Document:

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                              EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is entered into by and between Orthofix
Inc., a Minnesota corporation ("ORTHOFIX"), and Tom Hein ("Employee").

                                    Recitals

          ORTHOFIX desires to have the benefits of Employee's knowledge and
experience as a full-time senior executive without distraction by employment-
related uncertainties and considers such employment a vital element to
protecting and enhancing the best interests of ORTHOFIX and its parent company
Orthofix International N.V. ("OI"), and their respective affiliates, and
Employee desires to be employed full-time with ORTHOFIX.

          ORTHOFIX desires to assure itself of the continued services of
Employee, and Employee is willing to continue to render services to ORTHOFIX on
the terms and subject to the conditions set forth in this Agreement.

          In consideration of the mutual covenants set forth herein and other
good and valuable consideration, the parties agree as follows:

          1.   Term. ORTHOFIX hereby agrees to employ Employee for a minimum
    two-year period commencing on March 1, 2003 (the "Effective Date") and
    ending on March 1, 2005, unless sooner terminated as provided in Sections 5
    and 6 of this Agreement. Effective as of March 1, 2005 and March 1, 2006,
    the term of Employee's employment with ORTHOFIX shall be automatically
    extended for one additional year beyond the minimum two-year period, unless
    either party gives written notice of its or his election not to extend such
    employment at least 60 days prior to such date. In addition, if a Change of
    Control (as defined in Section 7 (d)) occurs when less than one year remains
    prior to the expiration of Employee's term of employment hereunder, such
    term shall be automatically extended until the first anniversary of the date
    on which the Change of Control first occurred. The period during which
    Employee is employed by ORTHOFIX hereunder is referred to herein as the
    "Employment Period".

          2.   Duties. Subject to the terms and conditions of this Agreement,
    Employee shall serve as the CFO of ORTHOFIX and shall exercise the
    authority and assume the responsibilities of the CFO of a company of
    the size and nature of ORTHOFIX, including without limitation such positions
    and duties with OI or its affiliates as are assigned by the Board of
    Directors of ORTHOFIX or OI. Throughout the Employment Period, Employee
    agrees to devote substantially all of Employee's time, attention and best
    efforts during normal business hours (subject to vacations, sick leave and
    other absences in accordance with policies in effect from time to time for
    executive

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    officers of ORTHOFIX prior to a Change of Control) to the performance of his
    duties. Without the prior approval of the Chief Executive Officer or the
    Board of Directors of ORTHOFIX, during the Employment Period Employee will
    not render any services as a director, trustee, officer, employee, or
    consultant to any other business or organization.

          3.   Compensation. During the Employment Period, ORTHOFIX shall
    compensate Employee for the services rendered under this Agreement as
    follows:

          (a)  A base annual salary determined by the Board of Directors or
               Compensation Committee of ORTHOFIX consistent with its practices
               for executive officers of ORTHOFIX, but not less than $231,000
               per year, payable in accordance with the customary payroll
               practices of ORTHOFIX for the payment of executive officers;

          (b)  Such bonuses under ORTHOFIX's ________ Executive Annual Incentive
               Plan, as amended, or subsequent plan, if any, as shall be
               determined by the Board of Directors or Chief Executive Officer
               of ORTHOFIX consistent with its practices for executive officers
               of ORTHOFIX;

          (c)  If Employee's base annual salary is increased at any time, it
               shall not thereafter be decreased during the Employment Period,
               unless such decrease is the result of a general reduction (on the
               same percentage basis) affecting the base salaries of
               substantially all other executive officers of ORTHOFIX and is not
               below the minimum set forth in subsection (a); and

          (d)  An automobile allowance of not less than $900 per month, or
               in such greater amount as may be payable pursuant to any
               automobile allowance plan or program maintained by ORTHOFIX for
               its executive officers.

          4.   Employee Benefits.

          (a)  During the Employment Period, Employee shall be entitled, on a
               basis commensurate with Employee's position with ORTHOFIX, to
               full participation in, and service credit for benefits as
               provided under, all life, accident, medical payment, health and
               disability insurance, retirement, pension, salary continuation,
               expense reimbursement and other employee benefit and perquisite
               policies, plans, programs and arrangements that generally are
               made available to executive officers of ORTHOFIX, except for such
               arrangements that the Board of Directors, in its sole discretion,
               shall adopt for select employees to compensate them for special
               or extenuating circumstances.

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          (b)  During the Employment Period, Employee shall be entitled to
               annual vacation leave, at full pay, as may be provided by
               ORTHOFIX's vacation policy applicable to executive officers.

          (c)  During the Employment Period, Employee shall be entitled to
               participate in all bonus, incentive, profit-sharing, stock
               option, stock purchase, stock appreciation, discretionary pay or
               similar policies, plans, programs and arrangements of ORTHOFIX
               that generally are made available to executive officers of
               ORTHOFIX.

          (d)  Nothing in this Agreement shall limit in any Employee's
               participation in any other benefit plans or arrangements as are
               from time to time approved by ORTHOFIX.

          5.   Termination by ORTHOFIX. Employee's employment hereunder
    may be terminated by ORTHOFIX during the Employment Period without any
    breach of this Agreement, and Employee will not be entitled to the benefits
    provided by Sections 7 and 8 hereof, only under the following circumstances:

          (a)  Death, Total Disability or Retirement. Employee's employment
               shall be deemed terminated by ORTHOFIX upon Employee's death or
               retirement. In addition, if as a result of Employee's incapacity
               resulting from physical or mental illness or disease that is
               likely to be permanent, Employee shall have been unable to
               perform Employee's duties hereunder for a period of more than 120
               consecutive days during any 12-month period, and Employee is
               qualified and eligible to receive disability benefits under the
               long-term disability plan then in effect for executive officers
               of ORTHOFIX, ORTHOFIX may terminate Employee's employment
               hereunder.

          (b)  Cause. ORTHOFIX may terminate Employee's employment hereunder for
               cause, which for purposes of this Agreement shall be defined to
               mean (i) the willful and continued failure by Employee to follow
               the reasonable instructions of the Board of Directors or Chief
               Executive Officer of ORTHOFIX after written notice of such
               failure has been given to Employee by the Board of Directors or
               Chief Executive Officer of ORTHOFIX; (ii) the willful commission
               by Employee of acts that are dishonest and demonstrably and
               materially injurious to ORTHOFIX, OI or their affiliates,
               monetarily or otherwise; (iii) the commission by Employee of a
               felonious act; (iv) drug addiction, (v) intentional wrongful
               disclosure of Confidential Information (as defined in Section 14)
               or (vi) intentional wrongful engagement in any Competitive
               Activity (as defined in Section 13).

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          The termination of Employee's employment by ORTHOFIX during the
     Employment Period for any reason other than those specified in this
     Section 5 shall be deemed to be a termination without cause. No breach or
     default by Employee shall be deemed to have occurred hereunder unless
     written notice thereof shall have been given by ORTHOFIX to Employee within
     60 days after ORTHOFIX first learns of such breach or default and it is not
     cured within 30 days after notice thereof is given to Employee.

          6.   Termination by Employee. Employee shall be entitled to terminate
    Employee's employment, with the right to severance compensation and benefits
    as provided in this Agreement, during the Employment Period for Good Reason;
    provided, that Employee terminates Employee's employment with ORTHOFIX not
    later than 90 days following the occurrence of the event constituting Good
    Reason. For purposes of this Agreement, "Good Reason" means the occurrence
    of any of the following:

          (a)  Without the express written consent of Employee, any duties are
               assigned to Employee that are materially inconsistent with
               Employee's position, duties and status with ORTHOFIX or OI as
               contemplated by this Agreement;

          (b)  Any action by ORTHOFIX or OI that results in a material adverse
               change in the nature or scope of the position, duties,
               authorities, responsibilities or functions of Employee with
               ORTHOFIX or OI as contemplated by this Agreement, except for
               strategic reallocations of the personnel reporting to Employee;

          (c)  (i) The base annual salary of Employee, as the same may hereafter
               be increased from time to time, is reduced, unless the reduction
               is a general reduction (on the same percentage basis) affecting
               the base salaries of substantially all other executive officers
               of ORTHOFIX provided, however, that Employee's salary may not be
               reduced below the minimum stated in Section 3(a); (ii) there is a
               change or termination of Employee's right to participate, on a
               basis substantially consistent with practices applicable to
               executive officers of ORTHOFIX generally on the Effective Date,
               in any policy, plan, program or arrangement of the type referred
               to in Section 4(c) of this Agreement; or (iii) there is a
               termination or denial of Employee's right, on a basis
               substantially consistent with practices applicable generally to
               executive officers of ORTHOFIX on the Effective Date, to benefits
               of the type referred to in Section 4(a) of this Agreement;

          (d)  Without limiting the generality or effect of the foregoing,
               ORTHOFIX fails to comply with any of its obligations hereunder in
               any material respect.

