Unassociated Document


    
      

    


    Exhibit
      10.8

     

    


    ORTHOFIX
      DEFERRED

    COMPENSATION
      PLAN

    


    Effective
      January
      1, 2007

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ORTHOFIX
      DEFERRED 

    COMPENSATION
      PLAN

    


    Effective
      January
      1, 2007

     

    ARTICLE
      I

     

    PURPOSE
      AND EFFECTIVE DATE

     

    1.1.   Purpose.
      This
      plan
      is intended to allow a select group of key management or other highly
      compensated employees and directors of the Company to defer the receipt of
      compensation that would otherwise be payable to them. The
      terms
      of this Plan are intended to, and shall be interpreted and applied so as to,
      comply in all respects with the provisions of Code Section 409A and regulations
      and rulings thereunder.

     

    1.2.    Effective
      Date.
      This
      Plan shall be effective as of January 1, 2007.

     

    ARTICLE
      II

     

    Definitions

     

    For
      ease
      of reference, the following definitions will be used in the Plan:

    


    2.1.   Account.“Account”
      means the account maintained on the books of the Company used solely to
      calculate the amount payable to each Participant who defers Compensation under
      this Plan and shall not constitute or be treated as a separate fund of
      assets.

     

    2.2.   Beneficiary.“Beneficiary”
      means the person, persons or entity designated in writing by the Participant
      to
      receive payments under this Plan in the event of the Participant’s death as
      provided in Article VII.

     

    2.3.   Board.“Board”
      means the board of directors of the Company.

     

    2.4.   Bonus
      Deferral Commitment.“Bonus
      Deferral Commitment” means that portion of bonus compensation, or other
      incentive compensation as may be designated by the Plan Administrator from
      time-to-time as eligible for deferral hereunder, for which a Participant has
      made an election to defer receipt pursuant to Article IV. 

     

    2.5.   Change
      in Control.
“Change
      in Control” means a change in the ownership or effective control of the Parent
      Company, the Company and/or any Subsidiary, or in the ownership of a substantial
      portion of the assets of the Parent Company, the Company and/or any Subsidiary
      as defined under Code Section 409A or any regulations or other guidance issued
      thereunder; provided, however, that a Change in Control of any such entity
      shall
      only be taken into account with respect to a particular Participant if such
      Participant performed services for the entity experiencing the Change in Control
      at the time of such Change in Control.

     

    
      
        
        

      

      
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    2.6.   Code.“Code”
      means the Internal Revenue Code of 1986, as amended (and any regulations
      thereunder).

     

    2.7.   Company.“Company”
      means Orthofix Holdings, Inc., a Delaware corporation, or any successor
      thereto.

     

    2.8.   Compensation.“Compensation”
      means compensation for services performed, as may be designated by the Plan
      Administrator from time-to-time as eligible for deferral. This includes a
      Participant’s (i) base salary as in effect from time to time during a Plan Year,
      and (ii) bonuses earned during a Plan Year. Compensation also includes all
      fees
      payable to Directors, including the retainer for service as a Director, any
      fee
      paid to the Director for service on any committee, and meeting fees. In no
      event
      shall any of the following items be treated as Compensation hereunder: (i)
      payments from this Plan or any other nonqualified deferred compensation plan;
      (ii) any form of non-cash compensation or benefits, including short and long
      term disability payments, group life insurance premiums, income from the
      exercise of nonqualified stock options, from the disqualifying disposition
      of
      incentive stock options, or realized upon vesting of restricted stock or the
      delivery of shares in respect of restricted stock units (or other similar items
      of income related to equity compensation grants or exercises); (iii) expense
      reimbursements; (iv) severance payments, or (vii) any other payments or benefits
      other than normal Compensation as determined by the Plan Administrator in its
      sole discretion.

     

    2.9.   Compensation
      Deferral.“Compensation
      Deferral” means that portion of Compensation as to which a Participant has made
      an annual irrevocable election to defer receipt pursuant to Article
      IV.
      A
      Participant’s Compensation Deferral may consist of a Salary Deferral Commitment,
      a Bonus Deferral Commitment, a Director’s Fees Deferral Commitment, or a
      combination or other commitment as may be designated by the Plan Administrator
      from time-to-time, as applicable to the Participant.

     

    2.10.   
           Director.
      “Director” means any non-employee member of the Board or the board of directors
      of the Parent Company or any Subsidiary.

     

    2.11.     Director’s
      Fees Deferral Commitment.
      “Director’s Fees Deferral Commitment” means that portion of a Director’s fees
      for which a Participant has made an election to defer receipt pursuant to
      Article IV.

     

    2.12.     Disability.“Disability”
      means (i) with respect to a Participant that is an employee, that a Participant
      has been determined to be disabled for purposes of receiving a benefit under
      the
      Company’s insured long-term disability plan, and (ii) with respect to a
      Participant that is a Director, that a Participant has been determined to be
      disabled for purposes of receiving a benefit under the disability insurance
      provisions of the Social Security Act.

     

    
      
        
        

      

      
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    2.13.  
        Elective
      Deferral Account.
      “Elective Deferral Account” means the Account or Accounts maintained in
      accordance with Section 5.2 with respect to any elective Compensation Deferrals
      made under this Plan. A Participant’s Elective Deferral Account shall be
      utilized solely as a device for the determination and measurement of the amounts
      to be paid to the Participant pursuant to this Plan and shall not constitute
      or
      be treated as a separate fund of assets.

