**EXHIBIT 10.24**

 

**INTERPORE CROSS INTERNATIONAL**

 

**FORM OF**

**NON-QUALIFIEDSTOCK OPTION AGREEMENT**

 

THIS AGREEMENT is made by andbetween 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 ofthe date thereon: 

 

WHEREAS, the Company wishes to afford theOptionee 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 forherein 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 undersignedofficers to issue said Option; 

 

NOW, THEREFORE, inconsideration 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, asamended. 

 

Section 1.5 - Option

 

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

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 thanthe 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 theengagement 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 atermination 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 questionsrelating 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 setforth 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 SignaturePage 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 andconditions set forth in this Agreement. 

 

Section 2.2 - Purchase Price

 

The purchase price of the shares of Common Stock covered bythe 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 aSubsidiary 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 orshall interfere with or restrict in 

any way the rights of the Company and its Subsidiaries, which are hereby expressly reserved, except to the extent setforth 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 providedto 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 ofthe 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 solediscretion, 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 asbefore 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 theOption (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) shallremain exercisable until it becomes unexercisable under 

 

Section 3.2 -Expiration of Option

 

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

(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’sTermination of Consultancy; or 

 

(c) Except to the extent ofCommittee 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 forthe 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 theliquidation 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 ordissolution, 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 anothercorporation 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 absolutediscretion 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 coveredhereby, 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 theCommittee, 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 withsuch 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 permittedto the extent that such discretion would be inconsistent with the requirements of Rule 16b-3. 

 

ARTICLE IV. 

 

EXERCISE OFOPTION

 

Section 4.1 - Person Eligible to Exercise

 

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

 

Section 4.2 - Partial Exercise

 

Any exercisable portion of the Option or the entire Option, ifthen 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

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

 

Section 4.3 - Manner of Exercise

 

The Option, or any exercisable portion thereof, may be exercised solely bydelivery 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. Thenotice 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 satisfactoryto 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 orreselling 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 theCompany 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. TheCommittee 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 orstate 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 notviolate 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 theagreements herein; and 

 

(d) Full payment to the Company (orSubsidiary) 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 ofthe right of such person or persons to exercise the Option. 

 

Section 4.4 -Conditions to Issuance of Stock Certificates

 

The shares ofstock 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: 

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

 

(b) The completion of any registration or otherqualification 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 necessaryor advisable; and 

 

(c) The obtaining of any approval or otherclearance 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 orprivileges 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 theAgreement 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 andall 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 totime 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 inthe sole discretion of the Committee. 

 

Section 5.2 - Option NotTransferable

 

Without the Consent of the Committee:

(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 thereofshall 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 suchdisposition 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 noeffect, 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 theOption or upon the receipt or resale of any Common Stock underlying the Option. 

 

Section 5.4 - Shares to Be Reserved

 

TheCompany 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 Shareshave 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 THESECURITIES 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 UNDERTHE 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 NOTREQUIRED. 

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 begiven 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 noticeshall 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 thisAgreement. 

 

Section 5.8 - Construction

 

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

 

INTERPORE CROSS INTERNATIONAL 

NON-QUALIFIED STOCK OPTION AGREEMENT 

 

SIGNATURE PAGE 

 

IN WITNESS WHEREOF, this Agreement hasbeen 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 ofGrant:                                                                          

                                                                                                          
  
ExpirationDate:                                                                      

                                                                                                          
  
Number of OptionShares:                                                   

Address
      
Purchase Price PerShare:                                                    

 

Commencement of Exercisability 

 

Schedule of Non Plan Non-Qualified Stock Option Agreements 

 

The following identifies the specific terms of the preceding form of non-planNon-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**
  **Date of**