Document:

Exhibit 10.1

 

RESTRICTED STOCK PURCHASE AGREEMENT

 

AGREEMENT made as of this 29th day of December, 2005, (the “Effective Date”) between Balchem Corporation, Inc., a Delaware corporation (the “Company”) and [Director’s Name] (the “Purchaser”).

 

WHEREAS, pursuant to the Company’s Amended and Restated 1999 Stock Plan (the “Plan”), the Company wishes to grant Purchaser a stock purchase right, as such term is defined in Section 1 of the Plan, to purchase shares of the Company’s common stock subject to the terms and conditions of the Plan and this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in the Plan and herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:             

 

	
             
 	
            1.
 	
            Stock Purchase Right.
 

 

1.1          Grant of Stock Purchase Right. The Company hereby grants to the Purchaser the right and option (the “Stock Purchase Right”), for a period from the date hereof until the “Expiration Date” (as defined in Section 1.3 below), to purchase three thousand (3,000) shares of the Common Stock, $.062/3 par value per share, of the Company (the “Shares”) for a purchase price of $.062/3 per share, on the terms and subject to the conditions, repurchase options, restrictions and other provisions set forth in this Agreement and in the Plan.

 

1.2          Exercise. Subject to the conditions set forth in this Agreement and in the Plan, the Purchaser may exercise the Stock Purchase Right and subscribe to purchase the Shares by executing and delivering this Agreement to the Company at any time prior to the Expiration Date, accompanied by payment in full of the purchase price for the Shares being purchased in cash or by check of the Purchaser payable to the order of the Company. Upon receipt of such payment and executed Agreement from the Purchaser, the Company shall issue one or more certificates in the name of the Purchaser for that number of Shares purchased by the Purchaser, which Shares shall be subject to the restrictions, conditions and other provisions set forth in this Agreement and in the Plan.

 

1.3          Expiration. This Stock Purchase Right and the right to purchase the Shares hereunder shall expire and be of no further force or effect on January 12, 2006.

 

1.4           Nontransferability of Stock Purchase Right. This Stock Purchase Right is personal to the Purchaser, and neither the right to purchase the Shares or any other right hereunder may be assigned, transferred, pledged or hypothecated (whether by operation of law or otherwise), nor shall any such rights be subject to execution, attachment or similar process. Upon any attempt to assign, pledge, transfer, hypothecate or otherwise dispose of this Stock Purchase Right or any rights granted hereunder, or upon the levy of any attachment or similar process upon this Stock Purchase Right or any such rights, this Stock Purchase Right and all of the rights of the Purchaser hereunder shall thereupon automatically terminate and become null and void.

 

 

 

 

 

2.            Company Representations and Warranties. The Company represents and warrants to the Purchaser as follows:

 

2.1           Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and has the corporate power and authority to enter into, execute and deliver this Agreement and to perform fully its obligations hereunder. 

 

2.2           Authority to Execute and Perform Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of the Company. This Agreement has been duly executed and delivered by the Company and, upon execution hereof by the Purchaser, will constitute a valid and binding obligation of the Company, enforceable in accordance with its terms.

 

2.3           Issuance of Shares. The issuance, sale and delivery of the Shares in accordance with Section 1 of this Agreement have been duly authorized by all necessary corporate action on the part of the Company. The Shares, when issued, sold and delivered against payment therefore in accordance with the provisions of this Agreement, will be duly and validly issued, fully paid and nonassessable.

 

3.             Purchaser’s Representations and Warranties. The Purchaser represents and warrants to the Company as follows:

 

3.1           Investment. The Purchaser is purchasing the Shares for his/her own account for investment only, and not with a view to, or for resale in connection with, any distribution of the Shares in violation of the Securities Act of 1933, as amended (the “Securities Act”), or any rule or regulation thereunder.

 

3.2           Adequate Information. The Purchaser has had such adequate opportunity to obtain from representatives of the Company such information as is necessary to permit an evaluation of the risks and merits of the investment in the Company.

 

3.3           Assessment of Risk. The Purchaser has had sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make an informed investment decision with respect to such purchase.

