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Exhibit 10.34
 
Nonqualified Stock Option Agreement under
the Orthofix International N.V.
Amended and Restated 2004 Long-Term Incentive Plan

This Option Agreement (the “Agreement”) is made this 11th day of April 2008 (the
“Grant Date”) between Orthofix International N.V., a Netherlands Antilles
company (the “Company”), and the person signing this Agreement adjacent to the
caption “Optionee” on the signature page hereof (the “Optionee”).  Capitalized
terms used and not otherwise defined herein shall have the meanings attributed
thereto in the Orthofix International N.V. Amended and Restated 2004 Long-Term
Incentive Plan (the “Plan”).

WHEREAS, the Optionee is entering into that certain Employment Agreement of even
date herewith with Orthofix Inc., a Minnesota corporation and wholly owned
subsidiary of the Company (the “Employment Agreement”);

WHEREAS, pursuant to the Plan and the Employment Agreement, the Company desires
to afford the Optionee the opportunity to purchase Common Shares on the terms
and conditions set forth herein;

NOW, THEREFORE, in connection with the mutual covenants hereinafter set forth
and for other good and valuable consideration, the parties hereto agree as
follows:

1.   Grant of Option. Subject to the provisions of this Agreement, the
Employment Agreement and the Plan, the Company hereby grants to the Optionee the
right and option (the “Option”) to purchase 50,000 Common Shares at an exercise
price of $31.83 per share (the “Exercise Price”).

2.   Incorporation of Plan. The Optionee acknowledges receipt of the Plan, a
copy of which is annexed hereto, and represents that he or she is familiar with
its terms and provisions and hereby accepts this Option subject to all of the
terms and provisions of the Plan and all interpretations, amendments, rules and
regulations which may, from time to time, be promulgated and adopted pursuant to
the Plan. The Plan is incorporated herein by reference. In the event of any
conflict or inconsistency between the Plan and this Agreement, the Plan shall
govern and this Agreement shall be interpreted to minimize or eliminate any such
conflict or inconsistency.  In the event of any conflict between this Agreement
and the Employment Agreement, the applicable provision of the Employment
Agreement shall supersede the conflicting provision in this Agreement.

3.   Nature of the Option. The Option shall be a Nonqualified Stock Option.

4.   Vesting. Subject to earlier termination in accordance with the Plan, the
Employment Agreement or this Agreement and the terms and conditions therein or
herein, the Option shall vest and become exercisable with respect to 33 1/3% of
the shares covered thereby on each of the first, second and third anniversaries
of the Grant Date; provided, however, that the exercisability of any portion of
the Option relating to a fractional share shall be deferred until such time, if
any, that such portion can be exercised as a whole Common Share.

5.   Term. The Option shall expire and no longer be exercisable 10 years from
the Grant Date, subject to earlier termination in accordance with the Plan, this
Agreement or the Employment Agreement; provided, however: (i) if the termination
date falls on a date on which the exercise of the Option would violate any
applicable federal, state, local or foreign law, such termination date shall be
extended to 30 days after the first date that exercise of the Option would no
longer violate any applicable federal, state, local or foreign law, and (ii) if
the termination date falls on a date on which the Optionee is prohibited by
Company policy in effect on such date from engaging in transactions in the
Company’s securities, such termination date shall be extended to the first date
that the Optionee is permitted to engage in transaction in the Company’s
securities under such Company policy so long as such extension does not cause
the Option to become subject to Code Section 409A or violate any other
applicable law.

 
 

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Exhibit 10.34

6.   Termination of Employment.

(a)     General. A termination of employment shall be deemed to have occurred if
the Optionee is no longer employed by, or otherwise providing services to, the
Company or any of its Subsidiaries for any reason, expressly including as
provided in Article IV of the Employment Agreement.

(b)     Termination of Employment on Death or Other than for Cause. In the event
(i) the Company terminates the Optionee's employment prior to vesting other than
for Cause (as defined in the Employment Agreement) or (ii) of the death of the
Optionee, then the Option shall be considered vested in full and be immediately
exercisable as of the date of such termination of employment as provided in the
Employment Agreement.  Following the term of such employment, the Optionee shall
have the right, subject to the other terms and conditions set forth in this
Agreement and the Plan, to exercise the Option until the expiration of the
Option as provided in Section 5 hereof. To the extent the vested portion of the
Option is not exercised within such period, the Option shall be cancelled and
revert back to the Company and the Optionee shall have no further right or
interest therein.

(d)     Termination of Employment for Cause or Voluntary Termination. If the
Optionee's employment is terminated by the Optionee in a Voluntary Termination
or by the Company or any of its Subsidiaries for Cause prior to the full vesting
of the Option, the unvested portion of the Option shall be cancelled and revert
back to the Company as of the date of such termination of employment, and the
Optionee shall have no further right or interest therein unless the Committee in
its sole discretion shall determine otherwise. The Optionee shall have the
right, subject to the other terms and conditions set forth in this Agreement,
the Employment Agreement and the Plan, to exercise the portion of the Option, if
any, to the extent it was vested as of the date of such termination of
employment at any time within three months after the date of such termination,
subject to the earlier expiration of the Option as provided in Section 5 hereof.

