Document:

ORTHOFIX INTERNATIONAL N.V.

                             STAFF SHARE OPTION PLAN
                           (as amended March 9, 1999)

1.   Purpose and Background

         This Staff Option Plan (the "Plan") is intended to provide an incentive
to certain officers, employees, directors and consultants of Orthofix
International N.V. (the "Company") and its subsidiaries to increase their
interest in the Company's success by offering them an opportunity to obtain a
proprietary interest in the Company through the grant of options ("Options") to
purchase Common Shares of the Company.

         The Plan is being restated as of March 31, 1992 (the "Restatement
Date") and is being submitted for ratification by the Company's shareholders in
connection with the public offering in the United States of up to 3,737,500 of
the Company's Common Shares (the "Initial Public Offering") and the related
repurchase by the Company of certain of its outstanding shares and declaration
of a stock dividend and stock split, as a result of which 8,212,386 Common
Shares (before completion of the Initial Public Offering) will be outstanding
(such repurchase of shares, stock dividend and stock split are collectively
referred to as the "Recapitalization"). The number of shares subject to
outstanding Options and the exercise price of such Options and certain other
terms of Options under the Plan are being adjusted to take account of the
Initial Public Offering and the Recapitalization and all reference herein
thereto are on a post-Recapitalization basis.

         Prior to the Restatement Date, the Company had granted Options under
the Plan to purchase an aggregate of 665,700 common Shares. Set forth as Exhibit
A hereto is a schedule of each such grant, indicating the name of the officer,
employee, director or consultant to whom Options were granted, the number of
shares covered by the grant, the vesting date(s) and the relevant exercise
price.

2.   Shares Subject to the Plan

         The maximum aggregate number of Common Shares which may be issued
pursuant to Options granted under the Plan is 1,510,600. This maximum aggregate
number shall be subject to adjustment as provided in Section 9 hereof. Shares
issued upon exercise of Options may be either authorized and unissued shares or
shares held by the Company in its treasury. If Options granted hereunder expire
or terminate for any reason without having been exercised, the underlying shares
with respect thereto shall again be available for grants of further Options
under the Plan.

         As of the Restatement Date, and subject to the foregoing provisions
concerning expiration and forfeiture, there remained 42,000 Common Shares
available for future grants of Options.

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3.   Administration

         The Board of Directors of the Company (the "Board") will administer the
Plan, provided, however, that the Board may designate persons other than its
members to carry out its responsibilities under such conditions or limitations
as it may set. Subject to the provisions of the Plan and applicable law, the
Board, acting in its sole and absolute discretion, shall have full power and
authority to interpret the Plan and notices of awards made under the Plan, to
supervise the administration of the Plan, and to take such other action as may
be necessary or desirable in order to carry out the provisions of the Plan, but
in no event shall any such action adversely affect the rights of an optionee
over Options previously granted. The decisions of the Board as to any disputed
question, including questions of construction, interpretation and
administration, shall be final and conclusive on all persons.

         The options shall be entered in a register, kept by or on behalf of the
Board.

4.   Eligibility

         Options may be granted to officers, other employees, directors and
consultants of the Company or any of its Subsidiaries (as such term is defined
in Section 6(d)), or to such other persons whom the Board determines are in a
position to contribute to the success of the Company. The Board shall have the
authority to select the persons to whom Options may be granted and to determine
the number and terms of Options to be granted to each such person. Under this
Plan, references to "employment", "employed", etc. include optionees who are
consultants of the Company.

5.   Terms and Conditions of Options

         Each Option granted under the Plan shall be evidenced by a written
notice of option grant containing the following terms and conditions (or
incorporating by reference the relevant terms and conditions set forth herein):

         (a) Option Price. The Board shall fix the share exercise price for each
Option at the time of grant thereof. Such exercise price may, in the discretion
of the Board, be less than, equal to or greater than the fair market value of a
Common Share on the date the Option is granted. With respect to periods prior to
the completion of the Initial Public Offering (and periods following the Initial
Public Offering if the Common Shares cease to be publicly traded in the United
States), the fair market value of the Common Shares will be determined by the
Board in good faith. With respect to periods following the completion of the
Initial Public Offering, and for so long as the Common Shares are publicly
traded in the United States, the fair market value of a Common Share will mean
the average of the highest and lowest quoted selling price of a Common Share as
reported on the composite tape for securities listed on such national securities
exchange on which the Common Shares are traded as may be designated by the
Board, or, if the Common Shares are not listed for trading on a national
securities exchange but are quoted on an automated quotation system, on such
automated quotation system, in any such case on the valuation date (or if there
were no sales on the valuation date, the average of the highest and the lowest
quoted selling prices as

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reported on said composite tape or automated quotation system for the most
recent day during which a sale occurred).