 

3.4          Economic Risk. The Purchaser can afford a complete loss of the value of the Shares and is able to bear the economic risk of holding such Shares for an indefinite period.

 

3.5           Transfer Restrictions. The Purchaser understands that, in addition to the restrictions on transfer of the Shares set forth in Section 6 hereof, (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares cannot be sold, transferred or otherwise disposed of until the Shares have vested in accordance with this Agreement.

	
             
 	
            4.
 	
            Intentionally omitted.
 

 

 

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            5.
 	
            Repurchase.
 

 

5.1          Repurchase Option. The Shares shall be subject to a repurchase option in favor of the Company as follows:

 

(a)           If, at any time prior to the “Vesting Date” (as defined in Section 5.3 below), the Purchaser commits an act of gross misconduct in the performance of his/her duties as a Director of the Company, as determined by majority vote of the remaining Directors then in office (Gross Misconduct”), the Company shall have the right and option to repurchase and acquire from the Purchaser, and upon exercise of such right and option the Purchaser shall sell to the Company, all or any portion of the Shares then owned by such Purchaser for a purchase price of $.062/3 per share (as adjusted for stock splits, stock dividends, stock combinations, reorganization and the like) (the “Repurchase Price”). 

 

(b)           If, at any time prior to the Vesting Date, the Purchaser ceases to be a Director of the Company for any reason other than those set forth in Section 5.3(b) below, the Company shall have the right and option to repurchase and acquire from the Purchaser, and upon exercise of such right and option the Purchaser shall sell to the Company, for a price per share equal to the Repurchase Price, that number of Shares which is equal to the difference between (i) the total number of Shares, minus (ii) the product of (A) 1/84 of the total number of Shares, times (B) the number of full months that the Purchaser has served as a member of the Board of Directors during the period from the Effective Date through the date of such resignation. 

 

5.2          Exercise of Repurchase Option. (a) The repurchase option hereunder shall only be exercised upon approval thereof by majority vote of the Board of Directors of the Company, specifying the number of Shares to be repurchased. Upon such approval, the Company shall exercise the repurchase option provided in this Section by delivering or mailing to the Purchaser written notice of exercise specifying the number of Shares to be repurchased by the Company within thirty (30) days after (i) the date of the Board of Directors’ determination that the Purchaser committed Gross Misconduct, in the event of a repurchase of the Shares pursuant to Section 5.1(a) above, or (ii)  the effective date of the termination of Purchaser’s service as a Director of the Company, in the event of a
repurchase of the Shares pursuant to Section 5.1(b) above.

 

(b)  Within ten (10) days after the Purchaser’s receipt of the Company’s notice of the exercise of the repurchase option pursuant to subsection (a) above, the Purchaser (or his/her estate, executors, administrators, heirs or personal representatives, as the case may be) shall tender to the Company at its principal offices the certificate or certificates representing the Shares which the Company has elected to re-purchase, duly endorsed in blank by the Purchaser or with duly endorsed stock powers attached thereto, all in form suitable for the transfer of such shares to the Company. Upon its receipt of such Shares, the Company shall deliver or mail to the Purchaser a check in the amount of aggregate re-purchase price therefore. 

 

(c)  After the time at which any Shares are required to be delivered to the Company for transfer to the Company pursuant to subsection (b) above, the Purchaser shall cease to be the owner 

 

 

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or holder of such Shares for all purposes, and the Company shall not pay any dividend to the Purchaser on account of the purchased Shares or permit the Purchaser to exercise any of the privileges or rights of a stockholder with respect to such Shares.

