Exhibit 10.2

LOGO [g198474g05w37.jpg]

June 15, 2011

Mr. Alan W. Milinazzo

President and Chief Executive Officer of Orthofix Inc.

3451 Plano Pkwy

Lewisville, TX 75056

Dear Alan:

Reference is made to your Amended and Restated Employment Agreement with
Orthofix Inc. (the “Company”) and Orthofix International N.V. (“Parent”), dated
July 1, 2009, as amended on July 27, 2009 (as amended, the “Agreement”). As you,
the Company and Parent have agreed, you will cease to serve as an employee of
the Company (and cease serving as an officer and director of the Company and any
of its subsidiaries, parents and affiliates, as applicable, other than as a
director of Parent) as of the close of business on August 1, 2011 (the
“Employment Cessation Date”). This letter agreement between you, the Company and
Parent serves to memorialize the terms that you, the Company and Parent have
agreed regarding your cessation of employment on the Employment Cessation Date.

As agreed, your cessation of employment on the Employment Cessation Date shall
be treated as a termination without “Cause” pursuant to Section 4.5 of the
Agreement, and this letter shall serve as a “Notice of Termination” by the
Company as defined under Section 4.8 of the Agreement. Until the Employment
Cessation Date, you will be paid your regular salary, the Agreement will remain
in effect, and you will continue to serve as an employee of the Company (as well
as in your capacity as President and Chief Executive Officer of the Company and
Orthofix International N.V.), all as required by and set forth in the Agreement.

As provided in your Agreement, this cessation of employment on the Employment
Cessation Date entitles you to the following on or after the Employment
Cessation Date:

 

  •  

Payment for all accrued and unused vacation as of the Employment Cessation Date
(calculated based on your current base salary rate);

--------------------------------------------------------------------------------

  •  

A lump sum cash severance payment in an amount equal to the “Base Amount” as
defined in the Agreement, as set forth in Section 5.1(b) of the Agreement (the
“Severance Payment”);

 

  •  

Eligibility for a 50% pro rata annual incentive program bonus for the 2011
fiscal year (which represents the portion of the 2011 fiscal year during which
you were employed by the Company), to be determined by the compensation
committee of the Parent Board (as defined herein) at the time 2011 annual
incentive program bonus determinations are made for other senior executives of
the Company, and to be paid (if any bonus is determined to be earned) at the
time such incentive compensation is paid to other Company senior executives but
in no event later than March 15, 2012; provided, however, that nothing in this
sentence is intended to give you greater rights to such incentive compensation
than a pro rata portion of what you would ordinarily be entitled to under the
annual incentive program that would have been applicable to you had your
employment not ended, it being understood that your cessation of employment
shall not be used to disqualify you from or make you ineligible for a pro rata
portion of the annual incentive program bonus to which you would otherwise have
been entitled);

 

  •  

The ability to continue certain welfare benefit plans until the earlier of the
date that is twelve (24) months following the Employment Cessation Date or the
date that you secure coverage from new employment, as set forth in
Section 5.1(d) of the Agreement;

 

  •  

The Company will make a cash payment to you in the amount of $35,000 (net of any
applicable withholdings) for use towards the costs and expenses of executive
outplacement services or an education program selected by you, as set forth in
Section 5.1(e) of the Agreement, and

 

  •  

Accelerated vesting of your stock options and restricted stock, and an extended
post-termination exercise period for your stock options, as set forth in
Section 5.1(c) of the Agreement.

For the avoidance of doubt, you, the Company and Parent agree that you will not
be entitled to any portion of the $400,000 special cash retention bonus approved
by the compensation committee of the Parent Board on February 15, 2011, as you
will not be employed on the applicable vesting dates with respect thereto.

As agreed by you and the Company, following the Employment Cessation Date, you
agree to remain available to serve as a member of the Board of Directors of
Parent (the “Parent Board”). You will be compensated for any service on the
Parent Board on and after August 1, 2013 consistent with and on the same terms
as other non-employee members of the Parent Board. For the avoidance of doubt,
nothing herein shall obligate or contractually require Parent or Parent Board to
nominate you for election or re-election to the Parent Board during any specific
period of time in the future.

