Document:

ex10_49.htm

    
      

      Exhibit
10.49

       

      AMENDED
AND RESTATED

      EMPLOYMENT
AGREEMENT

      

      This
Amended and Restated Employment Agreement (the “Agreement”), entered
into and effective as of November 16, 2009 (the “Effective Date”), is
by and between Breg Inc., a California corporation (the “Company”), and Brad
Lee, an individual (the “Executive”).

      

      PRELIMINARY
STATEMENTS

      

      A.           The
Company and the Executive are parties to an Amended and Restated Employment
Agreement, entered into August 17, 2009 (the “Prior Agreement”),
but desire to further amend and restate the Prior Agreement in its entirety to
memorialize the terms of their relationship in order to retain the continued
services of the Executive.

      

      B.           The
Executive desires to render such services, upon the terms and conditions
contained herein.

      

      C.           The
Company and the Executive agree and acknowledge that pursuant to this Agreement
the Executive will receive consideration and other benefits over and above that
which he was entitled to receive under the Prior Agreement and over and above
that which he would otherwise be entitled to receive as compensation for
services performed for the Company.

      

      D.           The
Company is, as of the date of this Agreement, a subsidiary of Orthofix
International N.V., a corporation organized under the laws of the Netherlands
Antilles (the “Parent”).

      

      E.           Capitalized
terms used herein and not otherwise defined have the meaning for them set forth
on Exhibit A
attached hereto and incorporated herein by reference.

      

      The
parties, intending to be legally bound, hereby agree and the Prior Agreement is
hereby amended and restated as follows:

      

      I.           EMPLOYMENT
AND DUTIES

      

      1.1           Duties.  The
Company hereby employs the Executive as an employee, and the Executive agrees to
be employed by the Company, upon the terms and conditions set forth
herein.  While serving as an employee of the Company, the Executive
shall serve as President of the Company.  The Executive shall have
such power and authority and perform such duties, functions and responsibilities
as are associated with and incident to such positions, and as the Board may from
time to time require of him; provided, however, that such
authority, duties, functions and responsibilities are commensurate with the
power, authority, duties, functions and responsibilities generally performed by
similarly-situated executives of companies which are
similar in size and nature to, and the financial position of, the
Company.

      
        
           

        

        
          
          

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      1.2           Services.  During
the Term (as defined in Section 1.3), and excluding any periods of vacation,
sick leave or disability, the Executive agrees to devote his full business time,
attention and efforts to the business and affairs of the
Company.  During the Term, it shall not be a violation of this Section
1.2 for the Executive to (a) serve on civic or charitable boards or committees
(but not corporate boards), (b) deliver lectures or fulfill speaking engagements
or (c) manage personal investments, so long as such activities do not interfere
with the performance of the Executive’s responsibilities in accordance with this
Agreement.  The Executive must request the Board’s prior written
consent to serve on a corporate board, which consent shall be at the Board’s
reasonable discretion and only so long as such service does not interfere with
the performance of his responsibilities hereunder.

      

      1.3           Term of
Employment.  The term of this Agreement shall commence on the
Effective Date and shall continue until 11:59 p.m. Eastern Time on July 1, 2011
(the “Initial
Term”) unless sooner terminated or extended as provided
hereunder.  This Agreement shall automatically renew for additional
one-year periods on July 1, 2011 and on each and every July 1 thereafter (each
such extension, the “Renewal Term”) unless
either party gives the other party written notice of its or his election not to
extend such employment at least six months prior to the next July 1 renewal
date.  Further, if a Change of Control occurs during the Initial Term
or during any Renewal Term, this Agreement shall automatically be extended for
two years only from the Change of Control Date and thereafter shall terminate on
the second anniversary of the Change of Control Date in accordance with its
terms.  The Initial Term, together with any Renewal Term or extension
as a result of a Change of Control, are collectively referred to herein as the
“Term.”  In
the event that the Executive continues to be employed by the Company after the
Term, unless otherwise agreed by the parties in writing, such continued
employment shall be on an at-will, month-to-month basis upon terms agreed upon
at such time without regard to the terms and conditions of this Agreement
(except as expressly provided herein) and this Agreement shall
be deemed terminated at the end of the Term, regardless of whether such
employment continues at-will, other than Articles VI and VII, plus specified
provisions of Articles IV and V to the extent they relate to termination of
employment after expiration of the Term, which shall survive the termination or
expiration of this Agreement for any reason.

      

      II.           COMPENSATION

      

      2.1           General.  The base salary and
Incentive Compensation (as defined in Section 2.3) payable to the Executive
hereunder, as well as any stock-based compensation, including stock options,
stock appreciation rights and restricted stock grants, shall be paid pursuant to
the Company’s customary payroll practices or in accordance with the terms of any
applicable stock-based plans.  The Company shall pay the Executive in
cash, in accordance with the normal payroll practices of the Company, the base
salary and Incentive Compensation set forth below.  For the avoidance
of doubt, in providing any compensation payable in stock, the Company may
withhold, deduct or collect from the compensation otherwise payable or issuable
to the Executive a portion of such compensation to the extent required to comply
with applicable tax laws to the extent such withholding is not made or otherwise
provided for pursuant to the agreement governing such stock-based
compensation.

      

      2.2           Base
Salary.  The Executive shall be paid a base salary of no less
than $24,166.67 per month ($290,000 on an annualized basis) while he is employed
by the Company during the Term.  The base salary shall be reviewed
annually by the Board (or, so long as the Company is a direct or indirect
subsidiary of the Parent, the Parent Board) for increase (but not decrease,
except as permitted above) as part of its annual compensation review, and any
increased amount shall become the base salary under this
Agreement.

      
        
           

        

        
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            Exhibit
10.49

          

        

      

      2.3           Bonus or other Incentive
Compensation.

      

      (a)           For
so long as the Company is a direct or indirect subsidiary of Parent, the
Executive shall be eligible to receive annual bonus compensation in an amount
based on reasonable Company-specific goals for the earning of such compensation
as may be determined by the Parent Board from time to time (the “Goals”).  Amounts
that may be earned upon attainment of annual Goals will be targeted to equal not
less than 50% of the annual base salary in such fiscal year.  The
amount of any actual payment under the Bonus Plan will depend upon the
achievement (or not) of the various performance metrics comprising the Goals,
with an opportunity to earn maximum annual bonus compensation of not less than
60% of annual base salary in such fiscal year under Parent’s Executive Annual
Incentive Plan or any successor plan or as may be determined by the Parent Board
from time-to-time (the “Bonus
Plan”).  Amounts will be less than either such target or
nothing if the Goals are not met as set forth under the terms of the Bonus
Plan.  Amounts payable under the Bonus Plan shall be determined by the
Parent Board and shall be payable following such fiscal year and no later than
two and one-half months after the end of such fiscal year.  In
addition, the Executive shall be eligible to receive such additional bonus or
incentive compensation as the Parent Board may establish from time to time in
its sole discretion.  In the event that a Change of Control occurs
that results in the Company not being a direct or indirect subsidiary of Parent,
(i) the Company (not Parent) shall be responsible for the payment of any
Incentive Compensation amounts with respect to completed or pro rata fiscal
years for which Bonus Plan amounts have not yet been paid (collectively, “Unpaid Periods”) and
(ii) the Goals will deemed satisfied at a 100% achievement level with respect to
Unpaid Periods.

      

      (b)           Following
any Change of Control that results in the Company not being a direct or indirect
subsidiary of Parent (a “Breg Disposition”),
Executive shall be eligible to receive annual bonus compensation awards from the
Company on economic terms materially consistent with those provided to Executive
under the Bonus Plan immediately prior to such Change of Control.

      

      (c)           Any
bonus or incentive compensation under this Section 2.3 under the Bonus Plan or
otherwise is referred to herein as “Incentive
Compensation.”  Stock-based compensation shall not be
considered Incentive Compensation under the terms of this Agreement unless the
parties expressly agree otherwise in writing.

      
        
           

        

        
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            Exhibit
10.49

          

        

      

      2.4           Stock
Compensation.  For so long as the Company is a direct or
indirect subsidiary of Parent, the Executive shall be eligible to receive
stock-based compensation, whether stock options, stock appreciation rights,
restricted stock grants or otherwise, under the Parent’s Amended and Restated
2004 Long Term Incentive Plan or other stock-based compensation plans as Parent
may establish from time to time (collectively, the “Plans”).  The
Executive shall be considered for such grants no less often than annually as
part of the Parent Board’s annual compensation review, but any such grants shall
be at the sole discretion of the Parent Board.  In addition, upon the
consummation of any Breg Disposition that occurs while Executive remains an
employee of the Company, all Parent stock options, stock
appreciation,  rights, or similar stock-based rights of Executive that
are unvested at the time of consummation of the Breg Disposition shall
(notwithstanding the terms thereof) automatically accelerate and become fully
vested as of the closing date of the Breg Disposition, and any risk of
forfeiture included in Parent restricted or other stock grants previously made
to the Executive shall immediately lapse.  Notwithstanding anything to
the contrary in the Plans or any related grant documents, in such even of a Breg
Disposition, (i) with respect to Parket stock options or stock appreciation
rights granted before June 30, 2009, Executive may exercise such options or
rights until the earlier of (A) five (5) years from the date of consummation of
the Breg Disposition, or (B) the latest date that each such stock option or
stock appreciation right would otherwise expire by its original terms, and (ii)
with respect to Parent stock options or stock appreciation rights granted on or
after June 30, 2009, Executive may exercise such options or rights until the
earlier of (X) two (2) years from the date of consummation of the Breg
Disposition, or (Y) the latest date that each stock option or stock appreciation
right would otherwise expire by its original terms to exercise any outstanding
stock options or stock appreciation rights.