 

5.3           Termination of Repurchase Option. The Company’s right of repurchase of the Shares under this Section 5 shall terminate as to all of the Shares upon the first to occur of the following dates (the “Vesting Date”):

 

	
             
 	
            (a)
 	
            the date which is seven (7) years after the Effective Date;
 

 

	
             
 	
            (b)
 	
            the date on which the Purchaser ceases to be a member of the Board of Directors of the Company by reason of his/her: (i) voluntary retirement from the Board of Directors upon attaining the age of 70 or as set forth in the then current Balchem Director’s Manual; or (ii) death, or (iii) major disability; or (iv) resignation as a Director of the Company due to a conflict of interest between the Purchaser and the Company which is determined by majority vote of the Board of Directors (excluding the Purchaser) to be sufficiently material to justify the Purchaser’s resignation as a Director of the Company; or (v) resignation as a Director of the Company due to a serious health issue suffered by the Purchaser which materially impairs the Purchaser’s ability to perform his/her duties and responsibilities as a Director of
the Company, as determined by majority vote of the Board of Directors (excluding the Purchaser); or
 

	
             
 	
            (c)
 	
            the date of a Change in Control of the Company. Change in Control shall mean the consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation or other reorganization is owned by persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization; or any transaction (other than an issuance of shares by the Company for cash) in or by means of which one or more persons acting in concert acquire, in the aggregate, more than 50% of the combined voting power of Company’s outstanding equity securities; or the sale, transfer or other disposition of all or substantially all of the Company’s
assets.
 

 

	
             
 	
            6.
 	
            Restrictions on Transfer.
 

6.1           Transfer Restrictions. The Purchaser shall not, directly or indirectly, sell, assign, transfer, encumber, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise (collectively, “Transfer”), any of the Shares or any interest therein so long as they remain subject to the repurchase option set forth in Section 5.1, except as expressly permitted pursuant to Section 6.2 

 

 

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below. Any sale or Transfer, or purported sale or Transfer, of Shares in violation of the provisions of this Section shall be null and void.

 

6.2           Permitted Transfers. The following transactions shall be exempt from the restrictions on Transfer set forth in Section 6.1:

 

(i)            the Purchaser’s transfer of any or all of the Shares either during his/her lifetime or on death by will or intestacy to his/her immediate family or to a trust the beneficiaries of which are exclusively one or more of the Purchaser and a member or members of the Purchaser’s immediate family, except any such transfers made pursuant to any divorce or separation proceedings or settlement (for purposes hereof, the term “immediate family” shall mean spouse, lineal descendant, father, mother, brother or sister of the Purchaser making the transfer); or

 

(ii)           a Transfer of Shares to the guardian or conservator of the Purchaser; provided, however, that in any such case, the transferee or other recipient shall receive and hold such stock subject to the provisions of this Agreement and there shall be no further Transfer of such stock except in accordance with this Agreement. No Transfer pursuant to this paragraph shall be effective, and the Company shall not be required to recognize any transferee of Shares hereunder as a stockholder of the Company, unless and until the conditions set forth in the preceding sentence have been met and the transferee agrees in writing to be bound by the provisions of this Agreement.

 

7.            Restrictive Legend.            All certificates representing Shares owned by the Purchaser shall have affixed thereto a legend in substantially the following form, in addition to any other legends that may be required under federal or state securities laws or under the Shareholders Agreement:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND AN OPTION TO PURCHASE SET FORTH IN A CERTAIN RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE CORPORATION (OR ITS PREDECESSOR IN INTEREST) AND THE REGISTERED OWNER OF THIS CERTIFICATE (OR HIS/HER PREDECESSOR IN INTEREST), AND SUCH AGREEMENT IS AVAILABLE FOR INSPECTION WITHOUT CHARGE AT THE OFFICE OF THE CORPORATION. 

 

8.             Adjustments for Stock Splits, Stock Dividends, etc.   If from time to time while the Shares are subject to the repurchase option, or restrictions on transfer set forth herein, there is any stock split-up, stock dividend, stock distribution or other reclassification of the stock of the Company, any and all new, substituted or additional securities to which the Purchaser is entitled by reason of his ownership of the Shares shall be immediately subject to such repurchase option and restrictions on transfer in the same manner and to the same extent as the Shares and the price payable to the Purchaser upon the Company’s exercise of the repurchase option shall be appropriately adjusted.

