Exhibit 10.1
CHANGE OF CONTROL AGREEMENT
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THIS CHANGE OF CONTROL AGREEMENT (this "Agreement") is entered
into as of the 18th day of February, 2005 (the "Effective Date"), by and between
Orthofix, Inc., a Minnesota corporation (the "Company"), and Raymond C. Kolls
(the "Employee"). Capitalized words which are not otherwise defined herein shall
have the meanings assigned to such words in Section 13 of this Agreement.
WHEREAS, the Company desires to have the benefits of the
Employee's knowledge and experience as Vice President and General Counsel
without distraction by employment-related uncertainties in connection with a
Change of Control or Potential Change of Control.
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein and other good and valuable consideration, the parties agree as
follows:
1. Payments and Benefits.
If, during the Employee's employment with the Company, the
Employee's employment is terminated by the Company without Cause or the Employee
resigns for Good Reason during a Change of Control Period, the Employee shall be
entitled to the following payments and benefits described below.
(i) The Employee shall be entitled to a lump sum severance
payment equal to the Employee's Base Amount (less applicable statutory
deductions and withholding taxes). The lump sum severance payment shall
be paid within thirty (30) days after the Employee's termination of
employment or resignation for Good Reason.
(ii) Notwithstanding the terms of any applicable plan or
arrangement to the contrary: (A) the Employee shall have immediate
vesting of, and the immediate right to exercise, all stock options and
stock appreciation rights theretofore granted to the Employee and (B)
any risk of forfeiture included in restricted stock grants theretofore
made to the Employee shall immediately lapse.
(iii) The Employee shall be entitled, without remuneration to
the Company, to continuation or provision of basic employee group
benefits that are welfare benefits, but not pension, retirement or
similar compensatory benefits, for the Employee and the Employee's
dependents substantially similar to those they are receiving or to
which they are entitled immediately prior to the termination of the
Employee's employment for the lesser of one year after termination or
until the Employee secures new employment.
2. Section 280G of the Code.
Notwithstanding any provision of this Agreement to the
contrary, if any amount or benefit to be paid or provided under this Agreement
or otherwise would be an "Excess Parachute Payment," within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), or
any successor provision thereto, but for the application of this sentence, then
the payments and benefits to be so paid or provided shall be reduced to the
minimum extent necessary (but in no event to less than zero), so that no portion
of any such payment or benefit as so reduced, constitutes an Excess Parachute
Payment. The determination of whether any reduction in such payments or benefits
to be provided under this Agreement or otherwise is required pursuant to the
preceding sentence shall be made at the expense of the Company, if requested by
the Employee or the Company, by the Company's independent accountants. If any
payment or benefit intended to be provided under this Agreement must be reduced
in accordance with this Section 2, the Employee shall be entitled to designate
the payments and/or benefits to be so reduced in order to give effect to this
Section 2. The Company shall provide the Employee with all information
reasonably requested by the Employee to permit the Employee to make such
designation. In the event that the Employee fails to make such designation
within ten business days of the termination of the Employee's employment with
the Company, the Company may effect such reduction in any manner it deems
appropriate.
3. Other Benefits.
The provisions of this Agreement shall not affect the
Employee's participation in, or terminating distributions and vested rights
under, any pension, profit-sharing, insurance or other employee benefit plan of
the Company or Orthofix N.V. to which the Employee is entitled pursuant to the
terms of such plans.
4. No Mitigation Obligation.
It will be difficult, and may be impossible, for the Employee
to find reasonably comparable employment following the termination of the
Employee's employment with the Company, and the non-competition covenant
contained in Section 6 hereof will further limit the employment opportunities
for the Employee. 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 by the Company
to the Employee in accordance with the terms of this Agreement will be
liquidated damages, and that the Employee shall not be required to seek other
employment, or otherwise, to mitigate any payment provided for hereunder.
5. No Right to Set Off.
The Company and Orthofix N.V. shall not be entitled to set off
against amounts payable to the Employee hereunder any amounts earned by the
Employee in other employment, or otherwise, after termination of his employment
with the Company,
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or any amounts which might have been earned by the Employee in other employment
had he sought such other employment.