       

      III.           EMPLOYEE
BENEFITS

      

      3.1           General.  Subject
only to any post-employment rights under Article V, so long as the Executive is
employed by the Company pursuant to this Agreement, he shall be eligible for the
following benefits to the extent generally available to senior executives of the
Company or by virtue of his position, tenure, salary and other
qualifications.  Any eligibility shall be subject to and in accordance
with the terms and conditions of the Company’s benefits policies and applicable
plans (including as to deductibles, premium sharing, co-payments or other
cost-splitting arrangements).

      

      3.2           Savings and Retirement
Plans.  The Executive shall be entitled to participate in, and
enjoy the benefits of, all savings, pension, salary continuation and retirement
plans, practices, policies and programs available to senior executives of the
Company.

      

      3.3           Welfare and Other
Benefits.  The Executive and/or the Executive’s eligible
dependents, as the case may be, shall be entitled to participate in, and enjoy
the benefits of, all welfare benefit plans, practices, policies and programs
provided by the Company (including without limitation, medical, prescription,
drug, dental, disability, salary continuance, group life, dependent life,
accidental death and travel accident insurance plans and programs) and other
benefits (including, without limitation, executive physicals and tax and
financial planning assistance) at a level that is available to other senior
executives of the Company.

      
        
           

        

        
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            Exhibit
10.49

          

        

      

      3.4           Vacation.  The
Executive shall be entitled to 4 weeks paid vacation per 12-month
period.

      

      3.5           Expenses.  The
Executive shall be entitled to receive prompt reimbursement for all reasonable
business-related expenses incurred by the Executive in performing his duties
under this Agreement.  Reimbursement of the Executive for such
expenses will be made upon presentation to the Company of expense vouchers that
are in sufficient detail to identify the nature of the expense, the amount of
the expense, the date the expense was incurred and to whom payment was made to
incur the expense, all in accordance with the expense reimbursement practices,
policies and procedures of the Company.

      

      3.6           Key Man
Insurance.  The Company shall be entitled to obtain a “key man”
or similar life or disability insurance policy on the Executive, and neither the
Executive nor any of his family members, heirs or beneficiaries shall be
entitled to the proceeds thereof.  Such insurance shall be available
to offset any payments due to the Executive pursuant to Section 5.1 of this
Agreement due to his death or Disability.

      

      IV.           TERMINATION
OF EMPLOYMENT

      

      4.1           Termination by Mutual
Agreement.  The Executive’s employment may be terminated at any
time during the Term by mutual written agreement of the Company and the
Executive.

      

      4.2           Death.  The
Executive’s employment hereunder shall terminate upon his death.

      

      4.3           Disability.  In
the event the Executive incurs a Disability for a continuous period exceeding 90
days or for a total of 180 days during any period of 12 consecutive months, the
Company may, at its election, terminate the Executive’s employment during or
after the Term by delivering a Notice of Termination (as defined in Section 4.8)
to the Executive 30 days in advance of the date of termination.

      

      4.4           Good Reason. The
Executive may terminate his employment at any time during or after the Term for
Good Reason by delivering a Notice of Termination to the Company 30 days in
advance of the date of termination; provided, however, that the
Executive agrees not to terminate his employment for Good Reason until the
Executive has given the Company at least 30 days’ in which to cure the
circumstances set forth in the Notice of Termination constituting Good Reason
and if such circumstances are not cured by the 30th day,
the Executive’s employment shall terminate on such date.  If the
circumstances constituting Good Reason are remedied within the cure period to
the reasonable satisfaction of the Executive, such event shall no longer
constitute Good Reason for purposes of this Agreement and the Executive shall
thereafter have no further right hereunder to terminate his employment for Good
Reason as a result of such event.  Unless the Executive provides
written notification of an event described in the definition of Good Reason
within 90 days after the Executive has actual knowledge of  the
occurrence of any such event, the Executive shall be deemed to have consented
thereto and such event shall no longer constitute Good Reason for purposes of
this Agreement.

      
        
           

        

        
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            Exhibit
10.49

          

        

      

      4.5           Termination without
Cause. The Company may terminate the Executive’s employment at any time
during or after the Term without Cause by delivering to the Executive a Notice
of Termination 30 days in advance of the date of termination; provided that as
part of such notice the Company may request that the Executive immediately
tender the resignations contemplated by Section 4.9 and otherwise cease
performing his duties hereunder.  The Notice of Termination need not
state any reason for termination and such termination can be for any reason or
no reason.  The date of termination shall be the date set forth in the
Notice of Termination.

      

      4.6           Cause. The Company
may terminate the Executive’s employment at any time during or after the Term
for Cause by delivering a Notice of Termination to the Executive. The Notice of
Termination shall include a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board, at a meeting of
the Board called and held for such purpose, finding that in the good faith
opinion of the Board an event constituting Cause has occurred and specifying the
particulars thereof.  A Notice of Termination for Cause may not be
delivered unless in conjunction with such Board meeting the Executive was given
reasonable notice and the opportunity for the Executive, together with the
Executive’s counsel, to be heard before the Board prior to such
vote.  If the event constituting Cause for termination is other than
as a result of a breach or violation by the Executive of any provision of
Article VI and only if the event constituting Cause is curable, then the
Executive shall have 30 days from the date of the Notice of Termination to cure
such event described therein to the reasonable satisfaction of the Board in its
sole discretion and, if such event is cured by the Executive within the cure
period, such event shall no longer constitute Cause for purposes of this
Agreement and the Company shall thereafter have no further right to terminate
the Executive’s employment for Cause as a result of such event.  The
Executive shall have no other rights under this Agreement to cure an event that
constitutes Cause.  Unless the Company provides written notification
of an event described in the definition of Cause within 90 days after the
Company knows or has reason to know of the occurrence of any such event, the
Company may not terminate the Executive for Cause unless such event is recurring
or uncurable.  Knowledge shall mean actual knowledge of the Board or
the Company’s senior executives.

      

      4.7           Voluntary
Termination.  The Executive may voluntarily terminate his
employment at any time during or after the Term by delivering to the Company a
Notice of Termination 30 days in advance of the date of termination (a “Voluntary
Termination”). For purposes of this Agreement, a Voluntary Termination
shall not include a termination of the Executive’s employment by reason of death
or for Good Reason, but shall include voluntary termination upon retirement in
accordance with the Company’s retirement policies. A Voluntary Termination shall
not be considered a breach or other violation of this Agreement.

      

      4.8           Notice of
Termination.  Any termination of employment under this
Agreement by the Company or the Executive requiring a notice of termination
shall require delivery of a written notice by one party to the other party (a
“Notice of
Termination”). A Notice of Termination must indicate the specific
termination provision of this Agreement relied upon and the date of termination.
It must also set forth in reasonable detail the facts and circumstances claimed
to provide a basis for such termination, other than in the event of a Voluntary
Termination or termination without Cause.  The date of termination
specified in the Notice of Termination shall comply with the time periods
required under this Article IV, and may in no event be earlier than the date
such Notice of Termination is delivered to or received by the party getting the
notice.  If the Executive fails to include a date of termination in
any Notice of Termination he delivers, the Company may establish such date in
its sole discretion.  No Notice of Termination under Section 4.4 or
4.6 shall be effective until the applicable cure period, if any, shall have
expired without the Company or the Executive, respectively, having corrected the
event or events subject to cure to the reasonable satisfaction of the other
party.  The terms “termination” and “termination of employment,” as
used herein are intended to mean a termination of employment which constitutes a
“separation from service” under Section 409A.

      
        
           

        

        
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            Exhibit
10.49

          

        

      

      4.9           Resignations.  Upon
ceasing to be an employee of the Company for any reason, or earlier upon request
by the Company pursuant to Section 4.5, the Executive agrees to immediately
tender written resignations to the Company with respect to all officer and
director positions he may hold at that time with the Company and its Affiliate
Companies.

      

      V.           PAYMENTS
ON TERMINATION

      

      5.1           Death; Disability;
Resignation for Good Reason; Termination without Cause.  If at
any time during the Term the Executive’s employment with the Company is
terminated pursuant to Section 4.2, 4.3, 4.4 or 4.5, the Executive shall be
entitled to the payment and benefits set forth below only.  If at any
time after the Term the Executive’s employment with the Company is terminated
pursuant to Section 4.2, 4.3, 4.4 or 4.5, the Executive shall be entitled to the
payment and benefits set forth in (a), (b) and the specified provisions of (c)
only.

