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EXHIBIT 10.13    
    


 
 

NUVASIVE, INC.
  STOCK OPTION AGREEMENT    
    


RECITALS  


        A. The Board has adopted the Plan for the purpose of retaining the services of selected Employees, non-employee members of the Board or the board of
directors of any Parent or Subsidiary and consultants and other independent advisors in the service of the Corporation (or any Parent or Subsidiary). 



        B.
Optionee is to render valuable services to the Corporation (or a Parent or Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the
Plan in connection with the Corporation's grant of an option to Optionee. 


        C.
All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix. 


        NOW, THEREFORE, it is hereby agreed as follows: 


        1.     Grant of Option. The Corporation hereby grants to Optionee, as of the Grant Date, an option
to purchase up to the number of Option Shares specified in the Grant Notice. The Option Shares shall be purchasable from time to time during the option term specified in Paragraph 2 at the
Exercise Price. 


        2.     Option Term. This option shall have a term of ten (10) years measured from the Grant
Date and shall accordingly expire at the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6. 



        3.     Limited Transferability. This option shall be neither transferable nor assignable by Optionee
other than by will or by the laws of descent and distribution following Optionee's death and may be exercised, during Optionee's lifetime, only by Optionee. However, if this option is designated a
Non-Statutory Option in the Grant Notice, then this option may, in connection with Optionee's estate plan, be assigned in whole or in part during Optionee's lifetime to one or more members
of Optionee's immediate family or to a trust established for the exclusive benefit of one or more such family members. The assigned portion shall be exercisable only by the person or persons who
acquire a proprietary interest in the option pursuant to such assignment. The terms applicable to the assigned portion shall be the same as those in effect for this option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate. 


        4.     Dates of Exercise. This option shall become exercisable for the Option Shares in one or more
installments as specified in the Grant Notice. As the option becomes exercisable for such installments, those installments shall accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term under Paragraph 5 or 6. 



        5.     Cessation of Service. The option term specified in Paragraph 2 shall terminate (and
this option shall cease to be outstanding) prior to the Expiration Date should any of the following provisions become applicable: 



        (a)   Should
Optionee cease to remain in Service for any reason (other than death, Disability or Misconduct) while this option is outstanding, then the period for which this
option shall remain exercisable shall be reduced to a three (3)-month period commencing with the date of such cessation of Service, but in no event shall this option be exercisable at any time after
the Expiration Date. 


        (b)   Should
Optionee die while holding this option, then the personal representative of Optionee's estate or the person or persons to whom the option is transferred pursuant
to 






 




Optionee's
will or in accordance with the laws of inheritance shall have the right to exercise this option. Such right shall lapse, and this option shall cease to be outstanding, upon the earlier of
(i) the expiration of the twelve (12)-month period measured from the date of Optionee's death or (ii) the Expiration Date. 



        (c)   Should
Optionee cease Service by reason of Disability while this option is outstanding, then the period during which this option shall remain exercisable shall be
reduced to a twelve (12)-month period commencing with the date of such cessation of Service. In no event, however, shall this option be exercisable at any time after the Expiration Date. 



Note:
Exercise of this option on a date later than three (3) months following cessation of Service due to Disability will result in loss of favorable Incentive
Option treatment, unless such Disability constitutes Permanent Disability. In the event that Incentive Option treatment is not available, this option will be taxed as a
Non-Statutory Option upon exercise. 




        (d)   During
the limited period of post-Service exercisability, this option may not be exercised in the aggregate for more than the number of Option Shares in
which Optionee is, at the time of Optionee's cessation of Service, vested pursuant to the Vesting Schedule specified in the Grant Notice or the special vesting acceleration provisions of
Paragraph 6. Upon the expiration of such limited exercise period or (if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding for any vested Option Shares
for which the option has not been exercised. To the extent Optionee is not vested in the Option Shares at the time of Optionee's cessation of Service, this option shall immediately terminate and cease
to be outstanding with respect to those shares. 