6. Competitive Activity.
During a period ending one year following the termination of
the Employee's employment with the Company, if the Employee has received or is
receiving the payments and benefits the Employee is entitled to receive under
this Agreement as provided for in subsections (i), (ii) and (iii) of Section 1
of this Agreement, the Employee shall not, without the prior written consent of
the Orthofix N.V. Board, engage in any Competitive Activity. For purposes of
this Agreement, the term "Competitive Activity" means the Employee's
participation in the management of any business enterprise if such enterprise
engages in substantial and direct competition with Orthofix N.V. Without
limitation, an enterprise shall be deemed to be in substantial and direct
competition with Orthofix N.V. if such enterprise's sales of any product or
service competitive with any product or service of Orthofix N.V. amounted to 25%
of such enterprise's net sales for its most recently completed fiscal year, and
if the net sales of the competing product or service of Orthofix N.V. amounted
to 25% of Orthofix N.V.'s net sales for its most recently completed fiscal year.
"Competitive Activity" shall not include:
(i) the passive ownership of publicly-traded securities in any
such enterprise and exercise of rights appurtenant thereto; or
(ii) participation in management of any such enterprise other
than in connection with the competitive operations of such enterprise.
7. Non-Disclosure of Information.
(a) For so long as the Employee is employed by the Company,
and thereafter except in the performance of the Employee's obligations to the
Company or one of its affiliates, the Employee shall not, directly or
indirectly, use or authorize the use of any confidential or other proprietary
information of the Company or one of its affiliates ("Confidential
Information"), including but not limited to trade secrets, product
specifications and ideas, manuals, systems, procedures, confidential reports,
customer lists, sales or distribution methods, patentable information and data
and financial information concerning the Company or one of its affiliates, which
Confidential Information has been made known (whether or not with the knowledge
and permission of the Company or Orthofix N.V., and whether or not developed,
devised or otherwise created in whole or in part by the efforts of the Employee)
to the Employee by reason of the Employee's activities on behalf of the Company
or one of its affiliates. The Employee shall not reveal, divulge or make known
any Confidential Information to any individual, partnership, firm, corporation,
or other business organization whatsoever except in performance of the
Employee's obligations to the Company or one of its affiliates, with the express
permission of the Company Board or the Orthofix N.V. Board or as otherwise
required by operation of law.
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(b) The Employee confirms that all Confidential Information is
the exclusive property of the Company or one of its affiliates. All business
records, papers and documents kept or made by the Employee relating to the
business of the Company or one of its affiliates shall be and remain the
property of the Company or one of its affiliates and shall remain in the
possession of the Company or one of its affiliates. Upon the termination of the
Employee's employment with the Company, or upon the request of the Company or
Orthofix N.V. at any time, the Employee shall promptly deliver to the Company,
and shall retain no copies of, any written materials, records and documents made
by the Employee or coming into the Employee's possession concerning the business
and affairs of the Company or one of its affiliates that contain Confidential
Information.
8. Remedies.
Without intending to limit the remedies available to the
Company or one of its affiliates, the Employee acknowledges that a breach of any
of the covenants contained in Section 6 hereof and Section 7 hereof may result
in material irreparable injury to the Company or one of its affiliates for which
there is not adequate remedy at law, that it may not be possible to measure
damages for such injuries precisely and that, in the event of such breach or
threat thereof, the Company or one of its affiliates may be entitled to obtain a
temporary restraining order and/or a preliminary or permanent injunction
restraining the Employee from engaging in activities prohibited by Section 6
hereof and Section 7 hereof or such other relief as many may be required to
specifically enforce any of the covenants in such Sections.
9. Inventions.
(a) The Employee 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"), which the Employee
conceives of or first actually reduces to practice, either solely or jointly
with others, during the Employee's employment with the Company or one of its
affiliates, and which relate to the business now or thereafter carried on or
contemplated by the Company or one of its affiliates or which result from any
work performed by the Employee for the Company or one of its affiliates.
