UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): April 15, 2005
Orthofix International N.V.
(Exact name of Registrant as specified in its charter)
Netherlands Antilles 0-19961 N/A
(State or other jurisdiction Commission File Number (I.R.S. Employer
of incorporation) Identification Number)
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7 Abraham de Veerstraat
Curacao
Netherlands Antilles N/A
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area
code: 011-59-99-465-8525
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2.):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 1. Registrant's Business and Operations.
Item 1.01. Entry into a Material Definitive Agreement.
On April 15, 2005, Orthofix International N.V., a corporation organized under
the laws of the Netherlands Antilles (the "Company"), Orthofix Inc., a Minnesota
corporation, and Charles W. Federico entered into a new employment agreement
(the "Agreement") under which Mr. Federico will continue to serve as the
Company's President and Chief Executive Officer effective as of April 15, 2005.
The Agreement provides for a two-year employment term and supercedes and
terminates his prior employment agreement dated July 1, 2001. The Agreement
provides that Mr. Federico will receive a minimum annual base salary of
$464,473. He will be eligible for bonuses as determined by the Board and
benefits provided to other senior executives.
If, prior to expiration of the two-year employment term, Mr. Federico's
employment is terminated by the Company without "cause" or by Mr. Federico for
"good reason" (each term as defined in the Agreement), he will be entitled to
receive a severance amount equal to (a) a lump sum equal to the highest monthly
base salary in effect in the preceding three years multiplied by the number of
months remaining in the employment term, payable immediately following
termination, plus (b) a prorated annual bonus through the date of termination,
to the extent he was otherwise entitled to a bonus, payable in the next fiscal
year that bonuses are otherwise paid to senior executives. In addition, Mr.
Federico's outstanding options will continue to vest through the end of the full
two-year employment term and he and his dependents will continue to receive
employee welfare benefits (or their monetary value) during that period.
In contrast, if prior to expiration of the full employment term, Mr. Federico's
employment is otherwise terminated by the Company for cause, by Mr. Federico
other than for good reason, or as a result of his death or disability, Mr.
Federico is generally entitled to limited salary and benefits accrued through
his date of termination or as otherwise required by law.
Mr. Federico's right to terminate the Agreement for good reason includes the
right to terminate (a) if there is a significant diminution in his duties,
compensation or benefits, (b) if there is an uncured breach of the Agreement by
the Company and (c) following a "change in control" (as defined in the
Agreement). In order to terminate for good reason following a change in control,
Mr. Federico must remain employed for six months after the date of the change in
control (unless he is earlier terminated by the Company) and, thereafter, may
only exercise his right to terminate for such good reason during the three-month
period after the six-month waiting period.
The Agreement includes a binding commitment of the Company to enter into a
consulting agreement with Mr. Federico effective as of the end of the employment
term, but only if he (a) remains an employee through the end of the employment
term, (b) is terminated without cause prior to such time or (c) terminates for
good reason (but not if he voluntarily terminates for good reason following a
change in control). The consulting period would continue until December 31, 2010
and during such time the Company
would pay Mr. Federico (a) $50,000 per year so long as he remains a director of
the Company and (b) $110,000 per year during such time as he provides consulting
services, but is not a director. In addition, he and his dependents are entitled
to group health benefits (or the financial equivalent thereof) during the
consulting period. Mr. Federico will also be provided with secretarial support
in order to assist him in the performance of his consulting duties. In the event
of termination of Mr. Federico's employment without cause during the employment
term, the Company reserves the right to make an annual payment to Mr. Federico
in the amount otherwise required to be paid to him for consulting services until
the end of the consulting term rather than require Mr. Federico to provide any
consulting services. Such amounts are in addition to the severance rights
described above.
The employment agreement contains a non-solicitation of employees and customers
restrictive covenant that extends for two years following the end of the
employment term, a non-competition restrictive covenant that remains in effect
for so long as Mr. Federico is employed and a confidentiality restrictive
covenant that lasts indefinitely. Such restrictive covenants will extend during
the period of any post-termination consulting agreement and for various periods
following the end of the consulting period.
A copy of the Agreement is attached hereto as Exhibit 10.1 and incorporated
herein by reference, and the foregoing description should be read in conjunction
with such exhibit.
Item 1.02. Termination of a Material Definitive Agreement
Pursuant to the terms of the Agreement as described under Item 1.01 of this
Current Report on Form 8-K, the Agreement will supercede and effectively
terminate as of April 15, 2005 the employment agreement between the Company and
Mr. Federico, dated July 1, 2001. A description of such employment agreement is
contained in the Company's definitive proxy statement for the 2004 Annual
Meeting of Stockholders, as filed with the Securities and Exchange Commission on
May 18, 2004, which description is incorporated by reference in this Current
Report on Form 8-K.
Section 9. Financial Statements and Exhibits.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits:
Exhibit No. Description of Document
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10.1 Employment Agreement between Charles W. Federico,
Orthofix, Inc. and Orthofix International N.V., dated as
of April 15, 2005.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: April 15, 2005
ORTHOFIX INTERNATIONAL N.V.
By: /s/ Thomas Hein
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Name: Thomas Hein
Title: Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description of Document
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10.1 Employment Agreement between Charles W. Federico,
Orthofix, Inc. and Orthofix International N.V., dated as
of April 15, 2005