        (e)   Should
Optionee's Service be terminated for Misconduct, then this option shall terminate immediately and cease to remain outstanding. 




        6.
Accelerated Vesting.



        (a)   In
the event of any Corporate Transaction, the Option Shares at the time subject to this option but not otherwise vested shall automatically vest in full so that this
option shall, immediately prior to the effective date of the Corporate Transaction, become fully exercisable for all of the Option Shares as fully-vested shares and may be exercised for any or all of
those vested shares. However, the Option Shares shall not vest on such an accelerated basis if and to the extent: (i) this option is assumed by
the successor corporation (or parent thereof) in the Corporate Transaction and the Corporation's repurchase rights with respect to the unvested Option Shares are assigned to such successor corporation
(or parent thereof) or (ii) this option is to be replaced with a cash incentive program of the successor corporation which preserves the spread existing on the unvested Option Shares at the
time of the Corporate Transaction (the excess of the Fair Market Value of those Option Shares over the
Exercise Price payable for such shares) and provides for subsequent payout in accordance with the same Vesting Schedule applicable to those unvested Option Shares as set forth in the Grant Notice. 



        (b)   Immediately
following the Corporate Transaction, this option shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or
parent thereof) in connection with the Corporate Transaction. 


        (c)   If
this option is assumed in connection with a Corporate Transaction, then this option shall be appropriately adjusted, immediately after such Corporate Transaction, to
apply to the number and class of securities which would have been issuable to Optionee in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price shall remain the same. 



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        (d)   The
Option Shares may also vest upon an accelerated basis in accordance with the terms and conditions of any special addendum attached to this Agreement. 


        (e)   This
Agreement shall not in any way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 




        7.     Adjustment in Option Shares. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number and/or class of securities subject to this option and (ii) the Exercise Price in order to reflect such change
and thereby preclude a dilution or enlargement of benefits hereunder. 


        8.     Stockholder Rights. The holder of this option shall not have any stockholder rights with
respect to the Option Shares until such person shall have exercised the option, paid the Exercise Price and become the record holder of the purchased shares. 


        9.
Manner of Exercising Option.



        (a)   In
order to exercise this option with respect to all or any part of the Option Shares for which this option is at the time exercisable, Optionee (or any other person or
persons exercising the option) must take the following actions: 



        (i)    Execute
and deliver to the Corporation a Purchase Agreement for the Option Shares for which the option is exercised. 


        (ii)   Pay
the aggregate Exercise Price for the purchased shares in one or more of the following forms: 



        (A)  cash
or check made payable to the Corporation; or 


        (B)  a
promissory note payable to the Corporation, but only to the extent authorized by the Plan Administrator in accordance with Paragraph 14. 


        Should
the Common Stock be registered under Section 12 of the 1934 Act at the time the option is exercised, then the Exercise Price may also be paid as follows: 


        (C)  in
shares of Common Stock held by Optionee (or any other person or persons exercising the option) for the requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date; or 


        (D)  to
the extent the option is exercised for vested Option Shares, through a special sale and remittance procedure pursuant to which Optionee (or any other person or
persons exercising the option) shall concurrently provide irrevocable instructions (a) to a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit
to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the Corporation by reason of such exercise and (b) to the Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale. 


        Except
to the extent the sale and remittance procedure is utilized in connection with the option exercise, payment of the Exercise Price must accompany the Purchase Agreement delivered
to the Corporation in connection with the option exercise. 





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        (iii)  Furnish
to the Corporation appropriate documentation that the person or persons exercising the option (if other than Optionee) have the right to exercise this option. 


        (iv)  Execute
and deliver to the Corporation such written representations as may be requested by the Corporation in order for it to comply with the applicable requirements of
Federal and state securities laws. 


        (v)   Make
appropriate arrangements with the Corporation (or Parent or Subsidiary employing or retaining Optionee) for the satisfaction of all Federal, state and local income
and employment tax withholding requirements applicable to the option exercise. 