(b) The Employee acknowledges and agrees that all Inventions
shall be the sole and exclusive property of the Company, and during the term of
the Employee's employment with the Company and thereafter, whenever requested to
do so by the Company, the Employee shall 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 its nominee 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 9 do not apply to an Invention (i) for which no equipment,
supplies, facility or
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Confidential Information of the Company or one of its affiliates was used; (ii)
that was developed entirely on the Employee's own time; (iii) that does not
relate directly to the business of the Company or one of its affiliates or to
the actual or demonstrably anticipated research or development of the Company or
one of its affiliates; and (iv) that does not result from any work performed by
the Employee for the Company or one of its affiliates.
10. Binding Arbitration: Legal Fees and Expenses.
It is the intent of the Company that the Employee not be
required to bear the legal fees and related expenses associated with the
enforcement or defense of the Employee's rights under this Agreement by
litigation or other legal action because having to do so would substantially
detract from the benefits intended to be extended to the Employee hereunder.
Accordingly, the parties hereto agree as follows:
(a) Any dispute or controversy arising under or in connection
with this Agreement prior to the occurrence of a Change of Control shall be
resolved exclusively by binding arbitration in Mecklenburg, North Carolina, 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. Each party shall bear his or its own costs and expenses of
arbitration, but if the Employee is the prevailing party in such arbitration, in
whole, or in part, the Company shall pay to the Employee as part of the
arbitration award to the Employee an amount equal to all attorneys' and related
fees, costs and expenses incurred by the Employee in connection with such
arbitration.
(b) If, following the occurrence of a Change of Control, the
Employee determines, in good faith, that the Company has failed to comply with
any of its obligations under this Agreement or the Company or any other person
takes or threatens to take action to declare this Agreement void or
unenforceable, or institutes any litigation, arbitration proceeding or other
action or proceeding designed to deny, or to recover from, the Employee the
benefits provided or intended to be provided to the Employee hereunder, the
Company irrevocably authorizes the Employee from time to time to retain counsel
of the Employee's choice, at the expense of the Company as hereafter provided,
to represent the Employee in connection with the initiation or defense of any
litigation, arbitration or other legal action, whether by or against the Company
or any director, officer, stockholder or other person affiliated with the
Company, in any jurisdiction. Within ten business days after receipt from the
Employee of a request referencing this Section 10(b), the Company shall, from
time to time, pay or reimburse the Employee for fees and expenses incurred, or
reasonably anticipated to be incurred, in accordance with such request and this
Section 10(b). Without respect to whether the Employee prevails, in whole or in
part, in connection with any of the foregoing, the Company shall pay or cause to
be paid and shall be solely responsible for any and all attorneys' and related
fees and expenses incurred by the Employee in connection with any of the
foregoing, excluding any such fees and expenses related to an unsuccessful
appeal filed by the Employee of an adjudication on the merits, any motion for a
new trial filed by the Employee after such an adjudication that is denied or any
other motion filed by the Employee for reconsideration or review of such an
adjudication that is denied.
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11. Withholding of Taxes.
The Company may withhold from any amounts payable under this
Agreement all federal, state, city or other taxes as shall be required pursuant
to any law or government regulation ruling.
12. Notices.
All notices, requests, demands, and other communications
called for or contemplated hereunder shall be in writing and shall be deemed to
have been duly given when delivered personally or when mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the parties, their successors in interest or assignees at the
following addresses or such other addresses as the parties may designate by
notice in the manner aforesaid:
If to the Company: Orthofix, Inc.