     

    2.14. 
        Measurement
      Funds.“Measurement
      Funds” means one or more of the independently established funds or indices that
      are identified by the Plan Administrator. These Measurement Funds are used
      solely to calculate the earnings that are credited to each Participant’s
      Account(s) in accordance with Article V below, and do not represent any
      beneficial interest on the part of the Participant in any asset or other
      property of the Company, the Parent Company or any Subsidiary. The determination
      of the increase or decrease in the performance of each Measurement Fund shall
      be
      made by the Plan Administrator in its reasonable discretion. Measurement Funds
      may be replaced, new funds may be added, or both, from time to time in the
      discretion of the Plan Administrator.

     

    2.15.  
        Orthofix.
      “Orthofix” means Orthofix, Inc., a Minnesota corporation, or any successor
      thereto.

     

    2.16.  
        Parent
      Company.
“Parent
      Company” means Orthofix
      International N.V., a corporation organized under the laws of Netherlands
      Antilles.

     

    2.17.  
        Participant.
      “Participant”
      means
      any employee or Director who satisfies the eligibility requirements set forth
      in
      Article III. In the event of the death or incompetency of a Participant, the
      term means his or her Beneficiary, personal representative or
      guardian.

     

    2.18.
          Participation
      Agreement.
      “Participation Agreement” means the authorization form that an eligible employee
      or Director files with the Plan Administrator to elect a Compensation Deferral
      under the Plan for a Plan Year.

     

    2.19.
          Plan.“Plan”
      means this Plan, entitled the Orthofix Deferred Compensation Plan, as amended
      from time to time.

     

    2.20.
          Plan
      Administrator.
“Plan
      Administrator” means the board of directors of Orthofix, or a person or
      committee appointed by the board of directors of Orthofix to administer this
      Plan pursuant to Article VIII.

     

    2.21.  
        Plan
      Year.“Plan
      Year” means the twelve (12) month period beginning on each January 1 and ending
      on the following December 31. 

     

    
      
        
        

      

      
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    2.22.  
        Retirement.“Retirement”
      means a separation from service with the Parent Company, the Company or any
      Subsidiary after attaining age fifty-five (55); provided, however, that a
      transfer between one or more of the Parent Company, the Company and/or any
      Subsidiary shall not be deemed to be a separation from service for purposes
      of
      this definition.

     

    2.23.  
        Salary
      Deferral Commitment.
“Salary
      Deferral Commitment” means that portion of salary compensation for which a
      Participant has made an election to defer receipt pursuant to Article
      IV.

     

    2.24.     Subsidiary.
      “Subsidiary”
      means any subsidiary or affiliate of the Company or the Parent Company, or
      any
      subsidiary or affiliate of such subsidiary or affiliate, that has been approved
      by the Company for participation in this Plan and which has taken appropriate
      action to become an adopting employer of this Plan.

     

    2.25.  
        Unforeseeable
      Emergency.“Unforeseeable
      Emergency” means a severe financial hardship to the Participant resulting from
      an illness or accident of the Participant, the Participant’s spouse, or a
      dependent (as defined in Code Section 152(a)) of the Participant, loss of the
      Participant’s property due to casualty, or other similar extraordinary and
      unforeseeable circumstances arising as a result of events beyond the control
      of
      the Participant.

     

    ARTICLE
      III

     

    Eligibility
      and Participation

     

    3.1.   Eligibility.
      An
      employee of the Parent Company, Company and/or any Subsidiary shall be eligible
      to participate in this Plan if the employee is a management or highly
      compensated employee and is named by the Board
      or
      its designee to
      be a
      Participant in this Plan. All Directors shall also be eligible to participate
      in
      this Plan as of the Effective Date or, if first elected as a Director following
      the Effective Date, as of the date elected. An
      individual shall remain a Participant until that individual has received full
      payment of all amounts credited to the Participant’s Account.

     

    3.2.   Participation.
      An
      eligible employee or Director may elect to enter into a Salary Deferral
      Commitment and/or a Director’s Fees Deferral Commitment with respect to any Plan
      Year by submitting a Participation Agreement to the Plan Administrator by
      December 31 (or such earlier date established by the Plan Administrator) of
      the
      calendar year immediately preceding the Plan Year. An eligible employee may
      elect to enter into a Bonus Deferral Commitment with respect to bonus
      Compensation earned during any Plan Year by submitting a Participation Agreement
      to the Plan Administrator by December 31 (or such earlier date established
      by
      the Plan Administrator) of the calendar year immediately preceding the Plan
      Year. With respect to any bonus Compensation that satisfies the definition
      of
“performance based compensation” for purposes of Code Section 409A, an eligible
      employee may elect to enter into a Bonus Deferral Commitment by submitting
      a
      Participation Agreement to the Plan Administrator no later than six (6) months
      prior to the end of the period in which the performance-based compensation
      that
      is the subject of the Bonus Deferral Commitment is earned (or such earlier
      date
      established by the Plan Administrator). Any Participation Agreement shall only
      be effective if entered into in a manner consistent with the provisions of
      Code
      Section 409A. 

     

    
      
        
        

      

      
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    3.3.   Partial
      Year Participation.
      If an
      employee or Director first becomes eligible to participate during a calendar
      year, the employee or Director must submit a Participation Agreement to the
      Plan
      Administrator no later than thirty (30) days following the date the employee
      or
      Director becomes eligible to participate in the Plan. Such Participation
      Agreement shall be effective only with respect to Compensation earned for
      services to be performed subsequent to the election and deferred in a manner
      consistent with the provisions of Code Section 409A.

