Exhibit 10.2

June 15, 2011

Mr. Alan W. Milinazzo

President and Chief Executive Officer of Orthofix Inc.

3451 Plano Pkwy

Lewisville, TX 75056

Dear Alan:

Reference is made to your Amended and Restated Employment Agreement with Orthofix Inc. (the “Company”) and Orthofix International N.V. (“Parent”), dated July 1, 2009, as amended on July 27, 2009 (as amended, the “Agreement”). As you, the Company and Parent have agreed, you will cease to serve as an employee of the Company (and cease serving as an officer and director of the Company and any of its subsidiaries, parents and affiliates, as applicable, other than as a director of Parent) as of the close of business on August 1, 2011 (the “Employment Cessation Date”). This letter agreement between you, the Company and Parent serves to memorialize the terms that you, the Company and Parent have agreed regarding your cessation of employment on the Employment Cessation Date.

As agreed, your cessation of employment on the Employment Cessation Date shall be treated as a termination without “Cause” pursuant to Section 4.5 of the Agreement, and this letter shall serve as a “Notice of Termination” by the Company as defined under Section 4.8 of the Agreement. Until the Employment Cessation Date, you will be paid your regular salary, the Agreement will remain in effect, and you will continue to serve as an employee of the Company (as well as in your capacity as President and Chief Executive Officer of the Company and Orthofix International N.V.), all as required by and set forth in the Agreement.

As provided in your Agreement, this cessation of employment on the Employment Cessation Date entitles you to the following on or after the Employment Cessation Date:

For the avoidance of doubt, you, the Company and Parent agree that you will not be entitled to any portion of the $400,000 special cash retention bonus approved by the compensation committee of the Parent Board on February 15, 2011, as you will not be employed on the applicable vesting dates with respect thereto.

As agreed by you and the Company, following the Employment Cessation Date, you agree to remain available to serve as a member of the Board of Directors of Parent (the “Parent Board”). You will be compensated for any service on the Parent Board on and after August 1, 2013 consistent with and on the same terms as other non-employee members of the Parent Board. For the avoidance of doubt, nothing herein shall obligate or contractually require Parent or Parent Board to nominate you for election or re-election to the Parent Board during any specific period of time in the future.

2

We understand you desire to avoid the imposition of tax under Section 409A of the Internal Revenue Code, as amended (the “Code”). As such, the Severance Payment, and $35,000 cash payment (net of any applicable withholdings) for outplacement/education purposes, are each being made more than 6 months after the Employment Cessation Date. In addition, as required by Section 5.1(d) of the Agreement, if you desire to continue welfare coverage in any plan other than medical or dental, you must pay the full cost of continuation of such benefits until the Severance Payment Date, at which time the Company will reimburse you for the difference between the full cost and the costs you were paying for such coverage prior to the Employment Cessation Date. You also understand that your receipt of the Severance Payment and other benefits under the Agreement are contingent on your signing a release in the form attached hereto as Exhibit A (the “Release”) and all revocation periods for such Release having expired prior to 28 days from the date hereof (the “Release Return Date”). We will have no obligation to pay you the Severance Payment or provide you the other benefits if you do not sign the Release by the Release Return Date and if the applicable revocation period has not expired by the Release Return Date. The payments described in this letter (the “Payments”) are intended by you and the Company to comply with Section 409A of the Code, and the guidance and Treasury Regulations issued thereunder to the extent applicable thereto, and this letter will be interpreted and construed consistent with this intent. Notwithstanding the foregoing, the Company will not be required to assume any increased economic burden in connection with the Payments. The Company does not represent or warrant that the Payments will comply with Section 409A of the Code or any other provision of federal, state, or local law. Neither the Company, nor any parent or affiliate, nor its or their respective directors, officers, employees or advisers (collectively, the “Parent Group”) will be liable to you (or to any other individual claiming a benefit through you) for any tax, interest, or penalties you might owe as a result of the Payments, and no member of the Parent Group shall have any obligation to indemnify or otherwise protect you from the obligation to pay any taxes pursuant to Section 409A of the Code.

At this time, we also remind you of your non-competition, non-solicitation, confidentiality and other obligations under the Agreement. For the avoidance of doubt, nothing in this letter limits or alters your post-termination obligations to the Company and its affiliates under Section 6 of the Agreement, all of which will remain in effect in accordance with the Agreement following the date hereof and the Employment Cessation Date.

