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EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into by and between Orthofix
Inc., a Minnesota corporation ("ORTHOFIX"), and Xxxx X. Xxxxxx ("Employee").
Recitals
ORTHOFIX desires to have the benefits of Employee's knowledge and
experience as a full-time senior executive without distraction by employment-
related uncertainties and considers such employment a vital element to
protecting and enhancing the best interests of ORTHOFIX and its parent company
Orthofix International N.V. ("OI"), and their respective affiliates, and
Employee desires to be employed full-time with ORTHOFIX.
ORTHOFIX desires to assure itself of the continued services of
Employee, and Employee is willing to continue to render services to ORTHOFIX on
the terms and subject to the conditions set forth in this Agreement.
In consideration of the mutual covenants set forth herein and other
good and valuable consideration, the parties agree as follows:
1. Term. ORTHOFIX hereby agrees to employ Employee for a minimum
two-year period commencing on March 1, 2003 (the "Effective Date") and
ending on March 1, 2005, unless sooner terminated as provided in Sections 5
and 6 of this Agreement. Effective as of March 1, 2005 and March 1, 2006,
the term of Employee's employment with ORTHOFIX shall be automatically
extended for one additional year beyond the minimum two-year period, unless
either party gives written notice of its or his election not to extend such
employment at least 60 days prior to such date. In addition, if a Change of
Control (as defined in Section 7 (d)) occurs when less than one year remains
prior to the expiration of Employee's term of employment hereunder, such
term shall be automatically extended until the first anniversary of the date
on which the Change of Control first occurred. The period during which
Employee is employed by ORTHOFIX hereunder is referred to herein as the
"Employment Period".
2. Duties. Subject to the terms and conditions of this Agreement,
Employee shall serve as the President of ORTHOFIX and shall exercise the
authority and assume the responsibilities of the President of a company of
the size and nature of ORTHOFIX, including without limitation such positions
and duties with OI or its affiliates as are assigned by the Board of
Directors of ORTHOFIX or OI. Throughout the Employment Period, Employee
agrees to devote substantially all of Employee's time, attention and best
efforts during normal business hours (subject to vacations, sick leave and
other absences in accordance with policies in effect from time to time for
executive
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officers of ORTHOFIX prior to a Change of Control) to the performance of his
duties. Without the prior approval of the Chief Executive Officer or the
Board of Directors of ORTHOFIX, during the Employment Period Employee will
not render any services as a director, trustee, officer, employee, or
consultant to any other business or organization.
3. Compensation. During the Employment Period, ORTHOFIX shall
compensate Employee for the services rendered under this Agreement as
follows:
(a) A base annual salary determined by the Board of Directors or
Compensation Committee of ORTHOFIX consistent with its practices
for executive officers of ORTHOFIX, but not less than $270,000
per year, payable in accordance with the customary payroll
practices of ORTHOFIX for the payment of executive officers;
(b) Such bonuses under ORTHOFIX's ________ Executive Annual Incentive
Plan, as amended, or subsequent plan, if any, as shall be
determined by the Board of Directors or Chief Executive Officer
of ORTHOFIX consistent with its practices for executive officers
of ORTHOFIX;
(c) If Employee's base annual salary is increased at any time, it
shall not thereafter be decreased during the Employment Period,
unless such decrease is the result of a general reduction (on the
same percentage basis) affecting the base salaries of
substantially all other executive officers of ORTHOFIX and is not
below the minimum set forth in subsection (a); and
(d) An automobile allowance of not less than $900 per month, or
in such greater amount as may be payable pursuant to any
automobile allowance plan or program maintained by ORTHOFIX for
its executive officers,
4. Employee Benefits.
(a) During the Employment Period, Employee shall be entitled, on a
basis commensurate with Employee's position with ORTHOFIX, to
full participation in, and 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 ORTHOFIX, except for such
arrangements that the Board of Directors, in its sole discretion,
shall adopt for select employees to compensate them for special
or extenuating circumstances.