     

    ARTICLE
      IV

     

    Elective
      Deferrals

     

    4.1.   Amount
      of Deferral Election.
      A
      Participant may elect a Compensation Deferral in the Participation Agreement
      as
      follows:

     

    (a)    Salary
      Deferral Commitment.
      A
      Salary Deferral Commitment shall be related to the salary payable by the Company
      to the Participant for services performed during the Plan Year. The amount
      to be
      deferred shall be stated as a percentage of the salary to be earned during
      the
      Plan Year, as a flat dollar amount from any salary earned during the Plan Year,
      or in such
      other form as allowed by the Plan Administrator. 

     

    (b)    Bonus
      Deferral Commitment.
      The
      amount to be deferred shall be stated as a percentage of any bonus earned during
      the Plan Year, as
      a flat
      dollar amount from any bonus earned during the Plan Year, or in such other
      form
      as allowed by the Plan
      Administrator. 

     

    (c)    Director’s
      Fees Deferral Commitment.
      The
      amount to be deferred shall be stated as a percentage of any fees earned during
      the Plan Year, as a flat dollar amount from any fees earned during the Plan
      Year, or in such other form as allowed by the Plan Administrator.

     

    4.2.   Deferral
      Limits.
      The
      following limitations shall apply to Compensation Deferrals:

     

    (a)    Minimum.
      The
      minimum deferral amount for a Salary, Bonus or Director’s Fees Deferral
      Commitment shall be two thousand dollars
      ($2,000) per Plan Year. If the Compensation Deferral is a Bonus Deferral
      Commitment,
      the
      $2,000 minimum shall be calculated as a percentage of targeted incentive
      bonus.

     

    
      
        
        

      

      
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    (b)    Maximum.
      The
      maximum deferral amount for a Salary Deferral Commitment shall be eighty percent
      (80%). The maximum
      deferral amount for a Bonus Deferral Commitment or a Director’s Fees Deferral
      Commitment shall be one hundred
      percent (100%) of any such bonus or fees to be earned during the Plan
      Year.

     

    (c)    Changes
      in Minimum or Maximum.
      The
      Plan Administrator may amend the Plan to change the minimum or maximum deferral
      amounts from time to time by giving written notice to all Participants. No
      such
      change may affect a Compensation Deferral made prior to the Plan Administrator’s
      action unless otherwise required by law. 

     

    4.3.   Treatment
      under Qualified Plan.
      Amounts
      deferred under this Plan will not constitute compensation for any
      Company-sponsored qualified retirement plan.

     

    4.4.   Period
      of Commitment.
      A
      Participant’s Participation Agreement as to a Compensation Deferral shall remain
      in effect only for the immediately succeeding Plan Year (or the remainder of
      the
      current year, as applicable). As of December 31 of the calendar year during
      which an election is made (or as of the end of the 30 day enrollment period
      for
      a newly eligible employee or Director), the Participation Agreement shall be
      irrevocable for the succeeding Plan Year (or portion thereof, with respect
      to a
      newly eligible employee or Director). Notwithstanding the above, the
      Participation Agreement shall be terminated if a distribution is made to a
      Participant as a result of an Unforeseeable Emergency pursuant to Section 6.8
      or
      if such termination is required for the Participant to be able to obtain a
      hardship distribution under a qualified plan with a qualified cash or deferred
      arrangement under Code Section 401(k). Any resumption of the Participant’s
      deferrals under this Plan shall be made only at the election of the Participant
      in accordance with Article III herein.

     

    4.5.   Change
      of Status.
      If a
      Participant no longer meets the eligibility criteria set forth in Section 3.1,
      the Participant’s most recent Compensation Deferral shall terminate with respect
      to Compensation earned after the effective date of such determination, and
      the
      employee or Director shall thereafter be prohibited from making Compensation
      Deferrals unless and until he or she meets the eligibility criteria in the
      future. 

     

    ARTICLE
      V

     

    Participant
      Accounts

     

    5.1.   Establishment
      of Accounts.
      For
      record keeping purposes only, an Account shall be maintained for each
      Participant to reflect his or her Elective Deferral Account. Separate
      sub-accounts, as may be allowed from time-to-time in the sole discretion of
      the
      Plan Administrator, shall be maintained to the extent necessary to properly
      reflect the Participant’s election of Measurement Funds and distribution
      elections.

     

    
      
        
        

      

      
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    5.2.   Crediting
      Compensation Deferrals to Elective Deferral Account.
      The
      Plan Administrator shall credit Compensation Deferrals to the Participant’s
      Elective Deferral Account as soon as practicable after the date on which such
      Compensation would otherwise have been paid, in accordance with the
      Participant’s election. Any withholding of taxes or other amounts which is
      required by federal, state, or local law with respect to Compensation Deferrals
      shall be withheld from the Participant’s non-deferred Compensation to the
      maximum extent possible with any excess reducing the amount
      deferred.

