Exhibit 10.7

         Nonqualified Stock Option Agreement for a Non-Employee Director
                      under the Orthofix International N.V.
               Amended and Restated 2004 Long-Term Incentive Plan


         This Option Agreement (the "Agreement") is made effective as of [o]
(the "Grant Date"), between Orthofix International N.V., a Netherlands Antilles
company (the "Company"), and the non-employee director of the Board of Directors
of the Company (the "Board") 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, pursuant to the Plan, 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 Director Option. Subject to the provisions of this
Agreement and the Plan, the Company hereby grants to the Optionee the right and
option (the "Director Option") to purchase [o] Common Shares at an exercise
price of $[o] per share (the "Exercise Price"), which represents the average of
the highest and lowest quoted selling prices of the Common Shares as reported on
the Nasdaq National Market on the Grant Date.

         2. Incorporation of Plan. The Optionee acknowledges receipt of the
Plan, a copy of which is annexed hereto, and represents that he is familiar with
its terms and provisions and hereby accepts this Director 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.

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

         4. Vesting. Subject to earlier termination in accordance with the Plan
or this Agreement and the terms and conditions therein, the Director Option
shall vest and become exercisable with respect to [o] Common Shares underlying
the Director Option on each of the first, second and third anniversaries of the
Grant Date.

         5. Term. The Director Option shall expire and no longer be exercisable
ten (10) years from the Grant Date, subject to earlier termination in accordance
with the Plan or this Agreement; provided, however, 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 transactions in the Company's securities under such
Company policy.

         6. Termination of Service.

         (a) Termination of Service Other than for Death or Permanent
Disability. If the Optionee's service on the Board is terminated prior to
vesting for any reason other than for death or


<PAGE>


Permanent Disability, the Director Option shall be considered vested with
respect to the aggregate number of Common Shares as to which the Director Option
would have been vested as of December 31 of the year in which such termination
of service occurs. The Optionee shall have the right, subject to the other terms
and conditions set forth in this Agreement and the Plan, to exercise the
Director Option, to the extent it has vested as of the date of such termination
of service with the Board, at any time within one hundred and eighty (180) days
after the date of such termination of service, subject to the earlier expiration
of the Director Option as provided in Section 5 hereof. To the extent the vested
portion of the Director Option is not exercised within such one hundred and
eighty (180) day period, the Director Option shall be cancelled and revert back
to the Company and the Optionee shall have no further right or interest therein.
The unvested portion of any Director Option shall be cancelled and revert back
to the Company as of the date of the Optionee's termination of service and the
Optionee shall have no further right or interest therein.

         (b) Termination of Service for Death or Permanent Disability. If the
Optionee's service with the Board is terminated by reason of death or Permanent
Disability, the Director Option shall automatically vest and become immediately
exercisable in full and remain exercisable by the Optionee, a Permitted
Transferee or the Optionee's estate, personal representative or beneficiary, as
applicable, at any time within twelve (12) months after the date of such
termination of service, subject to the earlier expiration of the Director Option
as provided in Section 5 hereof. To the extent the Director Option is not
exercised within such twelve (12) month period, the Director Option shall be
cancelled and revert back to the Company and the Optionee shall have no further
right or interest therein.

         7. Change in Control. Upon the occurrence of a Change in Control, the
Director Option shall automatically vest and become immediately exercisable in
full and shall remain exercisable at any time within three (3) months after the
date of such Change in Control, subject to the earlier expiration of the
Director Option as provided in Section 5 hereof. To the extent the Director
Option is not exercised within such three (3) month period, the Director Option
shall be cancelled and revert back to the Company and the Optionee shall have no
further right or interest therein.

         8. Method of Exercising Director Option.

         (a) Notice of Exercise. Subject to the terms and conditions of this
Agreement, the Director Option may be exercised by written notice to the Company
signed by the Optionee or a Permitted Transferee and stating the number of
Common Shares in respect of which the Director Option is being exercised. Such
notice shall be accompanied by payment of the full Purchase Price. The date of
exercise of the Director 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 8(b) and 8(e) are satisfied. Notwithstanding any other
provision of this Agreement, the Optionee may not exercise the Director 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 Director Option may not be exercised at any one time as to less than
one hundred (100) shares (or such number of shares as to which the Director
Option is then exercisable if less than one hundred (100)). In no event shall
the Director Option be exercisable for a fractional share.

         (b) Payment. Prior to the issuance of a certificate pursuant to Section
8(e) hereof evidencing the Common Shares in respect of which all or a portion of
the Director 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 Director 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


<PAGE>


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 Director Option.

         (c) Shareholder Rights. The Optionee shall have no rights as a
shareholder with respect to any Common Shares issuable upon exercise of the
Director 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 Director 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 Share Certificate. Subject to the foregoing
conditions, as soon as is reasonably practicable after its receipt of a proper
notice of exercise and payment of the Purchase Price, the Company shall deliver
or cause to be delivered to the Optionee (or a Permitted Transferee 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.
Such Common Shares shall be fully paid and nonassessable and shall be issued in
the name of the Optionee (or a Permitted Transferee or, following the Optionee's
death, the Optionee's estate, personal representative or beneficiary, as
applicable).

         9. 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 Director Option. The foregoing adjustments shall be
determined by the Committee in its sole discretion.

         10. Tax Withholding. The Company shall have the right, prior to the
delivery of any certificates evidencing Common Shares to be issued upon full or
partial exercise of the Director Option (whether by the Optionee or any
Permitted Transferees), to require the Optionee to remit to the Company any
amount sufficient to satisfy the minimum required federal, state or local tax
withholding requirements. 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 Director Option the minimum required federal,
state or local taxes required to be withheld with respect to such payments.