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(b) During the Employment Period, Employee shall be entitled to
annual vacation leave, at full pay, as may be provided by
ORTHOFIX's vacation policy applicable to executive officers.
(c) During the Employment Period, Employee shall be entitled to
participate in all bonus, incentive, profit-sharing, stock
option, stock purchase, stock appreciation, discretionary pay or
similar policies, plans, programs and arrangements of ORTHOFIX
that generally are made available to executive officers of
ORTHOFIX.
(d) Nothing in this Agreement shall limit in any Employee's
participation in any other benefit plans or arrangements as are
from time to time approved by ORTHOFIX.
5. Termination by ORTHOFIX. Employee's employment hereunder
may be terminated by ORTHOFIX during the Employment Period without any
breach of this Agreement, and Employee will not be entitled to the benefits
provided by Sections 7 and 8 hereof, only under the following circumstances:
(a) Death, Total Disability or Retirement. Employee's employment
shall be deemed terminated by ORTHOFIX upon Employee's death or
retirement. In addition, if as a result of Employee's incapacity
resulting from physical or mental illness or disease that is
likely to be permanent, Employee shall have been unable to
perform Employee's duties hereunder for a period of more than 120
consecutive days during any 12-month period, and Employee is
qualified and eligible to receive disability benefits under the
long-term disability plan then in effect for executive officers
of ORTHOFIX, ORTHOFIX may terminate Employee's employment
hereunder.
(b) Cause. ORTHOFIX may terminate Employee's employment hereunder for
cause, which for purposes of this Agreement shall be defined to
mean (i) the willful and continued failure by Employee to follow
the reasonable instructions of the Board of Directors or Chief
Executive Officer of ORTHOFIX after written notice of such
failure has been given to Employee by the Board of Directors or
Chief Executive Officer of ORTHOFIX; (ii) the willful commission
by Employee of acts that are dishonest and demonstrably and
materially injurious to ORTHOFIX, OI, or their affiliates,
monetarily or otherwise; (iii) the commission by Employee of a
felonious act; (iv) drug addiction, (v) intentional wrongful
disclosure of Confidential Information (as defined in Section 14)
or (vi) intentional wrongful engagement in any Competitive
Activity (as defined in Section 13).
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The termination of Employee's employment by ORTHOFIX during the
Employment Period for any reason other than those specified in this
Section 5 shall be deemed to be a termination without cause. No breach or
default by Employee shall be deemed to have occurred hereunder unless
written notice thereof shall have been given by ORTHOFIX to Employee within
60 days after ORTHOFIX first learns of such breach or default and it is not
cured within 30 days after notice thereof is given to Employee.
6. Termination by Employee. Employee shall be entitled to terminate
Employee's employment, with the right to severance compensation and benefits
as provided in this Agreement, during the Employment Period for Good Reason;
provided, that Employee terminates Employee's employment with ORTHOFIX not
later than 90 days following the occurrence of the event constituting Good
Reason. For purposes of this Agreement, "Good Reason" means the occurrence
of any of the following:
(a) Without the express written consent of Employee, any duties are
assigned to Employee that are materially inconsistent with
Employee's position, duties and status with ORTHOFIX or OI as
contemplated by this Agreement;
(b) Any action by ORTHOFIX or OI that results in a material adverse
change in the nature or scope of the position, duties,
authorities, responsibilities or functions of Employee with
ORTHOFIX or OI as contemplated by this Agreement, except for
strategic reallocations of the personnel reporting to Employee;
(c) (i) The base annual salary of Employee, as the same may hereafter
be increased from time to time, 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 ORTHOFIX provided, however, that Employee's salary may not be
reduced below the minimum stated in Section 3(a); (ii) there is a
change or termination of Employee's right to participate, on a
basis substantially consistent with practices applicable to
executive officers of ORTHOFIX generally on the Effective Date,
in any policy, plan, program or arrangement of the type referred
to in Section 4(c) of this Agreement; or (iii) there is a
termination or denial of Employee's right, on a basis
substantially consistent with practices applicable generally to
executive officers of ORTHOFIX on the Effective Date, to benefits
of the type referred to in Section 4(a) of this Agreement;
(d) Without limiting the generality or effect of the foregoing,
ORTHOFIX fails to comply with any of its obligations hereunder in
any material respect.