     

    5.3.   Earnings
      (or Losses) on Account.
      Participants must designate, on a Participation Agreement or by such other
      means
      as may be established by the Plan Administrator, the portion of the
      contributions to their Account that shall be allocated among the various
      Measurement Funds. If a Participant fails to designate any Measurement Funds,
      contributions to a Participant’s Account shall be allocated to one or more
      default Measurement Funds as determined by the Plan Administrator in its sole
      discretion and Participant shall be deemed, for all purposes of the Plan, to
      have designated such default Measurement Funds. A Participant’s Account shall be
      credited with all deemed earnings (or losses) generated by the Measurement
      Funds, as designated by the Participant, on each business day for the sole
      purpose of determining the amount of earnings to be credited or debited to
      such
      Account as if the designated balance of the Account had been invested in the
      applicable Measurement Fund. Notwithstanding that the rates of return credited
      to Participant’s Account are based upon the actual performance of the
      corresponding Measurement Funds, the Company shall not be obligated to invest
      any amount credited to a Participant’s Account under this Plan in such
      Measurement Funds or in any other investment funds. Upon notice to the Plan
      Administrator in the manner it prescribes, a Participant may reallocate, on
      a
      daily basis, the Funds to which his or her Account is deemed to be allocated.
      Changes made while the New York Stock Exchange is open will be effective at
      the
      end of the day on which the change was made. Changes made when the New York
      Stock Exchange is closed will be effective at the end of the next day on which
      the New York Stock Exchange is open.

     

    5.4.   Valuation
      of Account.
      The
      value of a Participant’s Account as of any date shall equal the amounts
      theretofore credited to such Account, including any earnings (positive or
      negative) deemed to be earned on such Account in accordance with Section 5.3,
      less any payments made to the Participant or the Participant’s Beneficiary
      pursuant to this Plan,
      and any
      forfeitures or Plan expenses allocated to the Participant’s Account by the Plan
      Administrator, in its sole discretion. 

     

    
      
        
        

      

      
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    5.5.   Vesting
      of Accounts.
      Participants shall be one-hundred percent vested in their Elective Deferral
      Accounts at all times. 

     

    5.6.   Statement
      of Account.
      The Plan
      Administrator shall provide or make available to each Participant (including
      electronically), not less frequently than annually, a statement in such form
      as
      the Plan Administrator deems desirable setting forth the balance of his or
      her
      Account.

     

    5.7.   Payments
      from Account.
      Any
      payment made to or on behalf of a Participant from his or her Account in an
      amount which is less than the entire balance of his or her Account shall be
      made
      pro rata from each of the Measurement Funds to which such Account is then
      allocated. 

     

    ARTICLE
      VI

     

    Payments
      to Participants

     

    6.1.   Distributions.
      It is
      intended that distributions under this Plan be made in accordance with the
      requirements of Code Section 409A. 

     

    6.2.   Specified
      Time or Fixed Schedule.
      A
Participant
      may elect in his or her initial Participation Agreement to receive his or her
      Account, or a sub-account thereof (as may be provided by the Plan Administrator
      from time-to-time), in a single lump sum payment as of the date specified in
      the
      Participation Agreement or in annual installments, over a one, three, five
      or
      ten year period, beginning as of the year specified in the Participation
      Agreement. Any lump sum payment shall be made under this Plan as of the date
      specified by the Participant or as soon thereafter as reasonably practicable.
      Any installment payment to be made under this Plan shall be made as soon as
      reasonably practicable following January 1 of the year specified in the
      Participation Agreement. Such
      election shall be made in a manner that satisfies Code Section 409A with regard
      to the
      timing of participant elections. Notwithstanding
      the foregoing, if the Participant has a separation from service for any reason
      other than the Participant’s Disability or death before the scheduled payment
      date for a lump sum or one or more installment payments, and the Participant
      does not again perform services for the Parent Company, the Company and/or
      any
      Subsidiary before the last day of the year in which such separation occurs,
      such
      payment shall instead be made, or shall commence, as set
      forth
      in Sections 6.3 and 6.5. If the Participant experiences a Disability or has
      a
      separation from service by reason of his or her death before the scheduled
      payment date for a lump sum or one or more installment payments, such payment
      shall instead be made, or shall continue, as set forth in Sections 6.6 and
      6.7.

     

    6.3.   Separation
      from Service.
      Upon
      a
      Participant’s separation from service with the Company, including termination of
      service as a Director, for any reason except Disability, Change in Control
      or
      death, the Participant
      shall receive payment of the Participant’s Account in
      the
      form and manner set
      forth
      in Section 6.5. Benefits
      payable in a lump sum and the first installment of any benefits payable in
      installments shall be paid as soon as practicable after January 1 of the year
      following the year in which Participant’s separation from service date occurs.
      Future annual installment benefits shall be paid annually as soon as practicable
      after January 1 of each subsequent year. Notwithstanding the above, if the
      Participant again performs services for the Company before the last day of
      the
      year in which such separation occurred, he or she shall be treated as if the
      separation never occurred. 

     

    
      
        
        

      

      
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    6.4.   Change
      in Control.
      Notwithstanding any other provision of this Plan to the contrary, upon a Change
      in Control, the Participant shall
      become entitled to receive payment of the Participant’s Elective Deferral
      Account in
      the
      form and manner set
      forth
      in Section 6.5. Benefits
      payable in a lump sum and the first installment of any benefits payable in
      installments shall be paid as of the effective date of the Change in Control.
      Future annual installment benefits shall be paid annually as soon as practicable
      after January 1 of each subsequent year. 

     

    6.5.   Form
      of Payment.
      Subject
      to the requirements of Code Section 409A, benefits payable under Sections 6.3
      and 6.4 shall be payable in the following form:

     

    (a)    Termination
      Prior to Retirement.
      Benefits payable as a result of separation from service prior to Retirement
      shall be paid in a lump sum, regardless of whether the Participant has a
      different election on file with the Plan Administrator.