 

 

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9.            Remedies. (a)  The Purchaser acknowledges and agrees that any violation of the provisions of this Agreement will cause irreparable damage to the Company and that the Company will have no adequate remedy at law for such violation. Accordingly, the Purchaser agrees that the Company shall be entitled as a matter of right to an injunction, specific performance or other appropriate equitable relief from any court of competent jurisdiction, restraining any further violation of such provision or affirmatively compelling the Purchaser to carry out his or her obligations hereunder. Such right to equitable relief shall be cumulative and in addition to any other right or remedy the Company may have at law or in equity.

 

(b)           In the event that the Purchaser fails to deliver any certificates representing Shares required to be transferred to the Company pursuant to the terms of this Agreement, the Company may (i) elect to establish a segregated account in which the purchase price for such Shares shall be placed, such account to be turned over to the Purchaser upon delivery of the certificates representing such Shares together with appropriate instruments of transfer duly executed by the Purchaser, and (ii) immediately thereafter take such action as may be required to transfer record title to such Shares to itself. The Purchaser hereby grants the Company a power of attorney for effecting any transfer in accordance with the previous sentence, such power of attorney to be deemed coupled with an interest and irrevocable.

 

10.           Section 83(b) Election. Purchaser understands that under Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), the difference between the purchase price paid for the Shares and their fair market value on the date any forfeiture restrictions applicable to such Shares lapse will be reported as ordinary income at that time. For this purpose, the term “forfeiture restrictions” includes the right of the Company to repurchase the Shares pursuant to its repurchase option under Section 5 of this Agreement. Purchaser understands that Purchaser may elect to be taxed at the time the Shares are acquired hereunder to the extent the fair market value of the Shares differs from the purchase price rather than when and as such Shares cease
to be subject to such forfeiture restrictions, by filing an election under Section 83(b) of the Code with the I.R.S. within thirty (30) days after the date of purchase hereunder. If the fair market value of the Shares at the date of purchase equals the purchase price paid (and thus no tax is payable), the election must be made to avoid adverse tax consequences in the future. Purchaser understands that failure to make this filing within the thirty (30) day period will result in the recognition of ordinary income by the Purchaser (in the event the fair market value of the Shares increases after the date of purchase) as the forfeiture restrictions lapse. PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER’S SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER SECTION 83(b). PURCHASER IS RELYING SOLELY ON PURCHASER’S ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE AN 83(b)
ELECTION. PURCHASER ALSO AGREES TO PROVIDE COMPANY WITH A COPY OF THE 83(b) ELECTION IF SO FILED.

11.           Withholding.       The Company shall have the right to deduct from payments of any kind otherwise due to the Purchaser any federal, state or local taxes of any kind required by law to be withheld with respect to any of the Shares issued hereunder.

 

 

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12.           Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.

 

13.           Waiver; Amendment. No provision of this Agreement shall be waived or amended, either generally or in any particular instance, except in a writing signed by the Company and the Purchaser.

 

14.          Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company and the Purchaser and their respective heirs, executors, administrators, legal representatives, successors and assigns. No transfer of any of the Shares shall be effective unless the transferee first agrees in writing to all of the terms hereof.

 

15.           No Rights To Employment. Nothing contained in this Agreement shall be construed as giving the Purchaser any right to be retained, in any position, as an employee of or consultant or advisor to the Company.

 

16.           Notices. All notices required or permitted hereunder shall be in writing and deemed effectively given upon personal delivery, delivery by Federal Express or other recognized overnight delivery service or upon deposit in the United States Post Office, by registered or certified mail, postage prepaid, return receipt requested, if to the Company at its executive offices and if to the Purchaser at the address shown beneath his or her signature to this Agreement, or in either case at such other address or addresses as either party shall designate to the other in accordance with this Section.

 

17.           Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa.

 

18.          Entire Agreement. This Agreement and the documents and agreements referenced herein constitute the entire agreement between the parties, and supersedes all prior agreements and understandings, relating to the subject matter of this Agreement.

 

19.          Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of New York. The Company and each of the Purchasers hereby (a) agree that any action, suit or other proceeding arising out of or based upon this Agreement shall be brought in the courts of the State of New York or any federal court located in such state, and (b) irrevocably consent and submit to the exclusive jurisdiction of such courts for the purpose of any such action, suit or proceeding.

