Exhibit 10.1
COOPERATION AGREEMENT
This COOPERATION AGREEMENT (this “Agreement”) is made and entered into as of December 11, 2023, by and among Orthofix Medical Inc., a Delaware corporation (the “Company”), and the entities and individuals set forth on the signatures pages hereto (collectively with each of their respective Affiliates, the “Investor Group”).
WHEREAS, as of the date hereof, the Investor Group beneficially owns, in the aggregate, 3,035,301 shares of the Company’s common stock, par value $0.10 per share (the “Common Stock”);
WHEREAS, certain members of the Investor Group have engaged in discussions with the Company regarding the appointment of certain new director candidates to the Board of Directors of the Company (the “Board”) and the nomination of such director candidates for election to the Board at the Company’s 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”); and
WHEREAS, the Company and the Investor Group have determined to come to an agreement with respect to the composition of the Board and certain other matters, as provided in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound hereby, agree as follows:
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Notwithstanding anything in this Agreement to the contrary, the restrictions in this Section 3 shall not prevent the members of the Investor Group from (1) making any factual statement or public disclosure as required by applicable legal process, subpoena or legal requirement from any governmental authority with competent jurisdiction over the Party from whom information is sought (so long as such request did not arise as a result of action by any of the members of the Investor Group or their Associates), (2) making any confidential communication to the Company or its directors and officers that would not be reasonably expected to trigger public disclosure obligations for either Party, or (3) tendering shares of Common Stock, receiving payment for shares of Common Stock or otherwise participating in any transaction on the same basis as the other stockholders of the Company or from participating in any such transaction that has been approved by the Board, subject to the other terms of this Agreement. Furthermore, for the avoidance of doubt, nothing in this Section 3 shall be deemed to limit the exercise in good faith by the New Directors of their fiduciary duties in their capacities as directors of the Company.
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If to the Company to:
Orthofix Medical Inc.
3451 Plano Parkway
Lewisville, Texas 75056
Attn: Kimberley A. Elting, President, Global Orthopedics
Email: KimElting@Orthofix.com
with a copy (which shall not constitute notice) to:
Hogan Lovells US LLP
555 13th Street, NW
Washington, D.C. 20004
Attn: Joseph Gilligan; Brian O’Fahey
Email: joseph.gilligan@hoganlovells.com; brian.ofahey@hoganlovells.com
If to the Investor Group:
Engine Capital, L.P.
1345 Avenue of the Americas, 33rd floor
New York, NY 10105
Attn: Arnaud Ajdler
Email: aajdler@enginecap.com
with a copy (which shall not constitute notice) to:
Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, NY 10019
Attn: Andrew M. Freedman
Email: AFreedman@olshanlaw.com
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[Signature Pages Follow]
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IN WITNESS WHEREOF, each of the Parties has executed this Agreement, or caused the same to be executed by its duly authorized representative, as of the date first above written.
| THE COMPANY:
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| ORTHOFIX MEDICAL INC.
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| By: |
| /s/ Kimberley A. Elting |
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| Kimberley A. Elting |
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| President, Global Orthopedics |
[Signatures continue on next page]
| INVESTOR GROUP:
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ENGINE CAPITAL, L.P. | ||
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| By: Engine Investments, LLC, General Partner | ||
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| By: |
| /s/ Arnaud Ajdler |
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| Arnaud Ajdler |
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| Managing Member |
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| ENGINE JET CAPITAL, L.P. | ||
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| By: Engine Investments, LLC, General Partner | ||
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| By: |
| /s/ Arnaud Ajdler |
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| Arnaud Ajdler |
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| Managing Member |
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| ENGINE LIFT CAPITAL, LP | ||
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| By: Engine Investments II, LLC, General Partner
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| By: |
| /s/ Arnaud Ajdler |
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| Arnaud Ajdler |
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| Managing Member |
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| ENGINE CAPITAL MANAGEMENT, LP | ||
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| By: Engine Capital Management GP, LLC, General Partner | ||
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| By: |
| /s/ Arnaud Ajdler |
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| Arnaud Ajdler |
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| Managing Member |
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| ENGINE CAPITAL MANAGEMENT GP, LLC
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| By: |
| /s/ Arnaud Ajdler |
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| Arnaud Ajdler |
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| Managing Member |
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| ENGINE INVESTMENTS, LLC | ||
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| By: |
| /s/ Arnaud Ajdler |
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| Arnaud Ajdler |
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| Managing Member |
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| ENGINE INVESTMENTS II, LLC | ||
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| By: |
| /s/ Arnaud Ajdler |
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| Arnaud Ajdler |
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| Managing Member |
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| /s/ Arnaud Ajdler | ||
| ARNAUD AJDLER | ||
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Exhibit A
Form of Strategy Committee Charter
Orthofix Medical Inc.
Strategy Committee Charter
(Adopted Effective as of December 14, 2023)
This charter governs the operations of the Strategy Committee (the “Committee”) of the Board of Directors (the “Board”) of Orthofix Medical Inc. (the “Company”).