         All Options granted prior to the Restatement Date were granted with a
per share exercise price equal to the fair market value of a Common Share as of
the date of grant, as determined by the Board.

         (b) Expiration. Unless otherwise determined by the Board at the time of
grant, each Option granted under the Plan shall expire on a date specified in
the written notice of option relating to such Option, provided, however, that
such date shall be no later than the 10 year anniversary of the date of grant of
the Option, to the extent not previously exercised or otherwise terminated
earlier in accordance with Section 6.

         (c) Vesting. The Board shall establish a vesting schedule for each
Option at the time of grant. The vesting schedules applicable to Options granted
prior to the Restatement Date are indicated on Exhibit A hereto. Subject to the
other terms and conditions of this Plan, Options shall be exercisable to the
extent, and only to the extent they have vested.

         (d) Exercise. Subject to Sections 5(e) and 5(g) hereof, an Optionee may
exercise all or any portion of an Option (to the extent vested) by giving
written notice to the Company, provided, however, that no less than 100 shares
may be purchased upon any exercise of the Option unless the number of shares
purchased at such time is the total number of shares in respect of which the
Option is then exercisable, and provided, further, that in no event shall an
Option be exercisable for a fractional share. The date of exercise of an Option
shall be the later of (i) the date on which the Company receives such written
notice or (ii) the date on which the conditions provided in Sections 5(e) and
5(g) are satisfied.

         (e) Payment. Prior to the issuance of a certificate pursuant to Section
5(g) hereof evidencing the Common Shares in respect of which all or a portion of
an Option shall have been exercised, the Optionee shall have paid to the Company
the option 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 or in such other
currency as the Company may accept for such purposes or, in the discretion of
the Board, payment may be made by tendering Common Shares already owned by the
Optionee valued at their fair market value (determined in accordance with
Section 5(a)), or in any combination of cash or such shares as the Board in its
sole discretion may approve.

         (f) Rights as a Shareholder. No Common Shares shall be issued in
respect of the exercise of an Option until full payment therefor has been made.
The holder of an Option shall have no rights as a shareholder with respect to
any shares covered by an Option until the date a certificate for such shares is
issued to him or her. Except as otherwise provided herein, no adjustments shall
be made for dividends or distributions of other rights for which the record date
is prior to the date such share certificate is issued.

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         (g) Issuance of Share Certificates. Subject to the foregoing
conditions, as soon as is reasonably practicable after its receipt of a proper
notice of exercise and payment of the option price for the number of shares with
respect to which an Option is exercised, the Company shall deliver to the
optionee (or following the optionee's death, such other person entitled to
exercise the Option), at the principal office of the Company or at such other
location as may be acceptable to the Company and the optionee (or such other
person), one or more stock certificates for the appropriate number of Common
Shares issued in connection with such exercise. Such shares shall be fully paid
and nonassessable and shall be issued in the name of the optionee (or such other
person).

         (h) Transferability of Options. No Option granted under the Plan shall
be assignable or transferable except by will and/or by the laws of descent and
distribution, and each such Option shall be exercisable during the optionee's
lifetime only by him or her.

6.   Termination of Employment

         (a) Forfeiture of Unvested Portion of Options upon Termination of
Employment. Except in the case of death or Permanent Disability (as such terms
are defined herein) of an optionee, if an optionee's employment with the Company
and its Subsidiaries terminates for any reason prior to the satisfaction of any
vesting period requirement under Section 5(c) hereof, the unvested portion of
the Option shall be forfeited to the Company, and the optionee shall have no
further right or interest therein, provided, however, that if an optionee's
employment is terminated by the Company or one of its Subsidiaries other than
for Cause (as such term is defined herein), Options previously granted to the
optionee shall be considered vested with respect to the aggregate number of
shares as to which such Options would have been vested as of December 31, of the
year in which such termination of employment occurs.

