16.	Share-based compensation plans

At December 31, 2015, the Company had stock option and award plans, and an employee stock purchase plan, which are described below.

2012 Long Term Incentive Plan

The Board of Directors adopted the Orthofix International N.V. 2012 Long-Term Incentive Plan (the “2012 LTIP”) on April 13, 2012, subject to shareholder approval, which was subsequently provided by shareholder ratification. The 2012 LTIP provides for the grant of options to purchase shares of the Company’s common stock, stock awards (including restricted stock, unrestricted stock, and stock units), stock appreciation rights, performance-based awards and other equity-based awards. All of the Company’s employees and the employees of the Company’s subsidiaries and affiliates are eligible and may receive awards under the 2012 LTIP. In addition, the Company’s non-employee directors and consultants and advisors who perform services for the Company and the Company’s subsidiaries and affiliates may receive awards under the 2012 LTIP. Incentive share options, however, are only available to the Company’s employees. The Company reserves a total of 3,200,000 shares of common stock for issuance pursuant to the 2012 LTIP, subject to certain adjustments set forth in the 2012 LTIP. At December 31, 2015, there were 653,040 options outstanding under the 2012 LTIP Plan, of which 185,788 were exercisable; in addition, there were 571,488 shares of unvested restricted stock outstanding.

2004 Long Term Incentive Plan

The 2004 Long Term Incentive Plan (the “2004 LTIP Plan”) reserves 3.1 million shares for issuance (in addition to shares (i) available for future awards as of June 29, 2004 under prior plans or (ii) that become available for future issuance upon the expiration or forfeiture after June 29, 2004 of awards upon prior plans). Awards generally vest on years of service with all awards fully vesting within three years from the date of grant for employees and either three or five years from the date of grant for non-employee directors. Awards can be in the form of a stock option, restricted stock, restricted share unit, performance share unit, or other award form determined by the Board of Directors. Awards granted under the 2004 LTIP Plan expire no later than ten years after the date of the grant. The 2004 LTIP Plan provides an annual grant to non-employee directors of 5,000 shares and limits the future the number of shares that may be awarded under the plan as full value awards to 100,000 shares. At December 31, 2015, there were 609,562 options outstanding under the 2004 LTIP Plan, of which 609,562 were exercisable; in addition, there were no shares of unvested restricted stock outstanding.

Stock Purchase Plan

The Orthofix International N.V. Amended and Restated Stock Purchase Plan (the “Stock Purchase Plan”) provides for the issuance of shares of the Company’s common stock to eligible employees and directors of the Company and its subsidiaries that elect to participate in the plan and acquire shares of common stock through payroll deductions (including executive officers).

During each purchase period, eligible employees may designate between 1% and 25% of their compensation to be deducted for the purchase of common stock under the plan (or such other percentage in order to comply with regulations applicable to Employees domiciled in or resident of a member state of the European Union). For eligible directors, the designated percentage will be an amount equal to his or her annual or other director compensation paid in cash for the current plan year. The purchase price of the shares under the plan is equal to 85% of the fair market value on the first day of the plan year (which is a calendar year, running from January 1 to December 31) or, if lower, on the last day of the plan year.

Due to the compensatory nature of such plan, the Company has recorded the related share based compensation in the consolidated statement of operations. The aggregate number of shares reserved for issuance under the Employee Stock Purchase Plan is 1,850,000 shares. As of December 31, 2015, 1,617,827 shares had been issued under the Stock Purchase Plan.

Share-Based Compensation:

The following tables show the detail of share-based compensation by line item in the consolidated statements of operations as well as by grant type, for the years ended December 31, 2015, 2014 and 2013 and the assumptions for each of these years in which grants were awarded:

	Year Ended December 31,
(U.S. Dollars in thousands)	2015		2014		2013
Cost of sales	$	440	$	137	$	104
Sales and marketing		1,304		1,701		1,444
General and administrative		5,051		3,578		4,483
Research and development		419		308		236
Total	$	7,214	$	5,724	$	6,267

	Year Ended December 31,
(U.S. Dollars in thousands)	2015		2014		2013
Stock options	$	1,437	$	1,391	$	2,753
Restricted stock awards		4,606		3,400		1,964
Stock purchase plan		1,171		933		1,550
Total	$	7,214	$	5,724	$	6,267

