PRELIMINARY
COPY -- SUBJECT TO COMPLETION
RAMIUS
VALUE AND OPPORTUNITY MASTER FUND LTD
______________,
2009
Dear
Fellow Shareholder:
Ramius Value and Opportunity Master Fund Ltd (“Value and
Opportunity Master Fund”) and the other participants in this solicitation
(collectively, the “Ramius Group”) are the beneficial owners of an aggregate of
901,980 shares of common stock of Orthofix International N.V. (the
“Company”), representing approximately 5.3% of the outstanding shares of common
stock of the Company. For the reasons set forth in the attached Proxy
Statement, the Ramius Group does not believe that the Board of Directors of the
Company is acting in the best interests of its shareholders. On January 28,
2009, we therefore submitted a written request pursuant to Article 129 of the
Netherlands Antilles Civil Code for the Company to convene a special general
meeting of shareholders (the “Special Meeting”) for the purpose of electing four
(4) new, highly qualified, candidates proposed by the Ramius Group, J. Michael
Egan, Peter A. Feld, Steven J. Lee and Charles T. Orsatti to replace four (4)
members of the current Board of Directors of the Company (the “Board”), James F.
Gero, Peter J. Hewett, Thomas J. Kester and Walter P. Von
Wartburg. On February 10, 2009, the Company announced that, in
response to our written request, it was calling the Special Meeting to be held
on Tuesday, April 7, 2009.
The
Ramius Group urges you to carefully consider the information contained in the
attached Proxy Statement and then support its efforts by signing, dating and
returning the enclosed GOLD proxy card
today. The attached Proxy Statement and the enclosed GOLD proxy card are first
being furnished to the shareholders on or about [___________ __],
2009.
If you
have any questions or require any assistance with your vote, please contact
Innisfree M&A Incorporated, which is assisting us, at their address and
toll-free numbers listed on the following page.
Thank you
for your support.
Jeffrey
C. Smith
Ramius
Value and Opportunity Master Fund Ltd
If
you have any questions, require assistance in voting your GOLD proxy
card,
or
need additional copies of Value and Opportunity Master Fund’s proxy
materials, please call
Innisfree
M&A Incorporated at the phone numbers listed below.
Innisfree
M&A Incorporated
501
Madison Avenue, 20th Floor
New
York, NY 10022
Shareholders
Call Toll-Free at: (888) 750-5884
Banks
and Brokers Call Collect at: (212) 750-5833
|
SPECIAL
GENERAL MEETING OF SHAREHOLDERS
OF
ORTHOFIX
INTERNATIONAL N.V.
_________________________
PROXY
STATEMENT
OF
RAMIUS
VALUE AND OPPORTUNITY MASTER FUND LTD
_________________________
PLEASE
SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY CARD TODAY
Ramius Value and Opportunity Master Fund Ltd, a Cayman
Islands exempted company (“Value and Opportunity Master Fund”), Ramius
Enterprise Master Fund Ltd, a Cayman Islands exempted company (“Enterprise
Master Fund”), Ramius Advisors, LLC, a Delaware limited liability company
(“Ramius Advisors”), RCG Starboard Advisors, LLC, a Delaware limited liability
company (“RCG Starboard Advisors”), Ramius LLC, a Delaware limited liability
company (“Ramius”), C4S & Co., L.L.C., a Delaware limited liability company
(“C4S”), Peter A. Cohen (“Mr. Cohen”), Morgan B. Stark (“Mr. Stark”), Thomas W.
Strauss (“Mr. Strauss”), Jeffrey M. Solomon (“Mr. Solomon”), J. Michael Egan
(“Mr. Egan”), Peter A. Feld (“Mr. Feld”), Steven J. Lee (“Mr. Lee”) and Charles
T. Orsatti (“Mr. Orsatti”) (collectively, the “Ramius Group”) are significant
shareholders of Orthofix International N.V., a limited liability company
organized under the laws of the Netherlands Antilles (“Orthofix” or the
“Company”). Each member of the Ramius Group is a participant in this
solicitation. The Ramius Group does not believe that the Board of
Directors of the Company (the “Board”) has acted in the best interests of its
shareholders. The Ramius Group is therefore seeking your support at
the special general meeting of shareholders (the “Special Meeting”), called by
the Company at the request of the Ramius Group, scheduled to be held at
_____________, _______, _______, ________, on April 7, 2009 at _______ _.m.,
___________, for the
following:
1.
|
To
remove four (4) members of the current Board of Directors of the Company
(the “Board”), James F. Gero, Peter J. Hewett, Thomas J. Kester, and
Walter P. Von Wartburg, without
cause;
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2.
|
To
remove, without cause, any directors appointed by the Board without
shareholder approval between December 10, 2008 through and including the
date of the Special Meeting; and
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3.
|
To
elect the Ramius Group’s slate of director nominees, J. Michael Egan,
Peter A. Feld, Steven J. Lee and Charles T. Orsatti (collectively, the
“Ramius Nominees”), to the Board.
|
NEITHER
PROPOSAL NO. 1 NOR PROPOSAL NO. 2 IS SUBJECT TO, OR IS CONDITIONED UPON, THE
EFFECTIVENESS OF THE OTHER PROPOSALS. PROPOSAL NO. 3 IS CONDITIONED IN PART UPON
THE EFFECTIVENESS OF PROPOSAL NO. 1. IF NONE OF THE THEN EXISTING
MEMBERS OF (OR APPOINTEES TO) THE BOARD ARE REMOVED IN PROPOSAL NO. 1 OR NO. 2,
AND THERE ARE NO VACANCIES TO FILL, NONE OF THE NOMINEES CAN BE ELECTED PURSUANT
TO PROPOSAL NO. 3. SHAREHOLDERS MAY
VOTE TO REMOVE FEWER THAN FOUR (4)
DIRECTORS IN PROPOSAL NO. 1. IF FEWER THAN FOUR (4) MEMBERS OF THE
BOARD ARE REMOVED IN PROPOSAL NO. 1, SHAREHOLDERS WILL HAVE THE OPPORTUNITY TO
ELECT A CORRESPONDING NUMBER OF NOMINEES IN PROPOSAL NO.
3.
As of ________ __, 2009, the approximate date on which
this Proxy Statement is being mailed to shareholders, the members of the Ramius
Group were the beneficial owners of an aggregate of [933,480] shares of Common
Stock, $0.10 par value (the “Shares”), which represent approximately [___]% of
the issued and outstanding Shares, [________] of which are entitled to be voted
at the Special Meeting.
Orthofix has set the record date for determining
shareholders entitled to notice of and to vote at the Special Meeting as
February 25, 2009 (the “Record Date”). The mailing address of the
principal executive offices of Orthofix is 7 Abraham de Veerstraat, Curaçao,
Netherlands Antilles. Shareholders of record at the close of business
on the Record Date will be entitled to vote at the Special
Meeting. According to the Company, as of the Record Date, there were
[_______] Shares outstanding and entitled to vote at the Special
Meeting. The participants in this solicitation intend to vote all of
their Shares FOR the proposals described herein.
THE
RAMIUS GROUP URGES YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF
THE REMOVAL AND REPLACEMENT OF FOUR CURRENT MEMBERS OF THE BOARD, JAMES F. GERO,
PETER J. HEWETT, THOMAS J. KESTER AND WALTER P. VON WARTBURG, WITH THE RAMIUS
NOMINEES.
IF YOU
HAVE ALREADY SENT A PROXY CARD FURNISHED BY ORTHOFIX MANAGEMENT TO ORTHOFIX, YOU
MAY REVOKE THAT PROXY AND VOTE FOR THE REMOVAL AND REPLACEMENT OF FOUR MEMBERS
OF THE BOARD BY SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY
CARD. THE LATEST DATED PROXY IS THE ONLY ONE THAT
COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE SPECIAL
MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY FOR
THE SPECIAL MEETING TO THE RAMIUS GROUP, C/O INNISFREE M&A INCORPORATED,
WHICH IS ASSISTING IN THIS SOLICITATION, OR TO THE SECRETARY OF ORTHOFIX, OR BY
VOTING IN PERSON AT THE SPECIAL MEETING.
IMPORTANT
Your
vote is important, no matter how few Shares you own. The Ramius Group
urges you to sign, date, and return the enclosed GOLD proxy card today to vote
FOR the election of the Ramius Nominees.
·
|
If
your Shares are registered in your own name, please sign and date the
enclosed GOLD
proxy card and return it to the Ramius Group, c/o Innisfree M&A
Incorporated in the enclosed envelope
today.
|
·
|
If
your Shares are held in a brokerage account or bank, you are considered
the beneficial owner of the Shares, and these proxy materials, together
with a GOLD voting
form, are being forwarded to you by your broker or bank. As a
beneficial owner, you must instruct your broker, trustee or other
representative how to vote. Your broker cannot vote your Shares
on your behalf without your
instructions.
|
·
|
Depending
upon your broker or custodian, you may be able to vote either by toll-free
telephone or by the Internet. Please refer to the enclosed
voting form for instructions on how to vote electronically. You
may also vote by signing, dating and returning the enclosed voting
form.
|
If you
have any questions regarding your proxy,
or need
assistance in voting your Shares, please call:
Innisfree
M&A Incorporated
501
Madison Avenue, 20th Floor
New
York, NY 10022
Shareholders
Call Toll-Free at: (877) 800-5884
Banks and Brokers Call Collect at:
(212) 750-5833
REASONS
FOR THE SOLICITATION
The
Ramius Group believes that the Shares are currently trading at a significant
discount to intrinsic value. As significant shareholders of Orthofix,
we have a vested financial interest in the maximization of the value of all
Shares. Our interests are aligned with the interests of all
shareholders. While general weakness in the stock market and
increasing competitive pressures within the industry have impacted the Company,
we believe the primary reason for the Company’s poor performance is the
ill-conceived and poorly executed acquisition of Blackstone Medical
(“Blackstone”) and its significant negative impact on the Company’s financial
condition and operational results. This poor performance is further
exacerbated by a bloated corporate overhead. Additionally, given the
Board’s history of weak oversight and poor judgment, we have serious concerns
about the ability and willingness of the current Board to make the necessary
structural and operational changes that we believe are required to maximize
value for all shareholders.