      

      (a)           any
unpaid base salary and accrued unpaid vacation then owing through the date of
termination or Incentive Compensation that is as of such date actually earned or
owing under Article II, but not yet paid to the Executive, which amounts shall
be paid to the Executive within 30 days of the date of termination; provided,
however, the Executive shall be entitled to receive the pro rata amount of any
Incentive Compensation for the fiscal year of his termination of employment
(based on the number of business days he was actually employed by the Company
during the fiscal year in which the termination of employment occurs) that he
would have received had his employment not been terminated during such year.
Nothing in the foregoing sentence is intended to give the Executive greater
rights to such Incentive Compensation than a pro rata portion of what Incentive
Compensation would have been applicable to him had his employment not been
terminated, provided that Executive’s termination of employment shall not be
used to disqualify Executive from or make him ineligible for a pro rata portion
of the Incentive Compensation to which he would otherwise have been entitled,
and provided further that any personal or Company-based performance goals
applicable to such Incentive Compensation shall be deemed 100% satisfied when
calculating the amount of any pro rata Incentive Compensation payable pursuant
to this Section 5.1(a).  The pro rata portion of Incentive
Compensation shall, subject to Section 7.16,  be paid at the time such
Incentive Compensation is paid to senior executives of the Company (“Severance Bonus Payment
Date”) but in no event later than two and one-half months after the end
of such fiscal year.

      
        
           

        

        
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            Exhibit
10.49

          

        

      

      (b)           a
one-time lump sum severance payment in an amount equal to 100% of the
Executive’s Base Amount.  The lump sum severance payment shall be paid
within 30 days of the Executive’s signing the release described in Section 5.4
and the expiration of any applicable revocation period, subject, in the case of
termination other than as a result of the Executive’s death, to Section
7.16.

       

      (c)           if
the Company is a direct or indirect subsidiary of Parent at the time of such
termination, all stock options, stock appreciation rights or similar stock-based
rights granted to the Executive by Parent shall vest in full and be immediately
exercisable and any risk of forfeiture included in restricted or other stock
grants previously made to the Executive shall immediately lapse.  In
addition, if the Executive’s employment is terminated pursuant to Section 4.2,
4.3, 4.4 or 4.5 during or after the Term while the Company is a direct or
indirect subsidiary of Parent, the Executive shall have until the earlier of (i)
five (5) years from the date of termination, or (ii) the latest date that each
stock option or stock appreciation right would otherwise expire by its original
terms had the Executive’s employment not terminated  to exercise any
outstanding stock options or stock appreciation rights of Parent that were
granted prior to June 30, 2009.  For any new stock options awarded
after June 29, 2009, if the Executive’s employment is terminated pursuant to
Section 4.2, 4.3, 4.4 or 4.5 during or after the Term while the Company is a
direct or indirect subsidiary of Parent, the Executive shall have until the
earlier of (i) two (2) years from the date of termination, or (ii) the latest
date that each stock option or stock appreciation right would otherwise expire
by its original terms had the Executive’s employment not terminated to exercise
any vested and outstanding stock options or stock appreciation rights of Parent
that were granted after June 29, 2009.  The vesting and extension of
the exercise period set forth in this Section 5.1(c) shall occur notwithstanding
any provision in any Plans or related grant documents which provides for a
lesser vesting or shorter period for exercise upon termination by the Company
without Cause (which for this purpose shall include a termination by the
Executive for Good Reason), notwithstanding anything to the contrary in any
Plans or grant documents; provided, however,
and for the avoidance of doubt, nothing in this Agreement shall be construed as
or imply that this Agreement does or can grant greater rights than are allowed
under the terms and conditions of the Plans; provided, further,
and for the avoidance of doubt, the first sentence of this Section 5.1(c) shall
not apply to a termination of employment after the Term.

       

      (d)           to
the fullest extent permitted by the Company’s then-current benefit plans,
continuation of health, dental, vision and life insurance
coverage  (but not pension, retirement, profit-sharing, severance or
similar compensatory benefits), for the Executive and the Executive’s eligible
dependents substantially similar to coverage they were receiving or which they
were entitled to immediately prior to the termination of the Executive’s
employment for the lesser of 12 months after termination or until the Executive
secures coverage from new employment and the period of COBRA health care
continuation coverage provided under Section 4980B of the Code shall run
concurrently with the foregoing 12 month period.  In order to receive
such benefits, the Executive or his eligible dependents must continue to make
any required co-payments, deductibles, premium sharing or other cost-splitting
arrangements the Executive was otherwise paying immediately prior to the date of
termination and nothing herein shall require the Company to be responsible for
such items.  If Executive is a “specified employee” under Section
409A, the full cost of the continuation or provision of employee group welfare
benefits (other than medical or dental benefits) shall be paid by Executive
until the earliest to occur of (i) Executive’s death or (ii) the first day of
the seventh month following Executive’s termination of employment, and such cost
shall be reimbursed by the Company to, or on behalf of, Executive in a lump sum
cash payment on the earlier to occur of Executive’s death or the first day of
the seventh month following Executive’s termination of employment, except that,
as provided above, Executive shall not receive reimbursement for any required
co-payments, deductibles, premium sharing or other cost-splitting arrangements
the Executive was otherwise paying immediately prior to the date of
termination.

      
        
           

        

        
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            Exhibit
10.49

          

        

      

      (e)           payment
or reimbursement to the Executive of the costs and expenses of any executive
outplacement firm selected by the Executive in an amount not to exceed $12,500
during the 12-month period following his date of termination.  The
Executive shall provide the Company with reasonable documentation of such costs
and expenses.

       

      In the
event the Executive’s termination is pursuant to Section 4.2, in lieu of a lump
sum payment, the Executive’s heirs, beneficiaries, or personal representatives,
as applicable, shall receive (i) salary-related portions of the Base Amount on
regular payroll dates of the Company until the twelve-month anniversary of the
date of termination of the Executive and (ii) Incentive Compensation-related
portions of the Base Amount on the dates that such Incentive Compensation is
actually paid by the Company to its senior executives, but in no event later
than two and one-half months after the end of such fiscal
year.  Further, any payments by the Company under Section 5.1(b) above
pursuant to a termination under Section 4.2 or 4.3 shall be reduced by any
payments received by the Executive pursuant to any of the Company’s employee
welfare benefit plans providing for payments in the event of death or
Disability.

      

      5.2           Termination for Cause;
Voluntary Termination.  If at any time during or after the Term
the Executive’s employment with the Company is terminated pursuant to Section
4.6 or 4.7, the Executive shall be entitled to only the following:

      

      (a)           any
unpaid base salary and accrued unpaid vacation then owing through the date of
termination or Incentive Compensation that is as of such date actually earned or
owing under Article II, but not yet paid to the Executive, which amounts shall
be paid to the Executive within 30 days of the date of
termination.  Nothing in this provision is intended to imply that the
Executive is entitled to any partial or pro rata payment of Incentive
Compensation on termination unless the Bonus Plan or other plan, as applicable,
expressly provides as much under its specific terms.

      

      (b)           whatever
rights, if any, that are available to the Executive upon such a termination
pursuant to the Plans or any award documents related to any stock-based
compensation such as stock options, stock appreciation rights or restricted
stock grants. This Agreement does not grant any greater rights with respect to
such items than provided for in the Plans or the award documents in the event of
any termination for Cause or a Voluntary Termination.

      
        
           

        

        
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            Exhibit
10.49

          

        

      

      5.3           Termination following Change
of Control.  The Executive shall have no specific right to
terminate this Agreement or right to any severance payments or other benefits
solely as a result of a Change of Control or Potential Change of
Control.  However, if during a Change of Control Period during or
after the Term, (a) the Executive terminates his employment with the Company
pursuant to Section 4.4, or (b) the Company terminates the Executive’s
employment pursuant to Section 4.5, the lump sum severance payment under Section
5.1 shall be increased from 100% of the Base Amount to 150% of the Base Amount
and, for a termination of employment described in (a) and (b) during the Term,
the period for continuation of benefits under Section 5.1 shall be increased to
18 months from 12 months.  The terms and rights with respect to such
payments shall otherwise be governed by Section 5.1.  No other rights
result from termination during a Change of Control Period; provided, however, that nothing
in this Section 5.3 is intended to limit or impair the rights of the Executive
under the Plans or any documents evidencing any stock-based compensation awards
in the event of a Change of Control if such Plans or award documents grant
greater rights than are set forth herein.

      

      5.4           Release.  The
Company’s obligation to pay or provide any benefits to the Executive following
termination (other than in the event of death pursuant to Section 4.2) is
expressly subject to the requirement that he execute and not breach or rescind a
release relating to employment matters and the circumstances surrounding his
termination in favor of the Company and its Affiliate Companies, their
successors, and their respective officers, directors and related parties and
agents, in a form acceptable to the Company at the time of termination of
employment.  The Company shall deliver such release to the Executive
within three business days following his termination of employment and the
Executive shall be obligated to sign and return the release to the Company
within 45 days of receipt of such release to receive any benefits or payments
following termination.