     

    (b)    Termination
      Due to Retirement or Following a Change in Control.
      Benefits payable as a result of separation from service due to Retirement or
      following a Change in Control shall be paid in the form elected by the
      Participant in his or her Participation Agreement. Options for form of payment
      shall include:

     

    (i)    A
      single
      lump sum payment, or

     

    (ii)   Substantially
      equal annual installments over a one, three, five, or ten year period. The
      Participant’s Account shall
      continue to accrue earnings (or losses) as measured by the Measurement Funds
      during the payment period on the unpaid balance in the Participant’s
      Accounts.

     

    6.6.   Disability.
      Upon the
      Disability of a Participant, the Participant shall be paid the balance in his
      or
      her Account in the form of a lump sum payment, with such payment to be made
      as
      soon as practicable after
      the
      Participant’s Disability has been determined.

     

    
      
        
        

      

      
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    6.7.   Death.
      

     

    (a)    Upon
      the
      death of a Participant prior to termination of employment or service as a
      Director, the Company shall pay to the Participant’s Beneficiary the balance in
      his or her Account in the form of a lump sum payment, with such payment to
      be
      made as soon as practicable after the Participant’s death.

     

    (b)    Upon
      the
      death of a Participant after benefit payments have commenced, the Participant’s
      Beneficiary shall receive the remaining unpaid balance in the Participant’s
      Accounts in the same manner as the Participant was being paid prior to the
      Participant’s death; provided, however, that any benefits payable hereunder to a
      trust or estate shall be made in a lump sum. 

     

    6.8.   Unforeseeable
      Emergency.
      Upon
      a
      finding that a Participant has suffered an Unforeseeable Emergency as defined
      under Section 2.23 of the Plan, the Plan Administrator may, in its sole
      discretion, make distributions from the Participant’s Elective Deferral Account.
      A Participant requesting a distribution as a result of an Unforeseeable
      Emergency shall apply in writing to the Plan Administrator and shall provide
      such additional information as the Plan Administrator may require. The amount
      of
      the withdrawal shall be limited to the amount necessary to satisfy such
      emergency plus amounts necessary to pay taxes reasonably anticipated as a result
      of the distribution, after taking into account the extent to which such hardship
      is or may be relieved through reimbursement or compensation by insurance or
      otherwise or by liquidation of the participant’s assets (to the extent the
      liquidation of such assets would not itself cause severe financial hardship).
      Upon requesting a distribution due to an Unforeseeable Emergency, the
      Participant shall be required to change the investment direction of the
      Participant’s Accounts to the money market fund. Immediately following a
      distribution due to an Unforeseeable Emergency, or the determination by the
      Plan
      Administrator not to authorize the distribution, the Participant may change
      the
      investment direction pursuant to Section 5.3. If a distribution is made due
      to
      an Unforeseeable Emergency in accordance with this Section 6.8, the
      Participant’s deferrals under this Plan shall cease in their entirety. Any
      resumption of the Participant’s deferrals under this Plan shall be made only at
      the election of the Participant in accordance with Article III
      herein.

     

    6.9.   Change
      in Election.
      A
      Participant may change the payment date and/or the form of an existing payment
      election made under Section 6.2 for a Plan Year by filing a new payment
      election, in the form specified by the Plan Administrator, at least twelve
      (12)
      months prior to the original payment date
      (in the
      case of installment payments, the date of the first scheduled installment
      payment),
      provided that such new election delays the payment year by at least five (5)
      years from the original payment year. In no event shall the new payment election
      take effect until at least twelve (12) months after the date on which the
      election is made. A Participant may not change the payment date or form of
      payment with respect to any Accounts, or sub-accounts as the case may be,
      payable at Retirement, once elected.

     

    
      
        
        

      

      
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    6.10.  
        Small
      Accounts.
      Notwithstanding any election made under this Plan, if the total value of the
      Participant’s Account on the Participant’s Retirement date is less than $25,000,
      then the Participant’s Account shall be paid to the Participant in one lump sum
      as soon as practicable after January 1 of the year
      following the year in which
      the
      Participant
      Retires.

     

    6.11.  
        Valuation
      of Payments.
      Any lump
      sum benefit owed under this Article VI shall be payable in an amount equal
      to
      the value of the Participant’s Account (or relevant portion thereof) as of
      January 1 in the year in which payment is to be made.
      The
      first annual installment payment in a series of installment payments shall
      be
      equal to (i) the value of the Participant’s Account (or relevant portion
      thereof) as of January
      1
      in the year in which payment is to be commenced,
      divided by (ii) the number of installment payments elected by the Participant.
      The remaining installments shall be paid in an amount equal to the value of
      such
      Accounts (or relevant portion thereof) as of January
      1
      in the year in which each payment is to be made,
      divided
      by the number of remaining unpaid installment payments.

     

    6.12.  
        Delay
      of Payment for Specified Employees.
      Notwithstanding any provision of this Plan to the contrary, in the case of
      any
      Participant who is a “specified employee” within the meaning of Code Section
      409A(a)(2)(B)(i), no distribution under this Plan may be made, or may commence,
      before the date which is 6 months after the date of such Participant’s
“separation from service” within the meaning of Code Section 409A(a)(2)(A)(i).
      The foregoing sentence shall not apply in the case of a distribution made in
      connection with the Disability or death of a Participant or upon the occurrence
      of a Change in Control.

     

    6.13.  
        Withholding
      Taxes.
      The
      Company may make such provisions and take such action as it may deem necessary
      or appropriate for the withholding of any taxes which the Company is required
      by
      any law or regulation of any govern-mental authority, whether federal, state
      or
      local, to withhold in connection with any benefits under the Plan, including,
      but not limited to, the withholding of appropriate sums from any amount
      otherwise payable to the Participant (or his or her Beneficiary). Each
      Participant, however, shall be responsible for the payment of all individual
      tax
      liabilities relating to any such benefits.