 

20.           1999 Stock Plan. The Shares are issued pursuant to the Company’s Amended and Restated 1999 Stock Plan, a copy of which has been furnished to the Purchaser, and are subject to such Plan in all respects.

 

 

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21.            Section 409A Compliance. This Stock Purchase Right is intended to comply with the requirements of Section 409A, and the regulations issued thereunder. To the extent of any inconsistencies with the requirements of Section 409A, the Stock Purchase Right shall be interpreted and amended in order to meet such Section 409A requirements. Notwithstanding anything contained in this Agreement or in any amendments attached hereto to the contrary, it is the intent of the Corporation to have this Plan interpreted and construed to comply with any and all provisions Section 409A including any subsequent amendments, rulings or interpretations from appropriate governmental agencies.

[END OF DOCUMENT]

 

[SIGNATURES FOLLOW]

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	
             
 	
             
 	
            BALCHEM CORPORATION
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
            By:
 	
            /s/ Dino A. Rossi
 
	
             
 	
             
 	
            Dino A. Rossi, President & CEO
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
            PURCHASER:
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 

 

 

	
             
 	
            Address:AMENDMENT TO EMPLOYMENT AGREEMENT

         THIS AMENDMENT TO EMPLOYMENT AGREEMENT is dated and effective as of
December 29, 2005, between Orthofix Inc., a Minnesota corporation (the
"Company") and Orthofix International N.V., a corporation organized under the
laws of the Netherlands Antilles (the "Parent"), on the one hand, and Charles W.
Federico, a citizen and resident of Cornelius, North Carolina (the "Executive"),
on the other.

         WHEREAS, the Parent, the Company and the Executive are currently
parties to an Employment Agreement dated as of April 15, 2005 (the "Agreement"),
which provides by its terms for its amendment to comply with applicable
provisions of Section 409A of the Internal Revenue Code (the "Code") and any
guidance issued thereunder; and

         WHEREAS, the Parent, the Company and the Executive desire to amend the
Agreement to comply with applicable provisions of Code Section 409A and guidance
issued thereunder.

         NOW, THEREFORE, in consideration of the recitals, mutual covenants and
agreements set forth in the Agreement and below, the parties agree as follows:

         (1) All capitalized terms used but not defined herein shall have the
meaning accorded to them in the Agreement.

         (2) The Agreement be and is amended in the following particulars,
effective as of December 29, 2005:

             (a) By substituting for Section 4.1.1(a) of the Agreement the
         following:

             "(a) General. If, prior to the expiration of the Employment
             Term, (i) the Executive's employment is terminated by the
             Company without Cause (as defined in Section 4.3) and for a
             reason other than death or disability (as described in Section
             5), or (ii) the Executive resigns from his employment hereunder
             for Good Reason (as defined in Section 4.4), the Executive shall
             be entitled to payment no later than the Company's next
             regularly scheduled payday following the date of termination (as
             described in Section 4.1.2) of all (A) Base Salary due and owing
             through the date of termination, (B) accrued unused vacation
             then owing in accordance with the Company's then-current
             policies and (C) expense reimbursements under Section 3.2. In
             addition, the Executive shall receive, on the first day of the
             seventh calendar month following the Executive's date of
             termination (as described in Section 4.1.2), a one-time lump sum
             payment (less applicable withholding taxes) in an amount equal
             to the product of: (I) his monthly Base Salary at the highest
             rate in effect during the three