         (b) Exercise Following Termination of Employment. If an optionee's
employment with the Company and its Subsidiaries terminates for any reason other
than death or Permanent Disability after an Option has vested in accordance with
Section 5(c) hereof with respect to all or a portion of the Common Shares
subject to the Option, the optionee shall have the right, subject to the terms
and conditions of the Plan and the notice of award, to exercise the Option, to
the extent it has vested as of the date of such termination of employment, at
any time within 180 days after the date of such termination, subject to the
earlier expiration of the Option as provided in Section 5(b).

         (c) Exercise Following Death or Permanent Disability. If an optionee's
employment with the Company and its Subsidiaries terminates by reason of death
or Permanent Disability prior to the satisfaction of any vesting period
requirement under Section 5(c) hereof, Options granted to the optionee shall be
deemed to have vested in full as of the date of termination of employment due to
death or Permanent Disability. In the event of Permanent Disability, the
optionee or his designated personal representative may exercise his or her
Options within one year after the date of termination of employment, subject to
the earlier expiration of such Options as provided in Section 5(b). In the event
of an optionee's death while employed by the Company or one of its Subsidiaries
or otherwise within the period of time after termination of employment during
which the optionee was entitled to

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exercise an Option, the Options granted to such optionee may be exercised by his
or her estate, personal representative or beneficiary within one year after the
date of death, subject to the earlier expiration of the Option as provided in
Section 5(b).

         (d) Definitions. For the purpose of this Plan, the following terms
shall have the meanings specified below:

             (i) Termination of Employment. The employment of an optionee shall
         be deemed terminated if the optionee is no longer employed by the
         Company or any of its Subsidiaries for any reason. The Board shall have
         discretion to determine whether an authorized leave of absence (as a
         result of disability or otherwise) shall constitute a termination of
         employment for purposes of the Plan.

             (ii) Permanent Disability. "Permanent Disability" means termination
         of an optionee's employment as a result of a physical or mental
         incapacity which substantially prevents the optionee from performing
         his or her duties as an employee and that has continued at least 180
         days and can reasonably be expected to continue indefinitely. Any
         dispute as to whether or not an optionee is disabled within the meaning
         of the preceding sentence shall be resolved by a physician selected by
         the Board.

             (iii) Cause. "Cause" means termination of an optionee's employment
         because of the optionee's (i) involvement in fraud, misappropriation or
         embezzlement related to the business or property of the Company or (ii)
         conviction for, or guilty plea to, a felony or crime of similar gravity
         in the jurisdiction which such conviction or guilty plea occurs or
         (iii) unauthorized disclosure of any trade secrets or other
         confidential information relating to the Company's business and affairs
         (except to the extent such disclosure is required under the applicable
         law).

             (iv) Subsidiary. "Subsidiary" means any corporation or other entity
         in which the Company directly or indirectly owns stock or other
         securities possessing 50% or more of the total combined voting power of
         all classes of stock and other securities of such corporation or other
         entity.

         (e) Board Authority. The Board shall have the authority, in its
discretion, to vary or waive the terms of this Section 6 as they apply to any
optionee whose employment with the Company and its Subsidiaries terminates for
any reason.

7.   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 an Option, to require the optionee to remit to the Company an amount
sufficient to satisfy any applicable tax withholding requirements. The Company
may, in its discretion, permit an optionee to satisfy, in whole or in part, such
obligation to remit taxes, by directing the Company to withhold shares that
would otherwise be received by the optionee, pursuant to such rules as the Board
may establish from time to time. The Company shall also have the right to deduct
from all

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cash payments made pursuant to or in connection with any Option any applicable
taxes required to be withheld with respect to such payments.

8.   No Restriction on Right to Effect Corporate Changes: No Right to Employment

         Neither the Plan nor the existence of any Option shall affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior preference
stocks ahead of or convertible into or otherwise affecting the Common Shares or
the rights thereof, or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

         In addition, neither the Plan nor the existence of any Option shall be
deemed to limit or restrict the right of the Company to terminate an optionee's
employment at any time, for any reason, with or without Cause.

