—		—		6,029		12,058		24,116		—		—		—		530,552
	04/01/2020			—		—		—		—		—		—		8,816		—		—		230,009
	04/01/2020			—		—		—		—		—		—		—		28,223		26.09		229,998
Kimberley				157,500		315,000		472,500		—		—		—		—		—		—		—
A. Elting	06/08/2020			—		—		—		5,767		11,534		23,068		—		—		—		507,496
	04/01/2020			—		—		—		—		—		—		8,432		—		—		219,991
	04/01/2020			—		—		—		—		—		—		—		26,996		26.09		219,998
Kevin J.				154,000		308,000		462,000		—		—		—		—		—		—		—
Kenny	06/08/2020			—		—		—		5,243		10,485		20,970		—		—		—		461,340
	04/01/2020			—		—		—		—		—		—		7,666		—		—		200,006
	04/01/2020			—		—		—		—		—		—		—		24,542		26.09		200,001
Paul W.				42,959		85,918		128,877		—		—		—		—		—		—		—
Gonsalves	09/11/2020	⁽⁸⁾		—		—		—		—		—		—		10,624		—		—		300,022
	09/11/2020	⁽⁸⁾		—		—		—		—		—		—		—		32,945		28.24		300,005
Davide				—		—		—		—		—		—		—		—		—		—
Bianchi				—		—		—		—		—		—		—		—		—		—

	Option Awards									Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable⁽¹⁾		Number of Securities Underlying Unexercised Options (#) Unexercisable⁽²⁾			Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock that have not Vested (#)			Market Value of Shares or Units of Stock that have not Vested ($)		Number of Shares or Units of Stock that have not Vested (#)			Market Value of Shares or Units of Stock that have not Vested ($)
Jon C.		12,677		38,034	⁽³⁾	50.87		8/05/2029			—			—		—			—
Serbousek		20,362		61,087	⁽⁴⁾	41.52		11/01/2029			—			—		—			—
		—		107,372	⁽⁵⁾	26.09		4/01/2030			—			—		—			—
		—		—			—		—		11,058	⁽⁶⁾	$	475,273		—			—
		—		—			—		—		18,064	⁽⁷⁾	$	776,391		—			—
		—		—			—		—		33,538	⁽⁸⁾	$	1,441,163		—			—
		—		—			—		—		—			—		45,872	⁽¹⁸⁾		1,971,579
Douglas C.		10,000		—			32.28	9/04/2024			—			—		—			—
Rice		9,750		—			36.46	4/24/2025			—			—		—			—
		13,275		—			33.12	6/30/2025			—			—		—			—
		13,781		—			44.39	7/01/2026			—			—		—			—
		9,936		3,312	⁽⁹⁾		46.10	7/03/2027			—			—		—			—
		6,555		6,554	⁽¹⁰⁾		56.87	4/02/2028			—			—		—			—
		3,242		9,729	⁽¹¹⁾		56.20	4/01/2029			—			—		—			—
		—		28,223	⁽⁵⁾		26.09	4/01/2030			949	⁽¹²⁾		40,788		—			—
		—		—			—		—		1,846	⁽¹³⁾		79,341		—			—
		—		—			—		—		2,937	⁽¹⁴⁾		126,232		—			—
		—		—			—		—		7,698	⁽¹⁵⁾		330,860		—			—
		—		—			—		—		8,816	⁽⁸⁾		378,912		—			—
		—		—			—		—		—			—		7,385	⁽¹⁶⁾		317,407
		—		—			—		—		—			—		7,829	⁽¹⁷⁾		336,490
		—		—			—		—		—			—		12,058	⁽¹⁸⁾		518,253
Kimberley		15,000		—			42.89	9/26/2026			—			—		—			—
A. Elting		9,226		3,075	⁽⁹⁾		46.10	7/03/2027			—			—		—			—
		6,048		6,047	⁽¹⁰⁾		56.87	4/02/2028			—			—		—			—
		2,984		8,955	⁽¹¹⁾		56.20	4/01/2029			—			—		—			—
		—		26,996	⁽⁵⁾		26.09	4/01/2030			—			—		—			—
		—		—			—		—		881	⁽¹²⁾		37,865		—			—
		—		—			—		—		1,703	⁽¹³⁾		73,195		—			—
		—		—			—		—		1,857	⁽¹⁹⁾		79,814		—			—
		—		—			—		—		2,703	⁽¹⁴⁾		116,175		—			—
		—		—			—		—		7,587	⁽¹⁵⁾		326,089		—			—
		—		—			—		—		8,432	⁽⁸⁾		362,407		—			—
		—		—			—		—		—			—		6,814	⁽¹⁶⁾		292,866
		—		—			—		—		—			—		7,206	⁽¹⁷⁾		309,714
		—		—			—		—		—			—		11,534	⁽¹⁸⁾		495,731
Kevin J.		—		24,542	⁽⁵⁾	26.09		4/01/2030			—			—		—			—
Kenny		8,348		25,047	⁽²⁰⁾		44.96	12/04/2029			—			—		—			—

	Option Awards				Stock Awards or Units
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)(1)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($)(2)
Jon C. Serbousek		—		—		9,706		310,706
Douglas C. Rice		—		—		7,747		231,166
Kimberley A. Elting		—		—		4,962		142,461
Kevin J. Kenny		—		—		2,502		92,799
Paul W. Gonsalves		—		—		—		—
Davide Bianchi		39,500		409,365		13,664		419,672

