Exhibit
10.74


 


CRDENTIA CORP. 2004 STOCK INCENTIVE PLAN


 


NOTICE OF STOCK OPTION AWARD


 


	
  Grantee’s Name
  and Address:

  	
   

  	
  James J.
  TerBeest

  
	
   

  	
   

  	
  5001 LBJ
  Freeway, Suite 850

  
	
   

  	
   

  	
  Dallas, TX 75244

  



 


You
(the “Grantee”) have been granted an option to purchase shares of Common Stock,
subject to the terms and conditions of this Notice of Stock Option Award (the “Notice”),
the Crdentia Corp. 2004 Stock Incentive Plan, as amended from time to time (the
“Plan”) and the Stock Option Award Agreement (the “Option Agreement”) attached
hereto, as follows. Unless otherwise defined herein, the terms defined in the
Plan shall have the same defined meanings in this Notice.


 


	
  Date of Award

  	
   

  	
  March 24, 2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date

  	
   

  	
  March 24, 2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exercise Price
  per Share

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Number of
  Shares Subject to the Option (the “Shares”)

  	
   

  	
  150,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Exercise
  Price

  	
   

  	
  $

  	
  675,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  March 24, 2016

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Post-Termination
  Exercise Period:

  	
   

  	
  Three (3) Months

  	
   

  
					



 


Vesting Schedule:


 


Subject
to the Grantee’s Continuous Service and other limitations set forth in this
Notice and the Option Agreement, the Option may be exercised, in whole or in
part, in accordance with the following schedule:


 


Subject to the
limitations of the following paragraph, the Shares shall vest over a four-year
period with 25% of the Shares vesting on the 1st anniversary of the
Vesting Commencement Date and 1/48 of the Shares shall vest on each monthly
anniversary of the Vesting Commencement Date thereafter.


 


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IN
WITNESS WHEREOF, the Company and the Grantee have executed this Notice and
agree that the Option is to be governed by the terms and conditions of this
Notice, the Plan, and the Option Agreement.


 


	
   

  	
  Crdentia Corp.,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  



 


THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES
SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE
GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING GRANTED THE OPTION
OR ACQUIRING SHARES HEREUNDER).


 


The
Grantee acknowledges receipt of a copy of the Plan and the Option Agreement,
and represents that he or she is familiar with the terms and provisions thereof,
and hereby accepts the Option subject to all of the terms and provisions hereof
and thereof. The Grantee has reviewed this Notice, the Plan, and the Option
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Notice, and fully understands all provisions of
this Notice, the Plan and the Option Agreement. The Grantee hereby agrees that
all questions of interpretation and administration relating to this Notice, the
Plan and the Option Agreement shall be resolved by the Administrator in
accordance with Section 13 of the Option Agreement. The Grantee further
agrees to the venue selection and waiver of a jury trial in accordance with
Section 14 of the Option Agreement. The Grantee further agrees to notify
the Company upon any change in the residence address indicated in this Notice.


 


	
  Dated: March 24,
  2006

  	
  Signed:

  	
  /s/ James J.
  TerBeest

  	
   

  
	
   

  	
   

  	
  Grantee

  
					



 


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Award Number: 
    


 


CRDENTIA CORP. 2004 STOCK INCENTIVE PLAN


 


STOCK OPTION AWARD AGREEMENT


 


1.                                       Grant
of Option. Crdentia Corp., a Delaware corporation (the “Company”), hereby
grants to the Grantee (the “Grantee”) named in the Notice of Stock Option Award
(the “Notice”), an option (the “Option”) to purchase the Total Number of Shares
of Common Stock subject to the Option (the “Shares”) set forth in the Notice,
at the Exercise Price per Share set forth in the Notice (the “Exercise Price”)
subject to the terms and provisions of the Notice, this Stock Option Award
Agreement (the “Option Agreement”) and the Company’s 2004 Stock Incentive Plan, as amended from time to time (the “Plan”),
which are incorporated herein by reference. Unless otherwise defined herein,
the terms defined in the Plan shall have the same defined meanings in this
Option Agreement.


 


The
Option is intended to qualify as a Non-Qualified Stock Option and not as an
Incentive Stock Option as defined in Section 422 of the Code.


 


2.                                       Exercise
of Option.


 


(a)                                  Right
to Exercise. The Option shall be exercisable during its term in accordance
with the Vesting Schedule set out in the Notice and with the applicable
provisions of the Plan and this Option Agreement. The Option shall be subject
to the provisions of Section 11 of the
Plan and Section 2(d) of this Option Agreement relating to the
exercisability or termination of the Option in the event of a Corporate
Transaction or Change in Control. The Grantee shall be subject to reasonable
limitations on the number of requested exercises during any monthly or weekly
period as determined by the Administrator. In no event shall the Company issue
fractional Shares.