Huntersville Business Park
The Storrs Building
10115 Kincey Avenue
Suite 250
Huntersville, North Carolina 28078
Attention: Chief Executive Officer
If to the Employee: Raymond C. Kolls
13809 Tributary Court
Davidson, North Carolina 28036
13. Definitions.
For purposes of this Agreement, the following capitalized
terms have the meanings set forth below:
(a) "Base Amount" shall mean an amount equal to the sum of:
(i) the average of the Employee's annual base salary at the highest rate in
effect in the 90-day period immediately prior to the termination of the
Employee's employment with the Company and the Employee's annual base salary for
the annual compensation period immediately preceding the annual compensation
period in which termination of the Employee's employment with the Company occurs
or, if greater, the average of the Employee's annual base salary in effect
immediately prior to the Change of Control Date or Potential Change of Control
Date and the Employee's annual base salary for the annual compensation period
immediately preceding the annual compensation period in which a Change of
Control or Potential Change of Control occurs; provided, however, that if the
Employee was not employed by the Company during such immediately preceding
compensation period, the amount included pursuant to this clause (i) shall be
the greater of the Employee's annual base salary at the highest rate in effect
in the 90-day period immediately prior to (A) the termination of the Employee's
employment with the Company or (B) the Change of Control Date or Potential
Change of Control Date; plus
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(ii) the average incentive compensation payable to the Employee with respect to
the two consecutive annual incentive compensation periods ending immediately
prior to the termination of the Employee's employment with the Company or, 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 Employee was not eligible
to participate in the Company's incentive compensation program for such two
consecutive incentive compensation periods, the amount included pursuant to this
clause (ii) shall be the most recent incentive compensation paid or payable to
the Employee by the Company, plus (iii) the monthly automobile allowance the
Employee is entitled to receive, multiplied by twelve.
(b) "Cause" shall mean termination of the Employee's
employment because of the Employee's: (i) involvement in fraud, misappropriation
or embezzlement related to the business or property of the Company; (ii)
conviction for, or guilty plea to, a felony or crime of similar gravity in the
jurisdiction which such conviction or guilty plea occurs; or (iii) unauthorized
disclosure of any trade secrets or other confidential information relating to
the Company's business and affairs (except to the extent such disclosure is
required under applicable law).
(c) "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 Securities Exchange
Act of 1934 (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 30% or more of either (A) the then outstanding shares of Orthofix
N.V.'s common stock (the "Outstanding Common Stock") or (B) the
combined voting power of the then outstanding voting securities of
Orthofix N.V. entitled to vote generally in the election of directors
(the "Outstanding Voting Securities"); excluding, however, the
following: (1) any acquisition directly from Orthofix N.V., other than
an acquisition by virtue of the exercise of a conversion privilege
unless the security being so converted was itself acquired directly
from Orthofix N.V.; (2) any acquisition by Orthofix N.V.; (3) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by Orthofix N.V. or any entity controlled by Orthofix
N.V.; or (4) any acquisition pursuant to a transaction which complies
with clauses (A), (B) and (C) of subsection (iii) of this definition of
Change of Control;
(ii) a change in the composition of the Orthofix N.V. Board
such that the individuals who, as of the date hereof, constitute the
Orthofix N.V. Board (such Orthofix N.V. Board shall be hereinafter
referred to as the "Incumbent Orthofix N.V. Board") cease for any
reason to constitute at least a majority of the Orthofix N.V. Board;
provided, however, for purposes of this paragraph, that any individual
who becomes a member of the Orthofix N.V. Board subsequent to the date
hereof, whose appointment, election, or nomination for election by
Orthofix N.V.'s shareholders was approved by a vote of at least a
majority of those individuals who are members of the Orthofix N.V.
Board and who were also
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members of the Incumbent Orthofix N.V. Board (or deemed to be such
pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Orthofix N.V. 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 Orthofix N.V. Board shall not be so considered as a member of
the Incumbent Orthofix N.V. Board;
(iii) consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of Orthofix N.V. ("Corporate Transaction"); excluding,
however, such a Corporate Transaction pursuant to which all of the
following conditions are met: (A) all or substantially all of the
individuals and entities who are the beneficial owners, respectively,
of the Outstanding Common Stock and Outstanding Voting Securities
immediately prior to such Corporate Transaction will beneficially own,
directly or indirectly, more than 50% of, respectively, the outstanding
shares of common stock, and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns Orthofix N.V. or
all or substantially all of Orthofix N.V.'s assets either directly or
through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Corporate Transaction, of
the Outstanding Common Stock and Outstanding Voting Securities, as the
case may be, (B) no Person (other than Orthofix N.V., any employee
benefit plan (or related trust) of Orthofix N.V. or such corporation
resulting from such Corporate Transaction) will beneficially own,
directly or indirectly, 30% or more of, respectively, the outstanding
shares of common stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the