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Notwithstanding the generality of the foregoing, should Employee be
involuntarily removed without cause from any of the offices or positions he
holds with OI as of the Effective Date; or should any of Employee's titles,
duties, or responsibilities with OI as of the Effective Date be removed,
reduced, diminished, or adversely affected without cause; or should the
securities of OI cease to be publicly traded in the United States due to a
merger, acquisition, or other transaction; or should all or substantially
all of the assets of OI (representing fifty percent or more of OI's sales
for its most recently completed fiscal year) be sold in a transaction or
series of related transactions, Employee shall be entitled to terminate his
employment for Good Reason and enjoy the benefits therefrom provided in
this Agreement.
7. Severance Payment after Change of Control.
(a) If, during the Employment Period and following the occurrence of
a Change of Control, ORTHOFIX terminates Employee's employment
without cause or an event occurs as a result of which Employee
terminates Employee's employment pursuant to Section 6 hereof,
Employee shall be entitled to a lump sum severance payment equal
to Employee's Base Amount (as defined in subsection (b)).
(b) As used in this Agreement, "Base Amount" shall mean an amount
equal to the sum of:
(i) The average of Employee's annual base salary at the highest
rate in effect in the 90-day period immediately prior to
the termination of Employee's employment with ORTHOFIX and
Employee's annual base salary for the annual compensation
period immediately preceding the annual compensation period
in which termination of Employee's employment with ORTHOFIX
occurs or, if greater, the average of Employee's annual
base salary in effect immediately prior to the date on
which a Change of Control occurs and Employee's annual base
salary for the annual compensation period immediately
preceding the annual compensation period in which a Change
of Control occurs provided, however, that if Employee was
not employed by ORTHOFIX during such immediately preceding
compensation period, the amount included pursuant to this
clause shall be the greater of Employee's annual base
salary at the highest rate in effect in the 90-day period
immediately prior to (A) the termination of Employee's
employment with ORTHOFIX or (B) the date on which a Change
of Control occurs; plus
(ii) The average incentive compensation payable to Employee with
respect to the two consecutive annual incentive
compensation periods ending immediately prior to the
termination of Employee's employment with ORTHOFIX or, if
greater, with respect to the two consecutive annual
incentive compensation periods ending
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immediately prior to the date on which a Change of Control
occurs; provided, however, that if Employee was not
eligible to participate in ORTHOFIX's incentive
compensation program for such two consecutive incentive
compensation periods, the amount included pursuant to this
clause shall be the most recent incentive compensation paid
or payable to Employee by ORTHOFIX; plus
(iii) The monthly automobile allowance Employee is entitled to
receive pursuant to Section 3(d) hereof, multiplied by 12.
(c) If a Chase of Control shall occur, notwithstanding the terms of
any applicable plan or arrangement to the contrary:
(i) Employee shall have immediate vesting of, and the immediate
right to exercise, all stock options and stock appreciation
rights theretofore granted to Employee; and
(ii) Any risk of forfeiture included in restricted stock grants
theretofore made to Employee shall immediately lapse and
employee shall have immediate vesting of Employee's rights
in all other employee benefit and compensation plans;
provided, however, that Employee's rights under any plan or
arrangement of ORTHOFIX described in Section 280G(b)(6) of
the Internal Revenue Code of 1986, as amended (the "Code"),
or any successor provision thereto, shall not be altered as
a result of this.