7.   Method of Exercising Option.

(a)     Notice of Exercise. Subject to the terms and conditions of this
Agreement, the Option may be exercised by written or electronic notice to the
Company, from the Optionee, a Permitted Transferee, a transferee pursuant to a
domestic relations order, or following the Optionee’s death, the Optionee’s
estate, personal representative, or beneficiary, as applicable, and stating the
number of Common Shares in respect of which the Option is being exercised. Such
notice shall be accompanied by payment of the Exercise Price for all Common
Shares purchased pursuant to the exercise of such Option. The date of exercise
of the Option shall be the later of (i) the date on which the Company receives
the notice of exercise or (ii) the date on which the conditions set forth in
Sections 7(b) and (e) are satisfied. Notwithstanding any other provision of this
Agreement, the Optionee may not exercise the Option and no Common Shares will be
issued by the Company with respect to any attempted exercise when such exercise
is prohibited by law or any Company policy then in effect. The Option may not be
exercised at any one time as to less than 100 shares (or such number of shares
as to which the Option is then exercisable if less than 100). In no event shall
the Option be exercisable for a fractional share.

 
 

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Exhibit 10.34
 
(b)     Payment. Prior to the issuance of the Common Shares pursuant to Section
7(e) hereof in respect of which all or a portion of the Option shall have been
exercised, the Optionee shall have paid to the Company the Exercise Price for
all Common Shares purchased pursuant to the exercise of such Option. Payment may
be made by personal check, bank draft or postal or express money order (such
modes of payment are collectively referred to as “cash”) payable to the order of
the Company in U.S. dollars. Payment may also be made in mature Common Shares
owned by the Optionee, or in any combination of cash or such mature shares as
the Committee in its sole discretion may approve. The Company may also permit
the Optionee to pay for such Common Shares by directing the Company to withhold
Common Shares that would otherwise be received by the Optionee, pursuant to such
rules as the Committee may establish from time to time. In the discretion of the
Committee, and in accordance with rules and procedures established by the
Committee, the Optionee may be permitted to make a “cashless” exercise of all or
a portion of the Option.

(c)     Shareholder Rights. The Optionee shall have no rights as a shareholder
with respect to any Common Shares issuable upon exercise of the Option until the
Optionee shall become the holder of record thereof, and no adjustment shall be
made for dividends or distributions or other rights in respect of any Common
Shares for which the record date is prior to the date upon which the Optionee
shall become the holder of record thereof.

(d)     Limitation on Exercise. The Option shall not be exercisable unless the
offer and sale of Common Shares pursuant thereto has been registered under the
Securities Act of 1933, as amended (the “1933 Act”), and qualified under
applicable state “blue sky” laws or the Company has determined that an exemption
from registration under the 1933 Act and from qualification under such state
“blue sky” laws is available.

(e)     Issuance of Common Shares. Subject to the foregoing conditions, as soon
as is reasonably practicable after its receipt of a proper notice of exercise
and payment of the Exercise Price for all Common Shares purchased pursuant to
the exercise of such Option, the Company shall either: (i) deliver or cause to
be delivered to the Optionee (or a Permitted Transferee, a transferee under a
domestic relations order, or following the Optionee's death, the Optionee's
estate, personal representative or beneficiary, as applicable) one or more share
certificates for the appropriate number of Common Shares issued in connection
with such exercise (less any Common Shares withheld under Section 9 below), or
(ii) cause its third-party recordkeeper to credit an account established and
maintained in the name of the Optionee (or a Permitted Transferee, a transferee
under a domestic relations order, or following the Optionee's death, the
Optionee's estate, personal representative or beneficiary, as applicable) with
the number of Common Shares issued in connection with such exercise (less any
Common Shares withheld under Section 9 below); provided, however, that an actual
share certificate shall be delivered if requested by the Optionee (or a
Permitted Transferee, a transferee under a domestic relations order, or
following the Optionee's death, the Optionee's estate, personal representative
or beneficiary, as applicable). Such Common Shares shall be fully paid and
nonassessable and shall be issued in the name of the Optionee (or a Permitted
Transferee, a transferee under a domestic relations order, or following the
Optionee's death, the Optionee's estate, personal representative or beneficiary,
as applicable).

 
 

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Exhibit 10.34

8.   Adjustment of and Changes in Common Shares. In the event of any merger,
consolidation, recapitalization, reclassification, stock dividend, extraordinary
dividend, or other event or change in corporate structure affecting the Common
Shares, the Committee shall make such adjustments, if any, as it deems
appropriate in the number and class of shares subject to, and the exercise price
of, the Option. The foregoing adjustments shall be determined by the Committee
in its sole discretion.

9.     Tax Withholding. The Company shall have the right, prior to the issuance
of any Common Shares upon full or partial exercise of the Option (whether by the
Optionee or any Permitted Transferees, a transferee under a domestic relations
order, or following the Optionee’s death, the Optionee’s estate, personal
representative, or beneficiary, as applicable), to require the Optionee to remit
to the Company any amount sufficient to satisfy the minimum required federal,
state or local tax withholding requirements, as well as all applicable
withholding tax requirements of any other country or jurisdiction. The Company
may permit the Optionee to satisfy, in whole or in part, such obligation to
remit taxes, by directing the Company to withhold Common Shares that would
otherwise be received by the Optionee, pursuant to such rules as the Committee
may establish from time to time. The Company shall also have the right to deduct
from all cash payments made pursuant to, or in connection with, the Option, the
minimum federal, state or local taxes required to be withheld with respect to
such payments.

10.     Transfers. Unless the Committee determines otherwise after the Grant
Date, the Option shall not be transferable other than by will or by the laws of
descent and distribution or pursuant to a domestic relations order; provided,
however, the Option may be transferred to the Optionee's family members or to
one or more trusts or partnerships established in whole or in part for the
benefit of one or more of such family members (collectively, the “Permitted
Transferees”). Any Option transferred to a Permitted Transferee shall be further
transferable only by will or the laws of descent and distribution or, for no
consideration, to another Permitted Transferee of the Optionee. The Committee
may in its discretion permit transfers of Options other than those contemplated
by this Section 10.

11.     Option Exercisable Only by the Optionee. During the lifetime of the
Optionee, an Option shall be exercisable only by the Optionee or by a Permitted
Transferee to whom such Option has been transferred in accordance with Section
10.

12.      Prohibition on Repricing.  The Agreement may not be amended to (a)
reduce the Exercise Price of the Option granted hereunder, nor (b) cancel or
replace the Option  hereunder with an Option having a lower exercise price.

13.     Miscellaneous Provisions.

(a)     Notices. Any notice required by the terms of this Agreement shall be
delivered or made electronically, over the Internet or otherwise (with request
for assurance of receipt in a manner typical with respect to communications of
that type), or given in writing.  Any notice given in writing shall be deemed
effective upon personal delivery or upon deposit with the United States Postal
Service, by registered or certified mail, with postage and fees prepaid, and
shall be addressed to the Company at its principal executive office and to the
Optionee at the address that he or she has most recently provided to the
Company.   Any notice given electronically shall be deemed effective on the date
of transmission.

(b)     Headings. The headings of sections and subsections are included solely
for convenience of reference and shall not affect the meaning of the provisions
of this Agreement.

 
 

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Exhibit 10.34
 
(c)     Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

(d)     Entire Agreement. This Agreement and the Plan constitute the entire
agreement between the parties hereto with regard to the subject matter hereof.
They supersede all other agreements, representations or understandings (whether
oral or written and whether express or implied) that relate to the subject
matter hereof.

(e)     Amendments. The Board and the Committee shall have the power to alter or
amend the terms of the Option as set forth herein from time to time, in any
manner consistent with the provisions of Sections 16 and 19 of the Plan, and any
alteration or amendment of the terms of the Option by the Board or the Committee
shall, upon adoption, become and be binding on all persons affected thereby
without requirement for consent or other action with respect thereto by any such
person. The Committee shall give notice to the Optionee of any such alteration
or amendment as promptly as practicable after the adoption thereof. The
foregoing shall not restrict the ability of the Optionee and the Board or the
Committee by mutual written consent to alter or amend the terms of the Option in
any manner which is consistent with the Plan.

(f)      Binding Effect. This Agreement shall be binding upon the heirs,
executors, administrators and successors of the parties hereto and may only be
amended by written agreement of the parties hereto.

(g)     Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to the choice
of law provisions thereof.

(h)     No Employment or Other Rights. This Option grant does not confer upon
the Optionee any right to be continued in the employment of, or otherwise
provide services to, the Company or any Subsidiary or other affiliate thereof,
or interfere with or limit in any way the right of the Company or any Subsidiary
or other affiliate thereof to terminate such Optionee’s employment at any time.

 
 

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Exhibit 10.34

EXECUTED as of the date first written above.

COMPANY:
ORTHOFIX INTERNATIONAL N.V.
     
By:  /s/ Alan W.
Milinazzo                                                                
 
Name:  Alan W. Milinazzo
 
Title:  Chief Executive Officer
   
OPTIONEE:
   
By:  /s/ Thomas
Hein                                                                         
 
Name:  Thomas Hein
 
Title:  Chief Financial Officer

 

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