3

Please indicate your agreement and acknowledgment to the above by signing where indicated below and returning a copy to me. Your signature below will also constitute resignation by you, as of the Employment Cessation Date, from all officer and director positions with the Company or any of its parents or affiliates (other than as a director of Parent).

EXHIBIT A

RELEASE

In exchange for the consideration set forth in the letter agreement, dated as of June 15, 2011, by and among Orthofix Inc. (the “Company”), Orthofix International N.V. (“Parent”) and myself (the “Letter Agreement”), and your amended and restated employment agreement with the Company dated as of July 1, 2009 and as amended on July 27, 2009 (together with the Letter Agreement, collectively, the “Agreement”), the respective terms of which Agreement are incorporated herein by reference, I, Alan W. Milinazzo, am entering into this Release (this “Release”) for good and valuable consideration as required by the Agreement, and agree as follows:

1. GENERAL RELEASE.

(a) On behalf of myself, my heirs, executors, successors and assigns, I irrevocably and unconditionally release, waive and forever discharge the Company, Parent, its members, divisions, subsidiaries, affiliates and related companies, including the Company Group (as defined below), or any member of the Company Group, and their present and former agents, employees, officers, directors, attorneys, stockholders, plan fiduciaries, successors and assigns (collectively, the “Releasees”), from any and all claims, demands, actions, causes of action, costs, fees and all liability whatsoever, whether known or unknown, fixed or contingent, suspected or unsuspected (collectively, “Claims”), which I had, have, or may have against Releasees relating to or arising out of my employment by or separation from the Company and its direct and indirect subsidiaries and parents (collectively, the “Company Group”), up to and including the date of execution of this Release, other than my right to receive the severance payments and other benefits and consideration described in the Agreement. This Release includes, without limitation: (i) claims at law or equity or sounding in contract (express or implied) or tort; (ii) claims arising under any federal, state or local laws of any jurisdiction that prohibit age, sex, race, national origin, color, disability, religion, veteran or military status, sexual orientation or any other form of discrimination, harassment or retaliation (including, without limitation, the Civil Rights Act of 1866, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, Title VII of the 1964 Civil Rights Act, the Civil Rights Act of 1991, the Rehabilitation Act, the Family and Medical Leave Act, the Sarbanes-Oxley Act, the Employee Polygraph Protection Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Unruh Civil Rights Act, or any other federal, state or local laws, regulations and ordinances governing discrimination, harassment or retaliation in employment; and the right to bring demands, complaints, causes of action, and claims under any other federal, state, local or common law, statute, regulation or decision); (iii) claims arising under the Employee Retirement Income Security Act; or (iv) any other statutory or common law claims related to my employment with the Company

or my separation from the Company. I further covenant not to sue any of the Releasees with respect to any matters released hereby.

(b) This release does not include a release or waiver of any rights or claims I have, or might subsequently have in my capacity as a stockholder of Orthofix International N.V. In addition, this Release shall not release the Company from its continuing obligation to honor the terms of the Agreement. However, this Release shall remain in full force and effect regardless of any claim by me that the Company failed to honor the terms of the Agreement. In the event of any such dispute, my sole remedy against the Company shall be to enforce the terms of the Release Agreement. I am also not waiving, and nothing in this Release is intended to waive, any right to coverage under any directors and officers insurance coverage, if any, provided by the Company, the Company Group, or any member of the Company Group, or any right to indemnification or expense advancement under any indemnification agreement, or any applicable Company Group articles of incorporation, bylaws or similar organizational document, if any, in each case, to which I might be entitled. I am also not waiving, and nothing in this Release is intended to waive, any claims I may have for unemployment insurance or workers’ compensation benefits, state disability compensation, claims for any vested benefits under any Company-sponsored benefit plan, or any claims that, as a matter of law, may not be released by private agreement. I am also not waiving, and nothing in this Release is intended to waive, any claims relating to the validity or enforceability of this Release; or any non-waivable right to file a charge with the United States Equal Employment Opportunity Commission (the “EEOC”) or the National Labor Relations Board (“NLRB”); provided, however, that I shall not be entitled to recover any monetary damages or to non-monetary relief if the EEOC or NLRB were to pursue any claims relating to my employment with the Company.

EXCEPT AS OUTLINED ABOVE, THIS MEANS THAT, BY SIGNING THIS RELEASE, I WILL WAIVE ANY RIGHT I MAY HAVE HAD TO PURSUE OR BRING A LAWSUIT OR MAKE ANY LEGAL CLAIM AGAINST THE COMPANY OR THE RELEASEES THAT IN ANY WAY ARISES FROM OR RELATES TO MY EMPLOYMENT OR THE TERMINATION OF THAT EMPLOYMENT, UP TO AND INCLUDING THE DATE OF THE EXECUTION OF THIS RELEASE.

(c) I acknowledge that different or additional facts may be discovered in addition to what I now know or believe to be true with respect to the matters herein released, and I agree that this Release shall be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any such different or additional facts. I represent and warrant that I have not previously filed or joined in any claims against the Company or any of the Releasees, that I have not given or sold any portion of any claims released herein to anyone else, and that I will indemnify and hold harmless the Releasees from all liabilities, claims, demands, costs, expenses and/or attorneys’ fees incurred as a result of any such assignment or transfer.

(d) I acknowledge that I have been given an opportunity of twenty one (21) days to consider this Release, but I may voluntarily waive that period by signing it earlier, and I acknowledge that I am being advised herein to consult with legal counsel of my own choosing prior to executing this Release. I understand that for a period ending at the end of the seventh calendar day following my execution of this Release (“Revocation Period”), I shall have the right to revoke this Release by delivering a written notice of revocation to James F. Gero, Chairman of the Board of Orthofix International N.V., 3451 Plano Parkway, Lewisville, TX 75056 no later than the end of the seventh calendar day after I sign this Release. I understand and agree that this Release will not be effective and enforceable until after the Revocation Period expires without revocation, and if I elect to exercise this revocation right, this Release shall be voided in its entirety, and the Company shall be relieved of all obligations under this Release and certain or all obligations under the Agreement as provided therein. This Release shall be effective on the eighth calendar day after it is executed by me (“Effective Date”) provided it has not been previously revoked as provided herein.

2. I agree not to disclose, publish or use any confidential information of the Company Group, except as the Company directs or authorizes unless required by law to do so. I also agree that I will take all reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of confidential information of the Company Group, and I will immediately notify the Company in the event of any unauthorized use or disclosure of the Company Group’s confidential information of which I become aware. I agree that the obligations set forth in this paragraph do not supersede, but are in addition to, any previous confidentiality obligations agreed to by me and any member of the Company Group, including those under the Agreement. The confidentiality provisions set forth in this Release and the Agreement are contractual and their terms are material to this Release. In any proceeding brought to enforce or seek damages for the alleged breach of the confidentiality provisions of this Release, the party successfully prosecuting or defending such action shall be entitled to recover from the opposing party its reasonable expenses, including attorneys’ fees.

3. I agree to hold harmless the Releasees, at my sole cost and expense, from and against any claims arising from my breach of this Release (including breaches of my post separation obligations under the Agreement).

4. I agree that I have not made and shall not make, publicly or privately, any critical or negative comments to the media or any significant critical or negative comments to any other person (including future or prospective employees) regarding any of the Releasees.

5. I understand it is my choice whether or not to enter into this Release and that my decision to do so is voluntary and is made knowingly.

6. I represent and acknowledge that in executing this Release, I do not rely, and have not relied, on any communications, statements, inducements or representations, oral or written, by any of the Releasees, except as expressly contained in this Release.

7. I also represent and warrant that, on or before my last date of employment, I will have delivered to the Company (a) all documents and materials containing confidential information (including without limitation any “soft” copies or computerized or electronic versions thereof) or otherwise containing information relating to the business and affairs of any member of the Company Group (whether or not confidential), and (b) all other documents, materials and other property belonging to any member of the Company Group that are or were in my possession or under my control.

8. The Company and I agree that this Release shall be binding on us and our heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of our heirs, administrators, representatives, executors, successors and assigns.

9. This Release shall be interpreted under and governed by the laws of the State of Massachusetts. The Company and I agree that the language of this Release shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against either party.

10. The Company and I agree that should that any provision of this Release be determined to be illegal or invalid, the validity of the remaining provisions will not be affected and any illegal or invalid provision will be deemed not to be a part of this Release.

11. The Company and I agree that this Release may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same instrument.

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Please read carefully as this document includes a General Release of claims.

As evidenced by my signature below, I certify that I have read the above Release and agree to its terms.