9.   Adjustment of and Changes in Shares

         In the event of any merger, consolidation, recapitalization,
reclassification, stock split, stock dividend, distribution of property, special
cash dividend, or other change in corporate structure affecting the Common
Shares, the Board shall make such equitable adjustments, if any, as it deems
appropriate in the number and class of shares subject to, and the exercise price
of, outstanding Options granted under the Plan or available to be granted under
the Plan. The foregoing equitable adjustment shall be determined by the Board in
its sole discretion.

10.  Preemption of Applicable Laws and Regulations

         If, at any time specified in the Plan or in a notice of award under the
Plan for the issuance of Common Shares to an optionee, any law, regulation or
requirement of any governmental authority having jurisdiction shall require
either the Company or the optionee to take any action in connection with the
shares then to be issued, the issuance of such shares shall be deferred until
such action shall have been taken.

11.  Change in Control

         (a) Board Discretion. The Board, in its sole discretion, may, at any
time prior to, or coincident with or after the time of a Change in Control, take
such actions as it may consider appropriate to maintain the rights of optionees
in Options granted under the Plan, including without limitation: (i)
accelerating any time periods relating to the exercise of Options; (ii)
providing for optionees to receive, in cancellation of their outstanding
options, an amount of cash in respect of each share subject to an Option equal
to the excess of the highest per share exercise price of the relevant Option;
(iii) making such other adjustments to the Options then outstanding as the Board
deems appropriate to reflect such Change in

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Control; or (iv) causing the Options then outstanding to be assumed, or new
rights substituted therefor, by the surviving corporation in such Change in
Control.

         The Board may, in its discretion, including such further provisions and
limitations in any notice of award documenting Options as it may deem equitable
and in the best interests of the Company in the event of a Change of Control.

         (b) Definition of Change in Control. For purpose of the Plan, the
"Change in Control" means:

         (i) the acquisition by any individual, entity or group of beneficial
      ownership (within the meaning of Rule 13d-3 promulgated under the United
      States Securities Exchange Act of 1934, as amended) of 30% or more of the
      then outstanding voting securities of the Company entitled to vote
      generally in the election of directors or of equity securities having a
      value equal to 30% or more of the total value of all equity securities of
      the Company, provided, however, that the following acquisitions of shares
      or other securities shall not constitute a Change in Control: (I) any
      acquisition directly from the Company, (II) any acquisition by the
      Company, (III) any acquisition by an employee benefit plan (or related
      trust) sponsored or maintained by the Company or any of its affiliates or
      (IV) any acquisition by any individual, entity or group who owned Common
      Shares as of the date prior to the effective date of the Company's
      registration statement on Form F-1 relating to the Initial Public
      Offering; or

         (ii) individuals who as of the effective date of the Initial Public
      Offering constitute the Board (the "Incumbent Board") cease for any reason
      to constitute at least a majority of the Board, except that any director
      whose election or nomination for election was approved by the vote of at
      least a majority of directors then comprising the Incumbent Board shall be
      considered as though such individual were a member of the Incumbent Board,
      but excluding for this purpose any individual whose initial assumption of
      office occurs as the result of either an actual or threatened election
      contest of other actual or threatened solicitation of proxies or consents
      by or on behalf of a person other than the Board.

12.  Amendment and Termination of the Plan

         The Board may amend or terminate the Plan. Except as otherwise provided
in the Plan with respect to equity changes, any amendment which would increase
the aggregate number of Common Shares as to which Options may be granted under
the Plan shall be subject to the approval of the holders of a majority of the
Common Shares issued and outstanding. No amendment or termination may adversely
affect any outstanding Option without the written consent of the optionee.

12.  Application of Funds

         The proceeds received by the Company from the sale of Common Shares
pursuant to Options will be used for general corporate purposes.

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14.  Governing Law

         The Plan and each Option hereunder shall be governed by the laws of the
Netherlands Antilles.

15.  Term of the Plan

         Unless earlier terminated pursuant to Section 12, the Plan will
terminate on June 30, 2002. The rights of optionees under Options outstanding at
the time of the termination of the Plan shall not be affected solely by reason
of the termination and shall continue in accordance with the terms of the
relevant Options.