      

      5.5           Other
Benefits.  Except as expressly provided otherwise in this
Article V, the provisions of this Agreement shall not affect the Executive’s
participation in, or terminating distributions and vested rights under, any
pension, profit-sharing, insurance or other employee benefit plan of the Company
or any of its Affiliate Companies to which the Executive is entitled pursuant to
the terms of such plans, or expense reimbursements he is otherwise entitled to
under Section 3.5.

      

      5.6           No
Mitigation.  It will be difficult, and may be impossible, for
the Executive to find reasonably comparable employment following the termination
of the Executive’s employment, and the protective provisions under Article VI
contained herein will further limit the employment opportunities for the
Executive.  In addition, the Company’s severance pay policy applicable
in general to its salaried employees does not provide for mitigation, offset or
reduction of any severance payment received thereunder.  Accordingly,
the parties hereto expressly agree that the payment of severance compensation in
accordance with the terms of this Agreement will be liquidated damages, and that
the Executive shall not be required to seek other employment, or otherwise, to
mitigate any payment provided for hereunder.

      

        
          
             

          

          
            10

            
              

            

          

          
             

            
              Exhibit
10.49

            

          

        
 

      5.7           Limitation; No Other
Rights.  Any amounts due or payable under this Article V are in
the nature of severance payments or liquidated damages, or both, and the
Executive agrees that such amounts shall fully compensate the Executive, his
dependents, heirs and beneficiaries and the estate of the Executive for any and
all direct damages and consequential damages that they do or may suffer as a
result of the termination of the Executive’s employment, or both, and are not in
the nature of a penalty.  Notwithstanding the above, neither the
Company nor any of its Affiliate Companies shall be liable to the Executive
under any circumstances for any consequential, incidental, punitive or similar
damages.  The Executive expressly acknowledges that the payments and
other rights under this Article V shall be the sole monies or other rights to
which the Executive shall be entitled to and such payments and rights will be in
lieu of any other rights or remedies he might have or otherwise be entitled
to.  In the event of any termination under this Article V, the
Executive hereby expressly waives any rights to any other amounts, benefits or
other rights, including without limitation whether arising under current or
future compensation or severance or similar plans, agreements or arrangements
with the Company or any of its Affiliate Companies (including as a result of
changes in (or of) control or similar transactions), unless Executive’s
entitlement to participate or receive benefits thereunder has been expressly
approved by the Board.  Similarly, neither the Company nor any of its
Affiliate Companies shall have any further liability or obligation to the
Executive following the date of termination, except as expressly provided in
this Agreement.

      

      5.8           No Right to Set
Off.  The Company shall not be entitled to set off against
amounts payable to the Executive hereunder any amounts earned by the Executive
in other employment, or otherwise, after termination of his employment with the
Company, or any amounts which might have been earned by the Executive in other
employment had he sought such other employment.

      

      5.9           Adjustments Due to Excise
Tax.

      

      (a)           If
it is determined that any amount or benefit to be paid or payable to the
Executive under this Agreement or otherwise in conjunction with his employment
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise in conjunction with his employment) would give
rise to liability of the Executive for the excise tax imposed by Section 4999 of
the Code, as amended from time to time, or any successor provision (the “Excise Tax”), then
the amount or benefits payable to the Executive (the total value of such amounts
or benefits, the “Payments”) shall be
reduced by the Company to the extent necessary so that no portion of the
Payments to the Executive is subject to the Excise Tax.  Such
reduction shall only be made if the net amount of the Payments, as so reduced
(and after deduction of applicable federal, state, and local income and payroll
taxes on such reduced Payments other than the Excise Tax (collectively, the
“Deductions”))
is greater than the excess of (1) the net amount of the Payments, without
reduction (but after making the Deductions) over (2) the amount of Excise Tax to
which the Executive would be subject in respect of such Payments.

      

      (b)           In
the event it is determined that the Excise Tax may be imposed on the Executive
prior to the possibility of any reductions being made pursuant to Section
5.9(a), the Company and the Executive agree to take such actions as they may
mutually agree in writing to take to avoid any such reductions being made or, if
such reduction is not otherwise required by Section 5.9(a), to reduce the amount
of Excise Tax imposed.

      

        
          
             

          

          
            11

            
              

            

          

          
             

            
              Exhibit
10.49

            

          

        

      

       

      (c)           The
independent public accounting firm serving as the Company's auditing firm, or
such other accounting firm, law firm or professional consulting services
provider of national reputation and experience reasonably acceptable to the
Company and Executive (the “Accountants”) shall
make in writing in good faith all calculations and determinations under this
Section 5.9, including the assumptions to be used in arriving at any
calculations.  For purposes of making the calculations and
determinations under this Section 5.9, the Accountants and each other party may
make reasonable assumptions and approximations concerning the application of
Section 280G and Section 4999.  The Company and Executive shall
furnish to the Accountants and each other such information and documents as the
Accountants and each other may reasonably request to make the calculations and
determinations under this Section 5.9.  The Company shall bear all
costs the Accountants incur in connection with any calculations contemplated
hereby.

      

      VI.           PROTECTIVE
PROVISIONS

      

      6.1           Noncompetition.  Without
the prior written consent of the Board (which may be withheld in the Board’s
sole discretion), so long as the Executive is an employee of the Company and for
a twelve-month period thereafter, the Executive agrees that he shall not
anywhere in the Prohibited Area, for his own account or the benefit of any
other, engage or participate in or assist or otherwise be connected with a
Competing Business.  For the avoidance of doubt, the Executive
understands that this Section 6.1 prohibits the Executive from acting for
himself or as an officer, employee, manager, operator, principal, owner,
partner, shareholder, advisor, consultant of, or lender to, any individual or
other Person that is engaged or participates in or carries out a Competing
Business or is actively planning or preparing to enter into a Competing
Business.  The parties agree that such prohibition shall not apply to
the Executive’s passive ownership of not more than 5% of a publicly-traded
company.

      

      6.2           No Solicitation or
Interference.  So long as the Executive is an employee of the
Company and for a twelve-month period thereafter, the Executive shall not,
whether for his own account or for the account or benefit of any other Person,
throughout the Prohibited Area:

      

      (a)           request,
induce or attempt to influence (i) any customer of the Company or Parent or
their respective direct and indirect subsidiaries to limit, curtail, cancel or
terminate any business it transacts with, or products or services it receives
from or sells to, or (ii) any Person employed by (or otherwise engaged in
providing services for or on behalf of) the Company or Parent or their
respective direct and indirect subsidiaries to limit, curtail, cancel or
terminate any employment, consulting or other service arrangement, with the
Company or Parent or their respective direct and indirect subsidiaries. Such
prohibition shall expressly extend to any hiring or enticing away (or any
attempt to hire or entice away) any employee or consultant of the Company or
Parent or their respective direct and indirect subsidiaries.

      

      (b)           solicit
from or sell to any customer any products or services that the Company or Parent
or their respective direct and indirect subsidiaries provides or is capable of
providing to such customer and that are the same as or substantially similar to
the products or services that the Company or Parent or their respective direct
and indirect subsidiaries sold or provided while the Executive was employed
with, or providing services to, the Company or Parent or their respective direct
and indirect subsidiaries.

      
        
           

        

        
          12

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      (c)           contact
or solicit any customer for the purpose of discussing (i) services or products
that are competitive with and the same or closely similar to those offered by
the Company or Parent or their respective direct and indirect subsidiaries or
(ii) any past or present business of the Company or Parent or their respective
direct and indirect subsidiaries.

      

      (d)           request,
induce or attempt to influence any supplier, distributor or other Person with
which the Company or Parent or their respective direct and indirect subsidiaries
has a business relationship or to limit, curtail, cancel or terminate any
business it transacts with the Company or Parent or their respective direct and
indirect subsidiaries.

      

      (e)           otherwise
interfere with the relationship of the Company or Parent or their respective
direct and indirect subsidiaries with any Person which is, or within one-year
prior to the Executive’s date of termination was, doing business with, employed
by or otherwise engaged in performing services for, the Company or Parent or
their respective direct and indirect subsidiaries.

      

      The
twelve-month post-termination employment period described herein and in Section
6.1 shall be extended to eighteen months in the event of a termination described
in Section 5.3.