(d) A Change of Control shall occur, notwithstanding the terms of any
applicable plan or arrangement to the contrary, upon any of the
following events:
(i) Any person, as that term is used in Section 13(d) and
Section 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), becomes, is discovered to be,
or files a report on Schedule 13D or 14D-1 (or any
successor schedule, form or report) disclosing that such
person is a beneficial owner (as defined in Rule 13d-3
under the Exchange Act or any successor rule or
regulation), directly or indirectly, of securities of OI
representing 20% or more of the combined voting power of
OI's then outstanding securities entitled to vote generally
in the election of directors (unless such person is known
by Employee already to be such a beneficial owner on the
Effective Date of this Agreement);
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(ii) Individuals who, as of the Effective Date, constitute the
Board of Directors of OI cease for any reason to constitute
at least a majority of the Board of Directors of OI, unless
any such change is approved by a unanimous vote of the
members of the Board of Directors of OI in office
immediately prior to such cessation;
(iii) ORTHOFIX or OI is merged, consolidated, or reorganized into
or with another corporation or legal person, or securities
of ORTHOFIX or OI are exchanged for securities of another
corporation or 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 legal person
are held, directly or indirectly, by the holders of
securities entitled to vote generally in the election of
directors of ORTHOFIX or OI immediately prior to such
transaction;
(iv) ORTHOFIX or OI, in any transaction or series of related
transactions, sells all or substantially all of their
assets to any other corporation or legal person, and
immediately after such transaction(s) less than a majority
of the combined voting power of the then-outstanding
securities of such corporation or legal person are held,
directly or indirectly, by the holders of securities
entitled to vote generally in the election of directors of
ORTHOFIX or OI immediately prior to such sale;
(v) OI 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 OI and its affiliates (determined on the basis
of OI's four most recently completed fiscal quarters for
which reports have been filed under the Exchange Act);
(vi) OI 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 OI has or may have occurred or will or
may occur in the future pursuant to any then-existing
contract or transaction;
(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 sentence; or
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(viii) Employee's employment is terminated by ORTHOFIX, or
Employee is removed from an office or position with OI
without cause within 90 days before the occurrence of a
Change of Control.
(e) 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 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 ORTHOFIX, if requested by the Employee or
ORTHOFIX, by ORTHOFIX's independent accountants. If any payment
or benefit intended to be provided under this Agreement or
otherwise is required pursuant to this subsection (e) Employee
shall be entitled to designate the payments and/or benefits to be
so reduced in order to give effect to this subsection (e).
ORTHOFIX shall provide Employee with all information reasonably
requested by Employee to permit Employee to make such
designation. In the event that Employee fails to make such
designation within 10 business days of the termination of
Employee's employment with ORTHOFIX, ORTHOFIX may effect such
reduction in any manner it deems appropriate.
Notwithstanding the provisions of Section 7(d)(i) or 7(d)(vi) hereof,
unless otherwise determined in a specific case by majority vote of the
Board of Directors of OI, a "Change of Control" shall not be deemed to
have occurred for purposes of this Agreement solely because:
(i) OI's acquisition or issuance of its own securities; or
(ii) An entity in which OI directly or indirectly beneficially
owns 50% or more of the voting securities, or any OI-
sponsored employee stock ownership plan, or any other
employee benefit plan of OI or ORTHOFIX, either files or
becomes obligated to file a report or a proxy statement
under or in response to Schedule 13D, Schedule 14D-1, Form
8K 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 OI, or because OI reports that a
change in control of OI has or may have occurred or will or
may occur in the future by reason of such beneficial
ownership.
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(iii) Any OI-sponsored employee stock ownership plan, or any
other employee benefit plan of OI or ORTHOFIX, either files
or becomes obligated to file a report or a proxy statement
under or in response to Schedule 13D, Schedule 14D-1, Form
8K 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 OI, or because OI reports that a
change in control of OI has or may have occurred or will or
may occur in the future by reason of such beneficial
ownership.
(f) If Employee's employment is not terminated as provided in Section
7(a), then the rights and obligations of the parties for the
balance of the Employment Period shall be governed by this
Agreement exclusive of the provisions contained in this Section
7, except this Section 7 shall continue and become applicable if
a subsequent Change of Control occurs during the Employment
Period.
8. Other Severance Benefits.
(a) If at any time during the Employment Period Employee is
terminated without cause, or Employee resigns for Good Reason,
and Employee is not entitled to the severance payment provided by
Section 7 hereof, then Employee shall be entitled to be paid a
severance payment equal to the Base Amount for termination
without cause, and one-half of the Base Amount for resignation
for Good Reason.
