ex10_50.htm


    
      

      

    

    Exhibit
10.50

    
    

    

     

    January
29, 2010

    


    Mr. Ray
Kolls

    13809
Tributary Court,

    Davidson,
NC 28036

    


    


    Dear
Ray:

    


    Reference
is made to your Amended and Restated Employment Agreement with Orthofix Inc.
(the “Company”), dated December 6, 2007 (the “Agreement”).  As you and
the Company previously agreed and determined on November 3, 2009, you will cease
to serve as an officer and employee of the Company as of the close of business
on March 31, 2010 (the “Separation Date”).  This letter serves to
memorialize the terms that you and the Company have previously agreed regarding
your cessation of employment on the Separation Date.  All terms
described herein are subject to you continuing to work for the Company until the
Separation Date.  In the event that you voluntarily leave the employ
of the Company prior to the Separation Date, the agreements described in this
letter shall be null and void and your resignation from the Company shall be
treated in accordance with the terms of the Agreement.

    


    As
agreed, your cessation of employment on the Separation 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 Separation 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
Senior Vice President, General Counsel and Corporate Secretary of the Company
and Orthofix International N.V.), all as required by and set forth in the
Agreement.

    


    As
provided in your Agreement, this termination on the Separation Date entitles you
to the following on or after the Separation Date:

    


    
      	
               
      

            	
              ·

            	
              A
      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”);

            


    

    


    
      	
               
      

            	
              ·

            	
              The
      ability to continue certain welfare benefit plans until the earlier of the
      date that is twelve (12) months following the Separation Date (the “One
      Year Anniversary Date”) or the date that you secure coverage from new
      employment (the “New Coverage Date”), as set forth in Section 5.1(d) of
      the Agreement; and

            


    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    
      	
               
      

            	
              ·

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

            


    

    


    In
addition, you and the Company agree that notwithstanding anything to the
contrary in the Agreement, and in consideration of the mutual agreements being
made pursuant to this letter, (i) prior to the Separation Date, you will receive
your bonus for the 2009 calendar year (which we expect to be approximately
$145,000), payable in the ordinary course at the same time bonuses are paid to
other executives of the Company, (ii) “Base Amount” for purposes of calculating
the Severance Amount described above shall equal $435,000, (iii) you will not be
entitled to a pro rata bonus payment for the 2010 calendar year, and (iv) your
right to receive reimbursement of outplacement services, as set forth in Section
5.1(e) of the Agreement, shall be reduced from $25,000 to $13,000.

    


    Notwithstanding
the foregoing and the terms of Section 5.1(d) of the Agreement, the Company
hereby agrees that, to the extent you have not secured health coverage from new
employment by the One Year Anniversary Date, the Company will permit you to
continue to receive, and shall pay the cost of, COBRA health coverage under the
Company’s health plan following the One Year Anniversary Date until the earlier
of (a) the date that is eighteen (18) months following the Separation Date (the
“Eighteen Month Anniversary Date”) or (b) the New Coverage Date, provided,
however, that you and your eligible dependents must continue to make any
required co-payments, deductibles, premium sharing or other cost-splitting
arrangements you were otherwise paying immediately prior to the Separation Date
and nothing herein shall require the Company to be responsible for such
items.  In addition, notwithstanding the terms of Section 5.1(d) of
the Agreement, the Company hereby agrees that, to the extent you have not
secured health coverage from new employment by the Eighteen Month Anniversary
Date (at which time you will no longer be eligible to receive COBRA health
coverage under the Company’s health plan), the Company shall, until the earlier
of the New Coverage Date or the date that is two (2) years following the
Separation Date, reimburse you for the lesser of (x) your out-of-pocket monthly
cost to obtain substantially similar health coverage from a third party provider
or (y) $2,000 per month.

    


    In
consideration for the additional consideration and benefits being provided to
you by the Company as described in this letter (including in the preceding
paragraph), you, the Company, and Orthofix International N.V. each hereby agree
that, if you continue to work for the Company until the Separation Date, then
notwithstanding the terms of Section 5.1(c) of the Agreement and the terms of
your stock option award agreements, each of your Orthofix International N.V.
stock options (which in such event will become vested in full on March 31, 2010
to the extent not already vested) shall expire, and shall no longer be
exercisable, on the earlier of (i) March 31, 2015 or (ii) the date that such
stock option would otherwise have expired by its original terms had your
employment not terminated.

    


    Following
your Separation Date, upon the Company’s reasonable request and your future
willingness to provide such services, you may provide consulting services to the
Company to advise on certain litigation-related matters.  The Company
will reimburse you at the rate of $300 per hour for such consulting services,
plus any reasonable and documented travel-related or other out-of-pocket
expenses (which shall not exceed $1,500 without the prior written consent of the
Company) you incur.  In addition, the Company shall agree to indemnify
you in connection with the rendering of such consulting services pursuant to a
customary indemnification agreement in a form acceptable to you and the
Company.

    


    
      
        
           


        

        
          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, you are
required to wait six months and one day from the Separation Date (the “Payment
Date”) to receive the Severance Payment.  In addition, as required by
Section 5.1(e) 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 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 Separation Date.  You also
understand that your receipt of the Severance Payment and other benefits under
the Agreement are contingent on your signing (and not revoking) a release in the
form attached hereto as Exhibit A on or after
the Separation Date (the “Release”).  We will pay you the Severance
Payment on the Payment Date only if prior to the Payment Date you have signed
and returned to the Company the Release and the applicable revocation period has
expired.  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 Payment
Date and if the applicable revocation period has not expired by the Payment
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 would 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 or otherwise, all of which will remain in effect in accordance
with the Agreement following the date hereof and the Separation
Date.