Orthofix
faces substantial operational and financial challenges primarily resulting from
the acquisition of Blackstone in August 2006 for $333
million. Despite heavy investments of capital and resources into
Blackstone, operating performance has declined precipitously to a level where
Blackstone has generated material operating losses and negative free cash
flow. As described in more detail below, in our opinion, the
acquisition of Blackstone was a failure from the outset. We believe
management and the Board failed to properly address critical risk factors
during due diligence, failed to implement and execute a profitable operating
plan, and, in light of the recent restructuring announcement, have once again
failed to take sufficient action. The acquisition has also saddled
Orthofix with a heavy debt load which has now put the Company in a precarious
position. The recently announced, costly amendment to the term loan
only provides some covenant leniency for the short-term. The Company’s debt
covenants tighten in late 2009 requiring significant improvement in EBITDA or
substantial reductions in total debt. To address these issues, the
Ramius Nominees, if elected, will work with the remaining members of the current
Board to evaluate all available options for Blackstone with a goal of preserving
value and stemming further operating losses, as well as exploring opportunities
to significantly reduce corporate overhead expenses. Although it is
currently our strong belief that a sale of Blackstone would create substantial
value for Orthofix shareholders, the Ramius Nominees have no present plans to pursue specific strategies at
this time and will approach the situation, if elected, with an open mind
and will consider and evaluate all options available to the Company, including
the sale of Blackstone, with a common goal of maximizing shareholder
value. These options could include possible divestitures, further
restructurings, corporate cost reductions, or other strategic
alternatives.
BACKGROUND
TO THE SOLICITATION
The
following is a chronology of events leading up to this proxy
solicitation:
v
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On
September 16, 2008, certain members of the Ramius Group participated on a
conference call with Daniel Yarbourough, Vice President of Investor
Relations. The purpose of the call was to gain a better
understanding of the Company’s
business.
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v
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On
September 25, 2008, certain members of the Ramius Group attended a
presentation at the UBS Conference where Mr. Yarbourough made a
presentation to the conference attendees regarding the
Company.
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v
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On
October 29, 2008, certain members of the Ramius Group traveled to the
corporate headquarters of the Company in Boston to meet with Alan
Milinazzo, President and Chief Executive Officer, and Mr.
Yarbourough. The purpose of the meeting was to gain a better
understanding of the business of the Company and to discuss certain
alternatives that the Ramius Group felt could improve shareholder
value.
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v
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On
November 24, 2008, certain members of the Ramius Group participated on a
conference call with Robert Vaters, Executive Vice President and Chief
Financial Officer, and Mr. Yarbourough. The purpose of the call
was to introduce the Ramius Group to the newly-appointed Chief Financial
Officer and to discuss specific financial and strategic items regarding
the Company.
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v
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On
November 26, 2008, certain members of the Ramius Group participated on a
second conference call with Mr. Vaters and Mr. Yarbourough. The
purpose of the call was to continue the discussion from the November 24,
2008 conference call and to provide feedback regarding initiatives the
Ramius Group believes would improve shareholder
value.
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v
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On
December 2, 2008, the Ramius Group issued an open letter to shareholders
of the Company outlining its views regarding the Company and specific
actions it felt should be taken by the Company in order to improve
shareholder value. The letter also outlined the Ramius Group’s
intention to proceed with a consent solicitation in order to call a
general special meeting of shareholders for the purpose of making
substantial changes to the composition of the
Board.
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v
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On
December 2, 2008, certain members of the Ramius Group spoke with Mr.
Vaters regarding the aforementioned
letter.
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v
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On
December 3, 2008, certain members of the Ramius Group spoke with Mr.
Vaters. Mr. Vaters contacted the Ramius Group to inform the
Ramius Group that due to the receipt of the aforementioned letter, the
Company had cancelled a pre-arranged conference call between the Ramius
Group and Michael Finegan, an employee of the
Company.
|
v
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On
December 3, 2008, certain members of the Ramius Group spoke with Mr.
Milinazzo regarding the aforementioned
letter.
|
v
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On
December 4, 2008, the Company filed a press release acknowledging the
receipt of the aforementioned
letter.
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v
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On
December 19, 2008, certain members of the Ramius Group met with Mr.
Milinazzo and Mr. Vaters at the Ramius offices in New York
City. As a result of the meeting, the parties agreed to
schedule an in-person meeting between certain members of the Ramius Group
and James Gero, Chairman of the Board, and Bradley Mason, President of
North America. This meeting was subsequently scheduled for
January 21, 2009.
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v
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On
January 12, 2009, the Ramius Group sent a letter and mailed a Consent
Solicitation Statement, dated January 7, 2009, regarding the Special
Meeting to
shareholders.
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v
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On
January 20, 2009, the Ramius Group issued a press release announcing that
RiskMetrics Group, formerly known as ISS, recommended that shareholders of
Orthofix vote for Ramius’ proposal to call the Special Meeting for the
purpose of making substantial changes to the composition of Orthofix's
Board of Directors.
|
v
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On
January 21, 2009, certain members of the Ramius Group met with Mr.
Milinazzo, Mr. Vaters, Mr. Gero, and Mr. Mason at the Orthofix offices in
Wayne, New Jersey.
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v
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On
January 23, 2009, the Ramius Group filed a supplement to the Solicitation
Statement dated January 7, 2009 in order to seek to remove, without cause,
Thomas J. Kester in place of Alan W. Milinazzo in the event the Special
Meeting is called and held.
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v
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On
January 23, 2009, certain members of the Ramius Group met with Mr.
Milinazzo and Mr. Vaters at the Ramius offices in New York
City.
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v
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On
January 28, 2009, pursuant to Article 129 of the Netherlands Antilles
Civil Code (the “Code”) the Ramius Group submitted a written request to
the Company requesting that the Company convene the Special
Meeting. The written request to convene the Special Meeting was
authorized by shareholders representing approximately 55% of shares
outstanding, far in excess of the 10% threshold required by the
Code
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PROPOSAL
NOS. 1 & 2
REMOVAL
OF CERTAIN EXISTING DIRECTORS
Pursuant
to each of Article 136 of the Netherlands Antilles Civil Code (the “Antilles
Code”) and Article 8 of the Company’s Articles of Association (the “Articles”),
the shareholders may remove any director with or without cause at a general
meeting of shareholders and fill the vacancy in the Board thus
created. We are seeking to remove four members of the Board, James F.
Gero, Peter J. Hewett, Thomas J. Kester, and Walter P. Von Wartburg, without
cause, and any directors appointed by the Board without shareholder approval
between December 10, 2008 and up through and including the date of the Special
Meeting.
In
“Proposal No. 1”, the Ramius Group is asking the Company’s shareholders to vote
for the removal, without cause, of four of the Company’s current directors,
effective immediately.
In “Proposal No. 2”, the
Ramius Group is asking the Company’s shareholders to vote for the removal,
without cause, of any directors appointed by the Board without
shareholder approval between December 10, 2008 and up through and including the
date of the Special Meeting
Reasons
for Removing Existing Directors
The Ramius Group does not believe the current Board has
acted in the best interests of shareholders. Orthofix shares have
materially underperformed in recent years driven primarily by the failed
acquisition of Blackstone, weak management execution, a bloated corporate
overhead and a highly-levered balance sheet. We believe there is a
terrific opportunity at Orthofix to substantially increase shareholder value and
to protect the long-term interests of shareholders. In order for this
value to be realized, we believe the Company must explore alternative options
for Blackstone to preserve value and stem operating losses and significantly
reduce corporate overhead expenses. To date management and the
current Board have been unwilling to take these actions or, in our opinion, any
other actions that have led to a material improvement in financial
performance. Accordingly, we feel it is appropriate for shareholders
to take action to make substantial changes to the composition of the
Board. For this reason, we are asking for shareholder support at the
Special Meeting to remove certain members of the Board now and to replace them
with the Ramius Nominees.
We
believe it is critical for shareholders to take action at the Special Meeting as
opposed to the regularly scheduled annual meeting which may not be held for
several months. Orthofix faces substantial risks due to bank debt
covenants that begin to tighten in the third quarter of 2009. If no
action is taken, it is possible that Orthofix may breach a covenant which could
cause further damage to the Company. Additionally, the announced
restructuring initiatives at Blackstone call for further integration of that
business into the core businesses of Orthofix which could potentially damage the
core businesses or make it more difficult to separate in order to sell
Blackstone. Therefore, we believe it is prudent for shareholders to
take action at this Special Meeting to make substantial changes to the
composition of the Board.
We
believe the Company’s acquisition of Blackstone was ill-conceived and poorly
executed.
At the
time of the acquisition, Blackstone was operating at a revenue run rate of $88
million per year and an operating income run rate of $7.6 million per
year. Management projected that the Blackstone acquisition, together
with the slower-growing spine stimulation business, would generate revenue
growth in excess of 25% per year and would continue to improve in
profitability. In stark contrast to these projections, the reality
has been that Blackstone’s last quarter revenue declined 15.3% year-over-year
and the last quarter operating loss, adjusted for the goodwill impairment and
inventory charges, was a loss of $8.8 million. Additionally, as of
the last quarter’s results, Orthofix had written down the carrying value of its
investment in Blackstone, originally $333 million, by 93% to $23.5
million. In our opinion, it seems quite apparent that the acquisition
of Blackstone was a disastrous failure.