(b) If, at any time during the Employment Period, Employee is
terminated without cause, or Employee resigns for Good Reason,
then Employee shall be entitled without cost to continuation or
provision of basic employee group benefits referred to in Section
4(a) that are welfare benefits, but not pension, retirement or
similar compensatory benefits, for Employee and Employee's
dependents substantially similar to those they are receiving or
to which they are entitled immediately prior to the termination
of Employee's employment for the lesser of one year after
termination or until Employee secures new employment. Employee's
stock option agreements shall provide for an extension of the
option exercise period for at least one year from the date of
Employee's termination without cause and for at least one-half
year from the date of Employee's resignation for Good Reason. In
the case of Employee's death, extension of the option exercise
period shall be for at least two years. The exercise period of an
option shall not be extended beyond the date on which it would
have terminated had Employee continued to be employed by
ORTHOFIX. The option exercise period for any
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"incentive stock option," as that term is defined in Section 422
of the Code, shall continue to be governed by the plan under
which such option was issued.
(c) If, at any time during the Employment Period, Employee is
terminated without cause, or Employee resigns for Good Reason,
ORTHOFIX shall promptly (and in any event within five business
days after a request by Employee therefor) either pay or
reimburse Employee for the costs and expenses of any executive
outplacement firm selected by Employee; provided, however, that
ORTHOFIX's liability hereunder shall be limited to the first
$20,000 of such expenses incurred by Employee. Employee shall
provide ORTHOFIX with reasonable documentation of such
outplacement costs and expenses.
9. Timing of Payment. Any severance or other payment payable to
Employee under this Agreement shall be paid within thirty (30) days after
the event giving rise to Employee's separation from employment.
10. Other Benefits. The provisions of Sections 7 and 8 shall not
affect Employee's participation in, or terminating distributions and vested
rights under, any pension, profit sharing, insurance or other employee
benefit plan of ORTHOFIX or OI to which Employee is entitled pursuant to the
terms of such plans, except for the acceleration of vested benefits in
certain employee benefits pursuant to Section 7(c) and as provided in
Section 8(b).
11. No Mitigation Obligation. It will be difficult, and may be
impossible, for Employee to find reasonably comparable employment following
the termination of Employee's employment with ORTHOFIX, and the non-
competition covenant contained in Section 13 hereof will further limit the
employment opportunities for Employee. In addition, ORTHOFIX'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 ORTHOFIX to Employee in accordance with the
terms of this Agreement will be liquidated damages, and that Employee shall
not be required to seek other employment or otherwise mitigate any payment
provided for hereunder.
12. No Right to Set Off. Neither ORTHOFIX nor OI shall be entitled to
set off against amounts payable to Employee hereunder any amounts earned by
Employee in other employment, or otherwise, after termination of his
employment with ORTHOFIX, or any amounts which might have been earned by
Employee in other employment had he sought such other employment.
13. Competitive Activity. For one year following the termination of
Employee's employment with ORTHOFIX, if Employee has timely received or is
timely receiving the payments and benefits Employee is entitled to under
this Agreement, Employee shall not, without the prior written consent of the
Board of Directors of OI, engage in any Competitive Activity. For purposes
of
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this Agreement, the term "Competitive Activity" means Employee's
participation in the management of any business enterprise if such
enterprise engages in substantial and direct competition with OI. Without
limitation, an enterprise shall be deemed to be in substantial and direct
competition with OI if such enterprise's sales of any product or service
competitive with any product or service of OI 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 OI amounted to 25% of
OI's net sales for its most recently completed fiscal year. "Competitive
Activity" shall not include:
(a) The passive ownership of publicly-traded securities in any such
enterprise and exercise of rights appurtenant thereto; or
(b) Participation in management of any such enterprise other than in
connection with the competitive operations of such enterprise.