<PAGE>

             year period immediately preceding the termination, times (II) the
             number of months (including any partial month) remaining in the
             Employment Term (the 'Base Salary Severance Amount'). Further, on
             the date in the next fiscal year that bonuses are otherwise paid
             to senior executives of the Company (the `Bonus Payment Date'),
             the Executive shall be entitled to receive the pro rata amount
             (based on the ratio of the number of business days he was
             actually employed by the Company in the fiscal year of his
             termination to the number of business days in such fiscal year)
             of any bonus for the fiscal year of his termination that he would
             have received had his employment not been terminated (the 'Bonus
             Severance Amount', which, together with the Base Salary Severance
             Amount, is referred to as the 'Severance Amount'); provided, on
             the Bonus Payment Date, the Bonus Severance Amount can be
             characterized as a 'short-term deferral' for purposes of IRC
             Section 409A. Notwithstanding anything in the preceding sentence
             to the contrary, if, on the Bonus Payment Date, the Bonus
             Severance Amount cannot be characterized as a 'short-term
             deferral' for purposes of IRC Section 409A, then the Bonus
             Severance Amount shall be paid to the Executive in a single lump
             sum payment on the first day of the seventh calendar month
             following the Executive's date of termination. By way of example
             of the calculation of the Severance Amount, if the Executive were
             terminated under this Section 4.1.1 on the first anniversary of
             the Effective Date, he would be entitled to (x) payment equal to
             twelve times the highest monthly Base Salary rate in effect
             during the three year period preceding his termination (less
             applicable taxes) plus (y) an amount payable in the next fiscal
             year (2007) equal to any bonus compensation for the number of
             business days that he was employed by the Company in the fiscal
             year (2006) of his termination, but only to the extent he would
             have been paid a bonus had he not been terminated. Nothing in
             this Section 4.1.1(a) is intended to give the Executive greater
             bonus rights than a pro rata portion of what he would ordinarily
             be entitled to under any bonus plan or bonus award that would
             have been applicable to him had he not been terminated. The
             parties intend and agree that Executive's termination shall not
             be used to disqualify Executive from or make him ineligible for
             any pro rata portion of any bonus he otherwise would have been
             entitled to."

             (b) By substituting for Section 4.1.1(c) of the Agreement the
         following:

             "(c) Options. Nothing in this Agreement shall be construed to
             diminish or alter in an adverse manner the current rights of the
             Executive provided for in the Plans or under his Award
             Agreements, or any additional rights accrued by the Executive
             during the Employment Term, and to which he is entitled, under
             the terms of the Plans and Award Agreements, with respect to any
             Options held by him in the event of (i) his termination of
             employment by the Company without Cause and for a reason other
             than

                                       2
<PAGE>

             death or disability or (ii) his resignation for Good Reason. In
             addition to such Option rights and notwithstanding anything to
             the contrary in such Plans and Award Agreements, if termination
             is pursuant to this Section 4.1.1, the Executive shall become
             immediately and fully vested in any outstanding unvested Options
             as of and on the Executive's date of termination (as described in
             Section 4.1.2) and shall be entitled to exercise his Options
             until the earlier of the following: (i) the date on which the
             Options would otherwise expire (for reasons other than the
             termination of the Executive's employment) by their original
             terms or (ii) the later to occur of (A) the 15th day of the third
             month following the Options Final Exercise Date (as such term is
             defined below) or (B) December 31 of the calendar year which
             includes the Options Final Exercise Date. 'Options Final Exercise
             Date' means the date the Options would otherwise have expired
             based on the terms of the Options at the original grant date of
             the Options and disregarding any subsequent extension thereof.
             The Executive expressly acknowledges that the rights granted him
             under this Section 4.1.1(c) are rights not otherwise available to
             him prior to the date hereof, but for his execution of this
             Agreement and his promises in Section 6."

         (3) By substituting for Section 7.1(ii) of the Agreement the following:

             "Mr. Charles W. Federico
             XXX
             XXX
             Facsimile:  XXX
             E-mail:  XXX

         (4) Except as amended herein, the Agreement shall continue unmodified
and in full force and effect.

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date first described above.

ORTHOFIX INTERNATIONAL N.V.                 ORTHOFIX INC.

By: /s/ Raymond C. Kolls                    By: /s/ Raymond C. Kolls
    ----------------------------                --------------------------------

Its: Corporate Secretary                    Its: Corporate Secretary
    ----------------------------                --------------------------------

                                            EXECUTIVE

                                            /s/ Charles W. Federico
                                            ------------------------------------
                                            Charles W. Federico

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