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     Notwithstanding the generality of the foregoing, should Employee be
     involuntarily removed without cause from any of the offices or positions he
     holds with OI as of the Effective Date; or should any of Employee's titles,
     duties, or responsibilities with OI as of the Effective Date be removed,
     reduced, diminished, or adversely affected without cause; or should the
     securities of OI cease to be publicly traded in the United States due to a
     merger, acquisition, or other transaction; or should all or substantially
     all of the assets of OI (representing fifty percent or more of OI's sales
     for its most recently completed fiscal year) be sold in a transaction or
     series of related transactions, Employee shall be entitled to terminate his
     employment for Good Reason and enjoy the benefits therefrom provided in
     this Agreement.

          7.   Severance Payment after Change of Control.

          (a)  If, during the Employment Period and following the occurrence of
               a Change of Control, ORTHOFIX terminates Employee's employment
               without cause or an event occurs as a result of which Employee
               terminates Employee's employment pursuant to Section 6 hereof,
               Employee shall be entitled to a lump sum severance payment equal
               to Employee's Base Amount (as defined in subsection (b)).

          (b)  As used in this Agreement, "Base Amount" shall mean an amount
               equal to the sum of:

               (i)   The average of Employee's annual base salary at the highest
                     rate in effect in the 90-day period immediately prior to
                     the termination of Employee's employment with ORTHOFIX and
                     Employee's annual base salary for the annual compensation
                     period immediately preceding the annual compensation period
                     in which termination of Employee's employment with ORTHOFIX
                     occurs or, if greater, the average of Employee's annual
                     base salary in effect immediately prior to the date on
                     which a Change of Control occurs and Employee's annual base
                     salary for the annual compensation period immediately
                     preceding the annual compensation period in which a Change
                     of Control occurs provided, however, that if Employee was
                     not employed by ORTHOFIX during such immediately preceding
                     compensation period, the amount included pursuant to this
                     clause shall be the greater of Employee's annual base
                     salary at the highest rate in effect in the 90-day period
                     immediately prior to (A) the termination of Employee's
                     employment with ORTHOFIX or (B) the date on which a Change
                     of Control occurs; plus

               (ii)  The average incentive compensation payable to Employee with
                     respect to the two consecutive annual incentive
                     compensation periods ending immediately prior to the
                     termination of Employee's employment with ORTHOFIX or, if
                     greater, with respect to the two consecutive annual
                     incentive compensation periods ending

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                     immediately prior to the date on which a Change of Control
                     occurs; provided, however, that if Employee was not
                     eligible to participate in ORTHOFIX's incentive
                     compensation program for such two consecutive incentive
                     compensation periods, the amount included pursuant to this
                     clause shall be the most recent incentive compensation paid
                     or payable to Employee by ORTHOFIX; plus

               (iii) The monthly automobile allowance Employee is entitled to
                     receive pursuant to Section 3(d) hereof, multiplied by 12.

          (c)  If a Change of Control shall occur, notwithstanding the terms of
               any applicable plan or arrangement to the contrary:

               (i)   Employee shall have immediate vesting of, and the immediate
                     right to exercise, all stock options and stock appreciation
                     rights theretofore granted to Employee; and

               (ii)  Any risk of forfeiture included in restricted stock grants
                     theretofore made to Employee shall immediately lapse and
                     employee shall have immediate vesting of Employee's rights
                     in all other employee benefit and compensation plans;
                     provided, however, that Employee's rights under any plan or
                     arrangement of ORTHOFIX described in Section 280G(b)(6) of
                     the Internal Revenue Code of 1986, as amended (the "Code"),
                     or any successor provision thereto, shall not be altered as
                     a result of this.

          (d)  A Change of Control shall occur, notwithstanding the terms of any
               applicable plan or arrangement to the contrary, upon any of the
               following events:

               (i)   Any person, as that term is used in Section 13(d) and
                     Section 14(d)(2) of the Securities Exchange Act of 1934, as
                     amended (the "Exchange Act"), becomes, is discovered to be,
                     or files a report on Schedule 13D or 14D-1 (or any
                     successor schedule, form or report) disclosing that such
                     person is a beneficial owner (as defined in Rule 13d-3
                     under the Exchange Act or any successor rule or
                     regulation), directly or indirectly, of securities of OI
                     representing 20% or more of the combined voting power of
                     OI's then outstanding securities entitled to vote generally
                     in the election of directors (unless such person is known
                     by Employee already to be such a beneficial owner on the
                     Effective Date of this Agreement);

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               (ii)  Individuals who, as of the Effective Date, constitute the
                     Board of Directors of OI cease for any reason to constitute
                     at least a majority of the Board of Directors of OI, unless
                     any such change is approved by a unanimous vote of the
                     members of the Board of Directors of OI in office
                     immediately prior to such cessation;

               (iii) ORTHOFIX or OI is merged, consolidated, or reorganized into
                     or with another corporation or legal person, or securities
                     of ORTHOFIX or OI are exchanged for securities of another
                     corporation or legal person, and immediately after such
                     merger, consolidation, reorganization, or exchange less
                     than a majority of the combined voting power of the then-
                     outstanding securities of such corporation or legal person
                     are held, directly or indirectly, by the holders of
                     securities entitled to vote generally in the election of
                     directors of ORTHOFIX or OI immediately prior to such
                     transaction;

               (iv)  ORTHOFIX or OI, in any transaction or series of related
                     transactions, sells all or substantially all of their
                     assets to any other corporation or legal person, and
                     immediately after such transaction(s) less than a majority
                     of the combined voting power of the then-outstanding
                     securities of such corporation or legal person are held,
                     directly or indirectly, by the holders of securities
                     entitled to vote generally in the election of directors of
                     ORTHOFIX or OI immediately prior to such sale;

               (v)   OI or its affiliates shall sell or dispose of (in a single
                     transaction or series of related transactions) business
                     operations that generated two-thirds of the consolidated
                     revenues of OI and its affiliates (determined on the basis
                     of OI's four most recently completed fiscal quarters for
                     which reports have been filed under the Exchange Act);

               (vi)  OI files a report or proxy statement with the Securities
                     and Exchange Commission pursuant to the Exchange Act,
                     disclosing in response to Form 8-K or Schedule 14A (or any
                     successor schedule, form or report or item therein) that a
                     change in control of OI has or may have occurred or will or
                     may occur in the future pursuant to any then-existing
                     contract or transaction;

               (vii) Any other transaction or series of related transactions
                     occur that have substantially the effect of the
                     transactions specified in any of the preceding clauses in
                     this sentence; or

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              (viii) Employee's employment is terminated by ORTHOFIX, or
                     Employee is removed from an office or position with OI
                     without cause within 90 days before the occurrence of a
                     Change of Control.

          (e)  Notwithstanding any provision of this Agreement to the
               contrary, if any amount or benefit to be paid or provided under
               this Agreement or otherwise would be an "Excess Parachute
               Payment", within the meaning of Section 280G of the Code, or any
               successor provision thereto, but for the application of this
               sentence, then the payments and benefits to be so paid or
               provided shall be reduced to the minimum extent necessary (but in
               no event to less than zero), so that no portion of any such
               payment or benefit as so reduced, constitutes an Excess Parachute
               Payment. The determination of whether any reduction in such
               payments or benefits to be provided under this Agreement or
               otherwise is required pursuant to the preceding sentence shall be
               made at the expense of ORTHOFIX, if requested by the Employee or
               ORTHOFIX, by ORTHOFIX's independent accountants. If any payment
               or benefit intended to be provided under this Agreement or
               otherwise is required pursuant to this subsection (e) Employee
               shall be entitled to designate the payments and/or benefits to be
               so reduced in order to give effect to this subsection (e).
               ORTHOFIX shall provide Employee with all information reasonably
               requested by Employee to permit Employee to make such
               designation. In the event that Employee fails to make such
               designation within 10 business days of the termination of
               Employee's employment with ORTHOFIX, ORTHOFIX may effect such
               reduction in any manner it deems appropriate.

          Notwithstanding the provisions of Section 7(d)(i) or 7(d)(vi) hereof,
          unless otherwise determined in a specific case by majority vote of the
          Board of Directors of OI, a "Change of Control" shall not be deemed to
          have occurred for purposes of this Agreement solely because:

               (i)   OI's acquisition or issuance of its own securities; or

               (ii)  An entity in which OI directly or indirectly beneficially
                     owns 50% or more of the voting securities, or any OI-
                     sponsored employee stock ownership plan, or any other
                     employee benefit plan of OI or ORTHOFIX, either files or
                     becomes obligated to file a report or a proxy statement
                     under or in response to Schedule 13D, Schedule 14D-1, Form
                     8K or Schedule 14A (or any successor schedule, form or
                     report or item therein) under the Exchange Act, disclosing
                     beneficial ownership by form or report or item therein)
                     under the Exchange Act, disclosing beneficial ownership by
                     it of shares of stock of OI, or because OI reports that a
                     change in control of OI has or may have occurred or will or
                     may occur in the future by reason of such beneficial
                     ownership.

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               (iii) Any OI-sponsored employee stock ownership plan, or any
                     other employee benefit plan of OI or ORTHOFIX, either files
                     or becomes obligated to file a report or a proxy statement
                     under or in response to Schedule 13D, Schedule 14D-1, Form
                     8K or Schedule 14A (or any successor schedule, form or
                     report or item therein) under the Exchange Act, disclosing
                     beneficial ownership by form or report or item therein)
                     under the Exchange Act, disclosing beneficial ownership by
                     it of shares of stock of OI, or because OI reports that a
                     change in control of OI has or may have occurred or will or
                     may occur in the future by reason of such beneficial
                     ownership.

          (f)  If Employee's employment is not terminated as provided in Section
               7(a), then the rights and obligations of the parties for the
               balance of the Employment Period shall be governed by this
               Agreement exclusive of the provisions contained in this Section
               7, except this Section 7 shall continue and become applicable if
               a subsequent Change of Control occurs during the Employment
               Period.

          8.   Other Severance Benefits.

          (a)  If at any time during the Employment Period Employee is
               terminated without cause, or Employee resigns for Good Reason,
               and Employee is not entitled to the severance payment provided by
               Section 7 hereof, then Employee shall be entitled to be paid a
               severance payment equal to the Base Amount for termination
               without cause, and one-half of the Base Amount for resignation
               for Good Reason.

          (b)  If, at any time during the Employment Period, Employee is
               terminated without cause, or Employee resigns for Good Reason,
               then Employee shall be entitled without cost to continuation or
               provision of basic employee group benefits referred to in Section
               4(a) that are welfare benefits, but not pension, retirement or
               similar compensatory benefits, for Employee and Employee's
               dependents substantially similar to those they are receiving or
               to which they are entitled immediately prior to the termination
               of Employee's employment for the lesser of one year after
               termination or until Employee secures new employment. Employee's
               stock option agreements shall provide for an extension of the
               option exercise period for at least one year from the date of
               Employee's termination without cause and for at least one-half
               year from the date of Employee's resignation for Good Reason. In
               the case of Employee's death, extension of the option exercise
               period shall be for at least two years. The exercise period of an
               option shall not be extended beyond the date on which it would
               have terminated had Employee continued to be employed by
               ORTHOFIX.  The option exercise period for any

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               "incentive stock option," as that term is defined in Section 422
               of the Code, shall continue to be governed by the plan under
               which such option was issued.

          (c)  If, at any time during the Employment Period, Employee is
               terminated without cause, or Employee resigns for Good Reason,
               ORTHOFIX shall promptly (and in any event within five business
               days after a request by Employee therefor) either pay or
               reimburse Employee for the costs and expenses of any executive
               outplacement firm selected by Employee; provided, however, that
               ORTHOFIX's liability hereunder shall be limited to the first
               $20,000 of such expenses incurred by Employee. Employee shall
               provide ORTHOFIX with reasonable documentation of such
               outplacement costs and expenses.

          9.   Timing of Payment. Any severance or other payment payable to
    Employee under this Agreement shall be paid within thirty (30) days after
    the event giving rise to Employee's separation from employment.

          10.  Other Benefits. The provisions of Sections 7 and 8 shall not
    affect Employee's participation in, or terminating distributions and vested
    rights under, any pension, profit sharing, insurance or other employee
    benefit plan of ORTHOFIX or OI to which Employee is entitled pursuant to the
    terms of such plans, except for the acceleration of vested benefits in
    certain employee benefits pursuant to Section 7(c) and as provided in
    Section 8(b).

          11.  No Mitigation Obligation. It will be difficult, and may be
    impossible, for Employee to find reasonably comparable employment following
    the termination of Employee's employment with ORTHOFIX, and the non-
    competition covenant contained in Section 13 hereof will further limit the
    employment opportunities for Employee. In addition, ORTHOFIX's severance pay
    policy applicable in general to its salaried employees does not provide for
    mitigation, offset or reduction of any severance payment received
    thereunder. Accordingly, the parties hereto expressly agree that the payment
    of severance compensation by ORTHOFIX to Employee in accordance with the
    terms of this Agreement will be liquidated damages, and that Employee shall
    not be required to seek other employment or otherwise mitigate any payment
    provided for hereunder.

          12.  No Right to Set Off. Neither ORTHOFIX nor OI shall be entitled to
    set off against amounts payable to Employee hereunder any amounts earned by
    Employee in other employment, or otherwise, after termination of his
    employment with ORTHOFIX, or any amounts which might have been earned by
    Employee in other employment had he sought such other employment.

          13.  Competitive Activity. For one year following the termination of
    Employee's employment with ORTHOFIX, if Employee has timely received or is
    timely receiving the payments and benefits Employee is entitled to under
    this Agreement, Employee shall not, without the prior written consent of the
    Board of Directors of OI, engage in any Competitive Activity. For purposes
    of

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    this Agreement, the term "Competitive Activity" means Employee's
    participation in the management of any business enterprise if such
    enterprise engages in substantial and direct competition with OI. Without
    limitation, an enterprise shall be deemed to be in substantial and direct
    competition with O1 if such enterprise's sales of any product or service
    competitive with any product or service of OI amounted to 25% of such
    enterprise's net sales for its most recently completed fiscal year, and if
    the net sales of the competing product or service of OI amounted to 25% of
    OI's net sales for its most recently completed fiscal year. "Competitive
    Activity" shall not include:

          (a)  The passive ownership of publicly-traded securities in any such
               enterprise and exercise of rights appurtenant thereto; or

          (b)  Participation in management of any such enterprise other than in
               connection with the competitive operations of such enterprise.

          14.  Non-Disclosure of Information.

          (a)  For so long as Employee is employed by ORTHOFIX, and thereafter
               except in the performance of Employee's obligations to ORTHOFIX
               or its affiliates, Employee shall not, directly or indirectly,
               use or authorize the use of any confidential or other proprietary
               information of ORTHOFIX, OI, or their affiliates ("Confidential
               Information"), including but not limited to trade secrets,
               product specifications and ideas, manuals, systems, procedures,
               confidential reports, customer lists, sales or distribution
               methods, patentable information and data and financial
               information concerning ORTHOFIX, OI, or their affiliates, which
               Confidential Information has been made known (whether or not with
               the knowledge and permission of ORTHOFIX or OI, and whether or
               not developed, devised or otherwise created in whole or in part
               by the efforts of Employee) to Employee by reason of Employee's
               activities on behalf of ORTHOFIX, OI, or their affiliates.
               Employee shall not reveal, divulge or make known any Confidential
               Information to any individual, partnership, firm, corporation, or
               other business organization whatsoever except in performance of
               Employee's obligations to ORTHOFIX or OI, with the express
               permission of the Board of Directors of ORTHOFIX or OI, or as
               otherwise compelled by law.

          (b)  Employee confirms that all Confidential Information is the
               exclusive property of ORTHOFIX, OI, or their affiliates. All
               business records, papers and documents kept or made by Employee
               relating to the business of ORTHOFIX, OI, or their affiliates
               shall be and remain the property of ORTHOFIX, OI, or their
               affiliates and shall remain in the possession of ORTHOFIX, OI, or
               their affiliates. Upon the termination of Employee's

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               employment with ORTHOFIX or upon the request of ORTHOFIX or OI,
               Employee shall promptly deliver to ORTHOFIX, and shall retain no
               copies of, any written materials, records and documents made by
               Employee or coming into Employee's possession concerning the
               business and affairs of ORTHOFIX, OI, or their affiliates that
               contain Confidential Information.

          (c)  Without intending to limit the remedies available to ORTHOFIX,
               OI, or their affiliates, Employee acknowledges that a breach of
               any of the covenants contained in Sections 13 or 14 may result in
               material irreparable injury to ORTHOFIX, OI, or their affiliates
               for which there is no adequate remedy at law; that it may not be
               possible to measure damages for such injuries precisely; and
               that, in the event of such breach or threat thereof, ORTHOFIX,
               OI, or their affiliates shall be entitled to obtain a temporary
               restraining order and/or a preliminary injunction restraining
               Employee from engaging in activities prohibited by Sections 13 or
               14, or such other relief as many may be required to specifically
               enforce any of the covenants in Sections 13 and 14.

          15.  Inventions.

          (a)  Employee shall promptly and fully disclose to ORTHOFIX any and
               all ideas, improvements, discoveries and inventions, whether or
               not they are believed to be patentable ("Inventions"), which
               Employee conceives of or first actually reduces to practice,
               either solely or jointly with others, during Employee's
               employment with ORTHOFIX, and which relate to the business now or
               thereafter carried on or contemplated by ORTHOFIX, OI, or their
               affiliates or which result from any work performed by Employee
               for ORTHOFIX, OI, or their affiliates.

          (b)  Employee acknowledges and agrees that all Inventions shall be the
               sole and exclusive property of ORTHOFIX, and during the term of
               Employee's employment with ORTHOFIX and thereafter, whenever
               requested to do so by ORTHOFIX, Employee shall execute and assign
               any and all applications, assignments and other instruments that
               ORTHOFIX shall deem necessary or appropriate in order to apply
               for and obtain Letters Patent of the United States and/or of any
               foreign countries for such Inventions and in order to assign and
               convey to ORTHOFIX or its nominee the sole and exclusive right,
               title and interest in and to such Inventions.

          (c)  ORTHOFIX acknowledges and agrees that the provisions of this
               Section 15 do not apply to an Invention (i) for which no
               equipment, supplies, facility or Confidential Information of
               ORTHOFIX, OI, or their affiliates was used; (ii) that was
               developed entirely on Employee's own time; (iii) that does not
               relate directly to the business of

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               ORTHOFIX, OI, or their affiliates or to the actual or
               demonstrably anticipated research or development of ORTHOFIX, OI,
               or their affiliates; and (iv) that does not result from any work
               performed by Employee for ORTHOFIX, OI, or their affiliates.

          16.  Binding Arbitration; Legal Fees and Expenses. It is the intent of
    ORTHOFIX that Employee not be required to bear the legal fees and related
    expenses associated with the enforcement or defense of Employee's rights
    under this Agreement by litigation or other legal action because having to
    do so would substantially detract from the benefits intended to be extended
    to Employee hereunder. Accordingly, the parties agree as follows:

          (a)  Any dispute or controversy arising under or in connection with
               this Agreement prior to the occurrence of a Change of Control
               shall be resolved exclusively by binding arbitration in Dallas
               County, Texas, in accordance with the rules of the American
               Arbitration Association then in effect. Judgment may be entered
               on the arbitrator's award in any court having jurisdiction. Each
               party shall bear his or its own costs and expenses of
               arbitration, but if Employee is determined by the arbitrator(s)
               to be the prevailing party in such arbitration, ORTHOFIX shall
               pay to Employee as part of the arbitration award all attorneys'
               and expert fees and other expenses reasonably incurred by
               Employee in connection with such arbitration.

          (b)  If, following the occurrence of a Change of Control, Employee
               determines in good faith that ORTHOFIX has failed to comply with
               any of its obligations under this Agreement or ORTHOFIX or any
               other person takes or threatens to take action to declare this
               Agreement void or unenforceable, or institutes any litigation,
               arbitration proceeding or other action or proceeding designed to
               deny Employee the benefits provided or intended to be provided to
               Employee hereunder, ORTHOFIX irrevocably authorizes Employee to
               retain counsel of Employee's choice, at the expense of ORTHOFIX
               as hereafter provided, to represent Employee in connection with
               the initiation or defense of any litigation, arbitration or other
               legal action, whether by or against ORTHOFIX or any director,
               officer, stockholder or other person affiliated with ORTHOFIX in
               any jurisdiction. Within 10 business days after receipt from
               Employee of a request referencing this Section 16(b), ORTHOFIX
               shall, from time to time, pay or reimburse Employee for fees and
               expenses incurred, or reasonably anticipated to be incurred, in
               accordance with such request and this Section 16(b). Without
               respect to whether Employee prevails, in whole or in part, in
               connection with any of the foregoing, ORTHOFIX shall pay or cause
               to be paid and shall be solely responsible for any and all
               attorneys' and related fees and expenses incurred by Employee in
               connection with any of the foregoing, excluding any such fees and
               expenses related to an unsuccessful appeal filed by Employee of
               an adjudication on the merits, any motion for a new trial filed
               by Employee after such an adjudication that is denied, or any
               other motion filed by Employee for reconsideration or review of
               such an adjudication that is denied.

                                    Page 13

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          17.  Withholding of Taxes. ORTHOFIX may withhold from any amounts
    payable under this Agreement all federal, state, city, or other taxes as
    shall be required pursuant to law or regulation.

          18.  Notices. All notices, requests, demands, and other communications
    called for or contemplated hereunder shall be in writing and shall be deemed
    to have been given when delivered personally or when mailed by United States
    certified or registered mail, return receipt requested, postage prepaid,
    addressed to the parties, their successors in interest or assignees at the
    following addresses or such other addresses as the parties may designate by
    notice in the manner aforesaid:

          If to ORTHOFIX:               Orthofix Inc,
                                        1720 Bray Central Drive
                                        McKinney, Texas 75069
                                        Attention: Gary D. Henley

          With a copy to:               Brian J. Hurst
                                        Baker & McKenzie
                                        2300 Trammell Crow Center
                                        2001 Ross Avenue
                                        Dallas, Texas 75201

          If to Employee:               Tom Hein
                                        Orthofix Inc.
                                        10115 Kincey Ave., Ste. 250
                                        Huntersville, North Carolina 28078

          19.  Law Governing. This Agreement shall be governed by and construed
    in accordance with the laws of the State of Texas, without giving effect to
    Texas's principles of conflict of laws.

          20.  Validity. The invalidity or unenforceability of any provision or
    provisions of this Agreement shall not affect the validity or enforceability
    of any other provision of this Agreement, which shall remain in full force
    and effect. Any provision of this Agreement held to be invalid or
    unenforceable shall be reformed to the extent necessary to make it valid and
    enforceable.

          21.  Entire Agreement. This Agreement constitutes the entire agreement
    between the parties with respect to the subject matter hereof, superseding
    all negotiations, discussions, preliminary agreements, and previous
    contracts between Employee and ORTHOFIX, OI, or their affiliates. No
    provisions of this Agreement may be amended or waived except in writing
    executed by the parties.

                                    Page 14

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          22.  Effect on Successors in Interest. This Agreement shall inure to
    the benefit of and be binding upon the heirs, administrators, executors, and
    successors of each of the parties, including without limitation any person
    acquiring, directly or indirectly, all or substantially all of the stock
    and/or assets of ORTHOFIX, OI, or their affiliates by purchase, merger,
    consolidation, reorganization or otherwise. Any such successor shall be
    deemed "ORTHOFIX" for purposes of this Agreement.

          23. Agreement. This Agreement is personal in nature and neither of the
     parties shall, without the consent of the other, assign, transfer or
     delegate this Agreement or any rights or obligations hereunder except as
     expressly provided in this Section. Without limiting the generality of the
     foregoing, Employee's right to receive payments hereunder shall not be
     assignable, transferable or delegable, whether by pledge, creation of a
     security interest or otherwise, other than by a transfer under Employee's
     will or by the laws of descent and distribution. In the event of any
     attempted assignment or transfer contrary to this Section, ORTHOFIX shall
     have no liability to pay any amount so attempted to be assigned,
     transferred or delegated.

          24.  Effectiveness. This Agreement shall be effective upon the
    Effective Date.

ORTH0FIX INC.                                   EMPLOYEE

By:     /s/  Charles Federico                   /s/  Thomas Hein
       --------------------------               --------------------------
                                                Tom Hein
Title: CEO

Date:  March 24, 2003                           Date:   March 24, 2003

                                    Page 15

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                     Guaranty by Orthofix International N.V.

Orthofix International N.V. joins in this Agreement for the sole purpose of
guaranteeing the obligations of Orthofix Inc. to pay, provide, or reimburse
Employee for, all cash and in-kind severance benefits provided in this
Agreement, including the provision of all benefits in the form of, or related
to, securities of Orthofix International N.V. or options thereon.

                                             ORTHOFIX INTERNATIONAL N.V.

                                             By:     /s/  Charles Federico
                                                    --------------------------

                                             Title: CEO

                                             Date:  March 24, 2003

Emp. Agr - Exec. Officer

                                    Page 16[ORTHOFIX LOGO]  [GRAPHIC OMITTED]

                              EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is entered into by and between Orthofix
Inc., a Minnesota corporation ("ORTHOFIX"), and Gary D. Henley ("Employee").

                                    Recitals

          ORTHOFIX desires to have the benefits of Employee's knowledge and
experience as a full-time senior executive without distraction by employment-
related uncertainties and considers such employment a vital element to
protecting and enhancing the best interests of ORTHOFIX and its parent company
Orthofix International N.V. ("OI"), and their respective affiliates, and
Employee desires to be employed full-time with ORTHOFIX.

          ORTHOFIX desires to assure itself of the continued services of
Employee, and Employee is willing to continue to render services to ORTHOFIX on
the terms and subject to the conditions set forth in this Agreement.

          In consideration of the mutual covenants set forth herein and other
good and valuable consideration, the parties agree as follows:

          1.   Term. ORTHOFIX hereby agrees to employ Employee for a minimum
    two-year period commencing on March 1, 2003 (the "Effective Date") and
    ending on March 1, 2005, unless sooner terminated as provided in Sections 5
    and 6 of this Agreement. Effective as of March 1, 2005 and March 1, 2006,
    the term of Employee's employment with ORTHOFIX shall be automatically
    extended for one additional year beyond the minimum two-year period, unless
    either party gives written notice of its or his election not to extend such
    employment at least 60 days prior to such date. In addition, if a Change of
    Control (as defined in Section 7 (d)) occurs when less than one year remains
    prior to the expiration of Employee's term of employment hereunder, such
    term shall be automatically extended until the first anniversary of the date
    on which the Change of Control first occurred. The period during which
    Employee is employed by ORTHOFIX hereunder is referred to herein as the
    "Employment Period".

          2.   Duties. Subject to the terms and conditions of this Agreement,
    Employee shall serve as the President of ORTHOFIX and shall exercise the
    authority and assume the responsibilities of the President of a company of
    the size and nature of ORTHOFIX, including without limitation such positions
    and duties with OI or its affiliates as are assigned by the Board of
    Directors of ORTHOFIX or OI. Throughout the Employment Period, Employee
    agrees to devote substantially all of Employee's time, attention and best
    efforts during normal business hours (subject to vacations, sick leave and
    other absences in accordance with policies in effect from time to time for
    executive

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    officers of ORTHOFIX prior to a Change of Control) to the performance of his
    duties. Without the prior approval of the Chief Executive Officer or the
    Board of Directors of ORTHOFIX, during the Employment Period Employee will
    not render any services as a director, trustee, officer, employee, or
    consultant to any other business or organization.

          3.   Compensation. During the Employment Period, ORTHOFIX shall
    compensate Employee for the services rendered under this Agreement as
    follows:

          (a)  A base annual salary determined by the Board of Directors or
               Compensation Committee of ORTHOFIX consistent with its practices
               for executive officers of ORTHOFIX, but not less than $270,000
               per year, payable in accordance with the customary payroll
               practices of ORTHOFIX for the payment of executive officers;

          (b)  Such bonuses under ORTHOFIX's ________ Executive Annual Incentive
               Plan, as amended, or subsequent plan, if any, as shall be
               determined by the Board of Directors or Chief Executive Officer
               of ORTHOFIX consistent with its practices for executive officers
               of ORTHOFIX;

          (c)  If Employee's base annual salary is increased at any time, it
               shall not thereafter be decreased during the Employment Period,
               unless such decrease is the result of a general reduction (on the
               same percentage basis) affecting the base salaries of
               substantially all other executive officers of ORTHOFIX and is not
               below the minimum set forth in subsection (a); and

          (d)  An automobile allowance of not less than $900 per month, or
               in such greater amount as may be payable pursuant to any
               automobile allowance plan or program maintained by ORTHOFIX for
               its executive officers,

          4.   Employee Benefits.

          (a)  During the Employment Period, Employee shall be entitled, on a
               basis commensurate with Employee's position with ORTHOFIX, to
               full participation in, and service credit for benefits as
               provided under, all life, accident, medical payment, health and
               disability insurance, retirement, pension, salary continuation,
               expense reimbursement and other employee benefit and perquisite
               policies, plans, programs and arrangements that generally are
               made available to executive officers of ORTHOFIX, except for such
               arrangements that the Board of Directors, in its sole discretion,
               shall adopt for select employees to compensate them for special
               or extenuating circumstances.

                                     Page 2

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          (b)  During the Employment Period, Employee shall be entitled to
               annual vacation leave, at full pay, as may be provided by
               ORTHOFIX's vacation policy applicable to executive officers.

          (c)  During the Employment Period, Employee shall be entitled to
               participate in all bonus, incentive, profit-sharing, stock
               option, stock purchase, stock appreciation, discretionary pay or
               similar policies, plans, programs and arrangements of ORTHOFIX
               that generally are made available to executive officers of
               ORTHOFIX.

          (d)  Nothing in this Agreement shall limit in any Employee's
               participation in any other benefit plans or arrangements as are
               from time to time approved by ORTHOFIX.

          5.   Termination by ORTHOFIX. Employee's employment hereunder
    may be terminated by ORTHOFIX during the Employment Period without any
    breach of this Agreement, and Employee will not be entitled to the benefits
    provided by Sections 7 and 8 hereof, only under the following circumstances:

          (a)  Death, Total Disability or Retirement. Employee's employment
               shall be deemed terminated by ORTHOFIX upon Employee's death or
               retirement. In addition, if as a result of Employee's incapacity
               resulting from physical or mental illness or disease that is
               likely to be permanent, Employee shall have been unable to
               perform Employee's duties hereunder for a period of more than 120
               consecutive days during any 12-month period, and Employee is
               qualified and eligible to receive disability benefits under the
               long-term disability plan then in effect for executive officers
               of ORTHOFIX, ORTHOFIX may terminate Employee's employment
               hereunder.

          (b)  Cause. ORTHOFIX may terminate Employee's employment hereunder for
               cause, which for purposes of this Agreement shall be defined to
               mean (i) the willful and continued failure by Employee to follow
               the reasonable instructions of the Board of Directors or Chief
               Executive Officer of ORTHOFIX after written notice of such
               failure has been given to Employee by the Board of Directors or
               Chief Executive Officer of ORTHOFIX; (ii) the willful commission
               by Employee of acts that are dishonest and demonstrably and
               materially injurious to ORTHOFIX, OI, or their affiliates,
               monetarily or otherwise; (iii) the commission by Employee of a
               felonious act; (iv) drug addiction, (v) intentional wrongful
               disclosure of Confidential Information (as defined in Section 14)
               or (vi) intentional wrongful engagement in any Competitive
               Activity (as defined in Section 13).

                                     Page 3

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          The termination of Employee's employment by ORTHOFIX during the
     Employment Period for any reason other than those specified in this
     Section 5 shall be deemed to be a termination without cause. No breach or
     default by Employee shall be deemed to have occurred hereunder unless
     written notice thereof shall have been given by ORTHOFIX to Employee within
     60 days after ORTHOFIX first learns of such breach or default and it is not
     cured within 30 days after notice thereof is given to Employee.

          6.   Termination by Employee. Employee shall be entitled to terminate
    Employee's employment, with the right to severance compensation and benefits
    as provided in this Agreement, during the Employment Period for Good Reason;
    provided, that Employee terminates Employee's employment with ORTHOFIX not
    later than 90 days following the occurrence of the event constituting Good
    Reason. For purposes of this Agreement, "Good Reason" means the occurrence
    of any of the following:

          (a)  Without the express written consent of Employee, any duties are
               assigned to Employee that are materially inconsistent with
               Employee's position, duties and status with ORTHOFIX or OI as
               contemplated by this Agreement;

          (b)  Any action by ORTHOFIX or OI that results in a material adverse
               change in the nature or scope of the position, duties,
               authorities, responsibilities or functions of Employee with
               ORTHOFIX or OI as contemplated by this Agreement, except for
               strategic reallocations of the personnel reporting to Employee;

          (c)  (i) The base annual salary of Employee, as the same may hereafter
               be increased from time to time, is reduced, unless the reduction
               is a general reduction (on the same percentage basis) affecting
               the base salaries of substantially all other executive officers
               of ORTHOFIX provided, however, that Employee's salary may not be
               reduced below the minimum stated in Section 3(a); (ii) there is a
               change or termination of Employee's right to participate, on a
               basis substantially consistent with practices applicable to
               executive officers of ORTHOFIX generally on the Effective Date,
               in any policy, plan, program or arrangement of the type referred
               to in Section 4(c) of this Agreement; or (iii) there is a
               termination or denial of Employee's right, on a basis
               substantially consistent with practices applicable generally to
               executive officers of ORTHOFIX on the Effective Date, to benefits
               of the type referred to in Section 4(a) of this Agreement;

          (d)  Without limiting the generality or effect of the foregoing,
               ORTHOFIX fails to comply with any of its obligations hereunder in
               any material respect.

                                     Page 4

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     Notwithstanding the generality of the foregoing, should Employee be
     involuntarily removed without cause from any of the offices or positions he
     holds with OI as of the Effective Date; or should any of Employee's titles,
     duties, or responsibilities with OI as of the Effective Date be removed,
     reduced, diminished, or adversely affected without cause; or should the
     securities of OI cease to be publicly traded in the United States due to a
     merger, acquisition, or other transaction; or should all or substantially
     all of the assets of OI (representing fifty percent or more of OI's sales
     for its most recently completed fiscal year) be sold in a transaction or
     series of related transactions, Employee shall be entitled to terminate his
     employment for Good Reason and enjoy the benefits therefrom provided in
     this Agreement.

          7.   Severance Payment after Change of Control.

          (a)  If, during the Employment Period and following the occurrence of
               a Change of Control, ORTHOFIX terminates Employee's employment
               without cause or an event occurs as a result of which Employee
               terminates Employee's employment pursuant to Section 6 hereof,
               Employee shall be entitled to a lump sum severance payment equal
               to Employee's Base Amount (as defined in subsection (b)).

          (b)  As used in this Agreement, "Base Amount" shall mean an amount
               equal to the sum of:

               (i)   The average of Employee's annual base salary at the highest
                     rate in effect in the 90-day period immediately prior to
                     the termination of Employee's employment with ORTHOFIX and
                     Employee's annual base salary for the annual compensation
                     period immediately preceding the annual compensation period
                     in which termination of Employee's employment with ORTHOFIX
                     occurs or, if greater, the average of Employee's annual
                     base salary in effect immediately prior to the date on
                     which a Change of Control occurs and Employee's annual base
                     salary for the annual compensation period immediately
                     preceding the annual compensation period in which a Change
                     of Control occurs provided, however, that if Employee was
                     not employed by ORTHOFIX during such immediately preceding
                     compensation period, the amount included pursuant to this
                     clause shall be the greater of Employee's annual base
                     salary at the highest rate in effect in the 90-day period
                     immediately prior to (A) the termination of Employee's
                     employment with ORTHOFIX or (B) the date on which a Change
                     of Control occurs; plus

               (ii)  The average incentive compensation payable to Employee with
                     respect to the two consecutive annual incentive
                     compensation periods ending immediately prior to the
                     termination of Employee's employment with ORTHOFIX or, if
                     greater, with respect to the two consecutive annual
                     incentive compensation periods ending

                                     Page 5

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                     immediately prior to the date on which a Change of Control
                     occurs; provided, however, that if Employee was not
                     eligible to participate in ORTHOFIX's incentive
                     compensation program for such two consecutive incentive
                     compensation periods, the amount included pursuant to this
                     clause shall be the most recent incentive compensation paid
                     or payable to Employee by ORTHOFIX; plus

               (iii) The monthly automobile allowance Employee is entitled to
                     receive pursuant to Section 3(d) hereof, multiplied by 12.

          (c)  If a Chase of Control shall occur, notwithstanding the terms of
               any applicable plan or arrangement to the contrary:

               (i)   Employee shall have immediate vesting of, and the immediate
                     right to exercise, all stock options and stock appreciation
                     rights theretofore granted to Employee; and

               (ii)  Any risk of forfeiture included in restricted stock grants
                     theretofore made to Employee shall immediately lapse and
                     employee shall have immediate vesting of Employee's rights
                     in all other employee benefit and compensation plans;
                     provided, however, that Employee's rights under any plan or
                     arrangement of ORTHOFIX described in Section 280G(b)(6) of
                     the Internal Revenue Code of 1986, as amended (the "Code"),
                     or any successor provision thereto, shall not be altered as
                     a result of this.

          (d)  A Change of Control shall occur, notwithstanding the terms of any
               applicable plan or arrangement to the contrary, upon any of the
               following events:

               (i)   Any person, as that term is used in Section 13(d) and
                     Section 14(d)(2) of the Securities Exchange Act of 1934, as
                     amended (the "Exchange Act"), becomes, is discovered to be,
                     or files a report on Schedule 13D or 14D-1 (or any
                     successor schedule, form or report) disclosing that such
                     person is a beneficial owner (as defined in Rule 13d-3
                     under the Exchange Act or any successor rule or
                     regulation), directly or indirectly, of securities of OI
                     representing 20% or more of the combined voting power of
                     OI's then outstanding securities entitled to vote generally
                     in the election of directors (unless such person is known
                     by Employee already to be such a beneficial owner on the
                     Effective Date of this Agreement);

                                     Page 6

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               (ii)  Individuals who, as of the Effective Date, constitute the
                     Board of Directors of OI cease for any reason to constitute
                     at least a majority of the Board of Directors of OI, unless
                     any such change is approved by a unanimous vote of the
                     members of the Board of Directors of OI in office
                     immediately prior to such cessation;

               (iii) ORTHOFIX or OI is merged, consolidated, or reorganized into
                     or with another corporation or legal person, or securities
                     of ORTHOFIX or OI are exchanged for securities of another
                     corporation or legal person, and immediately after such
                     merger, consolidation, reorganization, or exchange less
                     than a majority of the combined voting power of the then-
                     outstanding securities of such corporation or legal person
                     are held, directly or indirectly, by the holders of
                     securities entitled to vote generally in the election of
                     directors of ORTHOFIX or OI immediately prior to such
                     transaction;

               (iv)  ORTHOFIX or OI, in any transaction or series of related
                     transactions, sells all or substantially all of their
                     assets to any other corporation or legal person, and
                     immediately after such transaction(s) less than a majority
                     of the combined voting power of the then-outstanding
                     securities of such corporation or legal person are held,
                     directly or indirectly, by the holders of securities
                     entitled to vote generally in the election of directors of
                     ORTHOFIX or OI immediately prior to such sale;

               (v)   OI or its affiliates shall sell or dispose of (in a single
                     transaction or series of related transactions) business
                     operations that generated two-thirds of the consolidated
                     revenues of OI and its affiliates (determined on the basis
                     of OI's four most recently completed fiscal quarters for
                     which reports have been filed under the Exchange Act);

               (vi)  OI files a report or proxy statement with the Securities
                     and Exchange Commission pursuant to the Exchange Act,
                     disclosing in response to Form 8-K or Schedule 14A (or any
                     successor schedule, form or report or item therein) that a
                     change in control of OI has or may have occurred or will or
                     may occur in the future pursuant to any then-existing
                     contract or transaction;

               (vii) Any other transaction or series of related transactions
                     occur that have substantially the effect of the
                     transactions specified in any of the preceding clauses in
                     this sentence; or

                                     Page 7

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              (viii) Employee's employment is terminated by ORTHOFIX, or
                     Employee is removed from an office or position with OI
                     without cause within 90 days before the occurrence of a
                     Change of Control.

          (e)  Notwithstanding any provision of this Agreement to the
               contrary, if any amount or benefit to be paid or provided under
               this Agreement or otherwise would be an "Excess Parachute
               Payment", within the meaning of Section 280G of the Code, or any
               successor provision thereto, but for the application of this
               sentence, then the payments and benefits to be so paid or
               provided shall be reduced to the minimum extent necessary (but in
               no event to less than zero), so that no portion of any such
               payment or benefit as so reduced, constitutes an Excess Parachute
               Payment. The determination of whether any reduction in such
               payments or benefits to be provided under this Agreement or
               otherwise is required pursuant to the preceding sentence shall be
               made at the expense of ORTHOFIX, if requested by the Employee or
               ORTHOFIX, by ORTHOFIX's independent accountants. If any payment
               or benefit intended to be provided under this Agreement or
               otherwise is required pursuant to this subsection (e) Employee
               shall be entitled to designate the payments and/or benefits to be
               so reduced in order to give effect to this subsection (e).
               ORTHOFIX shall provide Employee with all information reasonably
               requested by Employee to permit Employee to make such
               designation. In the event that Employee fails to make such
               designation within 10 business days of the termination of
               Employee's employment with ORTHOFIX, ORTHOFIX may effect such
               reduction in any manner it deems appropriate.

          Notwithstanding the provisions of Section 7(d)(i) or 7(d)(vi) hereof,
          unless otherwise determined in a specific case by majority vote of the
          Board of Directors of OI, a "Change of Control" shall not be deemed to
          have occurred for purposes of this Agreement solely because:

               (i)   OI's acquisition or issuance of its own securities; or

               (ii)  An entity in which OI directly or indirectly beneficially
                     owns 50% or more of the voting securities, or any OI-
                     sponsored employee stock ownership plan, or any other
                     employee benefit plan of OI or ORTHOFIX, either files or
                     becomes obligated to file a report or a proxy statement
                     under or in response to Schedule 13D, Schedule 14D-1, Form
                     8K or Schedule 14A (or any successor schedule, form or
                     report or item therein) under the Exchange Act, disclosing
                     beneficial ownership by form or report or item therein)
                     under the Exchange Act, disclosing beneficial ownership by
                     it of shares of stock of OI, or because OI reports that a
                     change in control of OI has or may have occurred or will or
                     may occur in the future by reason of such beneficial
                     ownership.

                                     Page 8

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               (iii) Any OI-sponsored employee stock ownership plan, or any
                     other employee benefit plan of OI or ORTHOFIX, either files
                     or becomes obligated to file a report or a proxy statement
                     under or in response to Schedule 13D, Schedule 14D-1, Form
                     8K or Schedule 14A (or any successor schedule, form or
                     report or item therein) under the Exchange Act, disclosing
                     beneficial ownership by form or report or item therein)
                     under the Exchange Act, disclosing beneficial ownership by
                     it of shares of stock of OI, or because OI reports that a
                     change in control of OI has or may have occurred or will or
                     may occur in the future by reason of such beneficial
                     ownership.

          (f)  If Employee's employment is not terminated as provided in Section
               7(a), then the rights and obligations of the parties for the
               balance of the Employment Period shall be governed by this
               Agreement exclusive of the provisions contained in this Section
               7, except this Section 7 shall continue and become applicable if
               a subsequent Change of Control occurs during the Employment
               Period.

          8.   Other Severance Benefits.

          (a)  If at any time during the Employment Period Employee is
               terminated without cause, or Employee resigns for Good Reason,
               and Employee is not entitled to the severance payment provided by
               Section 7 hereof, then Employee shall be entitled to be paid a
               severance payment equal to the Base Amount for termination
               without cause, and one-half of the Base Amount for resignation
               for Good Reason.

          (b)  If, at any time during the Employment Period, Employee is
               terminated without cause, or Employee resigns for Good Reason,
               then Employee shall be entitled without cost to continuation or
               provision of basic employee group benefits referred to in Section
               4(a) that are welfare benefits, but not pension, retirement or
               similar compensatory benefits, for Employee and Employee's
               dependents substantially similar to those they are receiving or
               to which they are entitled immediately prior to the termination
               of Employee's employment for the lesser of one year after
               termination or until Employee secures new employment. Employee's
               stock option agreements shall provide for an extension of the
               option exercise period for at least one year from the date of
               Employee's termination without cause and for at least one-half
               year from the date of Employee's resignation for Good Reason. In
               the case of Employee's death, extension of the option exercise
               period shall be for at least two years. The exercise period of an
               option shall not be extended beyond the date on which it would
               have terminated had Employee continued to be employed by
               ORTHOFIX.  The option exercise period for any

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               "incentive stock option," as that term is defined in Section 422
               of the Code, shall continue to be governed by the plan under
               which such option was issued.

          (c)  If, at any time during the Employment Period, Employee is
               terminated without cause, or Employee resigns for Good Reason,
               ORTHOFIX shall promptly (and in any event within five business
               days after a request by Employee therefor) either pay or
               reimburse Employee for the costs and expenses of any executive
               outplacement firm selected by Employee; provided, however, that
               ORTHOFIX's liability hereunder shall be limited to the first
               $20,000 of such expenses incurred by Employee. Employee shall
               provide ORTHOFIX with reasonable documentation of such
               outplacement costs and expenses.

          9.   Timing of Payment. Any severance or other payment payable to
    Employee under this Agreement shall be paid within thirty (30) days after
    the event giving rise to Employee's separation from employment.

          10.  Other Benefits. The provisions of Sections 7 and 8 shall not
    affect Employee's participation in, or terminating distributions and vested
    rights under, any pension, profit sharing, insurance or other employee
    benefit plan of ORTHOFIX or OI to which Employee is entitled pursuant to the
    terms of such plans, except for the acceleration of vested benefits in
    certain employee benefits pursuant to Section 7(c) and as provided in
    Section 8(b).

          11.  No Mitigation Obligation. It will be difficult, and may be
    impossible, for Employee to find reasonably comparable employment following
    the termination of Employee's employment with ORTHOFIX, and the non-
    competition covenant contained in Section 13 hereof will further limit the
    employment opportunities for Employee. In addition, ORTHOFIX's severance pay
    policy applicable in general to its salaried employees does not provide for
    mitigation, offset or reduction of any severance payment received
    thereunder. Accordingly, the parties hereto expressly agree that the payment
    of severance compensation by ORTHOFIX to Employee in accordance with the
    terms of this Agreement will be liquidated damages, and that Employee shall
    not be required to seek other employment or otherwise mitigate any payment
    provided for hereunder.

          12.  No Right to Set Off. Neither ORTHOFIX nor OI shall be entitled to
    set off against amounts payable to Employee hereunder any amounts earned by
    Employee in other employment, or otherwise, after termination of his
    employment with ORTHOFIX, or any amounts which might have been earned by
    Employee in other employment had he sought such other employment.

          13.  Competitive Activity. For one year following the termination of
    Employee's employment with ORTHOFIX, if Employee has timely received or is
    timely receiving the payments and benefits Employee is entitled to under
    this Agreement, Employee shall not, without the prior written consent of the
    Board of Directors of OI, engage in any Competitive Activity. For purposes
    of

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    this Agreement, the term "Competitive Activity" means Employee's
    participation in the management of any business enterprise if such
    enterprise engages in substantial and direct competition with OI. Without
    limitation, an enterprise shall be deemed to be in substantial and direct
    competition with OI if such enterprise's sales of any product or service
    competitive with any product or service of OI amounted to 25% of such
    enterprise's net sales for its most recently completed fiscal year, and if
    the net sales of the competing product or service of OI amounted to 25% of
    OI's net sales for its most recently completed fiscal year. "Competitive
    Activity" shall not include:

          (a)  The passive ownership of publicly-traded securities in any such
               enterprise and exercise of rights appurtenant thereto; or

          (b)  Participation in management of any such enterprise other than in
               connection with the competitive operations of such enterprise.

          14.  Non-Disclosure of Information.

          (a)  For so long as Employee is employed by ORTHOFIX, and thereafter
               except in the performance of Employee's obligations to ORTHOFIX
               or its affiliates, Employee shall not, directly or indirectly,
               use or authorize the use of any confidential or other proprietary
               information of ORTHOFIX, OI, or their affiliates ("Confidential
               Information"), including but not limited to trade secrets,
               product specifications and ideas, manuals, systems, procedures,
               confidential reports, customer lists, sales or distribution
               methods, patentable information and data and financial
               information concerning ORTHOFIX, OI, or their affiliates, which
               Confidential Information has been made known (whether or not with
               the knowledge and permission of ORTHOFIX or OI, and whether or
               not developed, devised or otherwise created in whole or in part
               by the efforts of Employee) to Employee by reason of Employee's
               activities on behalf of ORTHOFIX, OI, or their affiliates.
               Employee shall not reveal, divulge or make known any Confidential
               Information to any individual, partnership, firm, corporation, or
               other business organization whatsoever except in performance of
               Employee's obligations to ORTHOFIX or OI, with the express
               permission of the Board of Directors of ORTHOFIX or OI, or as
               otherwise compelled by law.

          (b)  Employee confirms that all Confidential Information is the
               exclusive property of ORTHOFIX, OI, or their affiliates. All
               business records, papers and documents kept or made by Employee
               relating to the business of ORTHOFIX, OI, or their affiliates
               shall be and remain the property of ORTHOFIX, OI, or their
               affiliates and shall remain in the possession of ORTHOFIX, OI, or
               their affiliates. Upon the termination of Employee's

                                    Page 11

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               employment with ORTHOFIX or upon the request of ORTHOFIX or OI,
               Employee shall promptly deliver to ORTHOFIX, and shall retain no
               copies of, any written materials, records and documents made by
               Employee or coming into Employee's possession concerning the
               business and affairs of ORTHOFIX, OI, or their affiliates that
               contain Confidential Information.

          (c)  Without intending to limit the remedies available to ORTHOFIX,
               OI, or their affiliates, Employee acknowledges that a breach of
               any of the covenants contained in Sections 13 or 14 may result in
               material irreparable injury to ORTHOFIX, OI, or their affiliates
               for which there is no adequate remedy at law; that it may not be
               possible to measure damages for such injuries precisely; and
               that, in the event of such breach or threat thereof, ORTHOFIX,
               OI, or their affiliates shall be entitled to obtain a temporary
               restraining order and/or a preliminary injunction restraining
               Employee from engaging in activities prohibited by Sections 13 or
               14, or such other relief as many may be required to specifically
               enforce any of the covenants in Sections 13 and 14.

          15.  Inventions.

          (a)  Employee shall promptly and fully disclose to ORTHOFIX any and
               all ideas, improvements, discoveries and inventions, whether or
               not they are believed to be patentable ("Inventions"), which
               Employee conceives of or first actually reduces to practice,
               either solely or jointly with others, during Employee's
               employment with ORTHOFIX, and which relate to the business now or
               thereafter carried on or contemplated by ORTHOFIX, OI, or their
               affiliates or which result from any work performed by Employee
               for ORTHOFIX, OI, or their affiliates.

          (b)  Employee acknowledges and agrees that all Inventions shall be the
               sole and exclusive property of ORTHOFIX, and during the term of
               Employee's employment with ORTHOFIX and thereafter, whenever
               requested to do so by ORTHOFIX, Employee shall execute and assign
               any and all applications, assignments and other instruments that
               ORTHOFIX shall deem necessary or appropriate in order to apply
               for and obtain Letters Patent of the United States and/or of any
               foreign countries for such Inventions and in order to assign and
               convey to ORTHOFIX or its nominee the sole and exclusive right,
               title and interest in and to such Inventions.

          (c)  ORTHOFIX acknowledges and agrees that the provisions of this
               Section 15 do not apply to an Invention (i) for which no
               equipment, supplies, facility or Confidential Information of
               ORTHOFIX, OI, or their affiliates was used; (ii) that was
               developed entirely on Employee's own time; (iii) that does not
               relate directly to the business of

                                    Page 12

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               ORTHOFIX, OI, or their affiliates or to the actual or
               demonstrably anticipated research or development of ORTHOFIX, OI,
               or their affiliates; and (iv) that does not result from any work
               performed by Employee for ORTHOFIX, Ol, or their affiliates.

          16.  Binding Arbitration; Legal Fees and Expenses. It is the intent of
    ORTHOFIX that Employee not be required to bear the legal fees and related
    expenses associated with the enforcement or defense of Employee's rights
    under this Agreement by litigation or other legal action because having to
    do so would substantially detract from the benefits intended to be extended
    to Employee hereunder. Accordingly, the parties agree as follows:

          (a)  Any dispute or controversy arising under or in connection with
               this Agreement prior to the occurrence of a Change of Control
               shall be resolved exclusively by binding arbitration in Dallas
               County, Texas, in accordance with the rules of the American
               Arbitration Association then in effect. Judgment may be entered
               on the arbitrator's award in any court having jurisdiction. Each
               party shall bear his or its own costs and expenses of
               arbitration, but if Employee is determined by the arbitrator(s)
               to be the prevailing party in such arbitration, ORTHOFIX shall
               pay to Employee as part of the arbitration award all attorneys'
               and expert fees and other expenses reasonably incurred by
               Employee in connection with such arbitration.

          (b)  If, following the occurrence of a Change of Control, Employee
               determines in good faith that ORTHOFIX has failed to comply with
               any of its obligations under this Agreement or ORTHOFIX or any
               other person takes or threatens to take action to declare this
               Agreement void or unenforceable, or institutes any litigation,
               arbitration proceeding or other action or proceeding designed to
               deny Employee the benefits provided or intended to be provided to
               Employee hereunder, ORTHOFIX irrevocably authorizes Employee to
               retain counsel of Employee's choice, at the expense of ORTHOFIX
               as hereafter provided, to represent Employee in connection with
               the initiation or defense of any litigation, arbitration or other
               legal action, whether by or against ORTHOFIX or any director,
               officer, stockholder or other person affiliated with ORTHOFIX in
               any jurisdiction. Within 10 business days after receipt from
               Employee of a request referencing this Section 16(b), ORTHOFIX
               shall, from time to time, pay or reimburse Employee for fees and
               expenses incurred, or reasonably anticipated to be incurred, in
               accordance with such request and this Section 16(b). Without
               respect to whether Employee prevails, in whole or in part, in
               connection with any of the foregoing, ORTHOFIX shall pay or cause
               to be paid and shall be solely responsible for any and all
               attorneys' and related fees and expenses incurred by Employee in
               connection with any of the foregoing, excluding any such fees and
               expenses related to an unsuccessful appeal filed by Employee of
               an adjudication on the merits, any motion for a new trial filed
               by Employee after such an adjudication that is denied, or any
               other motion filed by Employee for reconsideration or review of
               such an adjudication that is denied.

                                    Page 13

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          17.  Withholding of Taxes. ORTHOFIX may withhold from any amounts
    payable under this Agreement all federal, state, city, or other taxes as
    shall be required pursuant to law or regulation.

          18.  Notices. All notices, requests, demands, and other communications
    called for or contemplated hereunder shall be in writing and shall be deemed
    to have been given when delivered personally or when mailed by United States
    certified or registered mail, return receipt requested, postage prepaid,
    addressed to the parties, their successors in interest or assignees at the
    following addresses or such other addresses as the parties may designate by
    notice in the manner aforesaid:

          If to ORTHOFIX:               Orthofix Inc,
                                        1720 Bray Central Drive
                                        McKinney, Texas  75069
                                        Attention: Gary D. Henley

          With a copy to:               Brian J. Hurst
                                        Baker & McKenzie
                                        2300 Trammell Crow Center
                                        2001 Ross Avenue
                                        Dallas, Texas  75201

          If to Employee:               Gary D. Henley
                                        3408 Radcliffe Dr.
                                        Plano, Texas  75093

                                               and

                                        1720 Bray Central Drive
                                        McKinney, Texas  75069

          19.  Law Governing. This Agreement shall be governed by and construed
    in accordance with the laws of the State of Texas, without giving effect to
    Texas's principles of conflict of laws.

          20.  Validity. The invalidity or unenforceability of any provision or
    provisions of this Agreement shall not affect the validity or enforceability
    of any other provision of this Agreement, which shall remain in full force
    and effect. Any provision of this Agreement held to be invalid or
    unenforceable shall be reformed to the extent necessary to make it valid and
    enforceable.

                                    Page 14

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          21.  Entire Agreement. This Agreement constitutes the entire agreement
    between the parties with respect to the subject matter hereof, superseding
    all negotiations, discussions, preliminary agreements, and previous
    contracts between Employee and ORTHOFIX, OI, or their affiliates. No
    provisions of this Agreement may be amended or waived except in writing
    executed by the parties.

          22.  Effect on Successors in Interest. This Agreement shall inure to
    the benefit of and be binding upon the heirs, administrators, executors, and
    successors of each of the parties, including without limitation any person
    acquiring, directly or indirectly, all or substantially all of the stock
    and/or assets of ORTHOFIX, OI, or their affiliates by purchase, merger,
    consolidation, reorganization or otherwise. Any such successor shall be
    deemed "ORTHOFIX" for purposes of this Agreement.

          23.  Agreement. This Agreement is personal in nature and neither of
    the parties shall, without the consent of the other, assign, transfer or
    delegate this Agreement or any rights or obligations hereunder except as
    expressly provided in this Section. Without limiting the generality of the
    foregoing, Employee's right to receive payments hereunder shall not be
    assignable, transferable or delegable, whether by pledge, creation of a
    security interest or otherwise, other than by a transfer under Employee's
    will or by the laws of descent and distribution. In the event of any
    attempted assignment or transfer contrary to this Section, ORTHOFIX shall
    have no liability to pay any amount so attempted to be assigned, transferred
    or delegated.

          24.  Effectiveness. This Agreement shall be effective upon the
    Effective Date.

ORTHOFIX INC.                                   EMPLOYEE

By:      /s/  Charles Federico                  /s/ Gary D. Henley
       --------------------------               --------------------------
                                                Gary D. Henley
Title: CEO
       --------------------------

Date:  3/25/03                                  Date:  3/1/03
       --------------------------                      -------------------

                                    Page 15

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                     Guaranty by Orthofix International N.V.

Orthofix International N.V. joins in this Agreement for the sole purpose of
guaranteeing the obligations of Orthofix Inc. to pay, provide, or reimburse
Employee for, all cash and in-kind severance benefits provided in this
Agreement, including the provision of all benefits in the form of, or related
to, securities of Orthofix International N.V. or options thereon.

                                             ORTHOFIX INTERNATIONAL N.V.

                                             By:    /s/  Charles Federico
                                                    --------------------------

                                             Title: CEO
                                                    --------------------------

                                             Date:  3/25/03
                                                    --------------------------

Emp. Agr - Exec. Officer

                                    Page 16

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