14. Non-Disclosure of Information.
(a) For so long as Employee is employed by ORTHOFIX, and thereafter
except in the performance of Employee's obligations to ORTHOFIX
or its affiliates, Employee shall not, directly or indirectly,
use or authorize the use of any confidential or other proprietary
information of ORTHOFIX, OI, or their 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 ORTHOFIX, OI, or their affiliates, which
Confidential Information has been made known (whether or not with
the knowledge and permission of ORTHOFIX or OI, and whether or
not developed, devised or otherwise created in whole or in part
by the efforts of Employee) to Employee by reason of Employee's
activities on behalf of ORTHOFIX, OI, or their affiliates.
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
Employee's obligations to ORTHOFIX or OI, with the express
permission of the Board of Directors of ORTHOFIX or OI, or as
otherwise compelled by law.
(b) Employee confirms that all Confidential Information is the
exclusive property of ORTHOFIX, OI, or their affiliates. All
business records, papers and documents kept or made by Employee
relating to the business of ORTHOFIX, OI, or their affiliates
shall be and remain the property of ORTHOFIX, OI, or their
affiliates and shall remain in the possession of ORTHOFIX, OI, or
their affiliates. Upon the termination of Employee's
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employment with ORTHOFIX or upon the request of ORTHOFIX or OI,
Employee shall promptly deliver to ORTHOFIX, and shall retain no
copies of, any written materials, records and documents made by
Employee or coming into Employee's possession concerning the
business and affairs of ORTHOFIX, OI, or their affiliates that
contain Confidential Information.
(c) Without intending to limit the remedies available to ORTHOFIX,
OI, or their affiliates, Employee acknowledges that a breach of
any of the covenants contained in Sections 13 or 14 may result in
material irreparable injury to ORTHOFIX, OI, or their affiliates
for which there is no 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, ORTHOFIX,
OI, or their affiliates shall be entitled to obtain a temporary
restraining order and/or a preliminary injunction restraining
Employee from engaging in activities prohibited by Sections 13 or
14, or such other relief as many may be required to specifically
enforce any of the covenants in Sections 13 and 14.
15. Inventions.
(a) Employee shall promptly and fully disclose to ORTHOFIX any and
all ideas, improvements, discoveries and inventions, whether or
not they are believed to be patentable ("Inventions"), which
Employee conceives of or first actually reduces to practice,
either solely or jointly with others, during Employee's
employment with ORTHOFIX, and which relate to the business now or
thereafter carried on or contemplated by ORTHOFIX, OI, or their
affiliates or which result from any work performed by Employee
for ORTHOFIX, OI, or their affiliates.
(b) Employee acknowledges and agrees that all Inventions shall be the
sole and exclusive property of ORTHOFIX, and during the term of
Employee's employment with ORTHOFIX and thereafter, whenever
requested to do so by ORTHOFIX, Employee shall execute and assign
any and all applications, assignments and other instruments that
ORTHOFIX 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 ORTHOFIX or its nominee the sole and exclusive right,
title and interest in and to such Inventions.
(c) ORTHOFIX acknowledges and agrees that the provisions of this
Section 15 do not apply to an Invention (i) for which no
equipment, supplies, facility or Confidential Information of
ORTHOFIX, OI, or their affiliates was used; (ii) that was
developed entirely on Employee's own time; (iii) that does not
relate directly to the business of
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ORTHOFIX, OI, or their affiliates or to the actual or
demonstrably anticipated research or development of ORTHOFIX, OI,
or their affiliates; and (iv) that does not result from any work
performed by Employee for ORTHOFIX, Ol, or their affiliates.
16. Binding Arbitration; Legal Fees and Expenses. It is the intent of
ORTHOFIX that Employee not be required to bear the legal fees and related
expenses associated with the enforcement or defense of 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 Employee hereunder. Accordingly, the parties 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 Dallas
County, Texas, 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 Employee is determined by the arbitrator(s)
to be the prevailing party in such arbitration, ORTHOFIX shall
pay to Employee as part of the arbitration award all attorneys'
and expert fees and other expenses reasonably incurred by
Employee in connection with such arbitration.