      

      6.3           Confidential
Information.  During the period of the Executive’s employment
with the Company and at all times thereafter, the Executive shall hold in
secrecy for the Company all Confidential Information that may come to his
knowledge, may have come to his attention or may have come into his possession
or control while employed by the Company (or otherwise performing services for
the Company or any then-current Affiliate Company).  Notwithstanding
the preceding sentence, the Executive shall not be required to maintain the
confidentiality of any Confidential Information which (a) is or becomes
available to the public or others in the industry generally (other than as a
result of disclosure or inappropriate use, or caused, by the Executive in
violation of this Section 6.3) or (b) the Executive is compelled to disclose under any
applicable laws, regulations or directives of any government agency, tribunal or
authority having jurisdiction in the matter or under subpoena.  Except
as expressly required in the performance of his duties to the Company under this
Agreement, the Executive shall not use for his own benefit or disclose (or
permit or cause the disclosure of) to any Person, directly or indirectly, any
Confidential Information unless such use or disclosure has been specifically
authorized in writing by the Company in advance.  During the
Executive’s employment and as necessary to perform his duties under
Section 1.2, the Company will provide and grant the Executive access to the
Confidential Information.  The Executive recognizes that any
Confidential Information is of a highly competitive value, will include
Confidential Information not previously provided the Executive and that the
Confidential Information could be used to the competitive and financial
detriment of the Company or any of its Affiliate Companies if misused or
disclosed by the Executive.  The Company promises to provide access to
the Confidential Information only in exchange for the Executive’s promises
contained herein, expressly including the covenants in Sections 6.1, 6.2 and
6.4.

      
        
           

        

        
          13

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      6.4           Inventions.

      

      (a)           The
Executive shall promptly and fully disclose to the Company any and all ideas,
improvements, discoveries and inventions, whether or not they are believed to be
patentable (“Inventions”), that
the Executive conceives of or first actually reduces to practice, either solely
or jointly with others, during the Executive’s employment with the Company, and
that relate to the business now or thereafter carried on or contemplated by the
Company or any of its Affiliate Companies or that result from any work performed
by the Executive for the Company or any of its Affiliate Companies.

      

      (b)           The
Executive acknowledges and agrees that all Inventions shall be the sole and
exclusive property of the Company (or applicable Affiliate Company) and are
hereby assigned to the Company (or applicable Affiliate
Company).  During the term of the Executive’s employment with the
Company and thereafter, whenever requested to do so by the Company, the
Executive shall take such action as may be requested to execute and assign any
and all applications, assignments and other instruments that the Company shall
deem necessary or appropriate in order to apply for and obtain Letters Patent of
the United States and/or of any foreign countries for such Inventions and in
order to assign and convey to the Company (or applicable Affiliate Company) or
their nominees the sole and exclusive right, title and interest in and to such
Inventions.

      

      (c)           The
Company acknowledges and agrees that the provisions of this Section 6.4 do not
apply to an Invention: (i) for which no equipment, supplies, or facility of the
Company or any of its Affiliate Companies or Confidential Information was used;
(ii) that was developed entirely on the Executive’s own time and does not
involve the use of Confidential Information; (iii) that does not relate directly
to the business of the Company or any of its Affiliate Companies or to the
actual or demonstrably anticipated research or development of the Company or any
of its Affiliate Companies; and (iv) that does not result from any work
performed by the Executive for the Company or any of its Affiliate
Companies.

      

      6.5           Return of Documents and
Property.  Upon termination of the Executive’s employment for
any reason, the Executive (or his heirs or personal representatives) shall
immediately deliver 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 the Company or its Affiliate
Companies (whether or not confidential), and (b) all other documents,
materials and other property belonging to the Company or any of its Affiliate
Companies that are in the possession or under the control of the
Executive.

      

      6.6           Reasonableness;
Remedies.  The Executive acknowledges that each of the
restrictions set forth in this Article VI are reasonable and necessary for the
protection of the Company’s business and opportunities (and those of the
Affiliate Companies) and that a breach of any of the covenants contained in this
Article VI would result in material irreparable injury to the Company and the
Affiliate Companies for which there is no adequate remedy at law and that it
will not be possible to measure damages for such injuries
precisely.  Accordingly, the Company and each of its Affiliate
Companies shall be entitled to the remedies of injunction and specific
performance, or either of such remedies, as well as all other remedies to which
the Company or any of its Affiliate Companies may be entitled, at law, in equity
or otherwise, without the need for the posting of a bond or by the posting of
the minimum bond that may otherwise be required by law or court
order.

      
        
           

        

        
          14

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      6.7           Extension;
Survival.  The Executive and the Company agree that the time
periods identified in this Article VI will be stayed, and the Company’s
obligation to make any payments or provide any benefits under Article V shall be
suspended, during the period of any breach or violation by the Executive of the
covenants contained herein.  The parties further agree that this
Article VI shall survive the termination or expiration of this Agreement for any
reason.  The Executive acknowledges that his agreement to each of the
provisions of this Article VI is fundamental to the Company’s willingness to
enter into this Agreement and for it to provide for the severance and other
benefits described in Article V.  Further, it is the express intent
and desire of the parties for each provision of this Article VI to be enforced
to the fullest extent permitted by law.  If any part of this Article
VI, or any provision hereof, is deemed illegal, void, unenforceable or overly
broad (including as to time, scope and geography), the parties’ express desire
is that such provision be reformed to the fullest extent possible to ensure its
enforceability or if such reformation is deemed impossible then such provision
shall be severed from this Agreement, but the remainder of this Agreement
(expressly including the other provisions of this Article VI) shall remain in
full force and effect.

      

      VII.           MISCELLANEOUS

      

      7.1           Notices.  Any
notice required or permitted under this Agreement shall be given in writing and
shall be deemed to have been effectively made or given if personally delivered,
or if sent via U.S. mail or recognized overnight delivery service or sent via
confirmed e-mail or facsimile to the other party at its address set forth below
in this Section 7.1, or at such other address as such party may designate
by written notice to the other party hereto. Any effective notice hereunder
shall be deemed given on the date personally delivered, three business days
after mailed via U.S. mail or one business day after it is sent via overnight
delivery service or via confirmed e-mail or facsimile, as the case may be, to
the following address:

       

      
        
          	 
      	
                  If
      to the Company:

                	 
      
	 
      	 
      	 
      
	 
      	
                  Breg
      Inc.

                	 
      
	 
      	
                  Attn:
      General Counsel

                	 
      
	 
      	
                  2611
      Commerce Way

                	 
      
	 
      	
                  Vista,
      California 92081

                	 
      
	 
      	
                  Facsimile:  760-598-8125

                	 
      

          

            
              
                 

              

              
                15

                
                  

                

              

              
                 

                
                  Exhibit
10.49

                

              

            

          

           

          	 
      	
                  With,
      so long as the Company is a direct or indirect subsidiary 

                  of
      Parent, a copy (which shall not constitute notice) to:

                	 
      
	 
      	 
      	 
      
	 
      	
                  Orthofix
      Inc.

                	 
      
	 
      	
                  Attn:
      Chief Financial Officer

                	 
      
	 
      	
                  800
      Boylston Street

                	 
      
	 
      	
                  15th
      Floor

                	 
      
	 
      	
                  The
      PRU Tower

                	 
      
	 
      	
                  Boston,
      MA 02199

                	 
      
	 
      	
                  E-mail:
      robertvaters@orthofix.com

                	 
      
	 
      	 
      	 
      
	 
      	
                  If
      to the Executive:

                	 
      
	 
      	 
      	 
      
	 
      	
                  At
      the most recent address on file with the Company

                	 
      

        

         

      

      7.2           Legal
Fees.

      

      (a)           The
Company shall
pay all reasonable legal fees and expenses of the Executive’s counsel in
connection with the preparation and negotiation of this Agreement.

      

      (b)           It
is the intent of the Company that the Executive not be required to bear the
legal fees and related expenses associated with the enforcement or defense of
the Executive's rights under this Agreement by litigation, arbitration or other
legal action because having to do so would substantially detract from the
benefits intended to be extended to the Executive hereunder. Accordingly, the
parties hereto agree that any dispute or controversy arising under or in
connection with this Agreement shall be resolved exclusively and finally by
binding arbitration in Vista, California, in accordance with the rules of the
American Arbitration Association then in effect.  Judgment may be
entered on the arbitrator's award in any court having
jurisdiction.  The Company shall be responsible for its own fees,
costs and expenses and shall pay to the Executive an amount equal to all
reasonable attorneys' and related fees, costs and expenses incurred by the
Executive in connection with such arbitration unless the arbitrator determines
that the Executive (a) did not commence or engage in the arbitration with a
reasonable, good faith belief that his claims were meritorious or (b) the
Executive’s claims had no merit and a reasonable person under similar
circumstances would not have brought such claims.  If there is any
dispute between the Company and the Executive as to the payment of such fees and
expenses, the arbitrator shall resolve such dispute, which resolution shall also
be final and binding on the parties, and as to such dispute only the burden of
proof shall be on the Company.

      

      7.3           Severability.  If
an arbitrator or a court of competent jurisdiction determines that any term or
provision hereof is void, invalid or otherwise unenforceable, (a) the
remaining terms and provisions hereof shall be unimpaired and (b) such
arbitrator or court shall replace such void, invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the void, invalid or unenforceable term
or provision. For the avoidance of doubt, the parties expressly intend that this
provision extend to Article VI of this Agreement.

