ofix-8k_20191031.htm

Delaware	0-19961	98-1340767
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3451 Plano Parkway Lewisville, Texas		75056
(Address of principal executive offices)		(Zip Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common stock, $0.10 par value per share

OFIX

Nasdaq Global Select Market

On November 1, 2019, Jon Serbousek succeeded Bradley R. Mason as the President and Chief Executive Officer of Orthofix Medical Inc. (the “Company”) in accordance with the Company’s previously announced succession plan. Consistent with such succession plan and the Transition and Retirement Agreement entered into by the Company and Mr. Mason on February 25, 2019 (the “Transition and Retirement Agreement”), Mr. Mason (i) retired as an officer and director of the Company on October 31, 2019 and (i) commenced a 12-month period as a Company consultant beginning on November 1, 2019.

Concurrently with Mr. Serbousek’s assumption of the office of President and Chief Executive Officer, the board of directors of the Company (the “Board”) appointed Mr. Serbousek as a director to fill the Board seat vacated by Mr. Mason upon his retirement.

Mr. Serbousek, age 59, has served since August 2019 as the Company’s President of Global Spine. Prior to joining the Company, he served since 2015 as an independent advisor to companies in the medical technology industry. During this period, Mr. Serbousek has also served as an independent board member of several privately-held companies in the medical technology industry. From 2008 until 2015, Mr. Serbousek served as a Senior Vice President of, and held senior operational positions with, Biomet, Inc. (“Biomet”), a medical device company. From 2013 to 2015, he served as Worldwide President of Biomet Biologics, and prior thereto served as Worldwide Group President of Biomet Orthopedics from 2011 to 2013 and as President of U.S. Orthopedics from 2008 to 2011. From 2000 until 2008, Mr. Serbousek held diverse general management roles of increasing responsibility with the Spine and Biologics Divisions of Medtronic, Inc. (“Medtronic”), a medical device company, including serving as Worldwide Division President, Spine and Vice President and General Manager, Worldwide Biologics. Before joining Medtronic, Mr. Serbousek served in various roles of increasing responsibility in the areas of joint reconstruction, spine, sports medicine, and biologics, at DePuy Orthopedics, a medical device company and subsidiary of Johnson & Johnson, from 1987 to 2000, including as Vice President of Marketing and Product Development and Vice President of Spinal Operations. Mr. Serbousek earned a bachelor’s of science degree in Engineering from Washington State University, a master’s of science degree in Bioengineering from the University of Utah and later completed several advanced management programs including a program at the IMD International School of Management in Lausanne, Switzerland.

Mr. Serbousek has no family relationship with any director or officer of the Company, or any person nominated or chosen by the Company to become a director or executive officer, and is not party to any related party transactions involving the Company.

As President and Chief Executive Officer, Mr. Serbousek will receive an annual base salary of $750,000 per year and a target bonus opportunity under the Company’s annual incentive plan of 100% of his then-current base salary. He will also be eligible to receive future, annual equity incentive awards (subject to approval of the Board or the Compensation Committee of the Board).

Change in Control and Severance Agreement and Indemnification Agreement with Mr. Serbousek

On November 1, 2019, the Company and Mr. Serbousek entered into a Change in Control and Severance Agreement (the “Change in Control and Severance Agreement”) that supersedes the prior change in control and severance agreement entered into by the Company and Mr. Serbousek when he originally joined the Company as its President of Global Spine. The Change in Control and Severance Agreement is materially consistent with the agreement that the Company had entered into with Mr. Mason in connection with his service as President and Chief Executive Officer.

Under the Change in Control and Severance Agreement, Mr. Serbousek will be eligible to receive the following severance payments and benefits upon termination of the his employment (i) for death or “disability” (as defined in the agreement), (ii) by the Company without “cause” (as defined in the agreement) or (iii) by Mr. Serbousek for “good reason” (as defined in the agreement):

•

The pro rata amount of any incentive compensation for the year of termination of employment (based on the number of days he is actually employed by the Company during the year in which termination of employment occurs) based on the achievement of the Company's performance goals for such year.

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An amount equivalent to 1.5 times the sum of: (i) Mr. Serbousek’s annual base salary plus (ii) his current year’s target bonus; provided that during the 24-month period following any change in control, the foregoing amount increases to 2.0 times such sum.

•

If Mr. Serbousek timely elects to continue coverage under the Consolidated Omnibus Budget Reconciliation Action of 1985 (“COBRA”) and remains eligible to receive COBRA coverage, the Company will reimburse him for his monthly premium payments for health care coverage under COBRA for a period of 18 months.

The right to receive cash payments following a change in control remains subject to a “double trigger” provision, such that payments by the Company are only owed if Mr. Serbousek separates from employment in specific circumstances in connection with or following a change in control.

The agreement contains restrictive covenants, including non-competition and non-solicitation covenants effective so long as Mr. Serbousek is an employee and for a period of 18 months after his employment is terminated. The agreement also contains provisions that define certain vesting and exercise rights in connection with time-based stock options, time-based restricted stock and time-based restricted stock units granted (such as by defining the terms “cause,” “good reason,” and “qualified retirement” for purposes of all prior and subsequent time-based equity grants). The agreement does not guarantee any minimum levels of cash or equity-based compensation levels during Mr. Serbousek’s employment with the Company. The term of the agreement continues in effect until the earlier of (i) the parties’ satisfaction of their respective obligations or (ii) the execution of a written agreement between the Company and Mr. Serbousek terminating the agreement.

As contemplated by the Transition and Retirement Agreement, the Company and Mr. Mason have entered into a Consulting Agreement, dated November 1, 2019 (the “Consulting Agreement”). The Consulting Agreement provides that Mr. Mason will provide ongoing transition assistance to the Company through October 31, 2020, for a fee of $40,000 per month. Such consulting services will be provided upon request by, and as directed by, Mr. Serbousek, provided that Mr. Mason will not be required to provide more than 50 hours of service in any month. Under the terms of the Consulting Agreement, Mr. Mason has agreed that the non-competition and non-solicitation obligations contained in his change in control and severance agreement with the Company shall continue during the 12-month consulting period and for an additional 18 months thereafter. In the event that the Company terminates the Consulting Agreement without cause prior to October 31, 2020, Mr. Mason will remain entitled to receive his monthly consulting fee through such date.

On November 1, 2019, the Company issued a press release regarding the succession matters described above. That press release is furnished herewith as Exhibit 99.1.

The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibit 99.1) shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Orthofix Medical Inc.
By:		/s/ Kimberley A. Elting
		Kimberley A. Elting Chief Legal and Administrative Officer

(d)	Exhibits
10.1	Change in Control and Severance Agreement, dated November 1, 2019, between Orthofix Medical Inc. and Jon Serbousek.
10.2	Consulting Agreement, dated November 1, 2019, between Orthofix Medical Inc. and Bradley R. Mason.
99.1	Press release, dated November 1, 2019.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).