 


(b)                                 Method
of Exercise. The Option shall be exercisable by delivery of an exercise
notice (a form of which is attached as Exhibit A) or by such other procedure as
specified from time to time by the Administrator which shall state the election
to exercise the Option, the whole number of Shares in respect of which the
Option is being exercised, and such other provisions as may be required by the
Administrator. The exercise notice shall be delivered in person, by certified
mail, or by such other method (including electronic transmission) as determined
from time to time by the Administrator to the Company accompanied by payment of
the Exercise Price. The Option shall be deemed to be exercised upon receipt by
the Company of such notice accompanied by the Exercise Price, which, to the
extent selected, shall be deemed to be satisfied by use of the broker-dealer
sale and remittance procedure to pay the Exercise Price provided in
Section 3(d), below.


 


(c)                                  Taxes.
No Shares will be delivered to the Grantee or other person pursuant to the
exercise of the Option until the Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of applicable income tax
and employment tax withholding obligations, including, without limitation, such
other tax obligations of the Grantee incident to the receipt of Shares. Upon
exercise of the Option, the Company or the Grantee’s


 


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employer may offset or
withhold (from any amount owed by the Company or the Grantee’s employer to the
Grantee) or collect from the Grantee or other person an amount sufficient to
satisfy such tax withholding obligations.


 


(d)                                 Acceleration
of Option Upon Corporate Transaction or Change in Control.


 


(i)                                     Corporate
Transaction. In the event of a Corporate Transaction and irrespective of
whether the Option is Assumed or Replaced, the Option automatically shall
become fully vested and exercisable immediately prior to the specified
effective date of such Corporate Transaction, for all of the Shares at the time
represented by the Option, provided that the Grantee’s Continuous Service has
not terminated prior to such date.


 


(ii)                                  Change
in Control. In the event of a Change in Control (other than a Change in
Control which also is a Corporate Transaction), the Option shall become fully
vested and exercisable immediately prior to the specified effective date of
such Change in Control, for all of the Shares at the time represented by the
Option, provided that the Grantee’s Continuous Service has not terminated prior
to such date.


 


3.                                       Method
of Payment. Payment of the Exercise Price shall be made by any of the
following, or a combination thereof, at the election of the Grantee; provided,
however, that such exercise method does not then violate any Applicable Law
and, provided further, that the portion of the Exercise Price equal to the par
value of the Shares must be paid in cash or other legal consideration permitted
by the Delaware General Corporation Law:


 


(a)                                  cash;


 


(b)                                 check;


 


(c)                                  surrender
of Shares or delivery of a properly executed form of attestation of ownership
of Shares as the Administrator may require which have a Fair Market Value on
the date of surrender or attestation equal to the aggregate Exercise Price of
the Shares as to which the Option is being exercised, provided, however, that Shares acquired under the Plan or any other
equity compensation plan or agreement of the Company must have been held by the
Grantee for a period of more than six (6) months (and not used for
another Award exercise by attestation during such period); or


 


(d)                                 payment
through a broker-dealer sale and remittance procedure pursuant to which the
Grantee (i) shall provide written instructions to a Company-designated
brokerage firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company sufficient funds to cover the aggregate
exercise price payable for the purchased Shares and (ii) shall provide written
directives to the Company to deliver the certificates for the purchased Shares
directly to such brokerage firm in order to complete the sale transaction.


 


4.                                       Restrictions
on Exercise. The Option may not be exercised if the issuance of the Shares
subject to the Option upon such exercise would
constitute a violation of any Applicable Laws. If the exercise of the Option
within the applicable time periods set forth in Section 6, 7 and 8 of this
Option Agreement is prevented by the provisions of this Section 5, the
Option shall remain exercisable until one (1) month after the date the Grantee
is notified by the Company that


 


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the Option is
exercisable, but in any event no later than the Expiration Date set forth in
the Notice.


 


5.                                       Termination
or Change of Continuous Service. In the event the Grantee’s Continuous
Service terminates, the Grantee may, but only during the Post-Termination
Exercise Period, exercise the portion of the Option that was vested at the date
of such termination (the “Termination Date”). The Post-Termination Exercise
Period shall commence on the Termination Date. In no event, however, shall the
Option be exercised later than the Expiration Date set forth in the Notice. In
the event of the Grantee’s change in status from Employee, Director or
Consultant to any other status of Employee, Director or Consultant, the Option
shall remain in effect and vesting of the Option shall continue only to the
extent determined by the Administrator as of such change in status. Except as
provided in Sections 6 and 7 below, to the extent that the Option was
unvested on the Termination Date, or if the Grantee does not exercise the
vested portion of the Option within the Post-Termination Exercise Period, the Option shall terminate.


 


6.                                       Disability
of Grantee. In the event the Grantee’s Continuous Service terminates as a
result of his or her Disability, the Grantee may, but only within twelve (12)
months commencing on the Termination Date (but in no event later than the
Expiration Date), exercise the portion of the Option that was vested on the
Termination Date. To the extent that the Option was unvested on the Termination
Date, or if the Grantee does not exercise the vested portion of the Option
within the time specified herein, the Option shall terminate.