Name	Triggering Event	Lump Sum Severance Payment ($)		Value of Stock- Based Rights ($)			Value of Welfare Benefits ($)		Fees and Expenses of Out-placement Firm ($)		Total ($)
Jon C. Serbousek	Termination for death or disability		2,250,000		6,567,405	⁽¹⁾		38,448		18,750		8,874,603
	Termination for cause or voluntary termination		—		—			—		—		—
	Termination for good reason or without cause		2,250,000		372,336			38,448		18,750		2,679,534
	Termination for death, disability, good reason or without cause during a change in control period		3,000,000		6,567,405	⁽¹⁾		38,448		25,000		9,630,853
Douglas C. Rice	Termination for death or disability		765,000		2,604,970	⁽¹⁾		23,538		12,500		3,406,008
	Termination for cause or voluntary termination		—		—			—		—		—
	Termination for good reason or without cause		765,000		584,915	⁽²⁾		23,538		12,500		1,385,953
	Termination for death, disability, good reason or without cause during a change in control period		1,147,500		2,604,970	⁽¹⁾		23,538		18,750		3,794,758
Kimberley A. Elting	Termination for death or disability		765,000		2,549,819	⁽¹⁾		—		12,500		3,327,319
	Termination for cause or voluntary termination		—		—			—		—		—
	Termination for good reason or without cause		765,000		542,580	⁽²⁾		—		12,500		1,320,080
	Termination for death, disability, good reason or without cause during a change in control period		1,147,500		2,549,819	⁽¹⁾		—		18,750		3,716,069
Kevin J. Kenny	Termination for death or disability		748,000		1,517,295	⁽¹⁾		25,632		12,500		2,303,427
	Termination for cause or voluntary termination		—		—			—		—		—
	Termination for good reason or without cause		748,000		85,100	⁽²⁾		25,632		12,500		871,232

Name⁽¹⁾	Fees Earned or Paid in Cash ($)⁽¹⁾		Restricted Stock Unit Awards (Number of Shares Granted)⁽²⁾			Grant Date Fair Value of Restricted Stock Awards ($)⁽³⁾			Option Awards⁽²⁾		Grant Date Fair Value of Option Awards ($)⁽³⁾		All Other Compensation ($)		Total ($)
Ronald A. Matricaria		154,667		8,520	⁽⁴⁾		325,038	⁽⁴⁾		—		—		—		479,705
Jason M. Hannon		21,923		4,588			175,032			24,701		300,000		—		496,955
James F. Hinrichs		82,167		4,588	⁽⁵⁾		175,032	⁽⁵⁾		—		—		—		257,199
Alexis V. Lukianov		67,667		4,588	⁽⁵⁾		175,032	⁽⁵⁾		—		—		—		242,699
Lilly Marks		77,333		4,588	⁽⁵⁾		175,032	⁽⁵⁾		—		—		—		252,365
Michael E. Paolucci		77,333		4,588	⁽⁵⁾		175,032	⁽⁵⁾		—		—		—		252,365
Maria Sainz		77,333		4,588	⁽⁵⁾		175,032	⁽⁵⁾		—		—		—		252,365
John E. Sicard		67,667		4,588	⁽⁵⁾		175,032	⁽⁵⁾		—		—		—		242,699

Director	Number of Shares Subject to Outstanding Stock Options as of 12/31/20		Number of Shares Subject to Outstanding Deferred Stock Units as of 12/31/20
Ronald A. Matricaria		30,000		26,675
Jason M. Hannon		24,701		4,588
James F. Hinrichs		30,000		14,498
Alexis V. Lukianov		30,000		14,498
Lilly Marks		30,000		14,498
Michael E. Paolucci		30,000		14,498
Maria Sainz		—		14,498
John E. Sicard		30,000		10,919

Plan Category	Number of Securities to Be Issued upon Exercise of Outstanding Options and Rights (#)⁽¹⁾ (a)			Weighted- Average Exercise Price of Outstanding Options and Rights ($)⁽⁴⁾ (b)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#) (c)
Equity Compensation Plans Approved by Security Holders		1,954,858	⁽²⁾⁽³⁾	$	39.48		1,530,980	⁽⁵⁾
Equity Compensation Plans Not Approved by Security Holders		233,656	⁽⁶⁾	$	39.94		—
Total		2,188,514	⁽³⁾	$	39.56		1,530,980	⁽⁵⁾



	The Board unanimously recommends you vote “FOR” the “say-on-pay” proposal.

	Shares		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price
Shares subject to outstanding option awards		1,411,770		5.72	$	39.46
Shares subject to outstanding time-based restricted stock awards and restricted stock units		622,669
Shares subject to outstanding performance-based stock units		343,640
Shares available for future grant under the 2012 LTIP, as currently approved		687,315
New shares requested under the 2012 LTIP		1,200,000
Sum of above		4,265,394
Common shares outstanding as of April 15, 2021 (excluding unvested restricted stock awards)		19,524,483

	2020		2019
Audit Fees	$	2,074,438	$	2,229,076
Audit-Related Fees		—		16,517
Tax Fees		266,934		564,400
All Other Fees		7,500		7,165
Total	$	2,348,872	$	2,817,158



		The Audit and Finance Committee
		James F. Hinrichs, Committee Chair
		Alexis V. Lukianov
		John E. Sicard