      
        
           

        

        
          16

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      7.4           Entire
Agreement.  This Agreement represents the entire agreement of
the parties with respect to the subject matter hereof and shall supersede any
and all previous contracts, arrangements or understandings between the Company,
any Affiliate Companies, and the Executive relating to the Executive’s
employment by the Company, expressly including the Prior Agreement, which Prior
Agreement is hereby terminated in its entirety upon mutual agreement of the
parties thereto and of no further force and effect. The Executive expressly
acknowledges that he has no further rights, and hereby waives or forfeits any
and all rights he may have or may have had, under the Prior Agreement as a
result of its termination hereby, and neither the Company nor any Affiliate
Company shall have any obligation to make any payments or satisfy any other
liability to him thereunder.  Nothing in this Agreement shall modify
or alter any Indemnity Agreement by and between Parent and the Executive (an
“Indemnity
Agreement”) or alter or impair any of the Executive’s rights under the
Plans or related award agreements.  In the event of any conflict
between this Agreement and any other agreement between the Executive and the
Company (or any Affiliate Company), this Agreement shall
control.  

      

      7.5           Amendment; Modification.  Except
for increases in Base Salary, and adjustments with respect to Incentive
Compensation, made as provided in Article II, this Agreement may be amended at
any time only by mutual written agreement of the Executive and the Company;
provided, however, that,
notwithstanding any other provision of this Agreement, the Plans (or any award
documents under the Plans) or an Indemnity Agreement, the Company may reform
this Agreement, the Plans (or any award documents under the Plans), an Indemnity
Agreement or any provision thereof (including, without limitation, an amendment
instituting a six-month waiting period before a distribution) or otherwise as
contemplated by Section 7.16 below.

      

      7.6           Withholding.  The
Company shall be entitled to withhold, deduct or collect or cause to be
withheld, deducted or collected from payment any amount of withholding taxes
required by law, statutory deductions or collections with respect to payments
made to the Executive in connection with his employment, termination (including
Article V) or his rights hereunder, including as it relates to stock-based
compensation.

      

      7.7           Representations.

      

      (a)           The
Executive hereby represents and warrants to the Company that (i) the execution,
delivery and performance of this Agreement by the Executive do not and shall not
conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which the Executive is a party or by
which he is bound, and (ii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of the
Executive, enforceable in accordance with its terms.  The Executive
hereby acknowledges and represents that he has consulted with legal counsel
regarding his rights and obligations under this Agreement and that he fully
understands the terms and conditions contained herein.

      
        
           

        

        
          17

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      (b)             The
Company hereby represents and warrants to the Executive that (i) the execution,
delivery and performance of this Agreement by the Company do not and shall not
conflict with, breach, violate or cause a default under any material contract,
agreement, instrument, order, judgment or decree to which the Company is a party
or by which it is bound and (ii) upon the execution and delivery of this
Agreement by the Executive, this Agreement shall be the valid and binding
obligation of the Company, enforceable in accordance with its
terms.

      

      7.8           Governing Law;
Jurisdiction.  This Agreement shall be construed, interpreted,
and governed in accordance with the laws of the State of California without
regard to any provision of that State’s rules on the conflicts of law that might
make applicable the law of a jurisdiction other than that of the State of
California.  Except
as otherwise provided in Section 7.2, all actions or proceedings arising out of
this Agreement shall exclusively be heard and determined in state or federal
courts in the State of California having appropriate
jurisdiction.  The parties expressly consent to the exclusive
jurisdiction of such courts in any such action or proceeding and waive any
objection to venue laid therein or any claim for forum
nonconveniens.

      

      7.9           Successors.  This
Agreement shall be binding upon and inure to the benefit of, and shall be
enforceable by the Executive, the Company, and their respective heirs,
executors, administrators, legal representatives, successors, and
assigns.  In the event of a Company Business Combination (as defined
in clause (ii) of Change of Control), the provisions of this Agreement shall be
binding upon and inure to the benefit of the entity resulting from such Company
Business Combination or to which the assets shall be sold or transferred, which
entity from and after the date of such Company Business Combination shall be
deemed to be the Company for purposes of this Agreement.  In the event
of any other assignment of this Agreement by the Company, the Company shall
remain primarily liable for its obligations hereunder.  The Executive
expressly acknowledges that Parent and the other Affiliate Companies (and their
successors and assigns) are third party beneficiaries of this Agreement and may
enforce this Agreement on behalf of themselves or the Company.  Both
parties agree that there are no third party beneficiaries to this Agreement
other than as expressly set forth in this Section 7.9.

      

      7.10           Nonassignability.  Neither
this Agreement nor any right or interest hereunder shall be assignable by the
Executive, his beneficiaries, dependents or legal representatives without the
Company’s prior written consent; provided, however, that nothing
in this Section 7.10 shall preclude (a) the Executive from designating a
beneficiary to receive any benefit payable hereunder upon his death or (b) the
executors, administrators or other legal representatives of the Executive or his
estate from assigning any rights hereunder to the Person(s) entitled
thereto.

      

      7.11           No
Attachment.  Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation in
favor of any third party, or to execution, attachment, levy or similar process
or assignment by operation of law in favor of any third party, and any attempt,
voluntary or involuntary, to effect any such action shall be null, void and of
no effect.

      
        
           

        

        
          18

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      7.12           Waiver.  No
term or condition of this Agreement shall be deemed to have been waived, nor
there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel.  No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.

      

      7.13           Construction.  The
headings of articles or sections herein are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement. References to days found herein shall be actual
calendar days and not business days unless expressly provided
otherwise.

      

      7.14           Counterparts.  This
Agreement may be executed by any of the parties hereto in counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.

      

      7.15           Effectiveness. This
Agreement shall be effective as of the Effective Date when signed by the
Executive and the Company.

      

      7.16           Code Section
409A.

      

      (a)           It
is the intent of the parties that payments and benefits under this Agreement
comply with Section 409A and, accordingly, to interpret, to the maximum extent
permitted, this Agreement to be in compliance therewith.  If the
Executive notifies the Company in writing  (with specificity as to the
reason therefore) that the Executive believes that any provision of this
Agreement (or of any award of compensation, including equity compensation or
benefits) would cause the Executive to incur any additional tax or interest
under Section 409A and the Company concurs with such belief or the Company
(without any obligation whatsoever to do so) independently makes such
determination, the parties shall, in good faith, reform such provision to try to
comply with Code Section 409A through good faith modifications to the minimum
extent reasonably appropriate to conform with Code Section 409A.  To
the extent that any provision hereof is modified by the parties to try to comply
with Code Section 409A, such modification shall be made in good faith and shall,
to the maximum extent reasonably possible, maintain the original intent of the
applicable provision without violating the provisions of Code Section
409A.  Notwithstanding the foregoing, the Company shall not be
required to assume any economic burden in connection therewith.

      

      (b)           If
the Executive is deemed on the date of “separation from service” to be a
“specified employee” within the meaning of that term under Section
409A(a)(2)(B), then with regard to any payment or the provision of any benefit
that is specified as subject to this Section, such payment or benefit shall be
made or provided at the date which is the earlier of (A) the expiration of the
six (6)-month period measured from the date of such “separation from service” of
the Executive, and (B) the date of the Executive’s death (the “Delay
Period”).  Upon the expiration of the Delay Period, all payments and
benefits delayed pursuant to this Section 7.16 (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to the Executive in a lump sum, and any
remaining payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them
herein.  If a payment is to be made promptly after a date, it shall be
made within sixty (60) days thereafter.

      
        
           

        

        
          19

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      (c)           Any
expense reimbursement under this Agreement shall be made promptly upon
Executive’s presentation to the Company of evidence of the fees and expenses
incurred by the Executive and in all events on or before the last day of the
taxable year following the taxable year in which such expense was incurred by
the Executive, and no such reimbursement or the amount of expenses eligible for
reimbursement in any taxable year shall in any way affect the expenses
eligible for reimbursement in any other taxable year, except for (i) the
limit on the amount of outplacement costs and expenses reimbursable pursuant to
Section 5.1(c) and (ii) any limit on the amount of expenses that may be
reimbursed under an arrangement described in Code Section 105(b).

      

      7.17           Survival.  As
provided in Section 1.3 with respect to expiration of the Term, Articles VI and
VII and specified parts of Articles IV and V shall survive the
termination or expiration of this Agreement for any reason.

      
        
           

        

        
          20

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      IN WITNESS WHEREOF, the
parties have executed this Agreement as of the Effective Date.

      

      

      
        	
                BREG,
      INC.

              	 
      	
                EXECUTIVE

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 	 	 	 	 
	
                /s/ Alan W. Milinazzo

              	 
      	
                /s/ Brad Lee

              	 
      
	
                Name:  
      

              	
                Alan W. Milinazzo

              	 
      	
                Brad
      Lee, an individual

              	 
      
	
                Title:

              	
                Chief Executive Officer

              	 
      	 
      	 
      

      

      
        
           

        

        
          21

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      EXHIBIT
A

       

      Definitions

       

      For purposes of this Agreement, the
following capitalized terms have the meanings set forth below:

       

      “Affiliate
Companies” shall
mean, unless otherwise specified, all past and present direct and indirect
subsidiaries and parents of the Company.