                                        8Form of Performance Accelerated
                                                   Stock Option Agreement (PASO)

                             PERFORMANCE ACCELERATED
                             STOCK OPTION AGREEMENT

         THIS AGREEMENT, dated as of the ____ day of ____, ____ by and between
Orthofix International N.V. (the "Company") and ____________ (the "Optionee").

                                   WITNESSETH:

         WHEREAS, the Optionee is an employee of the Company, and the Company
wishes to grant the Optionee options to purchase shares of the Company's Common
Shares, par value US $0.10 per share ("Stock"), on the terms and conditions set
forth herein.

         NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:

     SECTION 1. Definitions. For the purpose of this Agreement, the following
terms shall have the meanings specified below:

         (a) "Board" means the Board of Directors of the Company.

         (b) "Cause" means termination of the Optionee's employment because of
the Optionee's (i) involvement in fraud, misappropriation or embezzlement
related to the business or property of the Company or (ii) conviction for, or
guilty plea to, a felony or crime of similar gravity in the jurisdiction which
such conviction or guilty plea occurs or (iii) unauthorized disclosure of any
trade secrets or other confidential information relating to the Company's
business and affairs (except to the extent such disclosure is required under the
applicable law).

         (c) "Change in Control" means:

                  (i) the acquisition by any individual, entity or group of
         beneficial ownership (within the meaning of Rule 13d-3 promulgated
         under the United States Securities Exchange Act of 1934, as amended) of
         30% or more of the then outstanding voting securities of the Company
         entitled to vote generally in the election of directors or of equity
         securities having a value equal to 30% or more of the total value of
         all equity securities of the Company, provided, however, that the
         following acquisitions of shares or other securities shall not
         constitute a Change in Control: (I) any acquisition directly from the
         Company, (II) any acquisition by the Company, (III) any acquisition by
         an employee benefit plan (or related trust) sponsored or maintained by
         the Company or any of its affiliates or (IV) any acquisition by any
         individual, entity or group who owned Common Shares as of the date
         prior to the effective date of the Company's registration statement on
         Form F-1 relating to the public offering in the United States of up to
         3,737,500 of the Company's Stock (the "Initial Public Offering"); or

<PAGE>

                  (ii) individuals who as of the effective date of the Initial
         Public Offering constitute the Board (the "Incumbent Board") cease for
         any reason to constitute at least a majority of the Board, except that
         any director whose election or nomination for election was approved by
         the vote of at least a majority of directors then comprising the
         Incumbent Board shall be considered as though such individual were a
         member of the Incumbent Board, but excluding for this purpose any
         individual whose initial assumption of office occurs as the result of
         either an actual or threatened election contest of other actual or
         threatened solicitation of proxies or consents by or on behalf of a
         person other than the Board.

         (d) "Expiration Date" means the date that is the 10 year anniversary of
the Grant Date.

         (e) "Permanent Disability" means termination of the Optionee's
employment as a result of a physical or mental incapacity which substantially
prevents the Optionee from performing his or her duties as an employee of the
Company and that has continued at least 180 days and can reasonably by 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 Board.

     SECTION 2. Grant of Option. Subject to the terms and conditions set forth
in this Agreement, the Company hereby grants to the Optionee, during the period
commencing on ______________ (the "Grant Date") and ending on the tenth
anniversary of the Grant Date (the "Option Period"), an option to purchase from
the Company ________ shares of Stock at an exercise price of _______ per share,
which equals the price of the Stock on __________, the date on which the
Option was approved by the Company's shareholders (the "Option").