     

    6.14.  
        Effect
      of Payment.
      The full
      payment of the applicable benefit under this Article VI shall completely
      discharge all obligations on the part of the Company to the Participant (and
      each Beneficiary) with respect to the operation of this Plan, and the
      Participant’s (and Beneficiary’s) rights under this Plan shall
      terminate.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII

     

    Beneficiary
      Designation

    


    7.1.   Beneficiary
      Designation.
      Subject
      to Section 7.3, each Participant shall have the right, at any time, to designate
      one (1)
      or
      more persons or an entity as Beneficiary (both primary
      as well
      as contingent) to whom benefits under this Plan shall be paid in the event
      of
      such Participant’s death prior to complete distribution
      of the Participant’s Accounts. Each Beneficiary designation shall be in a
      written form prescribed by the Plan Administrator and shall be effective only
      when filed with the Plan Administrator during the Participant’s
      lifetime.

     

    7.2.   Changing
      Beneficiary.
      Subject
      to Section 7.3, any Beneficiary designation may be changed
      by a Participant without the consent of the previously named Beneficiary by
      the
      filing of a new Beneficiary designation
      with the Plan Administrator. The filing of a new properly completed Beneficiary
      designation shall cancel all Beneficiary designations previously
      filed.

     

    7.3.   Community
      Property.
      If the
      Participant resides in a community property state, any Beneficiary designation
      shall be valid
      or
      effective only as permitted under applicable law.

     

    7.4.   No
      Beneficiary Designation.
      If any
      Participant fails to designate a Beneficiary in the manner provided in Section
      7.1, if the Beneficiary designation is void under Section 7.3, or if the
      Beneficiary designated by a deceased Participant dies
      before the Participant or before complete distribution of the Participant’s
      Accounts, the Participant’s Beneficiary shall be the
      person in the first of the following classes in which there is a
      survivor:

     

    (a)    The
      Participant’s spouse;

     

    (b)    The
      Participant’s children in equal shares, except that if any of the children
      predeceases the Participant but leaves issue surviving, then such issue shall
      take, by right of representation, the share the parent would have taken if
      living; or

     

    (c)    The
      Participant’s estate.

     

    ARTICLE
      VIII

     

    Administration

     

    8.1.   Plan
      Administrator.
      The Plan
      Administrator shall be the board of directors of Orthofix, or a person or
      committee appointed by the board of directors of Orthofix to administer the
      Plan. The Plan Administrator shall have full discretionary power and authority
      to interpret the Plan, to prescribe, amend and rescind any rules, forms and
      procedures as it deems necessary or appropriate for the proper administration
      of
      the Plan and to make any other determinations, including factual determinations,
      and take such other actions as it deems necessary or advisable in carrying
      out
      its duties under the Plan. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    8.2.   Agents.
      The
      Plan Administrator may, from time to time, employ agents and delegate to them
      such administrative duties as it sees fit, and may, from time to time, consult
      with counsel who may be counsel to Orthofix. 

     

    8.3.   Binding
      Effect of Decisions.
      All
      decisions and determinations by the Plan Administrator shall be final,
      conclusive and binding on the Parent Company, the Company, any Subsidiary,
      Participants, Beneficiaries and any other persons having or claiming an interest
      hereunder.

     

    8.4.   Indemnification
      of Plan Administrator.
      The
      Company shall indemnify and hold the Plan Administrator harmless against any
      and
      all claims, loss, damage, expense or liability arising from any action or
      failure to act with respect to this Plan due to the Plan Administrator’s service
      as such, except in the case of gross negligence or willful misconduct by the
      Plan Administrator or as expressly provided by statute. 

     

    ARTICLE
      IX

     

    Claims
      Procedures

     

    9.1.   Claim.
      A
      Participant who believes that he or she is being denied a benefit to which
      he or
      she is entitled under the Plan may file a written request for such benefit
      with
      the Plan Administrator, setting forth his or her claim for
      benefits.

     

    9.2.   Claim
      Decision.
      The Plan
      Administrator shall reply to any claim filed under Section 9.1 within 90 days
      of
      receipt, unless it determines to extend such reply period for an additional
      90
      days for reasonable cause. If the claim is denied in whole or in part, such
      reply shall include a written explanation, using language calculated to be
      understood by the Participant, setting forth:

     

    (a)    the
      specific reason or reasons for such denial;

     

    (b)    the
      specific reference to relevant provisions of this Plan on which such denial
      is
      based;

     

    (c)    a
      description of any additional material or information necessary for the
      Participant to perfect his or her claim and an explanation why such material
      or
      such information is necessary;

     

    (d)    appropriate
      information as to the steps to be taken if the Participant wishes to submit
      the
      claim for review;

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    (e)    the
      time
      limits for requesting a review under Section 9.3 and for review under Section
      9.4 hereof; and

     

    (f)    the
      Participant’s right to bring an action for benefits under Section 502 of
      ERISA.

     

    9.3.   Request
      for Review.
      Within
      60 days after the receipt by the Participant of the written explanation
      described above, the Participant may request in writing that the Plan
      Administrator review its determination. The Participant or his or her duly
      authorized representative may, but need not, review the relevant documents
      and
      submit issues and comment in writing for consideration by the Plan
      Administrator. If the Participant does not request a review of the initial
      determination within such 60-day period, the Participant shall be barred and
      estopped from challenging the determination.