        (b)   As
soon as practical after the Exercise Date, the Corporation shall issue to or on behalf of Optionee (or any other person or persons exercising this option) a
certificate for the purchased Option Shares, with the appropriate legends affixed thereto. 


        (c)   In
no event may this option be exercised for any fractional shares. 




        10.  REPURCHASE RIGHTS. ALL OPTION SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE
CORPORATION AND ITS ASSIGNS TO REPURCHASE THOSE SHARES IN ACCORDANCE WITH THE TERMS SPECIFIED IN THE PURCHASE AGREEMENT.


        11.
Compliance with Laws and Regulations.



        (a)   The
exercise of this option and the issuance of the Option Shares upon such exercise shall be subject to compliance by the Corporation and Optionee with all applicable
requirements of law relating thereto and with all applicable regulations of any stock exchange (or the Nasdaq National Market, if applicable) on which the Common Stock may be listed for trading at the
time of such exercise and issuance. 


        (b)   The
inability of the Corporation to obtain approval from any regulatory body having authority deemed by the Corporation to be necessary to the lawful issuance and sale
of any Common Stock pursuant to this option shall relieve the Corporation of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation, however, shall use its best efforts to obtain all such approvals. 




        12.  Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3 and 6, the provisions of
this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and Optionee, Optionee's assigns and the legal representatives, heirs and legatees of
Optionee's estate. 


        13.
Notices. Any notice required to be given or delivered to the Corporation under the terms of this
Agreement shall be in writing and addressed to the Corporation at its principal corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated below Optionee's signature line on the Grant Notice. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid
and properly addressed to the party to be notified. 


        14.
Financing. The Plan Administrator may, in its absolute discretion and without any obligation to do so,
permit Optionee to pay the Exercise Price for the purchased Option Shares by delivering a full-recourse, interest-bearing promissory note secured by those Option Shares. The payment
schedule in effect for any such promissory note shall be established by the Plan Administrator in its sole discretion. 



        15.  Construction. This Agreement and the option evidenced hereby are made and granted pursuant to the Plan
and are in all respects limited by and subject to the terms of the Plan. All 


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decisions
of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this option. 



        16.  Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the
laws of the State of California without resort to that State's conflict-of-laws rules. 


        17.
Stockholder Approval. If the Option Shares covered by this Agreement exceed, as of the Grant Date, the
number of shares of Common Stock which may be issued under the Plan as last approved by the stockholders, then this option shall be void with respect to such excess shares, unless stockholder approval
of an amendment sufficiently increasing the number OF shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of the Plan. 



        18.  Additional Terms Applicable to an Incentive Option. In the event this option is designated an Incentive
Option in the Grant Notice, the following terms and conditions shall also apply to the grant: 



        (a)   This
option shall cease to qualify for favorable tax treatment as an Incentive Option if (and to the extent) this option is exercised for one or more Option Shares:
(i) more than three (3) months after the date Optionee ceases to be an Employee for any reason other than death or Permanent Disability or (ii) more than twelve (12) months
after the date Optionee ceases to be an Employee by reason of Permanent Disability. 



        (b)   This
option shall not become exercisable in the calendar year in which granted if (and to the extent) the aggregate Fair Market Value (determined at the Grant Date) of
the Common Stock for which this option would otherwise first become exercisable in such calendar year would, when added to the aggregate value (determined as of the respective date or dates of grant)
of the Common Stock and any other securities for which one or more other Incentive Options granted to Optionee prior to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate. To the extent the exercisability of
this option is deferred by reason of the foregoing limitation, the deferred portion shall become exercisable in the first calendar year or years thereafter in which the One Hundred Thousand Dollar
($100,000) limitation of this Paragraph 18(b) would not be contravened, but such deferral shall in all events end immediately prior to the effective date of a Corporate Transaction in which
this option is not to be assumed, whereupon the option shall become immediately exercisable as a Non-Statutory Option for the deferred portion of the Option Shares. 