We
believe that management and the Board failed to properly address critical risk
factors during due diligence and, since the acquisition, have clearly failed to
execute a profitable operating plan. At the time of the acquisition,
management originally asserted that the Blackstone acquisition would be
accretive to earnings on a GAAP basis, beginning in 2008, and would be
substantially accretive to GAAP earnings in subsequent years. Given
the substantial losses that Blackstone has generated since the acquisition, this
clearly did not come to fruition. As we outlined in our detailed
letter to shareholders on December 3, 2008 (the “December 3 Letter”), in order
for the acquisition of Blackstone to be accretive in 2008, revenue growth had to
have been at least 60% per year, which is substantially higher than Blackstone’s
historical growth rate of 40% prior to the acquisition. We fail to
see how prudent financial modeling would have yielded these lofty expectations
for the acquisition of Blackstone.
We
believe the integration of Blackstone into the Company has been plagued by
missteps.
Despite
heavy investments in working capital and capital expenditures, operating
performance at Blackstone has deteriorated almost every quarter since the fourth
quarter of 2007. However, capital expenditures at Blackstone alone
totaled more than $15 million for 2007, representing over 80% of total capital
spending for the entire Orthofix business even though it represented less than
25% of total revenues. In addition to a disproportionate need for
capital, management’s attempts to integrate Blackstone into the Company have
also been plagued with costly missteps. Consider the
following:
v
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In
July 2007, Blackstone received a subpoena issued by the Department of
Health and Human Services, Office of the Inspector General (“OIG”), under
the authority of the federal healthcare anti-kickback and false claims
statutes. A year and a half later, this issue has yet to be
resolved and remains a major overhang on the
business.
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v
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In
the fourth quarter of 2007, the Lyons Brothers, who founded Blackstone and
who agreed to remain with the Company after closing, left the
Company. This was followed by a slew of departures from
Blackstone, including key internal people in research and development and
sales and marketing, as well as several key outside
distributors. The Company then began a painful process of
restructuring the Blackstone distribution network from one that was
historically 100% third-party distributors to a hybrid model including
both indirect sales representatives as well as a team of direct sales
representatives that were hired at an additional expense of over $5
million per year. Due to poor performance, these representatives have
subsequently been fired or moved to other responsibilities within the
Company.
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v
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In
May 2008, Blackstone took another hit when a key competitor, NuVasive Inc.
(NUVA), announced the acquisition of the Osteocel business unit from
Osiris Therapeutics Inc. (OSIR). Blackstone is currently the
exclusive distributor of Osteocel’s key product, Trinity, a biological
spine implant using adult stem cells. The Trinity product has been
credited with most of the growth in Blackstone’s biologics business
historically. However, the distribution agreement terminates in
2009 and Blackstone will no longer be able to distribute the Trinity
product. The Trinity product has been a key differentiator for
Blackstone. We believe this major setback could have been
avoided had the Company identified this risk during its due diligence
process and properly addressed the issue through an earn-out payment based
on the successful renewal of the distribution agreement or a
re-negotiation of a longer-term contract with Osiris prior to
closing.
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v
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In
August 2008, the Company announced a collaboration agreement with the
Musculoskeletal Transplant Foundation (“MTF”) to develop a stem cell-based
allograft to compete head-to-head with Trinity. As part of this
arrangement, Orthofix agreed to pay $10 million to fund the ongoing
product development. Although management has stated that they expect the
MTF product to be available for commercial sales in mid-2009, industry
experts are skeptical of the initial sales traction of the product given a
lack of clinical data and physician support. In our opinion,
this will make it extremely difficult to generate any meaningful sales
before 2010.
|
We
believe the Board and management have failed to adequately address the issues
facing the Company.
The
Company has recently announced several restructuring initiatives for Blackstone,
including the implementation of a new software platform and the consolidation of
three facilities into one, yet to be constructed, facility in
Texas. These initiatives are expected to cost $4.2 million between
2008 and 2009 and yield savings of $2 million in 2010 and $5 million in 2011 and
beyond. These savings compare to the nearly $8.8 million of negative
operating income last quarter which equates to negative $35.2 million on an
annualized basis. In our opinion, these restructuring initiatives are
not nearly enough to halt the substantial operating losses at Blackstone and
prevent the Company from breaching bank covenants that begin to tighten in the
third quarter of 2009.
As we
highlighted in the December 3 Letter, management again appears to be counting on
significant growth to achieve breakeven results at
Blackstone. Including the full impact of the announced restructuring
initiatives and the savings from firing the direct sales force, we estimate
Blackstone would have to grow revenues by 35% from the last quarter run rate
without increasing operating costs in order to just break even. Recall that
initially management had envisioned a transaction that would be accretive to
GAAP earnings after taking into account interest expense and amortization of
purchased intangibles from the Blackstone acquisition, which together totaled
approximately $34 million in 2007. In order for Blackstone to achieve
that milestone, revenue would have to grow 84% from the last quarter run rate.
HOWEVER, BLACKSTONE’S SALES WERE DOWN 15.3% LAST QUARTER.
We
believe swift action must be taken to stem the losses at Blackstone and reduce
corporate overhead expenses.
Before
engaging in a lengthy integration and restructuring process that could bring
additional cost and substantial risk to Orthofix shareholders, we believe the
Board should immediately engage a strategic advisor to explore alternative
options for Blackstone, including a possible sale. Additionally, we
believe management and the Board must also take prompt action to further
reduce corporate overhead expenses. Since the Blackstone acquisition,
corporate overhead has ballooned. Corporate overhead was $10.2
million for the twelve-month period preceding the acquisition of
Blackstone. For the last twelve months, this number has increased to
over $20 million, even when excluding certain one-time items. We
believe this bloated cost structure has been driven by, among other things, the
highly distributed nature of the Company. As it stands today, the
executive offices are located in what is arguably some of the most expensive
real estate in Boston, a city where the Company has no other business
purpose. A portion of the legal, finance, and accounting groups still
remain in North Carolina, where the Company was originally
headquartered. The recently appointed President of Blackstone, who is
also the President of the North America division, is located in San Diego,
California, while some of the Company’s key manufacturing facilities are located
in Texas. This highly distributed infrastructure is neither efficient
nor cost effective, and should be remedied immediately.
If
the Board and management do not take immediate action, we believe the Company
will be in jeopardy of violating its debt covenants.
We
believe that given the state of the credit and equity markets, the Company
cannot count on its ability to refinance its debt or raise additional capital on
favorable terms. The recently announced amendment to the term loan
covenants provide Orthofix with leniency on the key Total Debt / EBITDA
covenant, however, beginning in the third quarter of 2009, this covenant begins
to tighten quickly, requiring significant debt reductions or dramatically
improved EBITDA. As we highlighted in the December 3 Letter, Orthofix
must either achieve 2009 EBITDA of $91.7 million versus LTM EBITDA of $81.3
million or reduce debt by $33.6 million, or a combination of the two, in order
to remain in compliance with the tightening covenants. For 2010,
Orthofix must either achieve EBITDA of $119.2 million or reduce debt by $94.6
million, or a combination of the two, in order to remain in compliance with the
covenants. These hurdles will be challenging to overcome, but with
prompt action to explore a sale of Blackstone, we believe Orthofix can meet
these requirements without raising additional capital. In contrast,
the currently proposed, Board adopted, 17-month restructuring initiative at
Blackstone that yields $5 million of total cost savings in 2011 does little to
remedy this situation.
Taking
these actions will ensure that Orthofix will remain in compliance with the
stringent debt covenants. The proceeds from a sale of Blackstone will likely not
be enough to pay down the term loan in its entirety. However, because
of the ongoing losses at Blackstone, we believe it is critical to explore a sale
of the business, use the proceeds to repay a portion of the debt, reduce
interest costs, and cut the losses. We believe the ongoing cash flow
from the legacy businesses would provide sufficient cash to further reduce debt
and meet obligations. Given the highly depressed value of Orthofix
stock, it is unacceptable for management and the Board to consider highly
dilutive equity or convertible issuances to accelerate debt reductions when
other, non-dilutive options are available. The Ramius Nominees have no present plans to
pursue specific strategies at this time and will approach the situation, if elected, with an open mind and will
consider and evaluate all such options available to the Company, including the
sale of Blackstone, with a common goal of maximizing shareholder
value.
THE
RAMIUS GROUP URGES YOU TO VOTE FOR ITS PROPOSAL TO REMOVE, WITHOUT CAUSE, FOUR
(4) MEMBERS OF THE CURRENT BOARD, JAMES F. GERO, PETER J. HEWETT, THOMAS J.
KESTER, AND WALTER P. VON WARTBURG.
PROPOSAL
NO. 3
ELECTION
OF THE RAMIUS NOMINEES
Upon the
approval of Proposal No. 1 and, if applicable, Proposal No. 2, there will exist
at least four (4) vacancies on the Board, which (assuming a quorum is present at
the meeting) may be filled by the affirmative vote of a majority of the Shares
represented and voting at the meeting. For the reasons stated above,
the Ramius Group is seeking your support at the Special Meeting to elect the
Ramius Nominees set forth below to replace four (4) members of the Company’s
current Board. The Ramius Group has nominated four (4) nominees who,
if elected, will constitute a minority of the Board and will hold office until
the Company’s next annual meeting of shareholders and until their successors
have been elected and qualified.