     SECTION 3. Limitations on Exercise of Option. Subject to the terms and
conditions set forth in this Agreement, the Option shall be subject to the
following vesting and exercisability requirements:

         (a) All shares subject to the Option shall vest and become fully
exercisable on the ______ anniversary of the Grant Date and shall be exercisable
thereafter until and including the Expiration Date. Notwithstanding the
foregoing, _____ shares subject to the Option shall be eligible for accelerated
vesting as of the first anniversary of the Grant Date; and an additional ______
shares subject to the Option shall be eligible for accelerated vesting on the
_____________________ anniversaries of the Grant Date, subject to the
attainment of the following stock price targets: each ___ increase in the market
price of the Stock above $__ (each a "Stock Price Target") that is attained
during each one-year period beginning on the Grant Date and ending on each of
the first ____ anniversaries of the Grant Date (each such date a "Grant Date
Anniversary") shall, without duplication for Options vested in prior years,
result in one-eighth of the shares subject to the Option and that are eligible
for accelerated vesting in such year to vest effective as of the applicable
Grant Date Anniversary; provided, however, that no portion of the Option shall
be exercisable prior to __________. As soon as practicable after each Grant
Date Anniversary, the Board shall determine the number of Stock Price Target
increases attained during the one-year period preceding such Grant Date
Anniversary. For purposes of the Stock

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Price Target increase determination, the Board shall assume that the market
price of the Stock was ___ on the first day of each one-year period.

Based on the foregoing, if, on any Grant Date Anniversary, the number of Stock
Price Target increases on such Grant Date Anniversary is equal to or exceeds the
number of Stock Price Target increases attained on the previous Grant Date
Anniversary, then the number of Options vested during the one-year period ending
on such Grant Date Anniversary shall equal (A) less (B), where:

                    (A) equals the product of (x) the shares eligible
                    for accelerated vesting on such Grant Date
                    Anniversary and (y) the product of a fraction,
                    the numerator of which is the total number of
                    Stock Price Targets attained during the one-year
                    period ending on such Grant Date Anniversary
                    (which, for purposes of this calculation, assumes
                    the market price of the Stock was ___ on the
                    first day of such one-year period), and the
                    denominator of which is 8, and

                    (B) equals the total number of Option shares
                    previously vested.

In the circumstance described in the preceding paragraph, the total number of
vested Option shares on any Grant Date Anniversary shall equal the sum of (A)
and (B) (each as determined above) (the "Grant Date Anniversary Vested Shares").

If, on any Grant Date Anniversary, the number of Stock Price Target increases
during the one-year period ending on such Grant Date Anniversary is less than
the number of Stock Price Target increases attained on the previous Grant Date
Anniversary, then the number of vested Option shares during such one-year period
shall equal the product of (x) _______, and (y) the product of a fraction, the
numerator of which is the total number of Stock Price Targets attained during
the one-year period ending on the Grant Date Anniversary (which, for purposes of
this calculation, assumes the market price of the Stock was ___ on the first day
of such one-year period), and the denominator of which is 8. In the circumstance
described in the preceding sentence, the total number of vested Option shares on
any Grant Date Anniversary shall equal the sum of (aa) the Grant Date
Anniversary Vested Shares (as of the preceding Grant Date Anniversary) and, (bb)
the number of vested Option shares determined pursuant to the immediately
preceding sentence.

         EXAMPLE

         o   If during the first year the price of the Stock exceeded ___, then
             2 of the 8 Stock Price Targets would have been met.

         o   By multiplying the total number of Option shares eligible for
             vesting (______ in year one from above) and the number of Stock
             Price Targets met in that year, the number of Option shares
             that would vest would be ______________.

         o   Continuing the example, if during year two the stock price exceeds
             ___, then 4 of 8 Stock Price Targets would have been met. The
             number of Option shares vesting in year two would be ___________,
             less __________ Option

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             shares vested in year one = ______, bringing the total number of
             Option vested Option shares to _________________.

         o   If the number of Stock Price Targets met in any given year is less
             than the number of Stock Price Targets met in any prior year, the
             number of Option shares vesting would be determined by multiplying
             the number of Option shares eligible for vesting in that year by
             the number of Stock Price Targets met in that year. Prior vested
             Option shares are not affected in any way. Continuing the example,
             if in year three, the stock price does not exceed ___, then only 2
             of 8 Stock Price Targets would have been met in that year,
             and thus only ______ additional Option shares will vest, bringing
             the total number of vested Option shares to ______________________.

         (b) The number of Stock Price Targets attained during any one-year
period ending on a Grant Date Anniversary shall be determined based upon the
highest market price attained during such one-year period for at least ten
consecutive trading days on the National Association of Securities Dealers
Automated Quotation Market System ("NASDAQ"), or on the principal securities
exchange on which the Stock is then traded (the "Sustained Trading Period").