        (c)   Should
Optionee hold, in addition to this option, one or more other options to purchase Common Stock which become exercisable for the first time in the same calendar
year as this option, then the foregoing limitations on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted. 



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APPENDIX    
    



        The following definitions shall be in effect under the Agreement: 


        A.  Agreement shall mean this Stock Option Agreement. 


        B.
Board shall mean the Corporation's Board of Directors. 


        C.
Code shall mean the Internal Revenue Code of 1986, as amended. 


        D.
Common Stock shall mean the Corporation's common stock. 



        E.  Corporate Transaction shall mean either of the following stockholder-approved transactions to which the
Corporation is a party: 



        (i)    a
merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities are
transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or 



        (ii)   the
sale, transfer or other disposition of all or substantially all of the Corporation's assets in complete liquidation or dissolution of the Corporation. 




        F.
Corporation shall mean Nuvasive, Inc., a Delaware corporation. 


        G.
Disability shall mean the inability of Optionee to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment and shall be determined by the Plan Administrator on the basis of such medical evidence as the Plan Administrator deems warranted under the
circumstances. Disability shall be deemed to constitute Permanent Disability in the event that such Disability is expected to result in death or has
lasted or can be expected to last for a continuous period of twelve (12) months or more. 


        H.
Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary),
subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance. 


        I.
Exercise Date shall mean the date on which the option shall have been exercised in accordance with
Paragraph 9 of the Agreement. 


        J.  Exercise Price shall mean the exercise price payable per Option Share as specified in the Grant Notice. 


        K.
Expiration Date shall mean the date on which the option expires as specified in the Grant Notice. 


        L.
Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with
the following provisions: 



        (i)    If
the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the
date in question, as the price is reported by the National Association of Securities Dealers on the Nasdaq National Market. If there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 


        (ii)   If
the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in
question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such
exchange. If 



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there
is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation
exists. 


        (iii)  If
the Common Stock is at the time neither listed on any Stock Exchange nor traded on the Nasdaq National Market, then the Fair Market Value shall be determined by the
Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate. 




        M.
Grant Date shall mean the date of grant of the option as specified in the Grant Notice. 


        N.
Grant Notice shall mean the Notice of Grant of Stock Option accompanying the Agreement, pursuant to which
Optionee has been informed of the basic terms of the option evidenced hereby. 


        O.  Incentive Option shall mean an option which satisfies the requirements of Code Section 422. 


        P.
Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by Optionee, any
unauthorized use or disclosure by Optionee of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which
the Corporation (or any Parent or Subsidiary) may consider as grounds for the dismissal or discharge of Optionee or any other individual in the Service of the Corporation (or any Parent or
Subsidiary). 


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


        R.
Non-Statutory Option shall mean an option not intended to satisfy the requirements of Code
Section 422. 


        S.
Option Shares shall mean the number of shares of Common Stock subject to the option. 



        T.  Optionee shall mean the person to whom the option is granted as specified in the Grant Notice. 


        U.
Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending
with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain. 


        V.
Plan shall mean the Corporation's 1998 Stock Option/Stock Issuance Plan. 



        W.  Plan Administrator shall mean either the Board or a committee of the Board acting in its capacity as
administrator of the Plan. 


        X.
Purchase Agreement shall mean the stock purchase agreement in substantially the form of Exhibit B
to the Grant Notice. 


        Y.
Service shall mean the Optionee's performance of services for the Corporation (or any Parent or
Subsidiary) in the capacity of an Employee, a non-employee member of the board of directors or an independent consultant. 



        Z.  Stock Exchange shall mean the American Stock Exchange or the New York Stock Exchange. 


        AA.
Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations
beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other corporations in such chain. 



        AB.  Vesting Schedule shall mean the vesting schedule specified in the Grant Notice pursuant to which the
Optionee is to vest in the Option Shares in a series of installments over his or her period of Service. 


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[GENERAL EMPLOYEE FORM]    
    


NUVASIVE, INC.

