Orthofix questions background of Ramius' director nominee

By Lisa Kerner

Charlotte, N.C., March 11 - Orthofix International NV is opposed to a proposal by Ramius LLC to nominate Steven Lee to the company's board of directors at a special meeting on April 2.

Lee is president of SL Consultant Inc., a private investment firm and hedge fund, as well as the founder of PolyMedica Corp.

He left the medical products company in 2002 following a Medicare fraud investigation by the Department of Justice, according to Orthofix.

Orthofix said Lee was a member of the board of ICN Pharmaceuticals (now Valeant Pharmaceuticals International) from 2001 to 2004. Valeant restated nearly a decade of financial statements as a result of inappropriate backdating of stock options following an investigation by the Securities and Exchange Commission, Orthofix said in a letter to its shareholders on Wednesday.

At the time, Lee was a member of the company's compensation committee.

"We are concerned about the impact that this information could have on Orthofix and its shareholders if Mr. Lee were to assume a seat on our board of directors," Orthofix said in the letter.

Shareholder support for special meeting

As previously reported, Orthofix's board voted to call the special meeting after Ramius delivered shares representing about 55% of the company's outstanding stock in support of such a meeting for the purpose of making changes to the board.

Ramius wants to remove chairman James Gero, Peter Hewet, Alan Milinazzo and Walter P. von Wartburg from the board and replace them with, in addition to Lee:

• J. Michael Egan, chief executive officer of Steadman Hawkins Research Foundation, an orthopedic research organization;

• Peter A. Feld, Ramius managing director; and

• Charles T. Orsatti, managing partner of Fairfield Capital Partners, Inc., a private equity fund.

Orthofix, a Curacao, the Netherlands Antilles-based diversified orthopedic products company, had called into question the qualifications of Feld, a 29-year-old Ramius employee, as well as those of Lee.

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