EXHIBIT 10.24

 

INTERPORE CROSS INTERNATIONAL

 

FORM OF

NON-QUALIFIED STOCK OPTION AGREEMENT

 

THIS AGREEMENT is made by and between Interpore International, Inc., a Delaware
corporation (the “Company”), and the consultant of the Company or Subsidiary of
the Company whose name and signature appears on the Signature Page hereof (the
“Optionee”) as of the date thereon:

 

WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase
shares of its Common Stock; and

 

WHEREAS, the Committee appointed to administer the Company’s stock option plans
has determined that it would be to the advantage and best interest of the
Company and its stockholders to grant the Non-Qualified Stock Option provided
for herein to the Optionee as an inducement to enter into or remain in the
service of the Company or its Subsidiaries and as an incentive for increased
efforts during such service, and has advised the Company thereof and instructed
the undersigned officers to issue said Option;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

Whenever the following terms are used in this Agreement, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter, and the singular
the plural, where the context so indicates.

 

Section 1.1 - Board

 

“Board” shall mean the Board of Directors of the Company.

 

Section 1.2 - Committee

 

“Committee” shall mean the Stock Option and Compensation Committee of the Board.

 

Section 1.3 - Company

 

“Company” shall mean Interpore International, Inc., a Delaware corporation, or
any successor corporation.

 

Section 1.4 - Exchange Act

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

Section 1.5 - Option

 

“Option” shall mean the non-qualified option to purchase Common Stock of the
Company granted under this Agreement.

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Section 1.6 - Rule 16b-3

 

“Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such
Rule may be amended from time to time.

 

Section 1.7 - Secretary

 

“Secretary” shall mean the Secretary of the Company.

 

Section 1.8 - Securities Act

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

Section 1.9 - Subsidiary

 

“Subsidiary” shall mean any corporation in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain then owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one (1) of
the other corporations in such chain.

 

Section 1.10 - Termination of Consultancy

 

“Termination of Consultancy” shall mean the time when the engagement of an
Optionee as a consultant to the Company or a Subsidiary is terminated for any
reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death or retirement; but excluding a
termination where there is a simultaneous commencement of engagement of the
Optionee as a consultant to or employment with the Company or any Subsidiary.
The Committee, in its sole discretion, shall determine the effect of all matters
and questions relating to Termination of Consultancy, including, but not by way
of limitation, all questions of whether a particular leave of absence
constitutes a Termination of Consultancy. Notwithstanding any other provision of
this Agreement, except as set forth in a separate written agreement between the
Company (or a Subsidiary) and the Optionee, the Company (or such Subsidiary) has
an absolute and unrestricted right to terminate a consultant’s service at any
time for any reason whatsoever.

 

ARTICLE II.

 

GRANT OF OPTION

 

Section 2.1 - Grant of Option

 

For good and valuable consideration, on the date set forth on the Signature Page
hereof, the Company irrevocably grants to the Optionee the option to purchase
any part or all of the aggregate number of shares of its Common Stock (the
“Option Shares”) set forth on the Signature Page hereof, all upon the terms and
conditions set forth in this Agreement.

 

Section 2.2 - Purchase Price

 

The purchase price of the shares of Common Stock covered by the Option shall be
the amount per share set forth on the Signature Page hereof and shall be without
commission or other charge.

 

Section 2.3 - Consideration to Company

 

In consideration of the granting of this Option by the Company, the Optionee
agrees to render faithful and efficient services to the Company or a Subsidiary
as a consultant to the Company for a period of at least one (1) year from the
date this Option is granted. Nothing in this Agreement shall confer upon the
Optionee any right to continue as a consultant of the Company or any Subsidiary
or shall interfere with or restrict in

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any way the rights of the Company and its Subsidiaries, which are hereby
expressly reserved, except to the extent set forth in a separate written
agreement between the Company (or a Subsidiary) and the Optionee, to discharge
the Optionee at any time for any reason whatsoever, with or without cause. The
Company and the Optionee acknowledge that the services provided to the Company
by the Optionee are bonafide services and not in connection with the offer or
sale of securities in any capital-raising transaction.