election of directors except to the extent that such ownership existed
prior to the Corporate Transaction, and (C) individuals who were
members of the Incumbent Orthofix N.V. Board will constitute at least a
majority of the members of the board of directors of the corporation
resulting from such Corporate Transaction;
(iv) the approval by the shareholders of Orthofix N.V. of a
complete liquidation or dissolution of Orthofix N.V;
(v) the Company is merged, consolidated or reorganized into,
or with another corporation or other legal person, or securities of the
Company are exchanged for securities of another corporation or other
legal person, and immediately after such merger, consolidation,
reorganization or exchange less than a majority of the combined voting
power of the then outstanding securities of such corporation or person
immediately after such transaction are held, directly or
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indirectly, in the aggregate by the holders of securities entitled to
vote generally in the election of directors of the Company immediately
prior to such transaction;
(vi) the Company, in any transaction or series of related
transactions, sells all or substantially all of its assets to any other
corporation or other legal person, and less than a majority of the
combined voting power of the then outstanding securities of such
corporation or person immediately after such sale or sales are held,
directly or indirectly, in the aggregate by the holders of securities
entitled to vote generally in the election of directors of the Company
immediately prior to such sale;
(vii) Orthofix N.V. or its affiliates 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
Orthofix N.V. and its affiliates (determined on the basis of Orthofix
N.V.'s four most recently completed fiscal quarters for which reports
have been filed under the Exchange Act);
(viii) Orthofix N.V. 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 in control of
Orthofix N.V. has or may have occurred or will or may occur in the
future pursuant to any then-existing contract or transaction;
notwithstanding the foregoing, unless determined in a specific case by
a majority vote of the Orthofix N.V., a "Change of Control" shall not
be deemed to have occurred solely because: (A) an entity in which
Orthofix N.V. directly or indirectly beneficially owns 50% or more of
the voting securities, or any Orthofix N.V.-sponsored employee stock
ownership plan, or any other employee benefit plan of Orthofix N.V. 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) under the Exchange Act, disclosing
beneficial ownership by it of shares of stock of Orthofix N.V., or
because Orthofix N.V. reports that a change in control of Orthofix N.V.
has or may have occurred or will or may occur in the future by reason
of such beneficial ownership or (B) any Orthofix N.V.-sponsored
employee stock ownership plan, or any other employee benefit plan of
Orthofix N.V. 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) under the
Exchange Act, disclosing beneficial ownership by it of shares of stock
of Orthofix N.V., or because Orthofix N.V. reports that a change in
control of Orthofix N.V. has or may have occurred or will or may occur
in the future by reason of such beneficial ownership; or
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(ix) 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 sentence.
(d) "Change of Control Date" shall mean the date on which a
Change of Control occurs.
(e) "Change of Control Period" shall mean the twenty-four
month period commencing on the Change of Control Date; provided, however, that
if the Executive's employment with the Company terminates prior to the Change of
Control Date but on or after a Potential Change of Control Date, and it is
reasonably demonstrated that the Employee's employment was terminated (A) at the
request of the third party who has taken steps reasonably calculated to effect a
Change of Control or (B) otherwise arose in connection with or in anticipation
of a Change of Control, then the "Change of Control Period" shall mean the
twenty-four month period beginning on the date immediately prior to the date of
the Employee's termination of employment with the Company.
(f) "Company Board" shall mean the Board of Directors of the
Company.
(g) "Good Reason" shall mean the occurrence of any of the
following: (i) without the express written consent of the Employee, any duties
are assigned to the Employee that are materially inconsistent with the
Employee's position, duties and status with the Company or one of its affiliates
as contemplated by this Agreement; (ii) any action by the Company or one of its
affiliates that results in a material adverse change in the nature or scope of
the position, duties, authorities, responsibilities or functions of the Employee
with the Company or one of its affiliates, except for strategic reallocations of
the personnel reporting to the Employee; (iii) the base annual salary of the
Employee is reduced, unless the reduction is a general reduction (on the same
percentage basis) affecting the base salaries of substantially all other
executive officers of the Company, there is a change or termination of the
Employee's right to participate, on a basis substantially consistent with
practices applicable to executive officers of the Company generally on the
Effective Date, in any bonus, incentive, profit-sharing, stock option, stock
purchase, stock appreciation, discretionary pay or similar policy, plan, program
or arrangement of the Company, or there is a termination or denial of the
Employee's right, on a basis substantially consistent with practices applicable
generally to executive officers of the Company on the Effective Date, 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 benefit
and perquisite policies, plans, programs and arrangements that generally are
made available to executive officers of the Company, except for any arrangements
that the Company Board adopt for select employees to compensate them for special
or extenuating circumstances.