    


    The
Company hereby agrees that it will pay up to $10,000 (which amount includes
bills already reimbursed by the Company and/or Orthofix International N.V. on
this matter) in reasonable, documented legal fees and expenses of your counsel
in connection with your review of this letter (including the consulting
arrangement contemplated above and any related ancillary
agreements).

    


    
      
        
           


        

        
          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 Separation Date, from all officer
and director positions with the Company or any of its parents or affiliates, as
required by the Agreement.

    


    Sincerely,

    


    Orthofix
Inc.

    
 

     

    
      	
              /s/ Alan W. Milinazzo

            	 
      
	
              Alan
      W. Milinazzo

            	 
      
	
              President
      and Chief Executive Officer

            	 
      
	 
      	 
      
	
              Acknowledged
      and Accepted:

            	 
      
	 
      	 
      
	 
      	 
      
	
              /s/ Raymond C. Kolls

            	 
      
	
              Raymond
      C. Kolls

            	 
      
	
              Dated:
      January 29, 2010

            	 
      


    

    


    


    cc:
Thomas P. Desmond at Vedder, Price, Kaufman & Kammholz, P.C.

    


    
      
        
           


        

        
          4

          
            

          

        

        
           


        

      

    

    


    EXHIBIT
A

     

    


     

    RELEASE

     

    In
exchange for the consideration set forth in the Amended and Restated Employment
Agreement, dated as of December 6, 2007, by and among Orthofix Inc. (the “Company”) and myself
(the “Employment
Agreement”), as amended and supplemented by that certain letter agreement
between the Company and myself dated January 29, 2010 (the “Letter Agreement”),
the respective terms of which are incorporated herein by reference, I, Raymond
C. Kolls, am entering into this Release Agreement (this “Release”) for good
and valuable consideration as required by the Employment 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, 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
Payment and other benefits and consideration described in the Letter
Agreement.  This Release includes, without limitation: (i) claims at
law or equity or sounding in contract (express or implied) or tort, including
but not limited to claims under the Employment Agreement; (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.

     

    


    
      
        
           


        

        
          5

          
            

          

        

        
           


        

      

    

    


    (b)           This
Release does not include a release of any rights and claims to any benefits to
which I might be entitled under the terms of any employee benefit plan
maintained by the Company, or any member of the Company Group, in which I am a
participant.  This release also does not include a release or waiver
of any rights or claims I have, or might subsequently have (i) under the
Indemnity Agreement between Orthofix International, N.V. and me or (ii) 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 Employment Agreement and the Letter
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 Employment Agreement or the Letter Agreement.  In the event of
any such dispute, my sole remedy against the Company shall be to enforce the
terms of the Employment Agreement and the Letter 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, or any employed
lawyers insurance coverage provided by the Company, the Company Group, or any
member of the Company Group, 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 AGREEMENT, 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 AGREEMENT.

     

    (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.

     

    


    
      
        
           


        

        
          6

          
            

          

        

        
           


        

      

    

    


    (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
Robert S. Vaters, Orthofix Inc., Chief Financial Officer, 800 Boylston Street,
15th Floor, The PRU Tower, Boston, MA 02199 no later than the end of the seventh
calendar day after I sign this Agreement.  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 Employment Agreement and the Letter Agreement as provided respectively
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 to keep this Release and its terms completely confidential; however, I may
disclose the terms of this Release to my spouse, accountants, tax advisors,
attorneys, or as otherwise required by law.  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, including those under the Employment
Agreement.  The confidentiality provisions set forth in this Release
and the Employment Agreement are contractual and their terms are material to
this Release.

     

    3.           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.

     

    4.           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.

     

    5.           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.

     

    6.           I
also represent and warrant that, as of the date hereof, I have delivered to
the Company
all documents and materials in my possession or control that are required to be
returned to the Company under Section 6.5 of the Employment
Agreement.

     

    7.           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.

     

    
      
        
           


        

        
          7

          
            

          

        

        
           


        

      

    

    


    8.           This
Release shall be interpreted under and governed by the laws of the State of
North Carolina.  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.

     

    9           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.

     

    10.        
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)

    


    
      
        
           


        

        
          8

          
            

          

        

        
           


        

      

    

    


    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.

    


     

    
      	 
      	
              /s/ Raymond C. Kolls

            	 
      
	 
      	
              Raymond
      C. Kolls

            	 
      
	 	 	 
	 
      	
              Date: 
      

            	
              January 29, 2010

            	 
      


    

    


     

    
      	
              Accepted
      and Acknowledged:

            	 
      
	
              ORTHOFIX
      INC.

            	 
      
	
              By:

            	
              /s/ Alan W. Milinazzo

            	 
      
	 
      	 
      	 
      
	
              Title: 
      

            	
              President and Chief Executive
      Officer

            	 
      
	 
      	 
      	 
      
	
              Date:

            	
              January 29, 2010

            	 
      


    

    


    


    


    
 

    SIGNATURE
PAGE TO KOLLS RELEASE AGREEMENT

     

    


    9