 

Section 2.4 - Adjustments in Option

 

(a) In the event that the outstanding shares of the stock subject to the Option
are changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company, or of another corporation, by reason
of reorganization, merger, consolidation, recapitalization, reclassification,
stock splitup, stock dividend or combination of shares, the Committee may, in
its sole discretion, make an adjustment in the number and kind of shares as to
which the Option, or portions thereof then unexercised, shall be exercisable, to
the end that after such event the Optionee’s proportionate interest shall be
maintained as before the occurrence of such event. Such adjustment in the Option
may include any necessary corresponding adjustment in the Option price per
share, but shall be made without change in the total price applicable to the
unexercised portion of the Option (except for any change in the aggregate price
resulting from rounding-off of share quantities or prices). Any such adjustment
made by the Committee shall be final and binding upon the Optionee, the Company
and all other interested persons.

 

ARTICLE III.

 

PERIOD OF EXERCISABILITY

 

Section 3.1 - Commencement and Duration of Exercisability

 

(a) The Option shall become exercisable as set forth under the caption
“Commencement of Exercisability” on the Signature Page hereto.

 

(b) No portion of the Option which is unexercisable at Termination of
Consultancy shall thereafter become exercisable.

 

(c) The installments provided for in Section 3.1(a) are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1(a) shall remain
exercisable until it becomes unexercisable under

 

Section 3.2 - Expiration of Option

 

The Option may not be exercised to any extent by anyone after the first to occur
of the following events:

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(a) The Expiration Date set forth on the Signature Page hereto; or

 

(b) The expiration of three (3) months from the date of the Optionee’s
Termination of Consultancy; or

 

(c) Except to the extent of Committee or Board action as authorized by Section
3.3 or otherwise, the effective date of either the merger or consolidation of
the Company with or into another corporation, the exchange of all or
substantially all of the assets of the Company for the securities of another
corporation, or the acquisition by another corporation or person of all or
substantially all of the Company’s assets or eighty percent (80%) or more of the
Company’s then outstanding voting stock, or the liquidation or dissolution of
the Company, unless the Committee waives this provision in connection with such
transaction. At least fifteen (15) days prior to the effective date of such
merger, consolidation, exchange, acquisition, liquidation or dissolution, the
Committee shall give the Optionee notice of such termination.

 

Section 3.3 - Acceleration of Exercisability

 

In the event of the merger or consolidation of the Company with or into another
corporation, the exchange of all or substantially all of the assets of the
Company for the securities of another corporation, the acquisition by another
corporation or person of all or substantially all of the Company’s assets or
eighty percent (80%) or more of the Company’s then outstanding voting stock, or
the liquidation or dissolution of the Company, the Committee may, in its
absolute discretion and upon such terms and conditions as it deems appropriate,
provide by resolution, adopted prior to such event, that as of some time prior
to the effective date of such event this Option shall be exercisable as to all
the shares covered hereby, notwithstanding that this Option may not yet have
become fully exercisable under Section 3.1; provided, however, that this
acceleration of exercisability shall not take place if:

 

(a) Option becomes unexercisable under Section 3.2 prior to said effective date;
or

 

(b) In connection with such event, provision is made, with the consent of the
Committee, for an assumption of this Option or a substitution therefor of a new
option by a successor corporation or a parent or subsidiary of such corporation.

 

The Committee may make such determinations and adopt such rules and conditions
as it, in its absolute discretion, deems appropriate in connection with such
acceleration of exercisability, including, but not by way of limitation,
provisions to ensure that any such acceleration and resulting exercise shall be
conditioned upon the consummation of the contemplated corporate transaction.

 

None of the foregoing discretionary terms of this Section shall be permitted to
the extent that such discretion would be inconsistent with the requirements of
Rule 16b-3.

 

ARTICLE IV.

 

EXERCISE OF OPTION

 

Section 4.1 - Person Eligible to Exercise

 

Only the Optionee (or transferee permitted by Section 5.2) may exercise the
Option or any portion thereof.