 

2

--------------------------------------------------------------------------------

We understand you desire to avoid the imposition of tax under Section 409A of
the Internal Revenue Code, as amended (the “Code”). As such, the Severance
Payment, and $35,000 cash payment (net of any applicable withholdings) for
outplacement/education purposes, are each being made more than 6 months after
the Employment Cessation Date. In addition, as required by Section 5.1(d) of the
Agreement, if you desire to continue welfare coverage in any plan other than
medical or dental, you must pay the full cost of continuation of such benefits
until the Severance Payment Date, at which time the Company will reimburse you
for the difference between the full cost and the costs you were paying for such
coverage prior to the Employment Cessation Date. You also understand that your
receipt of the Severance Payment and other benefits under the Agreement are
contingent on your signing a release in the form attached hereto as Exhibit A
(the “Release”) and all revocation periods for such Release having expired prior
to 28 days from the date hereof (the “Release Return Date”). We will have no
obligation to pay you the Severance Payment or provide you the other benefits if
you do not sign the Release by the Release Return Date and if the applicable
revocation period has not expired by the Release Return Date. The payments
described in this letter (the “Payments”) are intended by you and the Company to
comply with Section 409A of the Code, and the guidance and Treasury Regulations
issued thereunder to the extent applicable thereto, and this letter will be
interpreted and construed consistent with this intent. Notwithstanding the
foregoing, the Company will not be required to assume any increased economic
burden in connection with the Payments. The Company does not represent or
warrant that the Payments will comply with Section 409A of the Code or any other
provision of federal, state, or local law. Neither the Company, nor any parent
or affiliate, nor its or their respective directors, officers, employees or
advisers (collectively, the “Parent Group”) will be liable to you (or to any
other individual claiming a benefit through you) for any tax, interest, or
penalties you might owe as a result of the Payments, and no member of the Parent
Group shall have any obligation to indemnify or otherwise protect you from the
obligation to pay any taxes pursuant to Section 409A of the Code.

At this time, we also remind you of your non-competition, non-solicitation,
confidentiality and other obligations under the Agreement. For the avoidance of
doubt, nothing in this letter limits or alters your post-termination obligations
to the Company and its affiliates under Section 6 of the Agreement, all of which
will remain in effect in accordance with the Agreement following the date hereof
and the Employment Cessation Date.

 

3

--------------------------------------------------------------------------------

Please indicate your agreement and acknowledgment to the above by signing where
indicated below and returning a copy to me. Your signature below will also
constitute resignation by you, as of the Employment Cessation Date, from all
officer and director positions with the Company or any of its parents or
affiliates (other than as a director of Parent).

 

Sincerely,

 

ORTHOFIX INC.

 

/s/ James F. Gero

   

James F. Gero

Chairman of the Board

of Orthofix International N.V.,

ultimate parent of Orthofix Inc.

 

ORTHOFIX INTERNATIONAL N.V.

 

/s/ James F. Gero

   

James F. Gero

Chairman of the Board

 

 

 

Agreed and Accepted:  

/s/ Alan W. Milinazzo

   

Alan W. Milinazzo

 

Dated: June 15, 2011

 

 

 

 

--------------------------------------------------------------------------------

EXHIBIT A

RELEASE

In exchange for the consideration set forth in the letter agreement, dated as of
June 15, 2011, by and among Orthofix Inc. (the “Company”), Orthofix
International N.V. (“Parent”) and myself (the “Letter Agreement”), and your
amended and restated employment agreement with the Company dated as of July 1,
2009 and as amended on July 27, 2009 (together with the Letter Agreement,
collectively, the “Agreement”), the respective terms of which Agreement are
incorporated herein by reference, I, Alan W. Milinazzo, am entering into this
Release (this “Release”) for good and valuable consideration as required by the
Agreement, and agree as follows:

1. GENERAL RELEASE.

(a) On behalf of myself, my heirs, executors, successors and assigns, I
irrevocably and unconditionally release, waive and forever discharge the
Company, Parent, its members, divisions, subsidiaries, affiliates and related
companies, including the Company Group (as defined below), or any member of the
Company Group, and their present and former agents, employees, officers,
directors, attorneys, stockholders, plan fiduciaries, successors and assigns
(collectively, the “Releasees”), from any and all claims, demands, actions,
causes of action, costs, fees and all liability whatsoever, whether known or
unknown, fixed or contingent, suspected or unsuspected (collectively, “Claims”),
which I had, have, or may have against Releasees relating to or arising out of
my employment by or separation from the Company and its direct and indirect
subsidiaries and parents (collectively, the “Company Group”), up to and
including the date of execution of this Release, other than my right to receive
the severance payments and other benefits and consideration described in the
Agreement. This Release includes, without limitation: (i) claims at law or
equity or sounding in contract (express or implied) or tort; (ii) claims arising
under any federal, state or local laws of any jurisdiction that prohibit age,
sex, race, national origin, color, disability, religion, veteran or military
status, sexual orientation or any other form of discrimination, harassment or
retaliation (including, without limitation, the Civil Rights Act of 1866, the
Age Discrimination in Employment Act, the Older Workers Benefit Protection Act,
the Americans with Disabilities Act, Title VII of the 1964 Civil Rights Act, the
Civil Rights Act of 1991, the Rehabilitation Act, the Family and Medical Leave
Act, the Sarbanes-Oxley Act, the Employee Polygraph Protection Act, the
Uniformed Services Employment and Reemployment Rights Act of 1994, the Unruh
Civil Rights Act, or any other federal, state or local laws, regulations and
ordinances governing discrimination, harassment or retaliation in employment;
and the right to bring demands, complaints, causes of action, and claims under
any other federal, state, local or common law, statute, regulation or decision);
(iii) claims arising under the Employee Retirement Income Security Act; or
(iv) any other statutory or common law claims related to my employment with the
Company

--------------------------------------------------------------------------------

or my separation from the Company. I further covenant not to sue any of the
Releasees with respect to any matters released hereby.

(b) This release does not include a release or waiver of any rights or claims I
have, or might subsequently have in my capacity as a stockholder of Orthofix
International N.V. In addition, this Release shall not release the Company from
its continuing obligation to honor the terms of the Agreement. However, this
Release shall remain in full force and effect regardless of any claim by me that
the Company failed to honor the terms of the Agreement. In the event of any such
dispute, my sole remedy against the Company shall be to enforce the terms of the
Release Agreement. I am also not waiving, and nothing in this Release is
intended to waive, any right to coverage under any directors and officers
insurance coverage, if any, provided by the Company, the Company Group, or any
member of the Company Group, or any right to indemnification or expense
advancement under any indemnification agreement, or any applicable Company Group
articles of incorporation, bylaws or similar organizational document, if any, in
each case, to which I might be entitled. I am also not waiving, and nothing in
this Release is intended to waive, any claims I may have for unemployment
insurance or workers’ compensation benefits, state disability compensation,
claims for any vested benefits under any Company-sponsored benefit plan, or any
claims that, as a matter of law, may not be released by private agreement. I am
also not waiving, and nothing in this Release is intended to waive, any claims
relating to the validity or enforceability of this Release; or any non-waivable
right to file a charge with the United States Equal Employment Opportunity
Commission (the “EEOC”) or the National Labor Relations Board (“NLRB”);
provided, however, that I shall not be entitled to recover any monetary damages
or to non-monetary relief if the EEOC or NLRB were to pursue any claims relating
to my employment with the Company.

EXCEPT AS OUTLINED ABOVE, THIS MEANS THAT, BY SIGNING THIS RELEASE, I WILL WAIVE
ANY RIGHT I MAY HAVE HAD TO PURSUE OR BRING A LAWSUIT OR MAKE ANY LEGAL CLAIM
AGAINST THE COMPANY OR THE RELEASEES THAT IN ANY WAY ARISES FROM OR RELATES TO
MY EMPLOYMENT OR THE TERMINATION OF THAT EMPLOYMENT, UP TO AND INCLUDING THE
DATE OF THE EXECUTION OF THIS RELEASE.

(c) I acknowledge that different or additional facts may be discovered in
addition to what I now know or believe to be true with respect to the matters
herein released, and I agree that this Release shall be and remain in effect in
all respects as a complete and final release of the matters released,
notwithstanding any such different or additional facts. I represent and warrant
that I have not previously filed or joined in any claims against the Company or
any of the Releasees, that I have not given or sold any portion of any claims
released herein to anyone else, and that I will indemnify and hold harmless the
Releasees from all liabilities, claims, demands, costs, expenses and/or
attorneys’ fees incurred as a result of any such assignment or transfer.