         (c) Shares subject to the Option that vest pursuant to Section 3(a)
shall become exercisable on each Grant Date Anniversary and, subject to Section
4, shall remain exercisable until the Expiration Date; provided that no vested
Option shares shall be exercisable prior to _______________.

         (d) If the market price of a share of Stock equals or exceeds ____ for
the Sustained Trading Period at any time on or before ________________, the
Option shall vest pursuant to the requirements of Section 3(a), provided that
all shares subject to the Option shall be fully vested and exercisable on
_________________.

     SECTION 4. Termination of Employment or Change in Control.

         (a) If, prior to the Expiration Date, the Optionee shall cease to be
employed by the Company by reason of a Permanent Disability, the Option shares
shall remain exercisable until the earlier of the Expiration Date or one year
after the date of cessation of employment to the extent the Option shares were
exercisable as of the date of the Optionee's termination of employment by reason
of a Permanent Disability.

         (b) If, prior to the Expiration Date, the Optionee shall enter
retirement (in accordance with any qualified retirement plan maintained by the
Company) from employment or cease to be employed by the Company by reason of
death, or the Optionee shall die while entitled to exercise any of the Options
pursuant to Section 4(a) or the final sentence of Section 4(c), the executor or
administrator of the estate of the Optionee or the person or persons to whom the
Option shares shall have been validly transferred by the executor or
administrator pursuant to will or the laws of descent and distribution shall
have the right, until the earlier of the Expiration Date or one year after the
date of retirement or death, to exercise the Option shares to the extent that
the Optionee was entitled to exercise them on the date of death, subject to any
other limitation contained herein on the exercise of the Option shares in effect
on the date of exercise.

                                       - 4 -
<PAGE>

         (c) If the Optionee voluntarily terminates employment with the Company
for reasons other than death, Permanent Disability, or retirement (a "Voluntary
Termination"), or if the Optionee's employment with the Company is terminated
for Cause, the Option shares, to the extent not exercised prior to such
termination, shall lapse and be canceled. If the Company terminates the
Optionee's employment without Cause, the Option shares, to the extent
exercisable as of the date of Optionee's termination, shall continue to be
exercisable until the earlier of the Expiration Date or 90 days after the date
of such termination.

         (d) Whether employment has been or could have been terminated for the
purposes of this Agreement, and the reasons therefore, shall be determined by
the Board, whose determination shall be final, binding and conclusive.

         (e) After the expiration of any exercise period described in either of
Section 4(a), 4(b) or 4(c) hereof, the Option shares shall terminate together
with all of the Optionee's rights hereunder, to the extent not previously
exercised. Except as set forth herein, all vesting with respect to the Option
shares shall cease upon the Optionee's termination of employment and all Option
shares to the extent unvested as of the Date of Termination shall expire.

         (f) Notwithstanding the vesting and exercise requirements of Section 3,
in the event of a Change in Control, the Option shares shall become fully vested
and exercisable.

     SECTION 5. Method of Exercising Option.

         (a) Upon becoming exercisable pursuant to Section 3 hereof, the Option
shares may be exercised, in whole or in part, by delivery of written notice of
exercise to the Board accompanied by payment of the full exercise price. The
exercise price may be payable in (i) in immediately available funds in United
States dollars or in such other currency as the Company may accept for such
purposes, by certified or bank cashier's check, (ii) by surrender to the Company
of shares of Stock which have been held by the Optionee for at least six months,
(iii) by a combination of cash and shares of Stock, or (iv) by any other means
approved by the Board.

         (b) At the time of exercise, (i) the Company shall have the right to
withhold from the number of shares of Stock to be issued upon exercise or (ii)
at the discretion of the Board, the Optionee shall be obligated to pay to the
Company such amount, as the Company deems necessary to satisfy its obligation to
withhold all applicable taxes incurred by reason of the exercise or the transfer
of shares thereupon.

     SECTION 6. Issuance of Share Certificates. As soon as is reasonably
practical after its receipt of a proper notice of exercise and payment of the
option price for the number of shares with respect to which an Option is
exercised, the Company shall deliver to the Optionee, at the principal office of
the Company or at such other location as may be acceptable to the Company and
the Optionee, one or more stock certificates for the appropriate number of
shares of Stock issued in connection with such exercise. Such shares shall be
fully paid and nonassessable and shall be issued in the name of the Optionee.