We
believe the Ramius Nominees, who have no current affiliation with the Board and
management, will increase the quality of oversight by the Board and will
effectively exercise their fiduciary duties to shareholders. If
elected, the Ramius Nominees will, subject to their fiduciary duties, explore
alternative options for Blackstone and reduce operating inefficiencies and
unnecessary corporate overhead in order to maximize shareholder
value. There can be no assurance that the foregoing actions will be
implemented if the Ramius Nominees are elected or that the election of the
Ramius Nominees will maximize or otherwise enhance shareholder
value. Your vote to elect the Ramius Nominees will have the legal
effect of filling the vacancies created by the removal of the four (4) incumbent
directors, James F. Gero, Peter J. Hewett, Thomas J. Kester, and Walter P. Von
Wartburg, with the Ramius Nominees. In the event fewer than four (4)
members of the current Board are removed by shareholders in Proposal No. 1, the
Ramius Nominees shall be elected in the following order: Peter A. Feld followed
by (i) the Ramius Nominee receiving the highest number of votes from
shareholders, (ii) the Ramius Nominee receiving the second highest number of
votes from shareholders and (iii) the Ramius Nominee receiving the third highest
number of votes from shareholders.
THE
RAMIUS NOMINEES
Set forth
below are the name, age, business address, present principal occupation, and
employment and material occupations, positions, offices, or employments for the
past five years of each of the Ramius Nominees. This information has
been furnished to the Ramius Group by the Ramius Nominees. The Ramius
Nominees are independent of the Company in accordance with SEC and Nasdaq Stock
Market rules on board independence and are citizens of the United States of
America.
J. Michael Egan (Age 55) has
served as the Chief Executive Officer of Steadman Hawkins Research Foundation,
an orthopedic research organization, since November 2006. From April
1996 through May 2004, Mr. Egan served as the President and CEO of Bluebird
Development, LLC, a financial partnership with Kobayashi Pharmaceutical Company,
an Osaka, Japan-based major distributor of medical devices in
Asia. Mr. Egan currently serves on the Board of Cardica, Inc., a
designer, manufacturer and marketer of proprietary automated anastomotic systems
used by surgeons to perform coronary artery bypass surgery, and served as its
Chairman from August 2000 until January 2007. Mr. Egan also serves as
the Chairman of the Board of Directors at iBalance Medical, a privately held
medical device company, and is a director of several other privately held
companies. The principal business address of Mr. Egan is c/o Steadman
Hawkins Research Foundation, 181 West Meadow Drive, Suite 1000, Vail, Colorado
81657. Mr. Egan does not directly own any securities of Orthofix nor
has he made any purchases or sales of any securities of Orthofix during the past
two years. Mr. Egan, as a member of the Ramius Group, is deemed to be
the beneficial owner of the Shares owned by the members of the Ramius
Group. For information regarding purchases and sales during the past
two years by the members of the Ramius Group of securities of Orthofix that are
deemed to be beneficially owned by Mr. Egan, see Schedule I.
Peter Feld (Age 29) is a
Managing Director of Ramius LLC, a position he has held since November
2008. Prior to becoming a Managing Director, Mr. Feld served as a
Director at Ramius LLC from February 2007 to November 2008. Mr. Feld
joined Ramius LLC as an Associate in February 2005. From June 2001 to
July 2004, Mr. Feld was an investment banking analyst at Banc of America
Securities, LLC, the investment banking arm of Bank of America Corporation, a
bank and financial holding company. Mr. Feld currently serves on the
Board of Directors of CPI Corp. (NYSE: CPY), a leading portrait studio operator
in North America. The principal business address of Mr. Feld is c/o Ramius LLC,
599 Lexington Avenue, 20th Floor, New York, New York 10022. Mr. Feld
does not directly own any securities of Orthofix nor has he made any purchases
or sales of any securities of Orthofix during the past two years. Mr.
Feld, as a member of the Ramius Group, is deemed to be the beneficial owner of
the Shares owned by the members of the Ramius Group. For information
regarding purchases and sales during the past two years by the members of the
Ramius Group of securities of Orthofix that are deemed to be beneficially owned
by Mr. Feld, see Schedule I.
Steven J. Lee (Age 61) has
served as the President of SL Consultant Inc., a private investment firm and
hedge fund specializing in growing companies in the medical and high technology
fields, since 2002. Mr. Lee was the Founder, President, Chief
Executive Officer and Chairman of PolyMedica Corporation, a leading provider of
diabetes care, from 1990 until August 2002, the time of his retirement from
PolyMedica. Previously, Mr. Lee was President and a director of Shawmut National
Ventures. Prior to that, from 1984 to 1986, Mr. Lee served as President and
Chief Executive Officer and a director of RepliGen Corporation, a biotechnology
company focused on the development of novel therapeutics for neurological
disorders. Mr. Lee currently serves on the Board of Directors of
Kensey Nash Corporation (Nasdaq:KNSY), a medical device company known for
innovative product development and unique technology in the fields of resorbable
biomaterials used in a wide variety of medical procedures and endovascular
devices and Montreal, Maine & Atlantic Railway, a railroad company with
routes and operations in Maine, New Brunswick, Quebec and Vermont, and on the
Advisory Board of Capital Resource Partners, an investment fund specializing in
combined debt and equity structures that provide creative financing alternatives
for middle-market firms. The principal business address of Mr. Lee is
P.O. Box 1077, Osprey, Florida, 34229. Mr. Lee does not directly own
any securities of Orthofix nor has he made any purchases or sales of any
securities of Orthofix during the past two years. Mr. Lee, as a
member of the Ramius Group, is deemed to be the beneficial owner of the Shares
owned by the members of the Ramius Group. For information regarding
purchases and sales during the past two years by the members of the Ramius Group
of securities of Orthofix that are deemed to be beneficially owned by Mr. Lee,
see Schedule I.
Charles T. Orsatti (Age 64)
has served as the Managing Partner of Fairfield Capital Partners, Inc., a
private equity fund with investments in securities, commercial real estate and
business equity investments, since 1995. From 1998 to 2004, he was
the Managing Member of Orsatti and Partners, LLC (formerly, J.P. Morgan
Fairfield Partners, LLC), a private equity firm. From 1995 to 1998,
Mr. Orsatti was a senior consultant to Chase Capital Partners (CCP), a
predecessor of J.P. Morgan Partners, LLC. He had previously served as an advisor
and business consultant to CCP since 1987. Until 1995, Mr. Orsatti
was the Chairman and Chief Executive Officer of Fairfield Medical Products
Corporation, a worldwide manufacturer of critical care products sold to
hospitals and alternative care facilities. Mr. Orsatti currently
serves on the Board of Directors of AngioDynamics, Inc. (Nasdaq: ANGO), a global
provider of solutions for musculoskeletal and vascular health specializing in
rehabilitation and regeneration products for the non-operative orthopedic, spine
and vascular markets and SRI Surgical Express, Inc. (Nasdaq: STRC), a provider
of operating room, supply chain and central sterilization management solutions
to hospitals and surgery centers across the United States. Mr.
Orsatti previously served as the Chairman of dj Orthopedics, Inc., a global
orthopedic sports medicine company specializing in the design, manufacture and
marketing of surgical and non-surgical products and services that repair,
regenerate and rehabilitate soft tissue and bone, help protect against injury
and treat osteoarthritis of the knee, until shortly after its initial public
offering in 2001 and remained a Director until November 2007 when dj Orthopedics
was sold to affiliates of The Blackstone Group for $1.5 billion. Mr.
Orsatti was also the managing partner responsible for sourcing and executing the
transaction that ultimately formed dj Orthopedics in 1999. Mr.
Orsatti has also held executive positions with British Oxygen Corporation,
Johnson & Johnson, Coloplast, A/S Denmark and Air Products and Chemicals,
Inc. The principal business address of Mr. Orsatti is c/o Fairfield
Capital Partners, Inc., 372 Larboard Way, Clearwater Beach, Florida
33767. Mr. Orsatti does not directly own any securities of Orthofix
nor has he made any purchases or sales of any securities of Orthofix during the
past two years. Mr. Orsatti, as a member of the Ramius Group, is
deemed to be the beneficial owner of the Shares owned by the members of the
Ramius Group. For information regarding purchases and sales during
the past two years by the members of the Ramius Group of securities of Orthofix
that are deemed to be beneficially owned by Mr. Orsatti, see Schedule
I.
RCG
Starboard Advisors, an affiliate of Ramius, and certain of the Ramius Nominees,
have entered into compensation letter agreements (the “Compensation Letter
Agreements”) regarding compensation to be paid to such nominees for their
agreement to be named and to serve as nominees and for their services as a
director of Orthofix, if elected. Pursuant to the terms of the
Compensation Letter Agreements, RCG Starboard Advisors has agreed to pay Messrs.
Egan, Lee and Orsatti (i) $10,000 in cash as a result of the submission by Value
and Opportunity Master Fund of its nomination of the Ramius Nominees to Orthofix
and (ii) $10,000 in cash upon the filing of a definitive proxy statement with
the Securities and Exchange Commission relating to a solicitation of proxies in
favor of each of the Ramius Nominees’ election as a director at a special
general meeting. Pursuant to the Compensation Letter Agreements, each
of Messrs. Egan, Lee and Orsatti agrees to use such compensation to acquire
securities of Orthofix (the “Nominee Shares”) at such time that they shall
determine, but in any event no later than 14 days after receipt of such
compensation. If elected or appointed to serve as a director of the
Board, each of Messrs. Egan, Lee and Orsatti agrees not to sell, transfer or
otherwise dispose of any Nominee Shares within two years of their election or
appointment as a director; provided, however, in the event that Orthofix enters
into a business combination with a third party, they may sell, transfer or
exchange the Nominee Shares in accordance with the terms of such business
combination.