--------------------------------------------------------------------------------

(d) I acknowledge that I have been given an opportunity of twenty one (21) days
to consider this Release, but I may voluntarily waive that period by signing it
earlier, and I acknowledge that I am being advised herein to consult with legal
counsel of my own choosing prior to executing this Release. I understand that
for a period ending at the end of the seventh calendar day following my
execution of this Release (“Revocation Period”), I shall have the right to
revoke this Release by delivering a written notice of revocation to James F.
Gero, Chairman of the Board of Orthofix International N.V., 3451 Plano Parkway,
Lewisville, TX 75056 no later than the end of the seventh calendar day after I
sign this Release. I understand and agree that this Release will not be
effective and enforceable until after the Revocation Period expires without
revocation, and if I elect to exercise this revocation right, this Release shall
be voided in its entirety, and the Company shall be relieved of all obligations
under this Release and certain or all obligations under the Agreement as
provided therein. This Release shall be effective on the eighth calendar day
after it is executed by me (“Effective Date”) provided it has not been
previously revoked as provided herein.

2. I agree not to disclose, publish or use any confidential information of the
Company Group, except as the Company directs or authorizes unless required by
law to do so. I also agree that I will take all reasonable measures to protect
the secrecy of and avoid disclosure and unauthorized use of confidential
information of the Company Group, and I will immediately notify the Company in
the event of any unauthorized use or disclosure of the Company Group’s
confidential information of which I become aware. I agree that the obligations
set forth in this paragraph do not supersede, but are in addition to, any
previous confidentiality obligations agreed to by me and any member of the
Company Group, including those under the Agreement. The confidentiality
provisions set forth in this Release and the Agreement are contractual and their
terms are material to this Release. In any proceeding brought to enforce or seek
damages for the alleged breach of the confidentiality provisions of this
Release, the party successfully prosecuting or defending such action shall be
entitled to recover from the opposing party its reasonable expenses, including
attorneys’ fees.

3. I agree to hold harmless the Releasees, at my sole cost and expense, from and
against any claims arising from my breach of this Release (including breaches of
my post separation obligations under the Agreement).

4. I agree that I have not made and shall not make, publicly or privately, any
critical or negative comments to the media or any significant critical or
negative comments to any other person (including future or prospective
employees) regarding any of the Releasees.

5. I understand it is my choice whether or not to enter into this Release and
that my decision to do so is voluntary and is made knowingly.

--------------------------------------------------------------------------------

6. I represent and acknowledge that in executing this Release, I do not rely,
and have not relied, on any communications, statements, inducements or
representations, oral or written, by any of the Releasees, except as expressly
contained in this Release.

7. I also represent and warrant that, on or before my last date of employment, I
will have delivered to the Company (a) all documents and materials containing
confidential information (including without limitation any “soft” copies or
computerized or electronic versions thereof) or otherwise containing information
relating to the business and affairs of any member of the Company Group (whether
or not confidential), and (b) all other documents, materials and other property
belonging to any member of the Company Group that are or were in my possession
or under my control.

8. The Company and I agree that this Release shall be binding on us and our
heirs, administrators, representatives, executors, successors and assigns, and
shall inure to the benefit of our heirs, administrators, representatives,
executors, successors and assigns.

9. This Release shall be interpreted under and governed by the laws of the State
of Massachusetts. The Company and I agree that the language of this Release
shall in all cases be construed as a whole, according to its fair meaning, and
not strictly for or against either party.

10. The Company and I agree that should that any provision of this Release be
determined to be illegal or invalid, the validity of the remaining provisions
will not be affected and any illegal or invalid provision will be deemed not to
be a part of this Release.

11. The Company and I agree that this Release may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall be deemed one and the same instrument.

(Remainder of this page intentionally left blank)

--------------------------------------------------------------------------------

Please read carefully as this document includes a General Release of claims.

As evidenced by my signature below, I certify that I have read the above Release
and agree to its terms.

 

    Alan W. Milinazzo   Date:      

 

Accepted and Acknowledged:

 

ORTHOFIX INTERNATIONAL N.V.

 

By:

     

Title:

     

Date:

     

ORTHOFIX INC.

 

By:

     

Title:

     

Date: