Exhibit 10.20

Orthofix International N.V.

Director Compensation Policy

Directors are traditionally elected each year at the Annual General Meeting of
Shareholders, usually held in May or June. Other director appointments occur
from time to time as determined by the Board, for instance, in the event of
vacancies on the Board resulting from a director’s death or resignation.

The Board has adopted a director compensation philosophy providing for a 50th
percentile goal for total director compensation. This philosophy is consistent
with the total compensation philosophy applied to the compensation levels of the
executive officers. Non-employee directors receive a mix of cash and
equity-based compensation as consideration for serving on the Board. Current
Board compensation levels were determined by the Board based upon consideration
of Towers Watson’s 2008 compensation analysis, which included a competitive
market analysis to determine competitive compensation levels for our
directors. Towers Watson’s analysis concluded that the Board’s cash fees were in
line with its philosophy, but that our equity-based compensation for directors
was below our peer group as compared to our preferred percentile goals.

Upon election or appointment to the Board, each Board member is currently
entitled to an annual fee of $60,000 for his services, pro-rated for any partial
year of service. Chairmen of Committees are entitled to additional compensation
ranging from $5,000 to $10,000 for serving in those capacities, and the Chairman
of the Board receives an annual fee of $220,000 in his role as chairman. We do
not pay any other meeting fees. Each director may elect at the time of election
to the Board or at a subsequent increase in fees to have their director fee paid
either in U.S. Dollars or in the director’s local currency. If a director does
not elect to have his director fee paid in his local currency, the Company will
pay the director fee in U.S. Dollars.

Directors also receive grants of stock options under the 2004 LTIP. These grants
typically include (i) a grant of 30,000 options, granted on the date of such
director’s first election to the Board, with such options generally vesting in
one-fifth increments over a 5-year period (so long as a director remains on the
Board and subject to earlier vesting in the event of a change in control), and
(ii) a grant of 5,000 options, granted on the date of any re-election or
re-appointment to the Board, with such options generally vesting in one-third
increments on the anniversary of each grant (so long as a director remains on
the Board and subject to earlier vesting in the event of a change in
control). Directors are also eligible to participate in our SPP. In 2009,
non-employee directors each received a grant of 3,000 options instead of the
5,000 option grant typically provided, and a one-time supplemental fee of
$15,000 to reflect the lower stock option grant amount. In 2010, non-employee
directors did not receive any grant of options, and no additional supplemental
fee was provided.