Value and
Opportunity Master Fund and certain of its affiliates have signed or intend to
sign letter agreements pursuant to which they agree to indemnify certain of the
Ramius Nominees against claims arising from the solicitation of proxies from
Orthofix shareholders in connection with this solicitation, any solicitation in
connection with a special general meeting and any related
transactions. Other than as stated herein, there are no arrangements
or understandings between members of the Ramius Group and any of the Ramius
Nominees or any other person or persons pursuant to which the nomination of the
Ramius Nominees described herein is to be made. Each of the
Ramius Nominees has consented to be named in this Proxy Statement and to serve
as a director of Orthofix if elected as such at the Special
Meeting. None of the Ramius Nominees are a party adverse to Orthofix
or any of its subsidiaries or has a material interest adverse to Orthofix or any
of its subsidiaries in any material pending legal proceedings.
The
Ramius Group does not expect that the Ramius Nominees will be unable to stand
for election, but, in the event that such persons are unable to serve or for
good cause will not serve, the Shares represented by the enclosed GOLD proxy card will be voted
for substitute nominees, to the extent this is not prohibited under the
Company’s Articles or applicable law. In addition, Value and
Opportunity Master Fund reserves the right to challenge any action by Orthofix
that has, or if consummated would have, the effect of disqualifying the Ramius
Nominees. In any such case, Shares represented by the enclosed GOLD proxy card will be voted
for such substitute nominees, to the extent this is not prohibited under the
Company’s Articles or applicable law.
VOTING
AND PROXY PROCEDURES
Only
shareholders of record on the Record Date will be entitled to notice of and to
vote at the Special Meeting. Shareholders who sell Shares before the
Record Date (or acquire them without voting rights after the Record Date) may
not vote such Shares. Shareholders of record on the Record Date will
retain their voting rights in connection with the Special Meeting even if they
sell such Shares after the Record Date. Based on publicly available
information, the Ramius Group believes that the only outstanding class of
securities of Orthofix entitled to vote at the Special Meeting is the
Shares.
Shares
represented by properly executed GOLD proxy cards will be voted
at the Special Meeting as marked and, in the absence of specific instructions,
will be voted FOR the proposal to remove the existing directors serving on the
Board and FOR the election of the Ramius Nominees to the Board and in the
discretion of the persons named as proxies on all other matters as may properly
come before the Special Meeting.
We are
asking you to remove four (4) of the members of the Board, James F. Gero, Peter
Hewett, Thomas J. Kester and Walter P. Von Wartburg, and replace them with the
Ramius Nominees. The participants in this solicitation intend to vote
all of their Shares in favor of the removal of the four current members of the
Board and the election of the Ramius Nominees in their place.
QUORUM;
VOTES REQUIRED FOR APPROVAL; ABSTENTIONS AND BROKER NON-VOTES
The
presence, in person or by proxy, of the holders of fifty percent (50%) of the
Shares outstanding on the Record Date is required to constitute a quorum at the
Special Meeting.
VOTE
REQUIRED FOR PROPOSALS NOS. 1 AND 2. According to the Company’s Articles,
approval of the proposal to remove, without cause, four (4) of the existing
directors serving on the Board and approval of the proposal, if applicable, to
remove, without
cause, any directors appointed by the Board without shareholder approval
between December 10, 2008 through and including the date of the Special Meeting,
require the affirmative vote of a majority of the total votes cast (“Votes
Cast”) by the shareholders represented and voting at the Special
Meeting.
VOTE
REQUIRED FOR PROPOSAL NO. 3. A plurality of the total Votes Cast is required for
the election of the Nominees (assuming a quorum is present). A vote to
“WITHHOLD” for any nominee for director will be counted for purposes of
determining the votes present at the Special Meeting, but will have no other
effect on the outcome of the vote on the election of directors.
Abstentions
and “broker non-votes” are counted as shares that are present and entitled to
vote on the proposals for purposes of determining the presence of a
quorum. Abstentions and broker non-votes will not have any effect on
the outcome of voting. A broker “non-vote” occurs when a broker
holding shares for a beneficial owner does not vote on a particular proposal
because the broker does not have discretionary voting power for that particular
item and has not received instructions from the beneficial owner.
DISCRETIONARY
VOTING
Shares
held in “street name” and held of record by banks, brokers or nominees may not
be voted by such banks, brokers or nominees unless the beneficial owners of such
Shares provide them with instructions on how to vote.
REVOCATION
OF PROXIES
Shareholders
of Orthofix may revoke their proxies at any time prior to exercise by attending
the Special Meeting and voting in person (although attendance at the Special
Meeting will not in and of itself constitute revocation of a proxy) or by
delivering a written notice of revocation. The delivery of a
subsequently dated proxy which is properly completed will constitute a
revocation of any earlier proxy. The revocation may be delivered either to the
Ramius Group in care of Innisfree M&A Incorporated at the address set forth
on the back cover of this Proxy Statement or to Orthofix at 7 Abraham de
Veerstraat, Curaçao, Netherlands Antilles, or any other address provided by
Orthofix. Although a revocation is effective if delivered to
Orthofix, the Ramius Group requests that either the original or photostatic
copies of all revocations be mailed to the Ramius Group in care of Innisfree
M&A Incorporated at the address set forth on the back cover of this Proxy
Statement so that the Ramius Group will be aware of all revocations and can more
accurately determine if and when proxies have been received from the holders of
record on the Record Date and the number of outstanding Shares represented
thereby. Additionally, Innisfree M&A Incorporated may use this
information to contact shareholders who have revoked their proxies in order to
solicit later dated proxies for the election of the Ramius
Nominees.
SOLICITATION
OF PROXIES
The
solicitation of proxies pursuant to this Proxy Statement is being made by the
Ramius Group. Proxies may be solicited by mail, facsimile, telephone,
telegraph, Internet, in person and by advertisements.
Value and
Opportunity Master Fund has entered into an agreement with Innisfree M&A
Incorporated for solicitation and advisory services in connection with this
solicitation, for which Innisfree M&A Incorporated will receive a fee not to
exceed $100,000.00, together with reimbursement for its reasonable out-of-pocket
expenses, and will be indemnified against certain liabilities and expenses,
including certain liabilities under the federal securities
laws. Innisfree M&A Incorporated will solicit proxies from
individuals, brokers, banks, bank nominees and other institutional
holders. Value and Opportunity Master Fund has requested banks,
brokerage houses and other custodians, nominees and fiduciaries to forward all
solicitation materials to the beneficial owners of the Shares they hold of
record. Value and Opportunity Master Fund will reimburse these record
holders for their reasonable out-of-pocket expenses in so doing. It
is anticipated that Innisfree M&A Incorporated will employ approximately 65
persons to solicit Orthofix shareholders for the Special Meeting.
The
entire expense of soliciting proxies is being borne by the Ramius Group. Costs
of this solicitation of proxies are currently estimated to be approximately
$250,000.00. The Ramius Group estimates that through the date hereof
its expenses in connection with this solicitation are approximately
$___,000.00.
Important
Notice Regarding the Availability of Proxy Materials for the Special Meeting to
Be Held on _____, 2009
This Proxy Statement may be viewed
online at www.shareholdersfororthofix.com, together with any
additional soliciting materials relating to the Special Meeting issued by the
Ramius Group. Such materials, including this Proxy Statement, will be
available to stockholders at www.shareholdersfororthofix.com
through the conclusion of the Special Meeting.
ADDITIONAL
PARTICIPANT INFORMATION
The
Ramius Nominees and the other members of the Ramius Group are participants in
this solicitation. The principal business of Value and Opportunity
Master Fund is serving as a private investment fund. Value and Opportunity
Master Fund has been formed for the purpose of making equity investments and, on
occasion, taking an active role in the management of portfolio companies in
order to enhance shareholder value. The principal business of RCG
Starboard Advisors is acting as investment manager of Value and Opportunity
Master Fund. The principal business of Enterprise Master Fund is
serving as a private investment fund. The principal business of
Ramius Advisors is acting as the investment advisor of Enterprise Master
Fund. Ramius is engaged in money management and investment advisory
services for third parties and proprietary accounts and serves as the sole
member of RCG Starboard Advisors and Ramius Advisors. C4S serves as managing
member of Ramius. Messrs. Cohen, Strauss, Stark and Solomon serve as
co-managing members of C4S.
The
address of the principal office of each of RCG Starboard Advisors, Ramius
Advisors, Ramius, C4S, and Messrs. Cohen, Stark, Strauss and Solomon is 599
Lexington Avenue, 20th Floor, New York, New York 10022. The address
of the principal office of Value and Opportunity Master Fund and Enterprise
Master Fund is c/o Citco Fund Services (Cayman Islands) Limited, Corporate
Center, West Bay Road, Grand Cayman, Cayman Islands, British West
Indies.
As of the date hereof, Value and Opportunity Master Fund
beneficially owns 808,095 shares of Common Stock and Enterprise Master Fund
beneficially owns 125,385 Shares. As of the date hereof, RCG
Starboard Advisors (as the investment manager of Value and Opportunity Master
Fund) is deemed to be the beneficial owner of the 808,095 Shares owned by Value
and Opportunity Master Fund. As of the date hereof, Ramius Advisors
(as the investment advisor of Enterprise Master Fund) is deemed to be the
beneficial owner of the 125,385 Shares owned by Enterprise Master
Fund. As of the date hereof, Ramius (as the sole member of each of
RCG Starboard Advisors and Ramius Advisors), C4S (as the managing member of
Ramius) and Messrs. Cohen, Stark, Strauss and Solomon (as the managing members
of C4S) are deemed to be the beneficial owners of the 808,095 Shares owned by
Value and Opportunity Master Fund and the 125,385 Shares owned by Enterprise
Master Fund. Messrs. Cohen, Stark, Strauss and Solomon share voting
and dispositive power with respect to the Shares owned by Value and Opportunity
Master Fund and Enterprise Master Fund by virtue of their shared authority to
vote and dispose of such shares of Common Stock.
Each of the Ramius Nominees, as a member of a “group”
for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), is deemed to be a beneficial owner of the 808,095
Shares owned by Value and Opportunity Master Fund and the 125,385 Shares owned
by Enterprise Master Fund. Each of the Ramius Nominees disclaims
beneficial ownership of Shares that he does not directly
own.
For
information regarding purchases and sales of securities of Orthofix during the
past two years by members of the Ramius Group, including the Ramius Nominees and
certain affiliates of the Ramius Group that no longer own any shares of Common
Stock, see Schedule I.
Except as
set forth in this Proxy Statement (including the Schedules hereto), (i) during
the past 10 years, no participant in this solicitation has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors); (ii)
no participant in this solicitation directly or indirectly beneficially owns any
securities of Orthofix; (iii) no participant in this solicitation owns any
securities of Orthofix which are owned of record but not beneficially; (iv) no
participant in this solicitation has purchased or sold any securities of
Orthofix during the past two years; (v) no part of the purchase price or market
value of the securities of Orthofix owned by any participant in this
solicitation is represented by funds borrowed or otherwise obtained for the
purpose of acquiring or holding such securities; (vi) no participant in this
solicitation is, or within the past year was, a party to any contract,
arrangements or understandings with any person with respect to any securities of
Orthofix, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies; (vii) no
associate of any participant in this solicitation owns beneficially, directly or
indirectly, any securities of Orthofix; (viii) no participant in this
solicitation owns beneficially, directly or indirectly, any securities of any
parent or subsidiary of Orthofix; (ix) no participant in this solicitation or
any of his/its associates was a party to any transaction, or series of similar
transactions, since the beginning of Orthofix’s last fiscal year, or is a party
to any currently proposed transaction, or series of similar transactions, to
which Orthofix or any of its subsidiaries was or is to be a party, in which the
amount involved exceeds $120,000; (x) no participant in this solicitation or any
of his/its associates has any arrangement or understanding with any person with
respect to any future employment by Orthofix or its affiliates, or with respect
to any future transactions to which Orthofix or any of its affiliates will or
may be a party; and (xi) no person, including the participants in this
solicitation, who is a party to an arrangement or understanding pursuant to
which the Ramius Nominees are proposed to be elected has a substantial interest,
direct or indirect, by security holdings or otherwise in any matter to be acted
on at the special general meeting. There are no material proceedings
to which the Ramius Nominees or any of their associates is a party adverse to
Orthofix or any of its subsidiaries or has a material interest adverse to
Orthofix or any of its subsidiaries. With respect to the Ramius
Nominees, none of the events enumerated in Item 401(f)(1)-(6) of Regulation S-K
of the Exchange Act, occurred during the past five years.
OTHER
MATTERS AND ADDITIONAL INFORMATION
The
Ramius Group is unaware of any other matters to be considered at the Special
Meeting. However, should other matters, which the Ramius Group is not
aware of a reasonable time before this solicitation, be brought before the
Special Meeting, the persons named as proxies on the enclosed GOLD proxy card will vote on
such matters in their discretion.
SHAREHOLDER
PROPOSALS
If
shareholders wish to submit a proposal to be included in the Company’s 2009
proxy statement pursuant to Rule 14a-8 under the Exchange Act, the Company must
have received the written proposal on or before December 30,
2008. Proposals and requests for information should be addressed
to: Raymond C. Kolls, Senior Vice President, General Counsel and
Corporate Secretary, Orthofix International N.V., 7 Abraham de Veerstraat,
Curaçao, Netherlands Antilles.
Pursuant
to Rule 14a-4(c)(1) under the Exchange Act, proxy holders may use discretionary
authority to vote with respect to shareholder proposals presented in person at
the 2009 Annual General Meeting of Shareholders if the shareholder making the
proposal has not notified Orthofix by March 23, 2009 of its intent to present a
proposal at the 2009 Annual General Meeting of Shareholders.
The
information set forth above regarding the procedures for submitting shareholder
proposals for consideration at the 2009 Annual Meeting is based on information
contained in the Company’s proxy statement. The incorporation of this
information in this proxy statement should not be construed as an admission by
the Ramius Group that such procedures are legal, valid or binding.
INCORPORATION
BY REFERENCE
THE
RAMIUS GROUP HAS OMITTED FROM THIS PROXY STATEMENT CERTAIN DISCLOSURE REQUIRED
BY APPLICABLE LAW THAT IS EXPECTED TO BE INCLUDED IN THE COMPANY’S PROXY
STATEMENT RELATING TO THE SPECIAL MEETING. THIS DISCLOSURE IS
EXPECTED TO INCLUDE, AMONG OTHER THINGS, CURRENT BIOGRAPHICAL INFORMATION ON THE
COMPANY’S CURRENT DIRECTORS, INFORMATION CONCERNING EXECUTIVE COMPENSATION AND
OTHER IMPORTANT INFORMATION. THE RAMIUS GROUP WAS NOT INVOLVED IN THE
PREPARATION OF ORTHOFIX’S PROXY STATEMENT. SEE SCHEDULE II FOR INFORMATION
REGARDING PERSONS WHO BENEFICIALLY OWN MORE THAN 5% OF THE SHARES AND THE
OWNERSHIP OF THE SHARES BY THE DIRECTORS AND MANAGEMENT OF THE
COMPANY.
The
information concerning Orthofix contained in this Proxy Statement and the
Schedules attached hereto has been taken from, or is based upon, publicly
available information.
THE
RAMIUS GROUP
_______________
__, 2009
SCHEDULE
I
PURCHASES
AND SALES IN THE COMMON STOCK OF ORTHOFIX
DURING
THE PAST TWO YEARS
|
Quantity
Purchased
/ (Sold)
|
|
Date
of
Purchase
/ (Sale)
|
|
|
|
|
RAMIUS ENTERPRISE MASTER FUND
LTD
|
|
Common
Stock
|
224
|
|
23.7787
|
09/11/08
|
Common
Stock
|
11,480
|
|
24.0416
|
09/12/08
|
Common
Stock
|
9,296
|
|
24.4003
|
09/15/08
|
Common
Stock
|
8,680
|
|
24.2817
|
09/16/08
|
Common
Stock
|
12,320
|
|
23.6913
|
09/17/08
|
Common
Stock
|
(16,100)
|
|
22.8820
|
09/19/08
|
Common
Stock
|
(3,640)
|
|
23.7549
|
09/22/08
|
Common
Stock
|
(1,260)
|
|
23.8309
|
09/23/08
|
Common
Stock
|
(689)
|
|
23.2502
|
09/24/08
|
Common
Stock
|
(7,280)
|
|
22.6924
|
09/24/08
|
Common
Stock
|
(2,800)
|
|
22.0680
|
09/25/08
|
Common
Stock
|
10,231
|
|
23.6913
|
10/01/08
|
Common
Stock
|
(10,231)
|
|
23.6913
|
10/01/08
|
Common
Stock
|
(1,535)
|
|
11.7029
|
10/10/08
|
Common
Stock
|
7,000
|
|
12.0901
|
10/14/08
|
Common
Stock
|
(494)
|
|
9.3261
|
10/23/08
|
Common
Stock
|
(1,249)
|
|
9.3158
|
10/24/08
|
Common
Stock
|
13,350
|
|
10.8410
|
11/25/08
|
Common
Stock
|
8,400
|
|
11.1726
|
11/26/08
|
Common
Stock
|
4,550
|
|
11.8975
|
11/28/08
|
Common
Stock
|
12,550
|
|
10.9152
|
12/01/08
|
Common
Stock
|
34,500
|
|
11.1611
|
12/02/08
|
Common
Stock
|
5,000
|
|
13.7180
|
12/03/08
|
Common
Stock
|
800
|
|
12.9906
|
12/05/08
|
Common
Stock
|
(6,953)
|
|
23.6913
|
12/22/08
|
Common
Stock
|
6,953
|
|
23.6913
|
12/22/08
|
Common
Stock
|
(7,000)
|
|
12.0901
|
12/22/08
|
Common
Stock
|
7,000
|
|
12.0901
|
12/22/08
|
Common
Stock
|
(13,350)
|
|
10.8410
|
12/22/08
|
Common
Stock
|
13,350
|
|
10.8410
|
12/22/08
|
Common
Stock
|
(8,400)
|
|
11.1726
|
12/22/08
|
Common
Stock
|
8,400
|
|
11.1726
|
12/22/08
|
Common
Stock
|
(4,550)
|
|
11.8975
|
12/22/08
|
Common
Stock
|
4,550
|
|
11.8975
|
12/22/08
|
Common
Stock
|
(12,550)
|
|
10.9152
|
12/22/08
|
Common
Stock
|
12,550
|
|
10.9152
|
12/22/08
|
|
Quantity
Purchased
/ (Sold)
|
|
Date
of
Purchase
/ (Sale)
|
|
|
|
|
Common
Stock
|
(34,500)
|
|
11.1611
|
12/22/08
|
Common
Stock
|
34,500
|
|
11.1611
|
12/22/08
|
Common
Stock
|
(5,000)
|
|
13.7180
|
12/22/08
|
Common
Stock
|
5,000
|
|
13.7180
|
12/22/08
|
Common
Stock
|
(800)
|
|
12.9906
|
12/22/08
|
Common
Stock
|
800
|
|
12.9906
|
12/22/08
|
Common
Stock
|
3,632
|
|
16.6340
|
01/05/09
|
Common
Stock
|
5,100
|
|
17.4021
|
01/06/09
|
Common
Stock
|
5,100
|
|
16.9512
|
01/07/09
|
Common
Stock
|
9,000 |
|
17.2687
|
01/28/09
|
Common
Stock
|
690
|
|
16.0310
|
02/10/09
|
Common
Stock
|
8,760
|
|
16.4009
|
02/10/09
|
RAMIUS VALUE AND OPPORTUNITY MASTER FUND
LTD
|
|
Common
Stock
|
1,280
|
|
23.7787
|
09/11/08
|
Common
Stock
|
65,600
|
|
24.0416
|
09/12/08
|
Common
Stock
|
53,120
|
|
24.4003
|
09/15/08
|
Common
Stock
|
49,600
|
|
24.2817
|
09/16/08
|
Common
Stock
|
70,400
|
|
23.6913
|
09/17/08
|
Common
Stock
|
(92,000)
|
|
22.8820
|
09/19/08
|
Common
Stock
|
(20,800)
|
|
23.7549
|
09/22/08
|
Common
Stock
|
(1,280)
|
|
23.7787
|
09/22/08
|
Common
Stock
|
1,280
|
|
23.7787
|
09/22/08
|
Common
Stock
|
(65,600)
|
|
24.0416
|
09/22/08
|
Common
Stock
|
65,600
|
|
24.0416
|
09/22/08
|
Common
Stock
|
(53,120)
|
|
24.4003
|
09/22/08
|
Common
Stock
|
53,120
|
|
24.4003
|
09/22/08
|
Common
Stock
|
(49,600)
|
|
24.2817
|
09/22/08
|
Common
Stock
|
49,600
|
|
24.2817
|
09/22/08
|
Common
Stock
|
(70,400)
|
|
23.6913
|
09/22/08
|
Common
Stock
|
70,400
|
|
23.6913
|
09/22/08
|
Common
Stock
|
(7,200)
|
|
23.8309
|
09/23/08
|
Common
Stock
|
(3,939)
|
|
23.2502
|
09/24/08
|
Common
Stock
|
(41,600)
|
|
22.6924
|
09/24/08
|
Common
Stock
|
(16,000)
|
|
22.0680
|
09/25/08
|
Common
Stock
|
23,250
|
|
18.1208
|
09/30/08
|
Common
Stock
|
(58,461)
|
|
23.6913
|
10/01/08
|
Common
Stock
|
(23,250)
|
|
18.1208
|
10/01/08
|
Common
Stock
|
372
|
|
18.9650
|
10/01/08
|
Common
Stock
|
372
|
|
18.9650
|
10/01/08
|
Common
Stock
|
58,461
|
|
23.6913
|
10/01/08
|
Common
Stock
|
23,250
|
|
18.1208
|
10/01/08
|
Common
Stock
|
372
|
|
18.9650
|
10/01/08
|
Common
Stock
|
32,178
|
|
18.9947
|
10/02/08
|
|
Quantity
Purchased
/ (Sold)
|
|
Date
of
Purchase
/ (Sale)
|
|
|
|
|
Common
Stock
|
13,485
|
|
19.7102
|
10/03/08
|
Common
Stock
|
(13,485)
|
|
19.7102
|
10/03/08
|
Common
Stock
|
13,485
|
|
19.7102
|
10/03/08
|
Common
Stock
|
64,356
|
|
17.3096
|
10/07/08
|
Common
Stock
|
49,662
|
|
16.1414
|
10/08/08
|
Common
Stock
|
25,482
|
|
15.3398
|
10/09/08
|
Common
Stock
|
(40,087)
|
|
11.7029
|
10/10/08
|
Common
Stock
|
34,038
|
|
11.7187
|
10/13/08
|
Common
Stock
|
40,000
|
|
12.0901
|
10/14/08
|
Common
Stock
|
40,176
|
|
11.2020
|
10/15/08
|
Common
Stock
|
25,671*
|
|
11.0900
|
10/16/08
|
Common
Stock
|
50,000
|
|
10.9894
|
10/16/08
|
Common
Stock
|
37,000
|
|
10.8398
|
10/17/08
|
Common
Stock
|
16,300
|
|
10.7321
|
10/20/08
|
Common
Stock
|
19,840
|
|
10.7854
|
10/21/08
|
Common
Stock
|
8,800
|
|
10.7903
|
10/21/08
|
Common
Stock
|
20,300
|
|
10.5065
|
10/22/08
|
Common
Stock
|
(16,506)
|
|
9.3261
|
10/23/08
|
Common
Stock
|
5,400
|
|
10.2861
|
10/23/08
|
Common
Stock
|
(41,751)
|
|
9.3158
|
10/24/08
|
Common
Stock
|
24,000
|
|
12.4635
|
10/30/08
|
Common
Stock
|
26,000
|
|
12.9455
|
10/31/08
|
Common
Stock
|
17,200
|
|
12.1415
|
11/18/08
|
Common
Stock
|
12,800
|
|
11.9916
|
11/19/08
|
Common
Stock
|
19,300
|
|
11.2624
|
11/20/08
|
Common
Stock
|
10,700
|
|
10.9904
|
11/20/08
|
Common
Stock
|
8,200
|
|
10.1373
|
11/21/08
|
Common
Stock
|
25,100
|
|
9.9985
|
11/21/08
|
Common
Stock
|
33,300
|
|
10.8600
|
11/24/08
|
Common
Stock
|
13,350
|
|
10.8410
|
11/25/08
|
Common
Stock
|
8,400
|
|
11.1726
|
11/26/08
|
Common
Stock
|
4,550
|
|
11.8975
|
11/28/08
|
Common
Stock
|
12,550
|
|
10.9152
|
12/01/08
|
Common
Stock
|
34,500
|
|
11.1611
|
12/02/08
|
Common
Stock
|
5,000
|
|
13.7180
|
12/03/08
|
Common
Stock
|
800
|
|
12.9906
|
12/05/08
|
Common
Stock
|
19,068
|
|
16.6340
|
01/05/09
|
Common
Stock
|
11,900
|
|
17.4021
|
01/06/09
|
Common
Stock
|
11,900
|
|
16.9512
|
01/07/09
|
Common
Stock
|
21,000 |
|
17.2687
|
01/28/09
|
Common Stock
|
1,610
|
|
16.0310
|
02/10/09
|
Common Stock
|
20,440
|
|
16.4009
|
02/10/09
|
* Shares
were acquired in a cross-trade with RCG PB, Ltd., an affiliate of Ramius Value
and Opportunity Master Fund Ltd.
|
Quantity
Purchased
/ (Sold)
|
|
Date
of
Purchase
/ (Sale)
|
|
|
|
|
|
RCG PB, LTD.
|
|
Common
Stock
|
96
|
|
23.7787
|
09/11/08
|
Common
Stock
|
4,920
|
|
24.0416
|
09/12/08
|
Common
Stock
|
3,984
|
|
24.4003
|
09/15/08
|
Common
Stock
|
3,720
|
|
24.2817
|
09/16/08
|
Common
Stock
|
5,280
|
|
23.6913
|
09/17/08
|
Common
Stock
|
(6,900)
|
|
22.8820
|
09/19/08
|
Common
Stock
|
(96)
|
|
23.7787
|
09/19/08
|
Common
Stock
|
96
|
|
23.7787
|
09/19/08
|
Common
Stock
|
(4,920)
|
|
24.0416
|
09/19/08
|
Common
Stock
|
4,920
|
|
24.0416
|
09/19/08
|
Common
Stock
|
(3,984)
|
|
24.4003
|
09/19/08
|
Common
Stock
|
3,984
|
|
24.4003
|
09/19/08
|
Common
Stock
|
(3,720)
|
|
24.2817
|
09/19/08
|
Common
Stock
|
3,720
|
|
24.2817
|
09/19/08
|
Common
Stock
|
(5,280)
|
|
23.6913
|
09/19/08
|
Common
Stock
|
5,280
|
|
23.6913
|
09/19/08
|
Common
Stock
|
(1,560)
|
|
23.7549
|
09/22/08
|
Common
Stock
|
(540
|
|
23.8309
|
09/23/08
|
Common
Stock
|
(295
|
|
23.2502
|
09/24/08
|
Common
Stock
|
(3,120)
|
|
22.6924
|
09/24/08
|
Common
Stock
|
(1,200)
|
|
22.0680
|
09/25/08
|
Common
Stock
|
1,750
|
|
18.1208
|
09/30/08
|
Common
Stock
|
(4,385)
|
|
23.6913
|
10/01/08
|
Common
Stock
|
(1,750)
|
|
18.1208
|
10/01/08
|
Common
Stock
|
(28)
|
|
18.9650
|
10/01/08
|
Common
Stock
|
28
|
|
18.9650
|
10/01/08
|
Common
Stock
|
4,385
|
|
23.6913
|
10/01/08
|
Common
Stock
|
1,750
|
|
18.1208
|
10/01/08
|
Common
Stock
|
28
|
|
18.9650
|
10/01/08
|
Common
Stock
|
2,422
|
|
18.9947
|
10/02/08
|
Common
Stock
|
(1,015)
|
|
19.7102
|
10/03/08
|
Common
Stock
|
1,015
|
|
19.7102
|
10/03/08
|
Common
Stock
|
1,015
|
|
19.7102
|
10/03/08
|
Common
Stock
|
4,844
|
|
17.3096
|
10/07/08
|
Common
Stock
|
3,738
|
|
16.1414
|
10/08/08
|
Common
Stock
|
1,918
|
|
15.3398
|
10/09/08
|
Common
Stock
|
(3,015)
|
|
11.7029
|
10/10/08
|
Common
Stock
|
2,562
|
|
11.7187
|
10/13/08
|
Common
Stock
|
3,000
|
|
12.0901
|
10/14/08
|
|
Quantity
Purchased
/ (Sold)
|
|
Date
of
Purchase
/ (Sale)
|
|
|
|
|
Common
Stock
|
3,024
|
|
11.2020
|
10/15/08
|
Common
Stock
|
(25,671)**
|
|
11.0900
|
10/16/08
|
|
RAMIUS ADVISORS, LLC
None
|
|
RCG STARBOARD ADVISORS, LLC
None
|
|
RAMIUS LLC
None
|
|
C4S & CO., L.L.C.
