INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (the "Agreement") is made and entered into
as
of this ____ day of ______, 2005, by and between ORTHOFIX
INTERNATIONAL N.V., a
Netherlands Antilles corporation (the "Company"), and the
undersigned
Indemnitee.
W I T N E S S E T H:
WHEREAS, the Company and the Indemnitee recognize that the vagaries
of
public policy and the interpretation of sometimes ambiguous
statutes,
regulations and court opinions are too uncertain to provide the
Company's
directors and officers with adequate or reliable advance knowledge
or guidance
with respect to the legal risks and potential liabilities to which
they may
become personally exposed as a result of performing their duties
for the Company
or by reason of their status as a director or officer of the
Company;
WHEREAS, in entering into this Agreement both the Company and
the
Indemnitee represent and agree, to the best of their knowledge,
that at present
there is no pending or threatened litigation or proceeding
involving the
Indemnitee or any other director or officer of the Company,
where
indemnification under this Agreement would be required or permitted
or which may
result in a claim for indemnification hereunder; and
WHEREAS, the Company desires to have the Indemnitee begin or
continue
to serve as a director or officer of the Company or an Affiliate
(as defined
below), free from undue concern for unpredictable, inappropriate or
unreasonable
legal risks and personal liabilities by reason of performing his
duty to the
Company or his status as a director or officer; and the Indemnitee
desires to
begin or continue to serve in such capacity.
NOW, THEREFORE, in consideration of the premises, mutual covenants
and
agreements of the parties contained herein and the mutual benefits
to be derived
from this Agreement, the parties hereto covenant and agree as
follows:
1. Certain Definitions. The following terms as used in this
Agreement
shall be defined as follows:
(a) "Action(s)" shall include, without limitation, any
threatened,
pending or completed action, claim, litigation, suit or proceeding,
whether
civil, criminal, administrative, arbitrative or investigative,
predicated on any
applicable law of any jurisdiction, including, without limitation,
the U.S.
federal Securities Act of 1933, as amended, and/or Securities
Exchange Act of
1934, as amended, and/or their respective state counterparts and/or
any rule or
regulation promulgated thereunder, whether a Derivative Action
and/or whether
formal or informal.
(b) "Affiliate" shall include, without limitation, any
corporation,
partnership, joint venture, employee benefit plan, trust, or other
similar
enterprise that directly or indirectly through one or more
intermediaries,
controls or is controlled by, or is under common control with, the
Company.
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(c) "Authority" shall mean the panel of arbitrators or
independent
legal counsel selected under Section 6.
(d) "Board" shall mean the entire then serving Board of Directors
of
the Company.
(e) "Breach of Duty" shall mean Indemnitee breached or failed
to
perform his duties to the Company or an Affiliate, as the case may
be, and
Indemnitee's breach of or failure to perform those duties
constituted:
(i) a breach of his "duty of loyalty" (as defined herein) to
the
Company or its shareholders;
(ii) acts or omissions not in "good faith" (as further defined
herein) or which involve intentional misconduct or a knowing
violation of
the
law; or
(iii) a transaction from which Indemnitee derived an improper
direct personal financial profit (unless such profit is determined
to be
immaterial in light of
all the circumstances).
In
determining whether Indemnitee has acted or omitted to act
otherwise
than
in "good faith," as such term is used herein, the Authority, or
the
court, shall determine solely whether Indemnitee (i) in the case of
conduct
in
his "official capacity" (as defined herein) with the Company,
believed,
in
the exercise of his business judgment, that his conduct was in the
best
interests of the Company; and (ii) in all other cases, reasonably
believed
that
his conduct was at least not opposed to the best interests of
the
Company. Notwithstanding any other provision of this Agreement,
Indemnitee's conduct with respect to an employee benefit plan or
trust
sponsored by or otherwise associated with the Company and/or an
Affiliate
for
a purpose he reasonably believes to be in the interests of the
participants in and beneficiaries of such plan is conduct that does
not
constitute a breach or failure to perform his duties to the Company
or an
Affiliate, as the case may be.
(f) "Derivative Action" shall mean any Action brought by or in
the
right of the Company and/or an Affiliate.
(g) "Disinterested Quorum" shall mean a quorum of the Board who are
not
parties in interest to the subject Action or any related
Action.
(h) Breach of the "duty of loyalty" shall mean a breach of
fiduciary
duty by an Executive which constitutes a willful failure to deal
fairly with the
Company or its shareholders in connection with a transaction in
which the
Executive has a material undisclosed personal conflict of
interest.
(i) "Executive(s)" shall mean any individual who is, was or has
agreed
to become a director and/or officer of the Company and/or an
Affiliate.
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<PAGE>
(j) "Expenses" shall include, without limitation, any and all
reasonable expenses, fees, costs, charges, attorneys' fees and
disbursements,
other out-of-pocket costs, reasonable compensation for time spent
by Indemnitee
in connection with the Action for which he or she is not otherwise
compensated
by the Company, any Affiliate, any third party or other entity and
any and all
other reasonable direct and indirect costs of any type or nature
whatsoever.
(k) "Liabilities" shall include, without limitation, judgments,
amounts
incurred in settlement, fines, penalties and, with respect to any
employee
benefit plan, any excise tax or penalty incurred in connection
therewith, all
Expenses and any and all other reasonable liabilities of every type
or nature
whatsoever incurred in connection with the subject Action.
(l) "Official capacity" shall mean the office of director or
officer in
the Company, membership on any committee of directors, any other
offices in the
Company held by an Executive and any other employment or agency
relationship
between the Executive and the Company. Without limiting the
generality of the
foregoing, the provision of legal advice to the Company, the Board,
or the
officers, employees and agents of the Company by an Executive whose
duties
include legal counsel shall be deemed to be within such Executive's
"official
capacity."
2. Agreement to Serve. The Indemnitee agrees to begin or to
continue to
serve the Company or an "Affiliate," as an Executive; provided,
however, that
nothing contained in this Agreement shall create a contract of
employment
between the Company and the Indemnitee and the termination of the
Indemnitee's
relationship with the Company by either party hereto shall not be
restricted by
this Agreement.
3. General. The Company shall indemnify Indemnitee, to the
fullest
extent permitted by law, against any and all Liabilities which
Indemnitee may
incur as a result of being made or threatened to be made a party to
any Action
by reason of the fact that Indemnitee, or his testator or
intestate, is or was a
director or officer of the Company or serves or served any other
enterprise as a
director or officer at the request of the Company or any
predecessor of the
Company. The remaining specific provisions of this Agreement are in
furtherance,
and not in derogation or limitation of, the generality of the
foregoing.
4. Mandatory Indemnification.
(a) Mandatory Indemnification when Successful on Merits or
Otherwise.
With respect to any Action to which Indemnitee has been made or
threatened to be
made a party by reason of his status as an Executive, and/or as to
acts
performed in the course of Indemnitee's duties to the Company
and/or an
Affiliate, to the extent Indemnitee has been successful on the
merits or
otherwise, including, without limitation, the settlement,
dismissal, abandonment
or withdrawal of any such Action where Indemnitee does not pay,
incur or assume
any material Liabilities, he shall be indemnified by the Company
against all
Liabilities incurred by him or on his behalf in connection
therewith. The
Company shall pay or reimburse such Liabilities to Indemnitee, or
to such other
person or entity as Indemnitee may designate in writing to the
Company, within
ten days after the receipt of Indemnitee's written request
therefor, without
regard to the provisions of Section 6. In the event the Company
refuses or fails
to pay or
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<PAGE>
reimburse such requested Liabilities, Indemnitee may petition a
court to order
the Company to make such payment pursuant to Section 7.
(b) Mandatory Indemnification in Other Situations. In all cases
other
than those set forth in Section 4(a) hereof, and subject to the
conditions and
limitations set forth hereinafter in this Agreement, the Company
shall indemnify
and hold harmless Indemnitee in any circumstances in which he is or
was a party,
or is threatened to be made a party, to any Action by reason of his
status as an
Executive, and/or as to acts performed in the course of
Indemnitee's duties to
the Company and/or an Affiliate, against Liabilities incurred by or
on behalf of
Indemnitee in connection with any Action, including, without
limitation, in
connection with the investigation, defense, settlement or appeal of
any Action;
provided, that it is not determined by the Authority, or by a
court, pursuant to
Section 6 that Indemnitee engaged in misconduct which constitutes a
Breach of
Duty.
(c) Restrictions on Indemnification. Notwithstanding any other
provision contained in this Agreement to the contrary, the Company
shall not:
(i) indemnify against Liabilities (or advance Expenses) to
Indemnitee with respect to any Action initiated or brought
voluntarily by
Indemnitee and not by way of defense, except with respect to
Actions:
(1) brought to establish or enforce a right to indemnification
against Liabilities (or an advance of Expenses) under Section 7,
or
under any applicable statute or law;
(2) initiated or brought voluntarily by Indemnitee to the
extent Indemnitee is successful on the merits or otherwise in
connection with such an Action; or
(3) as to which the Board determines it be appropriate.
(ii) indemnify Indemnitee against judgments, fines or penalties
incurred in a Derivative Action if Indemnitee is finally adjudged
liable to
the
Company by a court (unless the court before which such
Derivative
Action was brought determines that Indemnitee is fairly and
reasonably
entitled to indemnity for any or all of such judgments, fines
or
penalties); or
(iii) indemnify
Indemnitee under this Article 11 for any amounts
paid
in settlement of any Action effected without the Company's
written
consent.
(d) Settlement of Action. The Company shall not settle any Action
in
any manner which would impose any Liabilities or other type of
limitation on
Indemnitee without the Indemnitee's written consent. Neither the
Company nor
Indemnitee shall unreasonably withhold their consent to any such
proposed
settlement.
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<PAGE>
5. Advance for Expenses. The Company shall from time to time pay to
or
reimburse Indemnitee, or such other person or entity as Indemnitee
may designate
in writing to the Company, Expenses incurred by or on behalf of
Indemnitee in
connection with any Action in advance of the final disposition or
conclusion of
any such Action within ten days after the receipt of Indemnitee's
written
request therefor; provided, that Indemnitee furnishes to the
Company an executed
written certificate affirming his good faith belief that he has not
engaged in
misconduct which constitutes a Breach of Duty and agrees in writing
to repay any
advances made under this Section 5 if it is ultimately determined
that he is not
entitled to be indemnified by the Company for such Expenses
pursuant to this
Agreement.
6. Determination of Right to Indemnification.
(a) Payment. Except as otherwise set forth in this Section 6 or
in
Section 4(c), any indemnification to be provided to Indemnitee by
the Company
under Section 4(b) upon the final disposition or conclusion of any
Action,
unless otherwise ordered by a court, shall be paid or reimbursed by
the Company
to Indemnitee, or such other person or entity as Indemnitee may
designate in
writing to the Company, within sixty days after the receipt of
Indemnitee's
written request therefor. Such request shall include an accounting
of all
Liabilities for which indemnification is being sought. No further
corporate
authorization for such payment shall be required other than this
Section 6(a).
(b) Restrictions on Payment. Notwithstanding the foregoing, the
payment
of such requested indemnifiable Liabilities pursuant to Section
4(b) may be
denied by the Company if:
(i) a Disinterested Quorum, by a majority vote thereof,
determines
that
Indemnitee has engaged in misconduct which constitutes a Breach
of
Duty; or
(ii) a Disinterested Quorum cannot be obtained.
(c) Authorization of Authority to Determine Right to
Indemnification.
In the event of nonpayment pursuant to either subsection of Section
6(b), the
Board shall immediately authorize and direct, by resolution, that
an independent
determination be made as to whether Indemnitee has engaged in
misconduct which
constitutes a Breach of Duty and, therefore, whether
indemnification of
Indemnitee is proper pursuant to this Agreement. If the Board does
not authorize
an Authority to determine the Indemnitee's right to indemnification
hereunder
with