(b) If, following the occurrence of a Change of Control, Employee
determines in good faith that ORTHOFIX has failed to comply with
any of its obligations under this Agreement or ORTHOFIX 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 Employee the benefits provided or intended to be provided to
Employee hereunder, ORTHOFIX irrevocably authorizes Employee to
retain counsel of Employee's choice, at the expense of ORTHOFIX
as hereafter provided, to represent Employee in connection with
the initiation or defense of any litigation, arbitration or other
legal action, whether by or against ORTHOFIX or any director,
officer, stockholder or other person affiliated with ORTHOFIX in
any jurisdiction. Within 10 business days after receipt from
Employee of a request referencing this Section 16(b), ORTHOFIX
shall, from time to time, pay or reimburse Employee for fees and
expenses incurred, or reasonably anticipated to be incurred, in
accordance with such request and this Section 16(b). Without
respect to whether Employee prevails, in whole or in part, in
connection with any of the foregoing, ORTHOFIX shall pay or cause
to be paid and shall be solely responsible for any and all
attorneys' and related fees and expenses incurred by Employee in
connection with any of the foregoing, excluding any such fees and
expenses related to an unsuccessful appeal filed by Employee of
an adjudication on the merits, any motion for a new trial filed
by Employee after such an adjudication that is denied, or any
other motion filed by Employee for reconsideration or review of
such an adjudication that is denied.
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17. Withholding of Taxes. ORTHOFIX may withhold from any amounts
payable under this Agreement all federal, state, city, or other taxes as
shall be required pursuant to law or regulation.
18. Notices. All notices, requests, demands, and other communications
called for or contemplated hereunder shall be in writing and shall be deemed
to have been 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 ORTHOFIX: Orthofix Inc,
0000 Xxxx Xxxxxxx Xxxxx
XxXxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx
With a copy to: Xxxxx X. Xxxxx
Xxxxx & XxXxxxxx
2300 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
If to Employee: Xxxx X. Xxxxxx
0000 Xxxxxxxxx Xx.
Xxxxx, Xxxxx 00000
and
0000 Xxxx Xxxxxxx Xxxxx
XxXxxxxx, Xxxxx 00000
19. Law Governing. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without giving effect to
Texas's principles of conflict of laws.
20. 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.
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21. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, superseding
all negotiations, discussions, preliminary agreements, and previous
contracts between Employee and ORTHOFIX, OI, or their affiliates. No
provisions of this Agreement may be amended or waived except in writing
executed by the parties.
22. 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, including without limitation any person
acquiring, directly or indirectly, all or substantially all of the stock
and/or assets of ORTHOFIX, OI, or their affiliates by purchase, merger,
consolidation, reorganization or otherwise. Any such successor shall be
deemed "ORTHOFIX" for purposes of this Agreement.
23. Agreement. This Agreement is personal in nature and neither of
the parties 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. Without limiting the generality of the
foregoing, 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 Employee's
will or by the laws of descent and distribution. In the event of any
attempted assignment or transfer contrary to this Section, ORTHOFIX shall
have no liability to pay any amount so attempted to be assigned, transferred
or delegated.
24. Effectiveness. This Agreement shall be effective upon the
Effective Date.
ORTHOFIX INC. EMPLOYEE
By: /s/ Xxxxxxx Xxxxxxxx /s/ Xxxx X. Xxxxxx
-------------------------- --------------------------
Xxxx X. Xxxxxx
Title: CEO
--------------------------
Date: 3/25/03 Date: 3/1/03
-------------------------- -------------------
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[ORTHOFIX LOGO] [GRAPHIC OMITTED]
Guaranty by Orthofix International N.V.
Orthofix International N.V. joins in this Agreement for the sole purpose of
guaranteeing the obligations of Orthofix Inc. to pay, provide, or reimburse
Employee for, all cash and in-kind severance benefits provided 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/ Xxxxxxx Xxxxxxxx
--------------------------
Title: CEO
--------------------------
Date: 3/25/03
--------------------------
Emp. Agr - Exec. Officer
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