None
|
|
PETER A. COHEN
None
|
|
MORGAN B. STARK
None
|
|
JEFFREY M. SOLOMON
None
|
|
THOMAS W. STRAUSS
None
|
|
J. MICHAEL EGAN
None
|
|
PETER A. FELD
None
|
|
STEVEN J. LEE
None
|
|
CHARLES T. ORSATTI
None
|
** Shares
were transferred through a cross-trade with Ramius Value and Opportunity Master
Fund Ltd, an affiliate of RCG PB, Ltd.
SCHEDULE
II
The
following table is derived from the Company’s Definitive Proxy Statement, as
filed on Schedule 14A with the Securities and Exchange Commission on
[__________, 2009]
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
SHAREHOLDERS
As
of [_____________], no person was known by the Company to be the beneficial
owner of more than 5% of the outstanding Common Stock of the Company, except as
follows:
Name
and Address of Beneficial Owner
|
Amount
and Nature of Beneficial Ownership
|
Percent
of Class
|
FMR
Corp
82
Devonshire Street
Boston,
MA 02109
|
1,659,290
(1)
|
9.7%
|
Paradigm
Capital Management, Inc
Nine
Elk Street
Albany,
NY 12207
|
926,450
(2)
|
5.4%
|
Columbia
Wanger Asset Management, L.P.
227
West Monroe Street, Suite 3000
Chicago,
IL 60606
|
906,230
(3)
|
5.3%
|
Robert
Gaines Cooper
c/o
Venner Capital SA
Osprey
House
P.O.
Box 862
Old
Street
St
Helier
Jersey
JE4
2ZZ
UK
|
905,773
(4)
|
5.3%
|
Porter
Orlin LLC
666
5th Avenue, 34th Floor
New
York, NY 10103
|
899,209
(5)
|
5.3%
|
____________
(1)
|
Information
obtained from Schedule 13G/A filed with the SEC by FMR Corp. (“FMR”) on
February 14, 2008. The Schedule 13G/A discloses that, of these shares, FMR
has sole power to vote or direct the vote of 278,490 shares and sole power
to dispose or to direct the disposition of 1,659,290
shares.
|
(2)
|
Information
obtained from Schedule 13G/A filed with the SEC by Paradigm Capital
Management, Inc. (“Paradigm”) on February 14, 2008. The Schedule 13G/A
discloses that Paradigm has sole power to vote or direct the vote of, and
sole power to dispose or to direct the disposition of, all of these
shares.
|
(3)
|
Information
obtained from Schedule 13G/A filed with the SEC by Columbia Wanger Asset
Management, L.P. (“Columbia Wanger”) on July 2, 2008. The Schedule 13G/A
discloses that, of these shares, Columbia Wanger has sole power to vote or
direct the vote of 848,330 shares and sole power to dispose or to direct
the disposition of 906,230 shares.
|
(4)
|
Information
obtained from Schedule 13G filed with the SEC by Robert Gaines Cooper on
May 5, 2008. The Schedule 13G discloses that Robert Gaines
Cooper has shared power to vote or direct the vote of, and shared power to
dispose or to direct the disposition of, all of these
shares.
|
(5)
|
Information
obtained from Schedule 13G filed with the SEC by Porter Orlin LLC.
(“Porter Orlin”) on March 4, 2008. The Schedule 13G discloses that Porter
Orlin has shared power to vote or direct the vote of, and shared power to
dispose or to direct the disposition of, all of these
shares.
|
IMPORTANT
Tell your
Board what you think! Your vote is important. No matter how many
Shares you own, please give the Ramius Group your proxy FOR the proposal to
remove four (4) members of the current Board, James F. Gero, Peter Hewett,
Thomas J. Kester and Walter P. Von Wartburg, and FOR the election of the Ramius
Nominees by taking three steps:
● SIGNING
the enclosed GOLD proxy
card,
● DATING
the enclosed GOLD proxy
card, and
● MAILING
the enclosed GOLD proxy
card TODAY in the envelope provided (no postage is required if mailed in the
United States).
If any of
your Shares are held in the name of a brokerage firm, bank, bank nominee or
other institution, only it can vote such Shares and only upon receipt of your
specific instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute the GOLD proxy card representing
your Shares. The Ramius Group urges you to confirm in writing your
instructions to the Ramius Group in care of Innisfree M&A Incorporated at
the address provided below so that the Ramius Group will be aware of all
instructions given and can attempt to ensure that such instructions are
followed.
If you
have any questions or require any additional information concerning this Proxy
Statement, please contact Innisfree M&A Incorporated at the address set
forth below.
Innisfree
M&A Incorporated
501
Madison Avenue, 20th Floor
New York,
NY 10022
Shareholders
Call Toll-Free at: (888) 750-5884
Banks and Brokers Call Collect at:
(212) 750-5833
PRELIMINARY
COPY SUBJECT TO COMPLETION
ORTHOFIX
INTERNATIONAL N.V.
SPECIAL
GENERAL MEETING OF SHAREHOLDERS
THIS
PROXY IS SOLICITED ON BEHALF OF THE RAMIUS GROUP
THE
BOARD OF DIRECTORS OF ORTHOFIX INTERNATIONAL N.V.
IS
NOT SOLICITING THIS PROXY
P R O X Y
The undersigned appoints _______________ and
____________, and each of them, attorneys and agents with full power of
substitution to vote all shares of common stock of Orthofix International N.V.
(“Orthofix” or the “Company”) which the undersigned would be entitled to vote if
personally present at the special general meeting of shareholders (the “Special
Meeting”), called by the Company at the request of the Ramius Group and certain
other shareholders of the Company, scheduled to be held at _____________,
_______, _______, ________, on April 7, 2009 at _______ _.m., ___________, and
including at any adjournments or postponements thereof and at any meeting called
in lieu thereof (the “Special Meeting”).
The
undersigned hereby revokes any other proxy or proxies heretofore given to vote
or act with respect to the shares of common stock of the Company held by the
undersigned, and hereby ratifies and confirms all action the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as
directed on the reverse and in the discretion of the herein named attorneys and
proxies or their substitutes with respect to any other matters as may properly
come before the Special Meeting that are unknown to the Ramius Group a
reasonable time before this solicitation.
IF
NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSAL ON THE REVERSE, THIS
PROXY WILL BE VOTED FOR ALL PROPOSALS.
This
Proxy will be valid until the sooner of one year from the date indicated on the
reverse side and the completion of the Annual Meeting.
IMPORTANT: PLEASE
SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
CONTINUED
AND TO BE SIGNED ON REVERSE SIDE
GOLD
PROXY CARD
[X] Please mark vote as in this
example
THE
RAMIUS GROUP STRONGLY RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF PROPOSALS 1,
2 AND 3 BELOW.
Proposal No. 1 - The Ramius
Group’s Proposal to remove, without cause, four (4) members of the current Board
of Directors of the Company (the “Board”), James F. Gero, Peter J. Hewett,
Thomas J.
Kester and Walter P.
Von Wartburg.
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FOR
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AGAINST
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FOR
REMOVAL OF ALL EXCEPT DIRECTORS(S) WRITTEN
BELOW
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Proposal No.
2 - The Ramius Group’s Proposal to remove, without cause, any directors
appointed by the Board without shareholder approval between December 10, 2008
and up through and including the date of the Special Meeting.
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FOR
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AGAINST
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ABSTAIN
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Proposal No.
3 - The Ramius Group’s Proposal to Elect: J. Michael Egan, Peter A.
Feld, Steven J. Lee and Charles T. Orsatti (each a “Ramius Nominee”)
to the Board.
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FOR
ALL NOMINEES
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WITHHOLD
AUTHORITY TO VOTE FOR ALL NOMINEES
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FOR
ALL EXCEPT NOMINEE(S) WRITTEN BELOW
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Nominees: J.
Michael Egan
Peter A. Feld
Steven J. Lee
Charles T. Orsatti
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If
fewer than four directors are removed in Proposal No. 1, the nominees shall be
elected in the following order: Peter A. Feld followed by (i) the Ramius Nominee
receiving the highest number of votes from shareholders, (ii) the Ramius Nominee
receiving the second highest number of votes from shareholders and (iii) the
Ramius Nominee receiving the third highest number of votes from
shareholders.
NEITHER
PROPOSAL NO. 1 NOR PROPOSAL NO. 2 IS SUBJECT TO, OR IS CONDITIONED UPON, THE
EFFECTIVENESS OF THE OTHER PROPOSALS. PROPOSAL NO. 3 IS CONDITIONED IN PART UPON
THE EFFECTIVENESS OF PROPOSALS NOS. 1 AND 2 (TO THE EXTENT APPLICABLE). IF NONE
OF THE THEN EXISTING MEMBERS OF (OR APPOINTEES TO) THE BOARD ARE REMOVED IN
PROPOSAL NO. 1 OR NO. 2, AND THERE ARE NO VACANCIES TO FILL, NONE OF THE
NOMINEES CAN BE ELECTED PURSUANT TO PROPOSAL NO. 3. SHAREHOLDERS MAY
VOTE TO REMOVE FEWER THAN FOUR (4) DIRECTORS IN PROPOSAL NO. 1. IF
FEWER THAN FOUR (4) MEMBERS OF THE BOARD ARE REMOVED IN PROPOSAL NO. 1,
SHAREHOLDERS WILL HAVE THE OPPORTUNITY TO ELECT A CORRESPONDING NUMBER OF
NOMINEES IN PROPOSAL NO. 3.
DATED: ____________________________
____________________________________
(Signature)
____________________________________
(Signature,
if held jointly)
____________________________________
(Title)
WHEN
SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH
SIGNING. PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS
PROXY.