The purpose of the Committee shall be assisting the new Chief Executive Officer of the Company (the “CEO”) with formulating and defining the go-forward strategy of the Company.
The foregoing list of duties is not exhaustive, and the Committee may, in addition, perform such other functions as may be necessary or appropriate for the performance of its duties.
Meetings may be held using any form of communications equipment, so long as all Committee members participating in the meeting can communicate with each other in real-time, including, but not limited to, via conference call, e-mail, instant messaging or otherwise using a virtual platform. A majority of Committee members will constitute a quorum for the transaction of Committee business, and the vote of a majority of Committee members present at a meeting at which a quorum is present will be the act of the Committee, unless in either case a greater number is required by the Legal Requirements.
Additionally, the Committee may act by unanimous written consent of all Committee members, or by unanimous consent evidenced by any other form of communication, whether or 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, unless such action in such matter is expressly prohibited by the Legal Requirements
Exhibit B
Form of Press Release
Orthofix Announces Agreement with Engine Capital and Appointment of Three New Independent Directors to Further Advance Position as Leading Global Spine and Orthopedics Company
Three New Directors Bring Substantial Finance, Strategic Development, Healthcare and
MedTech Experience
LEWISVILLE, Texas – December 12, 2023 – Orthofix Medical Inc. (NASDAQ: OFIX) (“Orthofix” or the “Company”) today announced the appointment of three new independent directors to the Company’s Board. These new directors bring substantial finance, strategic development, healthcare and medical technology experience to further advance Orthofix’s position as a leading global spine and orthopedics company. The appointments follow constructive engagement and entry into a cooperation agreement with Engine Capital Management, LP (together with its affiliates, “Engine”), one of the Company’s largest shareholders, which owns approximately 8.2% of Orthofix’s outstanding shares.
Catherine Burzik, Chair of the Orthofix Board of Directors and Interim Chief Executive Officer, said, “Orthofix is a market leader with a broad, differentiated technology offering, comprehensive commercial reach and a team who is unwavering in their dedication to delivering innovative solutions that improve patients’ lives. Our conversations with Engine identified that we are closely aligned in many areas. We are pleased to partner with one of our largest shareholders on these new director additions. We are confident their expertise and insights will further advance Orthofix’s strategy and objective of driving enhanced shareholder value.”
Massimo Calafiore, incoming President and Chief Executive Officer of Orthofix, said, “Orthofix is an outstanding company with a strong foundation of talent, innovation and growth opportunities across the business. I am excited to work with the Orthofix Board, including the newly appointed directors, and the management team to build on the momentum underway and unlock value for shareholders, while providing solutions for patients around the globe.”
Arnaud Ajdler, Managing Partner of Engine, said, “We appreciate the collaborative dialogue we have had with the Orthofix Board and share its belief that Orthofix has many value creation opportunities. We believe Orthofix is deeply undervalued and are confident the addition of these three new directors, together with Massimo’s recent appointment as CEO, position Orthofix to deliver profitable growth and significant, sustainable shareholder value.”
The three new independent directors joining the Orthofix Board are:
With these appointments and Mr. Calafiore joining the Board upon his effective date, Orthofix’s Board will consist of 12 directors, 11 of whom are expected to be independent as of early 2024. It is expected that the Board will be reduced to nine members at the 2024 Annual Meeting.
The cooperation agreement contains customary standstill, voting and other provisions and will be filed on a Form 8-K with the U.S. Securities and Exchange Commission.
Perella Weinberg Partners is serving as financial advisor to Orthofix, and Hogan Lovells US LLP is serving as legal counsel. Olshan Frome Wolosky LLP is acting as legal counsel to Engine.
About Alan Bazaar
Alan Bazaar is currently the CEO of wealth management firm Hollow Brook Wealth Management LLC. Prior to Hollow Brook, Mr. Bazaar spent more than a decade with private investment firm Richard L. Scott Investments, LLC, where he served as Managing Director and Portfolio Manager as well as a co-manager of the public equity portfolio, responsible for all aspects of the investment decision-making process. Earlier in his career, Mr. Bazaar worked at Arthur Andersen LLP.
Previously, Mr. Bazaar served on the board of directors of Wireless Telecom Group, Inc., a test and measurement solutions provider; PDL BioPharma, a company engaged in development of innovative therapeutics and healthcare technologies; Hudson Global, Inc., a total talent solutions provider; Sparton Corporation, a provider of electromechanical devices; LoJack Corporation, a provider of stolen vehicle recovery and IoT connected car systems; Media Sciences, Inc., a manufacturer and distributor of business color printer supplies and industrial ink applications; NTS, Inc., an independent provider of environmental simulation testing, inspection, and certification services; and Airco Industries, Inc., a privately held manufacturer of aerospace products.
Mr. Bazaar received a BA in history from Bucknell University and an MBA from the Stern School of Business at New York University. He is a Certified Public Accountant (inactive).
About Michael Finegan
Michael Finegan is CEO at Acera Surgical, a bioscience company developing and commercializing a portfolio of fully engineered materials for regenerative medicine. Prior to joining Acera, Mr. Finegan spent 14 years at Orthofix where he served in roles of increasing responsibility, including seven years as Chief Strategy Officer. Among his accomplishments at
Orthofix, Mr. Finegan created and led the biologics business. Before his tenure at Orthofix, Mr. Finegan served more than 16 years in a variety of roles at Boston Scientific, including as Vice President of Corporate Sales and as Vice President of National Accounts.
Mr. Finegan received a BA in economics from Wake Forest University.
About Charles Kummeth
Charles Kummeth is President and CEO of Bio-Techne Corporation, a leading developer and manufacturer of high-quality purified proteins, antibodies, immunoassays, and instruments for biomedical researchers and clinical research laboratories. Previously, Mr. Kummeth was at Thermo Fisher Scientific Inc. as President of Mass Spectrometry and Chromatography and President of the Laboratory Consumables Division. Prior to Thermo Fisher Scientific, he served in various roles during his 24-year career at 3M Corporation, most recently as the Vice President of the company's Medical Division.
Mr. Kummeth serves on the boards of Bio-Techne; Gentherm, a developer of thermal management technologies; and PerkinElmer, a maker of instrumentation, consumables and Software servicing the analytical needs of the food and environmental markets and which is a private company owned by New Mountain Capital, a New York based private equity firm.
Mr. Kummeth received a BS in Electrical Engineering from the University of North Dakota, an MS in Computer Science from the University of St. Thomas and an MBA from the Carlson School of Business at the University of Minnesota.
About Orthofix
Orthofix is a leading global spine and orthopedics company with a comprehensive portfolio of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions, and a leading surgical navigation system. Its products are distributed in approximately 68 countries worldwide.
The Company is headquartered in Lewisville, Texas and has primary offices in Carlsbad, CA, with a focus on spine and biologics product innovation and surgeon education, and Verona, Italy, with an emphasis on product innovation, production, and medical education for orthopedics. The combined Company’s global R&D, commercial and manufacturing footprint also includes facilities and offices in Irvine, CA, Toronto, Canada, Sunnyvale, CA, Wayne, PA, Olive Branch, MS, Maidenhead, UK, Munich, Germany, Paris, France and Sao Paulo, Brazil.
Forward-Looking Statements
This news release may include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, relating to our business and financial outlook, which are based on our current beliefs, assumptions, expectations, estimates, forecasts and projections. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “intends,” “predicts,” “potential,” or “continue” or other comparable terminology. Forward-looking statements are not guarantees of
our future performance, are based on our current expectations and assumptions regarding our business, the economy and other future conditions, and are subject to risks, uncertainties and changes in circumstances that are difficult to predict, including the risks described in Part I, Item 1A under the heading Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022, and in Part II, Item 1A under the heading Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023. Factors that could cause future results to differ from those expressed by forward-looking statements include, but are not limited to, (i) our ability to maintain operations to support our customers and patients in the near-term and to capitalize on future growth opportunities, (ii) risks associated with acceptance of surgical products and procedures by surgeons and hospitals, (iii) development and acceptance of new products or product enhancements, (iv) clinical and statistical verification of the benefits achieved via the use of our products, (v) our ability to adequately manage inventory, (vi) our ability to recruit and retain management and key personnel, (vii) global economic instability and potential supply chain disruption caused by Russia’s invasion of Ukraine and resulting sanctions, and (viii) the other risks and uncertainties more fully described in our periodic filings with the Securities and Exchange Commission (the “SEC”). As a result of these various risks, our actual outcomes and results may differ materially from those expressed in these forward-looking statements.
This list of risks, uncertainties, and other factors is not complete. We discuss some of these matters more fully, as well as certain risk factors that could affect our business, financial condition, results of operations, and prospects, in reports we file from time-to-time with the SEC, which are available to read at www.sec.gov. Any or all forward-looking statements that we make may turn out to be wrong (due to inaccurate assumptions that we make or otherwise), and our actual outcomes and results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any of these forward-looking statements. Further, any forward-looking statement speaks only as of the date hereof, unless it is specifically otherwise stated to be made as of a different date. We undertake no obligation to update, and expressly disclaim any duty to update, our forward-looking statements, whether as a result of circumstances or events that arise after the date hereof, new information, or otherwise, except as required by law.
Media Relations
Denise Landry
DeniseLandry@orthofix.com
214.937.2529
Investor Relations
Louisa Smith, Gilmartin Group
IR@orthofix.com
Schedule A
Schedule of Owned Shares
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Member of Investor Group | Shares Beneficially Owned |
Engine Capital, L.P. | 2,479,157 |
Engine Jet Capital, L.P. | 299,117 |
Engine Lift Capital, LP | 257,027 |
Engine Capital Management, LP | 3,035,301 |
Engine Capital Management GP, LLC | 3,035,301 |
Engine Investments, LLC | 2,778,274 |
Engine Investments II, LLC | 257,027 |
Arnaud Ajdler | 3,035,301 |