       

      “Base
Amount” shall
mean an amount equal to the sum of:

       

      (i) the
Executive’s annual base salary at the highest annual rate in effect at any time
during the Term; and

       

      (ii) the
lower of (i) the Executive’s target bonus under Section 2.3 in effect during the
fiscal year in which termination of employment occurs, or (ii) the average of
the Incentive Compensation (as defined in Section 2.3) actually earned by the
Executive (A) with respect to the two consecutive annual Incentive Compensation
periods ending immediately prior to the year in which termination of the
Executive’s employment with the Company occurs or, (B) if greater, with respect
to the two consecutive annual Incentive Compensation periods ending immediately
prior to the Change of Control Date or the Potential Change of Control Date;
provided, however, that if the
Executive was not eligible for Incentive Compensation for such two consecutive
Incentive Compensation periods, the amount included pursuant to this clause (ii)
shall be the Incentive Compensation paid to the Executive for the most recent
annual Incentive Compensation Period.  In the event the Incentive
Compensation paid to the Executive for any such prior Incentive Compensation
period represented a pro rated full-year amount because the Executive was not
employed by the Company for the entire Incentive Compensation period, the
Incentive Compensation paid to the Executive for such period for purposes of
this clause (ii) shall be an amount equal to such pro-rated full-year
amount.

       

      “Board” shall mean the Board of
Directors of the Company or a committee thereof.

       

      “Cause” shall mean termination of
the Executive’s employment because of the Executive’s:  (i)
involvement in fraud, misappropriation
or embezzlement related to the business or property of the Company; (ii)
conviction for, or guilty plea to, or plea of nolo contendere to, a felony or
crime of similar gravity in the jurisdiction in which such conviction or guilty
plea occurs; (iii) intentional wrongful disclosure of Confidential Information
or other intentional wrongful violation of Article VI;  (iv) willful
and continued failure by the Executive to follow the reasonable instructions of
the Board or the Chief Executive Officer of the Company (or, so long as the
Company is a direct or indirect subsidiary of Parent, the Parent Board or the
Chief Executive Officer of the Parent); (v) willful commission by the Executive
of acts that are dishonest and demonstrably and materially injurious to the
Company or any then-current Affiliate Company, monetarily or otherwise; (vi)
willful or material violation of, or willful or material noncompliance with, any
securities law, rule or regulation or stock exchange listing rule adversely
affecting the Company or any then-current Affiliate Company including without
limitation (a) if the Executive has undertaken to provide any certification or
related back-up material required for the chief and principal executive and
financial officers of the Company or any then-current Affiliate Company to
provide a certification required under the Sarbanes-Oxley Act of 2002, including
the rules and regulations promulgated thereunder (the “Sarbanes-Oxley Act”),
and he willfully or materially fails to take reasonable and appropriate steps to
determine whether or not the certificate or related back-up material was
accurate or otherwise in compliance with the requirements of the Sarbanes-Oxley
Act or (b) the Executive’s willful or material failure to establish and
administer effective systems and controls applicable to his area of
responsibility necessary for the Company or any then-current Affiliate Company
to timely and accurately file reports pursuant to Section 13 or 15(d) of the
Exchange Act.  No act or omission shall be deemed willful or material
for purposes of this definition if taken or omitted to be taken by Executive in
a good faith belief that such act or omission to act was in the best interests
of the Company and its then-current Affiliate Companies or if done at the
express direction of the Board (or, so long as the Company is a direct or
indirect subsidiary of Parent, the Parent Board).

      
        
           

        

        
          22

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      “Change of
Control” shall
occur upon any of the following events:

       

      (i)           the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act), in any individual
transaction or series of related transactions, of 50% or more of either (A) the
then outstanding shares of common stock of the Company (the “Outstanding Company Common
Stock”) or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting
Securities”); excluding, however, the
following:  (1) any acquisition directly from the Company, other than
an acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Company; (2)
any acquisition by the Company, Parent or any direct or indirect subsidiary of
the Company or Parent; (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or Parent or any entity
controlled by the Company or Parent; or (4) any acquisition pursuant to a
transaction which complies with clauses (A) and (B) of subsection (ii) of this
definition of Change of Control;

       

      (ii)           consummation
of a reorganization, merger, consolidation or other business combination or the
sale or other disposition of all or substantially all of the assets of the
Company (any such transaction, a “Company Business
Combination”); expressly excluding,
however, any
such Company Business Combination pursuant to which (A) the Company remains a
direct or indirect subsidiary of Parent after such Company Business Combination
or (B) all of the following conditions are met: (1) all or substantially
all of the Person(s) who are the beneficial owners of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively,
immediately prior to such Company Business Combination will beneficially own,
directly or indirectly, more than 50% of, respectively, the outstanding shares
of common stock, and the combined voting power of the outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the entity resulting from such Company Business Combination
(including, without limitation, an entity which as a result of such transaction
owns the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Company Business
Combination, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, and (2) no Person (other than the
Company, any employee benefit plan (or related trust) of the Company or such
entity resulting from such Company Business Combination) will beneficially own,
directly or indirectly, 50% or more of, respectively, the outstanding shares of
common stock of the entity resulting from such Company Business Combination or
the combined voting power of the outstanding voting securities of such entity
entitled to vote generally in the election of directors except to the extent
that such ownership existed prior to the Company Business
Combination;

      
        
           

        

        
          23

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      (iii)           the
approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company;

       

      (iv)           any
other transaction or series of related transactions occur that have
substantially the effect of the transactions specified in any of the preceding
clauses in this definition; or

       

      (v)           a
Parent Change of Control occurs during any time when the Company is a direct or
indirect subsidiary of Parent.

       

      Notwithstanding
the above definition of Change of Control, the Board, in its sole discretion,
may determine that a Change of Control has occurred for purposes of this
Agreement, even if the events giving rise to such Change of Control are not
expressly described in the above definition.

       

      “Change of
Control Date”
shall mean the date on which a Change of Control occurs.

       

      “Change of
Control Period”
shall mean the 24 month period commencing
on the Change of Control Date; provided, however, if the
Company terminates the Executive’s employment with the Company prior to the
Change of Control Date but on or after a Potential Change of Control Date, and
it is reasonably demonstrated that the Executive’s (i) employment was terminated
at the request of an unaffiliated third party who has taken steps reasonably
calculated to effect a Change of Control or (ii) termination of employment
otherwise arose in connection with or in anticipation of the Change of Control,
then the “Change of
Control Period” shall mean the 24 month period beginning
on the date immediately prior to the date of the Executive’s termination of
employment with the Company.

       

      “Code” shall mean the Internal
Revenue Code of 1986, as amended.

      

      “Competing
Business” means
any business or activity that (i) competes with the Company or any then-current
Affiliate Company for which the Executive performed services or the Executive
was involved in for purposes of making strategic or other material business
decisions and involves (ii) (A) the same or substantially similar types of
products or services (individually or collectively) manufactured, marketed or
sold by the Company or any then-current Affiliate Company during Term or (B)
products or services so similar in nature to that of the Company or any
then-current Affiliate Company during Term (or that the Company or any
then-current Affiliate Company will soon thereafter offer) that they would be
reasonably likely to displace substantial business opportunities or customers of
the Company or any then-current Affiliate Company.

      
        
           

        

        
          24

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      “Confidential
Information”
shall include Trade Secrets and includes information acquired by the Executive
in the course and scope of his activities under this Agreement, including
information acquired from third parties, that (i) is not generally known or
disseminated outside the Company or its Affiliate Companies (such as non-public
information), (ii) is designated or marked by the Company or an Affiliate
Company as “confidential” or reasonably should be considered confidential or
proprietary, or (iii) the Company or an Affiliate Company indicates through its
policies, procedures, or other instructions should not be disclosed to anyone
outside the Company or the Affiliate Companies.  Without limiting the
foregoing definitions, some examples of Confidential Information under this
Agreement include (a) matters of a technical nature, such as scientific, trade
or engineering secrets, “know-how”, formulae, secret processes, inventions, and
research and development plans or projects regarding existing and prospective
customers and products or services, (b) information about costs, profits,
markets, sales, customer lists, customer needs, customer preferences and
customer purchasing histories, supplier lists, internal financial data,
personnel evaluations, non-public information about medical devices or products
of the Company or an Affiliate Company (including future plans about them),
information and material provided by third parties in confidence and/or with
nondisclosure restrictions, computer access passwords, and internal market
studies or surveys and (c) and any other information or matters of a similar
nature.

       

      “Disability”
as used in this Agreement shall have the meaning given that term by any
disability insurance the Company carries at the time of termination that would
apply to the Executive. Otherwise, the term “Disability” shall
mean the inability of the Executive to perform his duties and responsibilities
under this Agreement as a result of a physical or mental illness, disease or
personal injury he has incurred. Any dispute as to whether or not the Executive
has a “Disability” for
purposes of this Agreement shall be resolved by a physician reasonably
satisfactory to the Board and the Executive (or his legal representative, if
applicable). If the Board and the Executive (or his legal representative, if
applicable) are unable to agree on a physician, then each shall select one
physician and those two physicians shall pick a third physician and the
determination of such third physician shall be binding on the
parties.