1998 STOCK OPTION/STOCK ISSUANCE PLAN

ADDENDUM TO STOCK OPTION AGREEMENT  


        The
following provisions are hereby incorporated into, and are hereby made a part of, that certain Stock Option Agreement (the "Option Agreement") by and between the Corporation and
                                        
("Optionee") evidencing the stock option(s) (collectively, the "Option") granted to Optionee under the terms of the NuVasive, Inc. 1998 Stock Option/Stock Issuance Plan (the "Plan"),
and such provisions shall be effective immediately. All capitalized terms in this Addendum, to the extent not otherwise defined herein, shall have the meanings assigned to such terms in the Option
Agreement. 


        1.    VESTING ACCELERATION AT CORPORATE TRANSACTION.    If the Option is assumed by the successor corporation (or its
parent) or is otherwise continued in effect pursuant to the terms of a Corporate Transaction (if, and only if, Optionee is still providing Service to the Corporation or its successor, as applicable,
at such time), then fifty percent (50%) of the then unvested Option Shares at the time subject to the Option shall automatically become Vested Shares on an accelerated basis and the Option shall
immediately become exercisable for such Option Shares as Vested Shares. 



        2.    ADDITIONAL ACCELERATION FOLLOWING A CORPORATE TRANSACTION.    If the Option is assumed by the successor
corporation (or its parent) or is otherwise continued in effect pursuant to the terms of a Corporate Transaction and Optionee's Service is Involuntarily Terminated within twelve months following such
Corporate Transaction, then all of the Option Shares at the time subject to the Option shall automatically become Vested Shares on an accelerated basis and the Option shall immediately become
exercisable for all of such Option Shares as Vested Shares. The Option shall remain so exercisable until the earlier of (a) the Expiration Date
or (b) the Close of Business on the first anniversary of the date Optionee's Service was Involuntarily Terminated. 



        3.    CASH INCENTIVE PROGRAM.    To the extent that, in connection with a Corporate Transaction, the successor
corporation (or its parent) replaces the Option with a cash incentive program, Optionee's right to receive cash payments for the Option Shares will be paid out no later than in accordance with the
Vesting Schedule. However, if Optionee's Service is Involuntarily Terminated within twelve months
following a Corporate Transaction, then Optionee's right to receive all of the cash payments that are unvested as of the date of the Involuntary Termination shall be accelerated in full and shall no
longer be subject to the Vesting Schedule. 


        4.    DEFINITIONS.    


                (A)    For
purposes of this Addendum, an Optionee's Service shall be "Involuntarily Terminated" upon the termination of Optionee's Service by reason of: 


                        (i)    Optionee's
involuntary dismissal or discharge by the Corporation for reasons other than Misconduct, or 


                        (ii)    Optionee's
voluntary resignation following (1) a change in Opitonee's position with the Corporation (or Parent or Subsidiary employing Optionee)
which materially reduces Optionee's duties and responsibilities or the level of management to which he or she reports, (2) a reduction in Optionee's level of compensation (including base
salary, fringe benefits and target bonuses under any corporate-performance based incentive programs) by more than fifteen percent (15%) or (3) a relocation of Optionee's place of employment by
more than fifty (50) miles, provided and only if such change, reduction or relocation is effected by the Corporation without Optionee's consent. 



                (B)    For
purposes of this Addendum, following a Corporate Transaction, "Corporation" shall refer to the successor corporation in the transaction. 








        The
provisions of this Addendum shall supersede any provisions to the contrary in the Option Agreement. 


        In
Witness Whereof, NuVasive, Inc. has caused this Addendum to be executed by its duly-authorized officer effective as of the Effective Date specified below. 



	Effective Date:                     ,
        	 	NuVasive, Inc.
	

 	
 	

By:	

                                         
                       
	

 	
 	

Printed Name:	

                                         
                       
	

 	
 	

Title:	

                                         
                       











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EXHIBIT 10.13


NUVASIVE, INC. STOCK OPTION AGREEMENT


APPENDIX



[GENERAL EMPLOYEE FORM]