         11. Transfers. Unless the Committee determines otherwise after the
Grant Date, the Director 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 Director 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 Director Option transferred to
a Permitted Transferee shall be further transferable only by will or the laws of


<PAGE>


descent and distribution or, for no consideration, to another Permitted
Transferee of the Optionee. The Committee may in its discretion permit transfers
of Director Options other than those contemplated by this Section 11.

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

         13. Miscellaneous Provisions.

         (a) Notices. Any notice required by the terms of this Agreement shall
be given in writing and 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. Notice shall be addressed to the Company at its
principal executive office and to the Optionee at the address that he has most
recently provided to the Company.

         (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.

         (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 Committee shall have the power to alter or amend
the terms of the Director Option as set forth herein from time to time, in any
manner consistent with the provisions of Section 16 of the Plan, and any
alteration or amendment of the terms of the Director Option by 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 written 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 Company by
mutual consent to alter or amend the terms of the Director Option in any manner
which is consistent with the Plan and approved by the Committee.

         (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.


<PAGE>


         14. Definitions. For purposes of this Agreement, the following
capitalized words shall have the meanings set forth below.

         "Change in Control" shall mean:

              (i) the acquisition by any individual, entity or group (within the
     meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
     1934 (the "Exchange Act")) (a "Person") of beneficial ownership (within the
     meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
     either (A) the then outstanding shares of the Company's common stock (the
     "Outstanding Common Stock") or (B) the combined voting power of the then
     outstanding voting securities of the Company entitled to vote generally in
     the election of directors (the "Outstanding Voting Securities"); excluding,
     however, the following: (1) any acquisition directly from the Company,
     other than an acquisition by virtue of the exercise of a conversion
     privilege unless the security being so converted was itself acquired
     directly from the Company; (2) any acquisition by the Company; (3) any
     acquisition by any employee benefit plan (or related trust) sponsored or
     maintained by the Company or any entity controlled by the Company; or (4)
     any acquisition pursuant to a transaction which complies with clauses (A),
     (B) and (C) of subsection (iii) of this definition of Change of Control; or

              (ii) a change in the composition of the Board such that the
     individuals who, as of the date hereof, constitute the Board (such Board
     shall be hereinafter referred to as the "Incumbent Board") cease for any
     reason to constitute at least a majority of the Board; provided, however,
     for purposes of this paragraph, that any individual who becomes a member of
     the Board subsequent to the date hereof, whose election, or nomination for
     election by the Company's shareholders, was approved by a vote of at least
     a majority of those individuals who are members of the Board and who were
     also members of the Incumbent Board (or deemed to be such pursuant to this
     proviso) shall be considered as though such individual were a member of the
     Incumbent Board; but provided further that any such individual whose
     initial assumption of office occurs as a result of either an actual or
     threatened election contest (as such terms are used in Rule 14a-11 of
     Regulation 14A promulgated under the Exchange Act) or other actual or
     threatened solicitation of proxies or consents by or on behalf of a Person
     other than the Board shall not be so considered as a member of the
     Incumbent Board; or

              (iii) consummation of a reorganization, merger or consolidation or
     sale or other disposition of all or substantially all of the assets of the
     Company ("Corporate Transaction"); excluding, however, such a Corporate
     Transaction pursuant to which all of the following conditions are met: (A)
     all or substantially all of the individuals and entities who are the
     beneficial owners, respectively, of the Outstanding Common Stock and
     Outstanding Voting Securities immediately prior to such Corporate
     Transaction will beneficially own, directly or indirectly, more than 50%
     of, respectively, the outstanding shares of common stock, and the combined
     voting power of the then outstanding voting securities entitled to vote
     generally in the election of directors, as the case may be, of the
     corporation resulting from such Corporate Transaction (including, without
     limitation, a corporation which as a result of such transaction owns the
     Company or all or substantially all of the Company's assets either directly
     or through one or more subsidiaries) in substantially the same proportions
     as their ownership, immediately prior to such Corporate Transaction, of the
     Outstanding Common Stock and Outstanding Voting Securities, as the case may
     be, (B) no Person (other than the Company, any employee benefit plan (or
     related trust) of the Company or such corporation resulting from such
     Corporate Transaction) will beneficially own, directly or indirectly, 30%
     or more of, respectively, the outstanding shares of common stock of the
     corporation resulting from such Corporate Transaction or the combined
     voting power of the outstanding voting securities of such corporation
     entitled to vote generally in


<PAGE>


     the election of directors except to the extent that such ownership existed
     prior to the Corporate Transaction, and (C) individuals who were members of
     the Incumbent Board will constitute at least a majority of the members of
     the board of directors of the corporation resulting from such Corporate
     Transaction; or

              (iv) the approval by the shareholders of the Company of a complete
     liquidation or dissolution of the Company.

         "Permanent Disability" shall mean termination of the Optionee's service
     as a result of a physical or mental incapacity which substantially prevents
     the Optionee from performing his duties as a member of the Board and that
     has continued for at least one hundred and eighty (180) days and can
     reasonably be expected to continue indefinitely. Any dispute as to whether
     or not the Optionee is disabled within the meaning of the preceding
     sentence shall be resolved by a physician selected by the Committee.

         "Purchase Price" shall mean the Exercise Price multiplied by the number
     of Common Shares with respect to which the Director Option is being
     exercised.


<PAGE>


         EXECUTED effective as of the day and year first written above.

                                                ORTHOFIX INTERNATIONAL N.V.
COMPANY:

                                                By:
                                                    ---------------------------
                                                    Name:
                                                    Title:

OPTIONEE:


                                                -------------------------------
                                                Name: