Document:

PERFORMANCE ACCELERATED
                             STOCK OPTIONS AGREEMENT

     This PERFORMANCE ACCELERATED STOCK OPTIONS AGREEMENT (this "Agreement"),
dated as of the ____ day of ___________ by and between Orthofix International
N.V. (the "Company") and ______________ (the "Optionee").

                              W I T N E S S E T H:

     WHEREAS, in connection with the transaction contemplated by the Acquisition
Agreement, dated as of November 20, 2003 (the "Acquisition Agreement"), among
the Company, Trevor Acquisition, Inc., a Delaware corporation and an indirect
wholly owned subsidiary of Orthofix, Breg, Inc., a California corporation, and
Bradley R. Mason, as shareholder's representative, and the Optionee's employment
with the Company, the Company wishes to grant the Optionee options to purchase
shares of the Company's common stock, par value U.S. $0.10 per share ("Common
Stock"), on the terms and conditions set forth herein.

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

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

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

          (b) "Cause" means termination of the Optionee's employment because of
any of the following events:

          (i) Any of the events or circumstances under the definition of "Cause"
     pursuant to the Optionee's employment agreement with the Company, dated
     _________________ (the "Employment Agreement"), if such Employment
     Agreement is in effect; or

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

          (c) "Change in Control" means, notwithstanding the terms of any
applicable plan or arrangement to the contrary, 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 the Company representing twenty percent (20%) or more of the
     combined voting power of the Company's then outstanding securities entitled

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     to vote generally in the election of directors (unless such person is known
     by Optionee to be already such beneficial owner on the date of this
     Agreement);

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

          (iii) The Company is merged, consolidated or reorganized into, or with
     another corporation or other legal person, or securities of the Company are
     exchanged for securities of another corporation or other 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 person immediately after such transaction
     are held, directly or indirectly, in the aggregate by the holders of
     securities entitled to vote generally in the election of directors of the
     Company immediately prior to such transaction;

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

          (v) The Company and 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 (determined on the
     basis of the Company's four (4) most recently completed fiscal quarters for
     which reports have been filed under the Exchange Act) of the Company and
     its subsidiaries immediately prior thereto;

          (vi) The Company 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 the Company has or may
     have occurred or will or may occur in the future pursuant to any
     then-existing contract or transaction; or

          (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.

     Notwithstanding the foregoing provisions, unless otherwise determined
     in a specific case by majority vote of the Board, a "Change of Control"
     shall not be deemed to have occurred for purposes of this Agreement
     solely because:

          (i) The acquisition of, or issuance by, Orthofix of its securities; or

          (ii) An entity in which Orthofix directly or indirectly beneficially
     owns fifty percent (50%) or more of the voting securities, or any
     Orthofix-sponsored employee stock ownership plan, or any other employee
     benefit plan of 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

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<PAGE>

     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 Common Stock of
     Orthofix, or because Orthofix reports that a Change in Control of Orthofix
     has or may have occurred or will or may occur in the future by reason of
     such beneficial ownership; or

          (iii) Any Orthofix-sponsored employee stock ownership plan, or any
     other employee benefit plan of 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 Common Stock of
     Orthofix, or because Orthofix reports that a Change in Control of Orthofix
     has or may have occurred or will or may occur in the future by reason of
     such beneficial ownership.

          (d) "Committee" means the Compensation Committee of the Board.

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

          (f) "Permanent Disability" means termination of the Optionee's
employment because of any of the following events:

          (i) Any of the events or circumstances under the description of
     "Permanent Disability" pursuant to the Optionee's Employment Agreement, if
     such Employment Agreement is in effect; or

          (ii) The Optionee's incapacity resulting from physical or mental
     illness or disease which substantially prevents the Optionee from
     performing his duties as an employee of the Company and that has continued
     at least one hundred and eighty (180) days and can be reasonably be
     expected to continue indefinitely. Any dispute as to whether or not the
     Optionee is disabled within the meaning of the preceding sentence shall be
     resolved by a physician selected by the Board or the Committee.

     SECTION 2. Grant of Options. Subject to the terms and conditions set forth
in this Agreement, the Company hereby grants to the Optionee, during the period
commencing on the date of the consummation of the transactions contemplated by
the Acquisition Agreement as of the Effective Time (as defined in the
Acquisition Agreement (the "Grant Date") and ending on the Expiration Date (the
"Option Period"), options to purchase from the Company ___________ shares of
Common Stock at an exercise price of $38.00 per share (the "Options").

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

          (a) Generally. All shares subject to the Options shall vest and become
fully exercisable on the fourth (4th) anniversary of the Grant Date and shall be
exercisable thereafter until and including the Expiration Date, subject to the
limitations on exercise set forth in Section 3(c) hereof and any other
limitations in effect on the date of exercise. Notwithstanding the foregoing,
____________ shares subject to the Options shall be eligible for accelerated
vesting as of the first (1st) anniversary of the Grant Date, an additional
____________ shares subject to the

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Options shall be eligible for accelerated vesting on the second (2nd)
anniversary of the Grant Date and an additional ____________ shares subject to
the Options shall be eligible for accelerated vesting on the third (3rd)
anniversary of the Grant Date, subject to the attainment of the following stock
price targets: each five dollar ($5) increase in the market price of the shares
of Common Stock above $40 (each a "Common Stock Price Target") that is attained
during each one-year period beginning on the Grant Date and ending on each of
the first three (3) anniversaries of the Grant Date (each such date a "Grant
Date Anniversary") shall, without duplication for Options that vest in prior
years, result in one-fifth (1/5) of the shares subject to the Options and that
are eligible for accelerated vesting in such year to vest effective as of the
applicable Grant Date Anniversary; provided, however, that the Optionee shall be
subject to the limitations on exercise set forth in Section 3(c) hereof. As soon
as practicable after each Grant Date Anniversary, the Board or the Committee
shall determine the number of Common Stock Price Target increases attained
during the one-year period preceding such Grant Date Anniversary. For purposes
of the Common Stock Price Target increase determination, the Board or the
Committee (as the case may be) shall assume that the market price of the shares
of Common Stock was $40 on the first day of each one-year period.

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

               (A) equals the (x) the total number of shares eligible for
          accelerated vesting on such Grant Date Anniversary (i.e., ____ in year
          one, ____ in year two and ____ in year three) multiplied by (y) a
          fraction of which the numerator is the total number of Common Stock
          Price Targets attained during the one-year period ending on such Grant
          Date Anniversary (which, for purposes of this calculation, assumes the
          market price of the shares of Common Stock was $40 on the first day of
          such one-year period) and the denominator is five (5), and

               (B) equals the total number of Options previously vested.

          (ii) If, on any Grant Date Anniversary, the number of Common Stock
     Price Target increases during the one-year period ending on such Grant Date
     Anniversary is less than the number of Common Stock Price Target increases
     attained on the previous Grant Date Anniversary, then the number of Options
     vested during the one-year period ending on such Grant Date Anniversary
     shall equal zero (0).

          (b) Grant Date Anniversary Vested Options; Total Number of Vested
Options. The total number of vested Options on any Grant Date Anniversary shall
be (x) equal the sum of (A) and (B) set forth above in Section 3(a)(i) if, on
any Grant Date Anniversary, the number of Common Stock Price Target increases on
such Grant Date Anniversary is equal to or exceeds the number of Common Stock
Price Target increases attained on the previous Grant Date Anniversary or (y)
zero (0) if, on any Grant Date Anniversary, the number of Common Stock Price
Target increases on such Grant Date Anniversary is less than the number of
Common Stock Price Target increases attained on the previous Grant Date
Anniversary (the "Grant Date Anniversary Vested Options"). For all purposes of
this Agreement, the total number of vested Options at any time shall equal (x)
the sum of all Grant Date Anniversary Vested Options or the number of Options
that vest on the fourth (4th ) anniversary of the Grant Date (as the case may
be) less (y) the sum of all vested Options that were properly exercised by the
Optionee, subject to

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<PAGE>

the limitations on exercise set forth in Section 3(c) hereof, and such amount
shall be referred to herein as the "Total Number of Vested Options."

          (c) Exercise Limited to 50% of Vested Options during any One-Year
Period. Notwithstanding anything to the contrary, the Optionee shall not
exercise more than fifty percent (50%) of the Total Number of Vested Options
during any one-year period; provided, however, the Optionee shall be eligible to
exercise one hundred percent (100%) of the Total Number of Vested Options after
the ninth (9th) anniversary of the Grant Date.

         EXAMPLE

     o    If during the first year the price of the shares of Common Stock
          exceeded $50, then 2 (i.e., $45 and $50) of the 5 Common Stock Price
          Targets (40% (i.e., 2 divided by 5)) would have been met.

     o    By multiplying the total number of Options eligible for vesting in
          year one (____) and the number of Common Stock Price Targets met in
          year one (i.e., 40%), the number of Options that would vest in year
          one would be ____ (i.e., ____ multiplied by 40% = ____). However, the
          Optionee would only be eligible to exercise ____ of the Total Number
          of Vested Options during any one-year period due to the limitations on
          exercise set forth in Section 3(c) hereof.

     o    Continuing the example, if during year two, the price of the shares of
          Common Stock exceeds $55, then 3 (i.e., $45, $50 and $55) of the 5
          Common Stock Price Targets (60% (i.e., 3 divided by 5)) would have
          been met. Thus, the number of Options vesting in year two would be
          ____. This is calculated by taking the total number of Options
          eligible for vesting in year two, which is ____, multiplied by 60%,
          less ____ (i.e., the number of Options that vested in year one). The
          Total Number of Vested Options would be ____. However, the Optionee
          would only be eligible to exercise ____ of the Total Number of Vested
          Options during any one-year period due to the limitations on exercise
          set forth in Section 3(c) hereof.

     o    Continuing the example, if during year three, the price of the shares
          of Common Stock does not exceed any of the five Common Stock Price
          Targets, then 0 of the 5 Common Stock Price Targets (0% (i.e., 0
          divided by 5)) would have been met. Thus, the number of Options
          vesting in year three would be 0. The Total Number of Vested Options
          would remain ____ (i.e., ____ from year one, ____ from year two and
          ____ from year three). However, the Optionee would only be eligible to
          exercise ____ of the Total Number of Vested Options during any
          one-year period due to the limitations on exercise set forth in
          Section 3(c) hereof.

          (d) Trading Period Relating to Common Stock Price Targets. The number
of Common Stock Price Targets attained during any one-year period ending on a
Grant Date Anniversary shall be determined based upon the highest market price
attained during such one-year period for at least ten (10) consecutive trading
days on the National Association of Securities Dealers Automated Quotation
Market System, or on the principal securities exchange on which the shares of
Common Stock is then traded (the "Sustained Trading Period").

          (e) Exercisability. Shares subject to the Options that vest pursuant
to Section 3(a) hereof shall become exercisable on each Grant Date Anniversary
and, subject to the

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<PAGE>

limitations on exercise set forth in Section 3(c) hereof and the terms and
conditions contained in Section 4 hereof, shall remain exercisable
until the Expiration Date.

     SECTION 4. Termination of Employment or Change in Control.

          (a) General. A termination of employment shall be deemed to have
occurred if the Optionee is no longer employed by the Company or any of its
subsidiaries for any reason. The Board and the Committee each shall have the
discretion to determine whether employment has been or could have been
terminated for the purposes of this Agreement, and the reasons therefore. Any
such determination shall be final, binding and conclusive.

          (b) Termination of Employment due to Permanent Disability. If, prior
to the Expiration Date, the Optionee shall cease to be employed by the Company
by reason of a Permanent Disability, the Options shall remain exercisable until
the earlier of the Expiration Date or one (1) year after the date of cessation
of employment to the extent the Options were exercisable as of the date of the
Optionee's termination of employment by reason of a Permanent Disability,
subject to the limitations on exercise set forth in Section 3(c) hereof and any
other limitation on the exercise of the Options in effect on the date of
exercise.

          (c) Termination of Employment due to Death or Retirement. If, prior to
the Expiration Date, the Optionee shall enter retirement (in accordance with any
qualified retirement plan maintained by the Company) from employment or cease to
be employed by the Company by reason of death, or the Optionee shall die while
entitled to exercise any of the Options pursuant to Section 4(b) hereof or the
final sentence of Section 4(d) hereof, the executor or administrator of the
estate of the Optionee or the person or persons to whom the Options shall have
been validly transferred by the executor or administrator pursuant to will or
the laws of descent and distribution shall have the right, until the earlier of
the Expiration Date or one (1) year after the date of retirement or death, to
exercise the Options to the extent that the Optionee was entitled to exercise
them on the date of death, subject to the limitations on exercise set forth in
Section 3(c) hereof and any other limitation on the exercise of the Options in
effect on the date of exercise.

          (d) Termination of Employment Other than due to Death, Permanent
Disability or Retirement. If the Optionee voluntarily terminates employment with
the Company for reasons other than death, Permanent Disability, or retirement (a
"Voluntary Termination"), or if the Optionee's employment with the Company is
terminated for Cause, the Options, to the extent not exercised prior to such
termination, shall lapse and be canceled. If the Company terminates the
Optionee's employment without Cause, the Options, to the extent exercisable as
of the date of Optionee's termination, shall continue to be exercisable until
the earlier of the Expiration Date or ninety (90) days after the date of such
termination, subject to the limitations on exercise set forth in Section 3(c)
hereof and any other limitation on the exercise of the Options in effect on the
date of exercise.

          (e) Change in Control. Upon the occurrence of a Change in Control, the
Options shall automatically vest in full, provided, however, the vested Options
shall continue to be subject to the limitations on exercise set forth in Section
3(c) hereof and any other limitation on the exercise of the Options in effect on
the date of exercise. The vested Options shall continue to be exercisable for
three months following the Change in Control, subject to such limitations.

          (f) Expiration of Options. After the expiration of any exercise period
described in either of Sections 4(b), 4(c), 4(d) or 4(e) hereof, the Options
shall terminate together with all of the Optionee's rights hereunder, to the
extent not previously exercised. Except as set

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forth herein, all vesting with respect to the Options shall cease upon the
Optionee's termination of employment and all Options to the extent unvested as
of the Date of Termination shall expire.

     SECTION 5. Methods of Exercising Options.

          (a) Notice of Exercise. Subject to the terms and conditions of this
Agreement, the Options may be exercised by written notice to the Company signed
by the Optionee or a Permitted Transferee and stating the number of shares of
Common Stock in respect of which the Options are being exercised. Such notice
shall be accompanied by payment of the full exercise price. The date of exercise
of the Options shall be the later of (i) the date on which the Company receives
the notice of exercise or (ii) the date on which any requisite conditions are
satisfied, including, without limitation, the conditions set forth below in
Sections 8 hereof. Notwithstanding any other provision of this Agreement, the
Optionee may not exercise the Options and no shares of Common Stock will be
issued by the Company with respect to any attempted exercise when such exercise
is prohibited by law or any Company policy then in effect. The Options may not
be exercised at any one time as to less than one hundred (100) shares (or such
number of shares as to which the Options are then exercisable if less than one
hundred (100)). In no event shall the Options be exercisable for a fractional
share.

          (b) Payment. Prior to the issuance of a certificate pursuant to
Section 14 hereof evidencing the shares of Common Stock in respect of which all
or a portion of the Options shall have been exercised, the Optionee shall have
paid to the Company the exercise price for all shares of Common Stock purchased
pursuant to the exercise of such Options. Payment may be made by personal check,
bank draft or postal or express money order (such modes of payment are
collectively referred to as "cash") payable to the order of the Company in U.S.
dollars. Payment may also be made in mature shares of Common Stock owned by the
Optionee, or in any combination of cash or such mature shares as the Board or
the Committee (as the case may be) in their sole discretion may approve. The
Company may also permit the Optionee to pay for such shares of Common Stock by
directing the Company to withhold shares of Common Stock that would otherwise be
received by the Optionee, pursuant to such rules as the Board or the Committee
may establish from time to time. In the discretion of the Board or the
Committee, and in accordance with rules and procedures established by the Board
or the Committee, the Optionee may be permitted to make a "cashless" exercise of
all or a portion of the Options.

     SECTION 6. Withholding. The Company shall have the right, prior to the
delivery of any certificates evidencing shares of Common Stock to be issued upon
full or partial exercise of the Options (whether by the Optionee or any
Permitted Transferees), to require the Optionee to remit to the Company any
amount sufficient to satisfy the minimum required federal, state or local tax
withholding requirements. The Company may permit the Optionee to satisfy, in
whole or in part, such obligation to remit taxes, by directing the Company to
withhold shares of Common Stock that would otherwise be received by the
Optionee, pursuant to such rules as the Board or the Committee may establish
from time to time. The Company shall also have the right to deduct from all cash
payments made pursuant to, or in connection with, the Options the minimum
required federal, state or local taxes required to be withheld with respect to
such payments.

     SECTION 7. Optionee. Whenever the word "Optionee" is used in any provision
of this Agreement under circumstances where the provision should logically be
construed to apply to the executors, the administrators, the person or persons
to whom the Options may be transferred by will or by the laws of descent and
distribution or Permitted Transferees (as defined below in Section 8 hereof),
the word "Optionee" shall be deemed to include such person or persons.

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     SECTION 8. Non-Transferability. Unless the Board or the Committee
determines otherwise on or after the Grant Date, no Options shall be
transferable by the Optionee other than by will or by the laws of descent and
distribution or pursuant to a domestic relations order; provided, however, that
the Board or the Committee may, in their discretion and subject to such terms
and conditions as they shall specify, permit the transfer of the Options for no
consideration to the Optionee's family members or to one or more trusts or
partnerships established in whole or in part for the benefit of one or more of
such family members (collectively, "Permitted Transferees"). Any Options
transferred to a Permitted Transferee shall be further transferable only by will
or the laws of descent and distribution or, for no consideration, to another
Permitted Transferee of the Optionee. The Board or the Committee may in their
discretion permit transfers of Options other than those contemplated by this
Section 8. During the lifetime of the Optionee, the Options shall be exercisable
only by the Optionee or by a Permitted Transferee to whom such Options have been
transferred in accordance with this Section 8. The grant of the Options shall
impose no obligation on the Optionee to exercise the Options.

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

     SECTION 10. No Restriction on Right to Effect Corporate Changes. Neither
this Agreement nor the existence of any Options granted hereunder shall affect
or restrict in any way the right or power of the Company or the shareholders of
the Company to make or authorize any adjustments, recapitalizations,
reorganizations or other change in the Company's capital structure or business,
any merger or consolidation of the Company, any issue of stock or of options,
warrants or rights to purchase stock or bonds, debentures, preferred or prior
preference stocks whose rights are superior to or affect the shares of Common
Stock or the rights thereof or which are convertible into or exchangeable for
shares of Common Stock, or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

     SECTION 11. Changes in Capitalization. Notwithstanding any provision of
this Agreement, the number and kind of shares authorized for issuance under
Section 2 hereof may be equitably adjusted in the sole discretion of the Board
or the Committee in the event of a stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, extraordinary dividend,
split-up, spin-off, combination, exchange of shares, warrants or rights offering
to purchase shares of Common Stock at a price substantially below fair market
value or other similar corporate event affecting the shares of Common Stock in
order to preserve, but not increase, the benefits or potential benefits intended
to be made available under this Agreement. In addition, upon the occurrence of
any of the foregoing events, the number of outstanding Options and the number
and kind of shares subject to any outstanding Options and the exercise price per
share under any outstanding Options may be equitably adjusted (including by
payment of cash to the Optionee) in the sole discretion of the Board or the
Committee in order to preserve the benefits or potential benefits intended to be
made available to the Optionee. Such adjustments shall be made by the Board or
the Committee, in their sole discretion, whose determination as to what
adjustments shall be made, and the extent thereof, shall be final. Unless
otherwise determined by the Board or the Committee, such adjusted Options shall
be subject to the same restrictions (including, without limitations, the
limitations on exercise set forth in Section 3(c) hereof) and vesting schedule
to which the underlying Options are subject.

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<PAGE>

     SECTION 12. No Right to Employment. Neither this Agreement, the grant of
Options under this Agreement, nor any action taken or omitted to be taken under
this Agreement shall be deemed to create or confer on the Optionee any right to
be retained in the employ of the Company or any subsidiary or other affiliate
thereof, or to interfere with or to limit in any way the right of the Company or
any subsidiary or other affiliate thereof to terminate the employment of such
Optionee at any time.

     SECTION 13. Compliance with Law. Notwithstanding any of the provisions
hereof, the Optionee hereby agrees that Optionee will not exercise the Options,
and that the Company will not be obligated to issue or transfer any shares of
Common Stock to the Optionee hereunder, if the exercise hereof or the issuance
or transfer of such shares shall constitute a violation by the Optionee or the
Company of any provisions of any law or regulation of any governmental
authority. Any determination in this connection by the Board or the Committee
(as the case may be) shall be final, binding and conclusive. In addition, the
Board or the Committee (as the case may be) may require the Optionee purchasing
shares of Common Stock pursuant to this Agreement to represent to and agree with
the Company in writing that such Optionee is purchasing the shares Common Stock
for investment purposes and not with a view to the distribution thereof.

     SECTION 14. Issuance of Share Certificates. As soon as is reasonably
practical after its receipt of a proper notice of exercise and payment of the
exercise price for the number of shares with respect to which the Options are
exercised, the Company shall deliver to the Optionee, at the principal office of
the Company or at such other location as may be acceptable to the Company and
the Optionee, one or more stock certificates for the appropriate number of
shares of Common Stock issued in connection with such exercise. Such shares of
Common Stock shall be fully paid and nonassessable and shall be issued in the
name of the Optionee. All certificates for shares of Common Stock delivered
under this Agreement shall be subject to such stock-transfer orders and other
restrictions as the Board or the Committee (as the case may be) may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any exchange upon which shares of Common Stock are then
listed, and any applicable securities law, and the Board or the Committee (as
the case may be) may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

     SECTION 15. Notice. Every notice or other communication relating to this
Agreement shall be in writing, and shall be mailed to or delivered to the party
for whom it is intended at such address as may from time to time be designated
by it in a notice mailed or delivered to the other party as herein provided,
provided that, unless and until some other address be so designated, all notices
or communications by the Optionee to the Company shall be mailed or delivered to
the Company at its principal executive office, and all notices or communications
by the Company to the Optionee may be given to the Optionee personally or may be
mailed to Optionee at the Optionee's last known address, as reflected in the
Company's records.

     SECTION 16. Non-Qualified Options. The Options are not an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended or any successor provision thereto.

     SECTION 17. Binding Effect. Subject to Section 7 hereof, this Agreement
shall be binding upon the heirs, executors, administrators and successors of the
parties hereto.

     SECTION 18. Determinations; Liability. All determinations by the Board or
the Committee (as the case may be) in construing and interpreting this Agreement
shall be final,

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binding and conclusive for all purposes and upon all persons interested herein.
No member of the Board or Committee shall be liable for any action or
determination made in connection with the operation or interpretation of this
Agreement and the Company shall indemnify, defend and hold harmless each such
person from any liability arising from or in connection with this Agreement,
except where such liability results directly from such person's fraud, willful
misconduct or failure to act in good faith. In the performance of its
responsibilities with respect to this Agreement, the Board and the Committee
shall be entitled to rely upon information and advice furnished by the Company's
officers, the Company's accountants, the Company's counsel and any other party
the Board or the Committee deems necessary, and no member of the Board or the
Committee shall be liable for any action taken or not taken in reliance upon any
such advice.

     SECTION 19. Amendments. The Board and the Committee each shall have the
power to alter or amend the terms of the Options as set forth herein from time
to time, and any alteration or amendment of the terms of the Options by the
Board or the Committee shall, upon adoption, become and be binding on all
persons affected thereby without requirement for consent or other action with
respect thereto by any such person, provided, however, that no amendment or
modification shall materially and adversely alter or impair the rights of the
Optionee in the Options granted pursuant to this Agreement without the consent
of the holder thereof. The Committee shall give written notice to the Optionee
of any such alteration or amendment as promptly as practicable after the
adoption thereof. The foregoing shall not restrict the ability of the Optionee
and the Company by mutual consent to alter or amend the terms of the Options in
any manner approved by the Board or the Committee.

     SECTION 20. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of New York.

     SECTION 21. Counterparts. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

                                       10
<PAGE>

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

                                            ORTHOFIX INTERNATIONAL N.V.

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

                                            ------------------------------------

                                       11
<PAGE>[ORTHOFIX LOGO]
                                                                  EXECUTION COPY
                                                                  --------------

                              EMPLOYMENT AGREEMENT
                              --------------------

          This EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of the
20th of November, 2003, by and between Orthofix International N.V., Inc., a
company organized under the laws of the Netherlands Antilles, ("ORTHOFIX"), and
Bradley R. Mason ("Employee").

                              W I T N E S S E T H:

          WHEREAS, in connection with the transaction contemplated by the
Acquisition Agreement, dated as of November 20, 2003 (the "Acquisition
Agreement"), among ORTHOFIX, Trevor Acquisition, Inc., a Delaware corporation
and an indirect wholly owned subsidiary of ORTHOFIX, Breg, Inc., a California
corporation ("Employer"), and Bradley R. Mason, as shareholders' representative,
ORTHOFIX desires to have the benefits of Employee's knowledge and experience as
a full-time senior executive of Employer without distraction by
employment-related uncertainties and ORTHOFIX considers such employment a vital
element to protecting and enhancing the best interests of ORTHOFIX and its
subsidiaries and shareholders, and Employee desires to be employed full-time
with ORTHOFIX.

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

          WHEREAS, pursuant to the terms of the Acquisition Agreement and the
Voting and Subscription Agreement, dated as of November 20, 2003, Employee, who
is a substantial shareholder of Breg, Inc., will vote his shares of common
stock, no par value, of Breg, Inc. in favor of a business combination
transaction pursuant to which Trevor Acquisition, Inc., a Delaware corporation
and an indirect wholly owned subsidiary of ORTHOFIX, will merge with and into
Breg, Inc. and Employee will receive the Merger Consideration (as defined in the
Acquisition Agreement) in exchange for his shares of common stock of Employer.

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

          1. Effectiveness of this Agreement.

          This Agreement shall constitute a binding obligation of ORTHOFIX and
Employee upon execution hereof; provided that, notwithstanding any other
provision of this Agreement, the terms hereof shall become automatically
effective upon the consummation of the transaction contemplated in the
Acquisition Agreement as of the Effective Time (as defined in the Acquisition
Agreement) (the "Effective Date"). In the event that the Acquisition Agreement
is terminated for any reason prior to the Effective Time (as defined in the
Acquisition Agreement) or the Effective Time (as defined in the

                           PRIVILEGED & CONFIDENTIAL
<PAGE>

Acquisition Agreement) does not occur, this Agreement shall be null and void and
shall be terminated without further obligation or liability of either Employee
or ORTHOFIX, or any of its subsidiaries or affiliates.

          2. Term.

          ORTHOFIX hereby agrees to employ Employee for a minimum two-year
period commencing on the Effective Date and ending on the second anniversary
thereof, unless sooner terminated as provided in Sections 6 and 7 of this
Agreement. Effective as of the second anniversary of the Effective Date and the
third anniversary of the Effective Date, 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 hereto delivers to the other party
a written notice of its or his election not to extend such employment, at least
sixty (60) days prior to such date. In addition, if a Change of Control (as
defined in Section 8(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."

          3. Duties.

          Subject to the terms and conditions of this Agreement, Employee shall
serve as the President of Employer and shall exercise the authority and assume
the responsibilities of the President, of a company of the size and nature of
Employer, including without limitation such positions and duties with ORTHOFIX
or any of its other subsidiaries as are assigned by the Board of Directors of
ORTHOFIX. 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 the policies of ORTHOFIX as in effect from time to time for
executive officers of Employer 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 business or other organization.

          4. 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 Employer, but not less than $250,000 per year,
          payable in accordance with the customary payroll practices of ORTHOFIX
          for the payment of executive officers of Employer;

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                           PRIVILEGED & CONFIDENTIAL
<PAGE>

               (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 Employer;

               (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 Employer and is subject to subsection (a)
          above; 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 the executive
          officers of Employer.

          5. Employee Benefits.

               (a) During the Employment Period, Employee shall be entitled, on
          a basis commensurate with Employee's position with Employer, 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 Employer, except for such arrangements that the Board of Directors
          of ORTHOFIX, in its sole discretion, shall adopt for select employees
          to compensate them for special or extenuating circumstances.

               (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 of Employer.

               (c) Effective upon the Effective Date, Employee shall be granted
          performance accelerated stock options pursuant to a Performance
          Accelerated Stock Options Agreement, dated November 20, 2003 (the
          "PASO Agreement"), to purchase from ORTHOFIX one hundred and fifty
          thousand (150,000) shares of common stock in accordance with the terms
          and conditions specified in the Performance Accelerated Stock Options
          Agreement.

               (d) Nothing in this Agreement shall limit Employee's
          participation in any other benefit plans or arrangements as are from
          time to time approved by ORTHOFIX, as determined by the Board of
          Directors of ORTHOFIX, in its sole discretion.

               (e) Under no circumstances will Employee's place of employment be
          moved by ORTHOFIX more than 25 miles from Employee's current work
          location, without the express consent of Employee.

          6. Termination by ORTHOFIX. Employee's employment hereunder may be
terminated by ORTHOFIX during the Employment Period without any breach of this
Agreement, and

                                       3
                           PRIVILEGED & CONFIDENTIAL
<PAGE>

Employee will not be entitled to the benefits provided by Sections 8 and 9
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 ORTHOFIX's long-term disability plan then in
          effect for executive officers of Employer, 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 of ORTHOFIX or Chief
          Executive Officer of ORTHOFIX after written notice of such failure has
          been given to Employee by the Board of Directors of ORTHOFIX or Chief
          Executive Officer of ORTHOFIX; (ii) the willful commission by Employee
          of acts that are dishonest and demonstrably and materially injurious
          to ORTHOFIX or its subsidiaries, 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 16) or (vi) intentional wrongful engagement in any
          Competitive Activity (as defined in Section 14).

          The termination of Employee's employment by ORTHOFIX during the
Employment Period for any reason other than those specified in this Section 6
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.

          Notwithstanding anything to the contrary, in the event Employee's
employment is terminated for any reason at any time by ORTHOFIX or Employee
terminates Employee's employment for any reason at any time, Employee shall be
required to relinquish his equity interest of one-tenth of one percent (0.1%) in
Breg Mexico S. de R.I. de C.V. to ORTHOFIX for no consideration prior to or on
the date of his termination of employment.

          7. 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:

                                       4
                           PRIVILEGED & CONFIDENTIAL
<PAGE>

               (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 as contemplated
          by this Agreement;

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

               (c) 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 Employer;
          there is a change or termination of Employee's right to participate,
          on a basis substantially consistent with practices applicable to
          executive officers of Employer generally on the Effective Date, in any
          policy, plan, program or arrangement of the type referred to in
          Section 5(c) of this Agreement; or there is a termination or denial of
          Employee's right, on a basis substantially consistent with practices
          applicable generally to executive officers of Employer on the
          Effective Date, to benefits of the type referred to in Section 5(a) of
          this Agreement;

               (d) Without the express consent of Employee, the permanent
          relocation by ORTHOFIX of Employee to a location not within 25 miles
          of Employee's current work location; and

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

          Termination by Employee of Employee's employment with ORTHOFIX
pursuant to this Section 7 shall be deemed to be termination of Employee's
employment by ORTHOFIX without Cause.

          Notwithstanding anything to the contrary, in the event Employee's
employment is terminated for any reason at any time by ORTHOFIX or Employee
terminates Employee's employment for any reason at any time, Employee shall be
required to relinquish his equity interest of one-tenth of one percent (0.1%) in
Breg Mexico S. de R.I. de C.V. to ORTHOFIX for no consideration prior to or on
the date of his termination of employment.

          8. 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 7 hereof,
          Employee shall be entitled to a lump sum severance payment equal to
          one year of Employee's Base Amount (as defined in subsection (b)).

                                       5
                           PRIVILEGED & CONFIDENTIAL
<PAGE>

               (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 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 4(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; provided, however, that all terms and
                         conditions, including, without limitation, those
                         relating to vesting and exercisability, of the
                         performance accelerated stock options granted pursuant
                         to the PASO Agreement shall be governed by the terms
                         and conditions contained in the PASO Agreement; and

                                       6
                           PRIVILEGED & CONFIDENTIAL
<PAGE>

                    (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 ORTHOFIX representing 20% or more of
                         the combined voting power of ORTHOFIX's then
                         outstanding securities entitled to vote generally in
                         the election of directors (unless such person is known
                         by Employee to be already such beneficial owner on the
                         date of this Agreement);

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

                    (iii) ORTHOFIX is merged, consolidated or reorganized into,
                         or with another corporation or other legal person, or
                         securities of ORTHOFIX are exchanged for securities of
                         another corporation or other 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 person immediately
                         after such transaction are held, directly or
                         indirectly, in the aggregate by the holders of
                         securities entitled to vote generally in the election
                         of directors of ORTHOFIX immediately prior to such
                         transaction;

                    (iv) ORTHOFIX, in any transaction or series of related
                         transactions, sells all or substantially all of its
                         assets to any other corporation or other legal person,
                         and less than a majority of the combined voting power
                         of the then-outstanding securities of such corporation
                         or person immediately after such sale or sales are
                         held, directly or indirectly, in the aggregate by the
                         holders of securities entitled to

                                       7
                           PRIVILEGED & CONFIDENTIAL
<PAGE>

                         vote generally in the election of directors of ORTHOFIX
                         immediately prior to such sale;

                    (v)  ORTHOFIX and 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 (determined on
                         the basis of ORTHOFIX's four most recently completed
                         fiscal quarters for which reports have been filed under
                         the Exchange Act) of ORTHOFIX and its subsidiaries
                         immediately prior thereto;

                    (vi) ORTHOFIX 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 ORTHOFIX
                         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

                    (viii) Employee is terminated by ORTHOFIX, or removed from
                         Employee's office or position with ORTHOFIX, without
                         cause within the period of 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 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 ORTHOFIX shall provide
          Employer 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 ten (10) business days of the
          termination of Employee's employment with ORTHOFIX, ORTHOFIX may
          effect such reduction in any manner it deems appropriate.

                                       8
                           PRIVILEGED & CONFIDENTIAL
<PAGE>

Notwithstanding the provisions of Section 8(d)(i) or 8(d)(vi) hereof, unless
otherwise determined in a specific case by majority vote of the Board of
Directors of ORTHOFIX, a "Change of Control" shall not be deemed to have
occurred for purposes of this Agreement solely because:

                    (i)  The acquisition of, or issuance by, ORTHOFIX of its
                         securities; or

                    (ii) An entity in which ORTHOFIX directly or indirectly
                         beneficially owns 50% or more of the voting securities,
                         or any ORTHOFIX-sponsored employee stock ownership
                         plan, or any other employee benefit plan of 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 ORTHOFIX, or because ORTHOFIX reports that a
                         Change in Control of ORTHOFIX has or may have occurred
                         or will or may occur in the future by reason of such
                         beneficial ownership; or

                    (iii) Any ORTHOFIX-sponsored employee stock ownership plan,
                         or any other employee benefit plan of 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 ORTHOFIX, or because ORTHOFIX reports that a
                         Change in Control of ORTHOFIX 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 8(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 8, except this
          Section 8 shall continue and become applicable if a subsequent Change
          of Control occurs during the Employment Period.

          Notwithstanding anything to the contrary, in the event Employee's
employment is terminated for any reason at any time by ORTHOFIX or Employee
terminates Employee's employment for any reason at any time, Employee shall be
required to relinquish his equity interest of one-tenth of one percent (0.1%) in
Breg Mexico S. de R.I. de C.V. to ORTHOFIX for no consideration prior to or on
the date of his termination of employment.

                                       9
                           PRIVILEGED & CONFIDENTIAL
<PAGE>

          9. Other Severance Benefits.

               (a) If at any time during the Employment Period, Employee is
          terminated without Cause, or Employee resigns for Good Reason,
          Employee is not entitled to the severance payment provided by Section
          8 hereof, then Employee shall be entitled to be paid a severance
          payment equal to one time the Base Amount for termination without
          Cause, and one-half time 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 remuneration to ORTHOFIX 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. Notwithstanding anything to the
          contrary herein, all terms and conditions, including, without
          limitation, those relating to vesting and exercisability, of the
          performance accelerated stock options granted pursuant to the PASO
          Agreement shall be governed by the terms and conditions contained in
          the PASO Agreement. Any stock option agreements for Employee (other
          than the PASO Agreement) shall provide for a continuance of the option
          exercise period for at least one year from the date of Employee's
          termination, without Cause and at least one-half year from the date of
          Employee's resignation for Good Reason, except that in the case of
          Employee's death, continuance of the option exercise period shall be
          at least two years and 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 preceding sentence
          shall not apply to any "incentive stock option," as that term is
          defined in Section 422 of the Code, heretofore granted to Employee.

               (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 the occurrence of such outplacement costs and
          expenses.

          10. 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.

          11. Other Benefits. The provisions of Sections 8 and 9 shall not
affect Employee's participation in, or terminating distributions and vested
rights under, any pension, profit sharing,

                                       10
                           PRIVILEGED & CONFIDENTIAL
<PAGE>

insurance or other employee benefit plan of ORTHOFIX 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 8(c) and as
provided in Section 9(b).

          12. 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 14 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, to mitigate any payment provided for hereunder.

          13. No Right to Set Off. ORTHOFIX shall not 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.

          14. Competitive Activity. During period ending one year following the
termination of Employee's employment with ORTHOFIX, if Employee shall have
received or shall be receiving the payments and benefits Employee is entitled to
receive under this Agreement, if any, Employee shall not, without the prior
written consent of the Board of Directors of ORTHOFIX, engage in any Competitive
Activity. For purposes of this Agreement, the term "Competitive Activity" means
Employee's participation, without the written consent of the Chief Executive
Officer of ORTHOFIX, in the management of any business enterprise if such
enterprise engages in substantial and direct competition with ORTHOFIX or any of
its subsidiaries or affiliates and such enterprise's sales of any product or
service competitive with any product or service of ORTHOFIX or any of its
subsidiaries or affiliates amounted to 25% of such enterprise's net sales for
its most recently completed fiscal year, and if the ORTHOFIX net sales of said
product or service amounted to 25% of ORTHOFIX's net sales for its most recently
completed fiscal year. "Competitive Activity" shall not include:

               (a) The mere ownership of 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.

          15. No Solicitation of Customers; Employees. During a period ending
two years following the termination of Employee's employment with ORTHOFIX,
Employee shall not, without the prior written consent of the Board of Directors
of ORTHOFIX, directly or indirectly, for the purpose of conducting or engaging
in any business that manufacturers, produces or supplies products or services of
the kind manufactured, produced or supplied by the Company: (i) call upon,
solicit, advise or

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otherwise do, or attempt to do, business that pertains to the manufacture,
production or supply of products or services of the kind manufactured, produced
or supplied by ORTHOFIX or any of its subsidiaries or affiliates with any
clients or customers of ORTHOFIX or any of its subsidiaries or affiliates with
whom ORTHOFIX or any of its subsidiaries or affiliates had any prior dealings;
or (ii) take away or interfere or attempt to interfere with any custom, trade,
business or patronage of ORTHOFIX or any of its subsidiaries or affiliates; or
(iii) solicit for employment any person who is, or was within the then most
recent six-month period, an employee of ORTHOFIX or any of its subsidiaries or
affiliates.