       

      “Exchange
Act” shall mean
the Securities Exchange Act of 1934, as amended.

       

      “Good
Reason” shall
mean the occurrence of any of the following without the written consent of the
Executive:  (i) any duties, functions or responsibilities are assigned
to the Executive that are materially inconsistent with the Executive’s duties,
functions or responsibilities with the Company as contemplated or permitted by
Section 1.1 or Executive’s duties, functions or responsibilities with the
Company are materially diminished from those existing as of the date of this
Agreement; (ii) any action by the Company that results in a material adverse
change in the nature or scope of the position, power, duties, functions,
responsibilities or authorities of the Executive with the Company from those
contemplated or permitted by Section 1.1; (iii) the base salary of the Executive
is materially reduced; (iv) there is, other than as a result of or in connection
with the Company ceasing to be a direct or indirect subsidiary of Parent, a
material adverse change or termination of the Executive’s right to participate,
on a basis substantially consistent with practices applicable to senior
executives of the Company generally, in any bonus, incentive, profit-sharing,
stock option, stock purchase, stock appreciation, restricted stock,
discretionary pay or similar policy, plan, program or arrangement of the
Company, (v) there is any material adverse failure to provide the compensation
and benefits contemplated by Sections 2.3, 2.4 and Article III, except where
necessary to avoid the imposition of any additional tax under Section 409A of
the Code; (vi) there is a material termination or denial of the Executive’s
right, on a basis substantially consistent with practices applicable generally
to senior executives of the Company, to participate in and receive service
credit for benefits as provided under, all life, accident, medical payment,
health and disability insurance, retirement, pension, salary continuation,
expense reimbursement and other employee and perquisite policies, plans,
programs and arrangements that generally are made available to senior executives
of the Company, except for any arrangements that the Board adopts for select
senior executives to compensate them for special or extenuating circumstances or
as needed to comply with applicable law or as necessary to avoid the imposition
of any additional tax under Section 409A, (vii) any material
breach by the Company of its representations under Section 7.7(b), or (viii)
without the express written consent of Executive, the permanent relocation by
the Company of Executive to a location more than 25 miles from San Diego,
California.

      
        
           

        

        
          25

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      “Parent” shall mean Orthofix
International N.V., an entity organized under the laws of the Netherlands
Antilles.

       

      “Parent
Board” shall mean
the Board of Directors of Parent or a committee thereof.

       

      “Parent
Change of Control”
shall occur upon any of the following events:

       

      (i)           the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act), in any individual
transaction or series of related transactions, of 50% or more of either (A) the
then outstanding shares of common stock of Parent (the “Outstanding Parent Common
Stock”) or (B) the combined voting power of the then outstanding voting
securities of Parent entitled to vote generally in the election of directors
(the “Outstanding
Parent Voting Securities”); excluding, however, the
following:  (1) any acquisition directly from Parent, other than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from Parent; (2) any
acquisition by Parent; (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Parent or any entity controlled by
Parent; or (4) any acquisition pursuant to a transaction which complies
with clauses (A), (B) and (C) of subsection (iii) of this definition of Parent
Change of Control;

       

      (ii)           a
change in the composition of the Parent Board such that the individuals who as
of the Effective Date constitute the Parent Board (the “Incumbent Parent
Board”) cease for any reason to constitute at least a majority of the
Parent Board; provided, however, for purposes
of this paragraph, that any individual who becomes a member of the Parent Board
subsequent to the Effective Date, whose appointment, election, or nomination for
election by Parent’s shareholders was approved by a vote of at least a
majority of those
individuals who are members of the Parent Board and who were also members of the
Incumbent Parent Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Parent
Board; but provided further that any such
individual whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Parent Board shall not be so considered as a member of the Incumbent Parent
Board;

      

        
          
             

          

          
            26

            
              

            

          

          
             

            
              Exhibit
10.49

            

          

        

      

       

      (iii)           consummation
of a reorganization, merger, consolidation or other business combination or the
sale or other disposition of all or substantially all of the assets of Parent
(including assets that are shares held by Parent in its subsidiaries) (any such
transaction, a “Parent
Business Combination”); expressly excluding,
however, any
such Parent Business Combination pursuant to which all of the following
conditions are met:  (A) all or substantially all of the
Person(s) who are the beneficial owners of the Outstanding Parent Common Stock
and Outstanding Parent Voting Securities, respectively, immediately prior to
such Parent Business Combination will beneficially own, directly or indirectly,
more than 50% of, respectively, the outstanding shares of common stock, and the
combined voting power of the outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity
resulting from such Parent Business Combination (including, without limitation,
an entity which as a result of such transaction owns Parent or all or
substantially all of Parent’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Parent Business Combination, of the Outstanding Parent
Common Stock and Outstanding Parent Voting Securities, as the case may be,
(B) no Person (other than Parent, any employee benefit plan (or related
trust) of Parent or such entity resulting from such Parent Business Combination)
will beneficially own, directly or indirectly, 50% or more of, respectively, the
outstanding shares of common stock of the entity resulting from such Parent
Business Combination or the combined voting power of the outstanding voting
securities of such entity entitled to vote generally in the election of
directors except to the extent that such ownership existed prior to the Parent
Business Combination, and (C) individuals who were members of the Incumbent
Parent Board will constitute at least a majority of the members of the board of
directors of the entity resulting from such Parent Business
Combination;

       

      (iv)           the
approval by the shareholders of Parent of a complete liquidation or dissolution
of Parent;

       

      (v)           the
Parent shall sell or dispose of, in a single transaction or series of related
transactions, business operations that generated two-thirds of the consolidated
revenues of the Parent and its subsidiaries (determined on the basis of Parent’s
four most recently completed fiscal quarters for which reports have been filed
under the Exchange Act) and such disposal shall not be exempted pursuant to
clause (iii) of this definition of Parent Change of Control;

      
        
           

        

        
          27

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      (vi)           Parent
files a report or proxy statement with the Securities and Exchange Commission
pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A
(or any successor schedule, form or report or item therein) that a change of
control of Parent has or may have occurred or will or may occur in the future
pursuant to any then-existing agreement or transaction; notwithstanding the
foregoing, unless determined in a specific case by a majority vote of the Parent
Board, a “Parent Change of Control” shall not be deemed to have occurred solely
because:  (A) an entity in which Parent directly or indirectly
beneficially owns 50% or more of the voting securities, or any Parent-sponsored
employee stock ownership plan, or any other employee plan of Parent or the
Company, either files or becomes obligated to file a report or a proxy statement
under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A
(or any successor schedule, form or report or item therein) under the Exchange
Act, disclosing beneficial ownership by form or report or item therein,
disclosing beneficial ownership by it of shares of stock of Parent, or because
Parent reports that a change of control of Parent has or may have occurred or
will or may occur in the future by reason of such beneficial ownership or (B)
any Parent-sponsored employee stock ownership plan, or any other employee plan
of Parent or the Company, either files or becomes obligated to file a report or
a proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K
or Schedule 14A (or any successor schedule, form or report or item therein)
under the Exchange Act, disclosing beneficial ownership by form or report or
item therein, disclosing beneficial ownership by it of shares of stock of
Parent, or because Parent reports that a change of control of Parent has or may
have occurred or will or may occur in the future by reason of such beneficial
ownership; or

       

      (vii)           any
other transaction or series of related transactions occur that have
substantially the effect of the transactions specified in any of the preceding
clauses in this definition.

       

      “Person” shall include individuals or entities
such as corporations, partnerships, companies, firms, business organizations or
enterprises, and governmental or quasi-governmental bodies.

       

      “Potential
Change of Control”
shall mean the earliest to occur of:  (i) the date on which the
Company (or an applicable Affiliate Company) executes an agreement or letter of
intent, the consummation of the transactions described in which would result in
the occurrence of a Change of Control or (ii) the date on which the Board
approves a transaction or series of transactions, the consummation of which
would result in a Change of Control, and ending when, in the opinion of the
Board, the Company or the respective third party has abandoned or terminated any
Potential Change of Control.

       

      “Potential
Change of Control Date” shall mean the date on which
a Potential Change of Control occurs; provided, however, such date
shall become null and void when, in the opinion of the Board, the Company or the
respective third party has abandoned or terminated any Potential Change of
Control.

       

      “Prohibited
Area” means North
America, South America and the European Union, which Prohibited Area the parties
have agreed to as a result of the fact that those are the geographic areas in
which the Company conducts a preponderance of its business and in which the
Executive provides substantive services to the benefit of the
Company.

      
        
           

        

        
          28

          
            

          

        

        
           

          
            Exhibit
10.49

          

        

      

      “Section
409A” shall mean
Section 409A of the Code and regulations promulgated thereunder (and any similar
or successor federal or state statute or regulations).

       

      “Trade
Secrets” are
information of special value, not generally known to the public that the Company
or any Affiliate Company has taken steps to maintain as secret from Persons
other than those selected by the Company or any Affiliate Company.

        

      
      

      29ex10_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

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