     

    9.4.   Review
      of Decision.
      After
      considering all materials presented by the Participant, the Plan Administrator
      will render a written decision, setting forth the specific reasons for the
      decision and containing specific references to the relevant provisions of this
      Plan on which the decision is based. The decision on review shall normally
      be
      made within 60 days after the Plan Administrator’s receipt of the Participant’s
      claim or request. If an extension of time is required for a hearing or other
      special circumstances, the Participant shall be notified and the time limit
      shall be 120 days. The decision shall be in writing and shall state the reasons
      and the relevant Plan provisions and the Participant’s right to bring an action
      for benefits under Section 502 of ERISA. All decisions on review shall be final
      and shall bind all parties concerned.

     

    ARTICLE
      X

     

    Miscellaneous

     

    10.1.  
        Unfunded
      Plan.
      This
      Plan is intended to be an unfunded plan maintained primarily to provide deferred
      compensation benefits for a select group of “management or highly compensation
      employees” within the meaning of Sections 201, 301, and 401 of the Employee
      Retirement Income Security act of 1974, as amended (“ERISA”), and therefore to
      be exempt from the provisions of Parts 2, 3, and 4 of Title I of ERISA.
      Accordingly, the Plan shall terminate and no further benefits shall be paid
      hereunder if it is determined by a court of competent jurisdiction or by an
      opinion of counsel that the Plan constitutes an employee pension benefit plan
      within the meaning of Section 3(2) of ERISA which is not so exempt.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    


    10.2.
          Unsecured
      General Creditor.
      Participants and their Beneficiaries, heirs, successors, and assigns shall
      have
      no legal or equitable rights, interest or claims in any property or assets
      of
      the Parent Company, the Company, or any Subsidiary nor shall they be
      beneficiaries of, or have any rights, claims or interests in any life insurance
      policies, annuity contracts, or the proceeds therefrom owned or which may be
      acquired by the Parent Company, the Company or any Subsidiary. Except as may
      be
      provided in Section 10.3, such policies, annuity contracts or other assets
      of
      the Parent Company, the Company or any Subsidiary shall not be held under any
      trust for the benefit of Participants, their Beneficiaries, heirs, successors
      or
      assigns, or held in any way as collateral security for the fulfilling of the
      obligations of the Parent Company, the Company or any Subsidiary under this
      Plan. Any and all of the Parent Company, the Company or any Subsidiary’s assets
      and policies shall be, and remain, the general, unpledged, unrestricted assets
      of the Parent Company, the Company or the Subsidiary. The Parent Company, the
      Company or any Subsidiary’s obligation under the Plan shall be that of an
      unfunded and unsecured promise to pay money in the future. 

     

    10.3.  
        Trust
      Fund.
      Each
      adopting employer shall be responsible for the payment of all benefits provided
      under the Plan. At its discretion, an adopting employer or the Company, acting
      on behalf of all adopting employers, may establish one or more grantor trusts,
      with such trustees as the Board may approve, for the purpose of providing for
      the payment of such benefits. Such trust or trusts may be irrevocable, but
      the
      assets thereof shall be subject to the claims of the adopting employer’s or the
      Company’s creditors, as the case may be. To the extent any benefits provided
      under the Plan are actually paid from any such trust, the adopting employer
      and/or the Company shall have no further obligation with respect thereto, but
      to
      the extent not so paid, such benefits shall remain the obligation of, and shall
      be paid by, the adopting employer or the Company.

     

    10.4.  
        Protective
      Provisions.
      Each
      Participant and Beneficiary shall cooperate with the Plan Administrator by
      furnishing any and all information requested by the Plan Administrator in order
      to facilitate the payment of benefits hereunder. If a Participant or Beneficiary
      refuses to cooperate with the Plan Administrator, the Company shall have no
      further obligation to the Participant or Beneficiary under the Plan, other
      than
      payment of the then-current balance of the Participant’s Account in accordance
      with prior elections.

     

    10.5.  
        Inability
      to Locate Participant or Beneficiary.
      If the
      Plan Administrator is unable to locate a Participant or Beneficiary within
      two
      years following the date the Participant was to commence receiving payment,
      the
      entire amount allocated to the Participant’s Account shall be forfeited. If,
      after such forfeiture, the Participant or Beneficiary later claims such benefit,
      such benefit shall be reinstated without interest or earnings from the date
      payment was to commence pursuant to Article VI.

     

    10.6.  
        No
      Contract of Employment.
      Neither
      the establishment of the Plan, nor any modification thereof, nor the creation
      of
      any fund, trust or account, nor the payment of any benefits shall be construed
      as giving any Participant or any person whosoever, the right to be retained
      in
      the service of the Parent Company, the Company and/or any Subsidiary, and all
      Participants and other employees shall remain subject to discharge to the same
      extent as if the Plan had never been adopted.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    


    10.7.  
        No
      Limitation on Company Actions.
      Nothing
      contained in the Plan shall be construed to prevent the Parent Company, the
      Company and/or any Subsidiary from taking any action which is deemed by it
      to be
      appropriate or in its best interest. No Participant, Beneficiary, or other
      person shall have any claim against the Parent Company, the Company and/or
      any
      Subsidiary as a result of such action.

     

    10.8.  
        Obligations
      to Company.
      If a
      Participant becomes entitled to a payment of benefits under the Plan, and if
      at
      such time the Participant has out-standing any debt, obligation, or other
      liability representing an amount owing to the Parent Company, the Company and/or
      any Subsidiary, then the Parent Company, the Company and/or any Subsidiary
      may
      offset such amount owed to it against the amount of benefits otherwise
      distributable. Such determination shall be made by the Plan Administrator in
      its
      sole discretion.