	Year Ended December 31,
Assumptions:	2015		2014		2013
Expected term	4.50 years		5.00 years		5.00 years
Expected volatility	31.1% – 31.6%		31.7% – 34.5%		32.1% – 50.8%
Risk free interest rate	1.37% – 1.54%		1.52% – 1.70%		0.58% – 1.52%
Dividend rate	—		—		—
Weighted average fair value of options granted during the year	$	9.49	$	10.45	$	10.83

Stock Option Activity:

Summaries of the status of the Company’s stock option plans as of December 31, 2015 and 2014 and changes during the year ended December 31, 2015 are presented below:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2014		1,527,836		$	34.91
Granted		208,890		$	33.28
Exercised		(93,184	)	$	31.19
Forfeited		(230,940	)	$	38.92
Outstanding at December 31, 2015		1,412,602		$	34.26		5.22
Vested and expected to vest at December 31, 2015		1,332,992		$	34.39		5.02
Options exercisable at December 31, 2015		795,350		$	35.06		2.96

The table below summarizes the options outstanding and exercisable by exercise price range as of December 31, 2015:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$10.42 – $21.78		131,000		6.23	$	21.07		71,004	$	20.65
$22.75 – $27.98		133,333		5.51	$	25.14		93,333	$	24.86
$28.29 – $31.40		131,500		3.66	$	29.30		114,000	$	29.29
$31.83 – $32.28		98,150		6.96	$	32.11		42,500	$	31.99
$33.12 – $33.12		165,990		9.10	$	33.12		—	$	—
$33.24 – $36.25		148,650		8.26	$	35.64		30,284	$	36.25
$36.46 – $38.11		129,592		1.35	$	37.90		119,842	$	38.02
$38.82 – $39.94		299,687		4.56	$	39.32		149,687	$	39.81
$41.37 – $44.97		156,200		2.32	$	44.10		156,200	$	44.10
$45.84 – $50.99		18,500		0.92	$	48.43		18,500	$	48.43
$10.42 – $50.99		1,412,602		5.22	$	34.26		795,350	$	35.06

As of December 31, 2015, the unamortized compensation expense relating to options granted and expected to be recognized was $2.6 million. This amount is expected to be recognized through June 2019. The weighted average remaining contractual life of exercisable options was 2.96 years at December 31, 2015. The total intrinsic value of options exercised was $0.7 million, $2.1 million and $0.4 million for the years ended December 31, 2015, 2014 and 2013, respectively. The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2015 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for the shares that had exercise prices that were lower than the $39.21 closing price of the Company’s stock on December 31, 2015. The aggregate intrinsic value of options outstanding was $8.0 million, $2.4 million and $0.5 million for the years ended December 31, 2015, 2014, and 2013, respectively. The aggregate intrinsic value of options exercisable was $4.3 million, $1.0 million and $0.2 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Restricted Stock:

During the year ended December 31, 2015, the Company granted to employees and non-employee directors 314,278 shares of restricted stock, 110,660 of which are performance based, which vest at various dates through August 2019. During the year ended December 31, 2014, the Company granted to employees and non-employee directors 358,450 shares of restricted stock, 99,600 of which are performance based, which vest at various dates through December 2018. The compensation expense, which represents the fair value of the stock measured at the market price at the date of grant, less estimated forfeitures, is recognized on a straight-line basis over the vesting period. No compensation expense has been recorded to date related to the performance-based restricted stock awards granted in 2014 or 2015, which vest based upon the achievement of certain earnings targets as the achievement of those targets is not considered probable as of December 31, 2015. The aggregate fair value of restricted stock that vested during the years ended December 31, 2015, 2014 and 2013 was $5.6 million, $2.5 million and $2.1 million, respectively. Unamortized compensation expense related to restricted stock amounted to $16.1 million at December 31, 2015, of which $6.6 million related to performance based restricted stock that is contingent upon meeting certain performance based vesting criteria, and is expected to be recognized over a weighted average period of approximately 2.4 years. The aggregate intrinsic value of restricted stock outstanding was $22.4 million, $13.9 million and $6.5 million for the years ended December 31, 2015, 2014 and 2013, respectively.

A summary of the status of our restricted stock as of December 31, 2015 and 2014 and changes during the year ended December 31, 2015 are presented below:

	Service-based Awards					Performance-based Awards
	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Non-vested as of December 31, 2014		374,926		$	30.47		86,050		$	36.25
Granted		203,618		$	33.27		110,660		$	33.12
Vested		(183,216	)	$	30.35		–		$	–
Cancelled		(16,190	)	$	27.42		(4,400	)	$	36.25
Non-vested as of December 31, 2015		379,138		$	32.15		192,310		$	34.45