     SECTION 7. Optionee. Whenever the word "Optionee" is used in any provision
of this Agreement under circumstances where the provision should logically be
construed to apply to

                                     - 5 -
<PAGE>

the executors, the administrators, or the person or persons to whom the Option
may be transferred by will or by the laws of descent and distribution, the word
"Optionee" shall be deemed to include such person or persons.

     SECTION 8. Non-Transferability. The Option is not transferable by the
Optionee otherwise than by will or the laws of descent and distribution and are
exercisable during the Optionee's lifetime only by Optionee. No assignment or
transfer of the Option, or of the rights represented thereby, whether voluntary
or involuntary, by operation of law or otherwise (except by will or the laws of
descent and distribution), shall vest in the assignee or transferee any interest
or right herein whatsoever, but immediately upon such assignment or transfer the
Option shall terminate and become of no further effect.

     SECTION 9. Rights as Stockholder. No shares of Stock shall be issued in
respect of the exercise of an Option until full payment therefor has been made.
The holder of an Option shall have no rights as a shareholder with respect to
any shares covered by an Option until the date a certificate for such shares is
issued to him or her. Except as otherwise provided herein, no adjustments shall
be made for dividends or distributions of other rights for which the record date
is prior to the date such share certificate is issued.

     SECTION 10. No Restriction on Right to Effect Corporate Changes; No Right
                 to Employment.

         (a) Neither the Plan nor the existence of any Option shall affect in
any way the right or power of the Company or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or convertible into or otherwise affecting the
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.

         (b) In addition, the existence of any Option shall not be deemed to
limit or restrict the right of the Company to terminate an Optionee's employment
at any time, for any reason, with or without Cause.

     SECTION 11. Adjustment of and Changes in Stock. In the event of any merger,
consolidation, recapitalization, reclassification, stock split, stock dividend,
distribution of property, special cash dividend, or other change in corporate
structure affecting the Stock, the Board shall make such equitable adjustments,
if any, as it deems appropriate in the number and class of shares subject to,
and the exercise price of, outstanding Options granted under the Plan or
available to be granted under the Plan. The foregoing equitable adjustment shall
be determined by the Board in its sole discretion.

     SECTION 12. Compliance with Law. Notwithstanding any of the provisions
hereof, the Optionee hereby agrees that Optionee will not exercise the Option,
and that the Company will not be obligated to issue or transfer any shares to
the Optionee hereunder, if the exercise hereof or the issuance or transfer of
such shares shall constitute a violation by the Optionee or the

                                     - 6 -
<PAGE>

Company of any provisions of any law or regulation of any governmental
authority. Any determination in this connection by the Board shall be final,
binding and conclusive.

     SECTION 13. Tax Withholding.  The Optionee agrees as a condition of this
Agreement, to pay to the Company, or make arrangements satisfactory to the
Company regarding payment to the Company of, the aggregate amount of federal,
state and local income and payroll taxes that the Company is required to
withhold in connection with the exercise of the Option.

     SECTION 14. Notice. Every notice or other communication relating to this
Agreement shall be in writing, and shall be mailed to or delivered to the party
for whom it is intended at such address as may from time to time be designated
by it in a notice mailed or delivered to the other party as herein provided,
provided that, unless and until some other address be so designated, all notices
or communications by the Optionee to the Company shall be mailed or delivered to
the Company at its principal executive office, and all notices or communications
by the Company to the Optionee may be given to the Optionee personally or may be
mailed to Optionee at the Optionee's last known address, as reflected in the
Company's records.

     SECTION 15. Non-Qualified Option. The Option is not an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended.

     SECTION 16. Binding Effect. Subject to Section 7 hereof, this Agreement
shall be binding upon the heirs, executors, administrators and successors of the
parties hereto.

     SECTION 17. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the Netherlands Antilles.

     SECTION 18. Signature in Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

                                      * * *

                                     - 7 -
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                    ORTHOFIX INTERNATIONAL N.V.

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

                                    -------------------------------------
                                    Optionee

                                     - 8 -

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