     

    10.9.  
        No
      Liability for Action or Omission.
      Neither
      the Parent Company, the Company, any Subsidiary nor any Director, officer or
      employee of the Parent Company, the Company and/or any Subsidiary shall be
      responsible or liable in any manner to any Participant, Beneficiary or any
      person claiming through them for any benefit or action taken or omitted in
      connection with the granting of benefits, the continuation of benefits, or
      the
      interpretation and administration of this Plan.

     

    10.10.
        Nonalienation
      of Benefits. Except
      as
      otherwise specifically provided herein, all
      amounts
      payable hereunder shall be paid only to the person or persons designated by
      the
      Plan and not to any other person or corporation. No part of a Participant’s
      Account shall be liable for the debts, contracts, or engagements of any
      Participant, his or her Beneficiary, or successors in interest, nor shall such
      accounts of a Participant be subject to execution by levy, attachment, or
      garnishment or by any other legal or equitable proceeding, nor shall any such
      person have any right to alienate, anticipate, commute, pledge, encumber, or
      assign any benefits or payments hereunder in any manner whatsoever. If any
      Participant, Beneficiary or successor in interest is adjudicated bankrupt or
      purports to anticipate, alienate, sell, transfer, assign, pledge, encumber
      or
      charge any payment from the Plan, voluntarily or involuntarily, the Plan
      Administrator, in its discretion, may cancel such payment (or any part thereof)
      to or for the benefit of such Participant, Beneficiary or successor in interest
      in such manner as the Plan Administrator shall direct. Notwithstanding
      the foregoing, all or a portion of a Participant’s Account may be awarded to an
“alternate payee” (within the meaning of Section 206(d)(3)(K) of ERISA) if and
      to the extent so provided in a judgment, decree or order that, in the Plan
      Administrator’s sole discretion, would meet the applicable requirements for
      qualification as a “qualified domestic relations order” (within the meaning of
      Section 206(d)(3)(B)(i) of ERISA) if the Plan were subject to the provisions
      of
      Section 206(d) of ERISA. 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    


    10.11.
        Liability
      for Benefit Payments.
      The
      obligation to pay or provide for payment of a benefit hereunder to any
      Participant or his or her Beneficiary shall, at all times, be the sole and
      exclusive liability and responsibility of the adopting employer of the
      particular Participant. 

     

    10.12.
        Governing
      Law.
      This
      Plan shall be construed in accordance with and governed by the laws of the
      State
      of Texas to the extent not superseded by federal law, without reference to
      the
      principles of conflict of laws.

     

    10.13.   Severability
      of Provisions.
      If any
      provision of this Plan shall be held invalid or unenforceable, such invalidity
      or unenforceability shall not affect any other provisions hereof, and this
      Plan
      shall be construed and enforced as if such provisions had not been
      included.

     

    10.14.
        Headings
      and Captions.
      The
      headings and captions herein are provided for reference and convenience only,
      shall not be considered part of the Plan, and shall not be employed in the
      construction of the Plan.

     

    10.15.
        Gender,
      Singular and Plural.
      All
      pronouns and any variations thereof shall be deemed to refer to the masculine,
      feminine, or neuter, as the identity of the person or persons may require.
      As
      the context may require, the singular may read as the plural and the plural
      as
      the singular.

     

    10.16.
        Notice.
      Any
      notice or filing required or permitted to be given to the Plan Administrator
      under the Plan shall be sufficient if in writing and hand delivered, or sent
      by
      registered or certified mail, to the Plan Administrator, c/o Orthofix, Inc.,
      1720 Bray Central Drive, McKinney, Texas 75069 or to such other person or entity
      as the Plan Administrator may designate from time to time. Any notice required
      or permitted to be given to the Participant under the Plan shall be sufficient
      if in writing and hand delivered, or sent by registered or certified mail,
      to
      the Participant at his or her address as on file with the Parent Company, the
      Company or any Subsidiary, as the case may be. Any such notices shall be deemed
      given as of the date of delivery, or, if delivery is made by mail, as of the
      date shown on the postmark on the receipt for registration or
      certification.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    


    10.17.
        Amendment
      and Termination.
      The Plan
      may be amended, suspended, or terminated at any time by the Company or by the
      Plan Administrator in its sole discretion; provided, however, that no such
      amendment, suspension or termination shall result in any reduction in the value
      of a Participant’s Accounts determined as of the effective date of such
      amendment. In addition, the Plan, and/or the terms of any election made
      hereunder, may be amended at any time and in any respect by the Company or
      by
      the Plan Administrator if and to the extent recommended by counsel in order
      to
      avoid the imposition of any additional tax under Code Section 409A. In the
      event
      of any suspension or termination of the Plan, payment of Participants’ Accounts
      shall be made under and in accordance with the terms of the Plan and the
      applicable elections (except that the Plan Administrator may determine, in
      its
      sole discretion, to accelerate payments to all Participants if and to the extent
      that such acceleration is permitted under Code Section 409A and regulations
      thereunder).

     

     

    
      	 	 	
              ORTHOFIX
                HOLDINGS, INC.

            
	 	 	 
	 	
              By:
                  

            	
              /s/
                Alan W. Milinazzo

            
	 	 	 
	 	
              Title:
                  

            	
              Director

            
	 	 	 
	 	
              Date:  
                

            	
              January
                1, 2007

            


    

     

     

    18