          16. 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 one of its subsidiaries, Employee shall not, directly or
          indirectly, use or authorize the use of any confidential or other
          proprietary information of ORTHOFIX or one of its subsidiaries
          ("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 or one of its subsidiaries, which
          Confidential Information has been made known (whether or not with the
          knowledge and permission of ORTHOFIX, 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 or one of its subsidiaries. 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, with the express permission of the Board of Directors of
          ORTHOFIX or its authorized representative or as otherwise required by
          operation of law.

               (b) Employee confirms that all Confidential Information is the
          exclusive property of ORTHOFIX. All business records, papers and
          documents kept or made by Employee relating to the business of
          ORTHOFIX or any of its subsidiaries or affiliates shall be and remain
          the property of ORTHOFIX and shall remain in the possession of
          ORTHOFIX. Upon the termination of Employee's employment with ORTHOFIX,
          or upon the request of ORTHOFIX, at any time, 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
          or any of its subsidiaries or affiliates that contain Confidential
          Information.

               (c) Without intending to limit the remedies available to
          ORTHOFIX, Employee acknowledges that a breach of any of the covenants
          contained in Sections 14, 15 and 16 hereof may result in material
          irreparable injury to ORTHOFIX or one of its subsidiaries for which
          there is not 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 may be entitled to obtain a
          temporary restraining order and/or a preliminary or permanent
          injunction restraining

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                           PRIVILEGED & CONFIDENTIAL
<PAGE>

          Employee from engaging in activities prohibited by Sections 14, 15 and
          16 hereof or such other relief as many may be required to specifically
          enforce any of the covenants in such Sections.

          17. 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 or any of its subsidiaries or affiliates or
          which result from any work performed by Employee for ORTHOFIX or any
          of its subsidiaries or 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 17 do not apply to an Invention for which no equipment,
          supplies, facility or Confidential Information of ORTHOFIX or any of
          its subsidiaries or affiliates was used, that was developed entirely
          on Employee's own time, and that does not relate (A) directly to the
          business of ORTHOFIX or any of its subsidiaries or affiliates or (B)
          to the actual or demonstrably anticipated research or development of
          ORTHOFIX or any of its subsidiaries or affiliates, or (C) that does
          not result from any work performed by Employee for ORTHOFIX or any of
          its subsidiaries or affiliates.

          18. 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 hereto 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 California, 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 the prevailing party
          in such arbitration, in whole, or in part, ORTHOFIX shall pay

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                           PRIVILEGED & CONFIDENTIAL
<PAGE>

          to Employee as part of the arbitration award to Employee an amount
          equal to all attorneys' and related fees, costs and expenses 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, or to
          recover from, Employee the benefits provided or intended to be
          provided to Employee hereunder, ORTHOFIX irrevocably authorizes
          Employee from time to time 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 ten (10) business days after
          receipt from Employee of a request referencing this Section 18(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 18(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.

          19. 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 any law or government regulation ruling.

          20. Notices. All notices, requests, demands, and other communications
called for or contemplated hereunder shall be in writing and shall be deemed to
have been duly 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 International N.V.
                    10115 Kincey Avenue, Suite 250
                    Huntersville, NC 28078
                    Facsimile No.: (704) 948-2690
                    Attention:  Thomas Hein
                    Email:  Tomhein@orthofix.com

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                           PRIVILEGED & CONFIDENTIAL
<PAGE>

                    with a copy to:

                    Shearman & Sterling LLP
                    599 Lexington Avenue
                    New York, New York 10022
                    Facsimile No.:  (212) 848-7179
                    Attention:   John J. Cannon, III
                    Email:  jcannon@shearman.com

          If to Employee:

          21. Law Governing. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without giving effect to
the principles of conflict of laws of such State.

          22. Severability. ORTHOFIX and Employee recognize that the laws and
public policies of various jurisdictions may differ as to the validity and
enforceability of covenants similar to those set forth herein. It is the
intention of the parties that the provisions hereof be enforced to the fullest
extent permissible under the laws and policies of each jurisdiction in which
enforcement may be sought, and that the unenforceability (or the modification to
conform to such laws or policies) of any provisions hereof shall not render
unenforceable, or impair, the remainder of the provisions hereof. Accordingly,
if at the time of enforcement of any provision hereof, an arbitrator or a court
of competent jurisdiction holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope, or geographic area reasonable under such
circumstances will be substituted for the stated period, scope or geographical
area and that the arbitrator or the court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and
geographical area permitted by law.

          23. 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.

          24. Entire Agreement. This Agreement constitutes the entire
understanding between the parties with respect to the subject matter hereof,
superseding all negotiations, prior discussions, preliminary agreements and
employment arrangements between Employee and ORTHOFIX or any of ORTHOFIX's
subsidiaries, affiliates or other related entities. This Agreement may not be
amended, nor may any of its provisions be waived, except in writing executed by
the parties hereto.

          25. 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, hereto including without limitation any
person acquiring, directly or indirectly, all or substantially all of the

                                       15
                           PRIVILEGED & CONFIDENTIAL
<PAGE>

business and/or assets of ORTHOFIX by purchase, merger, consolidation,
reorganization or otherwise (and such successor shall thereafter be deemed
"ORTHOFIX" for purposes of this Agreement.

          26. Agreement. This Agreement is personal in nature and neither of the
parties hereto 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 Employee's will or by the laws
of descent and distribution and, 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.

                                       16
                           PRIVILEGED & CONFIDENTIAL
<PAGE>

          Executed and delivered as of the date first above written.

ORTHOFIX INTERNATIONAL N.V.                EMPLOYEE

/s/ Charles Federico                       /s/ Bradley R. Mason
------------------------------------       -------------------------------------
By:  Charles Federico                      Employee

------------------------------------
Title:  Chief Executive Officer

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                           PRIVILEGED & CONFIDENTIAL
<PAGE>

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