 

Section 4.2 - Partial Exercise

 

Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.2;
provided, however, that each partial exercise shall be for not less than one

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hundred (100) shares (or the minimum installment set forth in Section 3.1, if a
smaller number of shares) and shall be for whole shares only.

 

Section 4.3 - Manner of Exercise

 

The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.2:

 

(a) A written notice complying with the applicable rules established by the
Committee stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Optionee or other person then entitled to exercise
the Option or such portion; and

 

(b) Full cash payment to the Secretary of the Company for the shares with
respect to which such Option or portion is exercised; and

 

(c) A bona fide written representation and agreement, in a form satisfactory to
the Committee, signed by the Optionee or other person then entitled to exercise
such Option or portion, stating that the shares of stock are being acquired for
its own account, for investment and without any present intention of
distributing or reselling said shares or any of them except as may be permitted
under the Securities Act and then applicable rules and regulations thereunder,
and that the Optionee or other person then entitled to exercise such Option or
portion will indemnify the Company against and hold it free and harmless from
any loss, damage, expense or liability resulting to the Company if any sale or
distribution of the shares by such person is contrary to the representation and
agreement referred to above. The Committee may, in its absolute discretion, take
whatever additional actions it deems appropriate to insure the observance and
performance of such representation and agreement and to effect compliance with
the Securities Act and any other federal or state securities laws or
regulations. Without limiting the generality of the foregoing, the Committee may
require an opinion of counsel acceptable to it to the effect that any subsequent
transfer of shares acquired on an Option exercise does not violate the
Securities Act, and may issue stop-transfer orders covering such shares. Share
certificates evidencing stock issued on exercise of this Option shall bear an
appropriate legend referring to the provisions of this subsection (c) and the
agreements herein; and

 

(d) Full payment to the Company (or Subsidiary) of all amounts which, under
federal, state or local tax law, it is required to withhold upon exercise of the
Option; and

 

(e) In the event the Option or portion shall be exercised pursuant to Section
5.2 by any person or persons other than the Optionee, appropriate proof of the
right of such person or persons to exercise the Option.

 

Section 4.4 - Conditions to Issuance of Stock Certificates

 

The shares of stock deliverable upon the exercise of the Option, or any portion
thereof, may be either previously authorized but unissued shares or issued
shares which have then been reacquired by the Company. Such shares shall be
fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:

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(a) The admission of such shares to listing on all stock exchanges on which such
class of stock is then listed; and

 

(b) The completion of any registration or other qualification of such shares
under any state or federal law or under rulings or regulations of the Securities
and Exchange Commission or of any other governmental regulatory body, which the
Committee shall, in its absolute discretion, deem necessary or advisable; and

 

(c) The obtaining of any approval or other clearance from any state or federal
governmental agency which the Committee shall, in its absolute discretion,
determine to be necessary or advisable; and

 

(d) The receipt by the Company of full payment for such shares, including
payment of all amounts which, under federal, state or local tax law, the Company
(or Subsidiary) is required to withhold upon exercise of the Option; and

 

(e) The lapse of such reasonable period of time following the exercise of the
Option as the Committee may from time to time establish for reasons of
administrative convenience.

 

Section 4.5 - Rights as Stockholder

 

The holder of the Option shall not be, nor have any of the rights or privileges
of, a stockholder of the Company in respect of any shares purchasable upon the
exercise of any part of the Option unless and until certificates representing
such shares shall have been issued by the Company to such holder.

 

ARTICLE V.

 

OTHER PROVISIONS

 

Section 5.1 - Administration

 

The Committee shall have the power to interpret this Agreement and to adopt such
rules for the administration, interpretation and application of the Agreement as
are consistent therewith and to interpret, amend or revoke any such rules. All
actions taken and all interpretations and determinations made by the Committee
in good faith shall be final and binding upon the Optionee, the Company and all
other interested persons. No member of the Committee shall be personally liable
for any action, determination or interpretation made in good faith with respect
to the Option. In its absolute discretion, the Board may at any time and from
time to time exercise any and all rights and duties of the Committee under this
Agreement except with respect to matters which under Rule 16b-3 or Section
162(m) of the Code, or any regulations or rules issued thereunder, are required
to be determined in the sole discretion of the Committee.