(h) "Orthofix N.V." shall mean Orthofix International N.V., a
corporation organized under the laws of Netherlands Antilles.
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(i) "Orthofix N.V. Board" shall mean the Board of Directors of
Orthofix N.V.
(j) "Potential Change of Control" shall mean the earliest to
occur of: (i) the date on which Orthofix N.V. 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, Orthofix N.V. or the respective third party has abandoned or terminated
any Potential Change of Control.
(k) "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, Orthofix N.V. or the
respective third party has abandoned or terminated any Potential Change of
Control.
14. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina, without giving effect
to the principles of conflict of laws of such State.
15. Validity.
The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect. Any provision of this Agreement held to be invalid or unenforceable
shall be reformed to the extent necessary to make it valid and enforceable.
16. Requirements of Law.
If any provision of this Agreement contravenes the final
regulations or regulations anticipated to be promulgated under Section 409A of
the Code or any other guidance from the United States Department of Treasury
("Treasury"), the Company may reform this Agreement or any provision hereof or
incorporate the necessary provisions to maintain to the maximum extent
practicable the original intent of the provision without violating the
provisions of Section 409A of the Code to the extent that the Company, in its
discretion, shall determine.
17. Entire Agreement.
This Agreement constitutes the entire understanding between
the parties with respect to the subject matter hereof, superseding all
negotiations, prior discussions, preliminary agreements and employment
arrangements between the Employee and the Company or any of the Company's
subsidiaries, affiliates or other related entities. This Agreement may not be
amended, nor may any of its provisions be waived, except in writing executed by
the parties hereto; provided, however, that the Company shall be
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permitted to unilaterally amend this Agreement to comply with any legal
requirements or to ensure that any amounts hereunder are not subject to federal,
state or local income tax prior to payments (including, without limitation, any
amendment to the definition of "Change of Control" based on the Treasury
regulations under Section 409A of the Code or instituting a six-month waiting
period following a distribution if required).
18. Effect on Successors in Interest.
This Agreement shall inure to the benefit of and be binding
upon the heirs, administrators, executors and successors of each of the parties
hereto, including without limitation any person acquiring, directly or
indirectly, all or substantially all of the business and/or assets of the
Company or one of its affiliates by purchase, merger, consolidation,
reorganization or otherwise (and such successor shall thereafter be deemed the
"Company" for purposes of this Agreement). This Agreement is personal in nature
and neither of the parties hereto shall, without the consent of the other,
assign, transfer or delegate this Agreement or any rights or obligations
hereunder except as expressly provided in this Section 18. Without limiting the
generality of the foregoing, the Employee's right to receive payments hereunder
shall not be assignable, transferable or delegable, whether by pledge, creation
of a security interest or otherwise, other than by a transfer under the
Employee's will or by the laws of descent and distribution and, in the event of
any attempted assignment or transfer contrary to this Section 18, the Company
shall have no liability to pay any amount so attempted to be assigned,
transferred or delegated.
19. Effectiveness.
This Agreement shall be effective upon the Effective Date.
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This Agreement is executed and delivered as of the date first
above written.
ORTHOFIX, INC.
By: /s/ Charles W. Federico
--------------------------
Name: Charles W. Federico
Title: Director
RAYMOND C. KOLLS
/s/ Raymond C. Kolls
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Guaranty by Orthofix International N.V.
Orthofix International N.V. joins in this Agreement for the
sole purposes of guaranteeing the obligations of Orthofix, Inc. to pay, provide,
or reimburse the Employee for all cash or other benefits provided for in this
Agreement, including the provision of all benefits in the form of, or related
to, securities of Orthofix International N.V. or options thereon.
ORTHOFIX INTERNATIONAL N.V.
By: /s/ Charles W. Federico
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Name: Charles W. Federico
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Title: President and CEO
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