 

Section 5.2 - Option Not Transferable

 

Without the Consent of the Committee:

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(a) neither the Option nor any interest or right therein or part thereof shall
be sold, pledged, assigned, or transferred in any manner unless and until such
Option has been exercised, or the shares underlying such Option have been
issued, and all restrictions applicable to such shares have lapsed; and

 

(b) neither the Option nor any interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.

 

Section 5.3 - Confidentiality; Risk of Forfeiture

 

Optionee shall maintain the terms of this Agreement and the terms of the Option
in strictest confidence and shall not disclose any of such terms to any other
person or entity without the prior approval of the Company. Optionee’s failure
to comply with this Section 5.3 shall be harmful to the interests of the Company
and may result in termination of the Option and forfeiture of any gains or other
economic benefit received by Optionee in connection with the Option or upon the
receipt or resale of any Common Stock underlying the Option.

 

Section 5.4 - Shares to Be Reserved

 

The Company shall at all times during the term of the Option reserve and keep
available such number of shares of stock as will be sufficient to satisfy the
requirements of this Agreement.

 

Section 5.5 - Sale of Option Shares

 

Neither this Option nor any of the Option Shares have been registered under the
Act or under the securities laws of any state. Until the Option Shares have been
registered under the Act and registered and qualified under the securities laws
of any state in question, the Corporation shall cause each certificate
evidencing any Option Shares to bear the following legend:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE.
THE SHARES MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND SUCH
REGISTRATION OR QUALIFICATION AS MAY BE NECESSARY UNDER THE SECURITIES LAWS OF
ANY STATE, OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION OR QUALIFICATION IS NOT REQUIRED.

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Section 5.6 - Notices

 

Any notice to be given under the terms of this Agreement to the Company shall be
addressed to the Company in care of its Secretary, and any notice to be given to
the Optionee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.5, either party
may hereafter designate a different address for notices to be given to him. Any
notice shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.

 

Section 5.7 - Titles

 

Titles are provided herein for convenience only and are not to serve as a basis
for interpretation or construction of this Agreement.

 

Section 5.8 - Construction

 

This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of Delaware without regard to conflicts of laws
thereof.

 

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INTERPORE CROSS INTERNATIONAL

NON-QUALIFIED STOCK OPTION AGREEMENT

 

SIGNATURE PAGE

 

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.

 

Spine and Scoliosis Center

  

Interpore International, Inc.

By:                                      
                                                              

   By:                                      
                                                         

                                                                               
                            

  

Richard L. Harrison

Its:                                      
                                                               

   Its:                CFO & Sr. VP,                

Finance

    

                                                                               
                            

    

Taxpayer Identification Number

         

Date of Grant:                                      
                                    

                                                                               
                            

  

Expiration Date:                                      
                                

                                                                               
                            

  

Number of Option Shares:                                                    

Address

         

Purchase Price Per Share:                                                     

 

Commencement of Exercisability

 

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Schedule of Non Plan Non-Qualified Stock Option Agreements

 

The following identifies the specific terms of the preceding form of non-plan
Non-Qualified Stock Option Agreement as they apply to specific options held by
the Optionees identified below (defined terms refer to terms in the form of
option):

 

Optionee

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   Date of
Grant

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   Expiration
Date

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   Option
Shares

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   Purchase
Price per
Share

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Exercisability

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Spine and Scoliosis center

   11/01/2001    11/01/2004    10,000    $ 8.39    Exercisable on first
anniversary of the date of grant.

Innovative Spine Technologies

   07/10/2001    07/10/2006    60,000    $ 5.24    33 1/3% of the shares shall
become exercisable on each of the first three anniversary dates of the date of
grant.