 


7.                                       Death
of Grantee. In the event of the termination of the Grantee’s Continuous
Service as a result of his or her death, or in the event of the Grantee’s death
during the Post-Termination Exercise Period or during the twelve (12)
month period following the Grantee’s termination of Continuous Service as a
result of his or her Disability, the person who acquired the right to exercise
the Option pursuant to Section 8 may exercise the portion of the Option
that was vested at the date of termination within twelve (12) months commencing
on the date of death (but in no event later than the Expiration Date). To the
extent that the Option was unvested on the date of death, or if the vested
portion of the Option is not exercised within the time specified herein, the
Option shall terminate.


 


8.                                       Transferability
of Option. The Option may not be transferred in any manner other than by
will or by the laws of descent and distribution, provided, however, that the Option
may be transferred during the lifetime of the Grantee to the extent and in the
manner authorized by the Administrator. Notwithstanding the foregoing, the
Grantee may designate one or more beneficiaries of the Grantee’s Option in the
event of the Grantee’s death on a beneficiary designation form provided by the
Administrator. Following the death of the Grantee, the Option, to the extent
provided in Section 7, may be exercised (a) by the person or persons
designated under the deceased Grantee’s beneficiary designation or (b) in
the absence of an effectively designated beneficiary, by the Grantee’s legal
representative or by any person empowered to do so under the deceased Grantee’s
will or under the then applicable laws of descent and distribution. The terms
of the Option shall be binding upon the executors, administrators, heirs,
successors and transferees of the Grantee.


 


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9.                                       Term
of Option. The Option must be exercised no later than the Expiration Date
set forth in the Notice or such earlier date as otherwise provided herein. After
the Expiration Date or such earlier date, the Option shall be of no further
force or effect and may not be exercised.


 


10.                                 Tax
Consequences. Set forth below is a brief summary as of the date of this
Option Agreement of some of the federal tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.


 


(a)                                  Exercise
of Non-Qualified Stock Option. On exercise of a Non-Qualified Stock Option,
the Grantee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price. If the
Grantee is an Employee or a former Employee, the Company will be required to
withhold from the Grantee’s compensation or collect from the Grantee and pay to
the applicable taxing authorities an amount in cash equal to a percentage of
this compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.


 


(b)                                 Disposition
of Shares. In the case of a Non-Qualified Stock Option, if Shares are held
for more than one year, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes.


 


11.                                 Entire
Agreement: Governing Law. The Notice, the Plan and this Option Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee’s interest except by
means of a writing signed by the Company and the Grantee. Nothing in the
Notice, the Plan and this Option Agreement (except as expressly provided
therein) is intended to confer any rights or remedies on any persons other than
the parties. The Notice, the Plan and this Option Agreement are to be construed
in accordance with and governed by the internal laws of the State
of Texas without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the
State of Texas to the rights and duties of the parties. Should any provision of
the Notice, the Plan or this Option Agreement be determined to be illegal or
unenforceable, such provision shall be enforced to the fullest extent allowed
by law and the other provisions shall nevertheless remain effective and shall
remain enforceable.


 


12.                                 Construction.
The captions used in the Notice and this Option Agreement are inserted for
convenience and shall not be deemed a part of the Option for construction or
interpretation. Except when otherwise indicated by the context, the singular shall
include the plural and the plural shall include the singular. Use of the term “or”
is not intended to be exclusive, unless the context clearly requires otherwise.


 


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13.                                 Administration
and Interpretation. Any question or dispute regarding the administration or
interpretation of the Notice, the Plan or this Option Agreement shall be
submitted by the Grantee or by the Company to the Administrator. The resolution
of such question or dispute by the Administrator shall be final and binding on
all persons.


 


14.                                 Venue
and Waiver of Jury Trial. The Company, the Grantee, and the Grantee’s
assignees pursuant to Section 8 (the “parties”) agree that any suit,
action, or proceeding arising out of or relating to the Notice, the Plan or
this Option Agreement shall be brought in the United States District Court for
the Northern District of Texas (or should such court lack jurisdiction to hear
such action, suit or proceeding, in a Texas state court in the County of Dallas)
and that the parties shall submit to the jurisdiction of such court. The
parties irrevocably waive, to the fullest extent permitted by law, any
objection the party may have to the laying of venue for any such suit, action
or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT
THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If
any one or more provisions of this Section 14 shall for any reason be held
invalid or unenforceable, it is the specific intent of the parties that such
provisions shall be modified to the minimum extent necessary to make it or its
application valid and enforceable.


 


15.                                 Notices.
Any notice required or permitted hereunder shall be given in writing and shall
be deemed effectively given upon personal delivery, upon deposit for delivery
by an internationally recognized express mail courier service or upon deposit
in the United States mail by certified mail (if the parties are within the
United States), with postage and fees prepaid, addressed to the other party at
its address as shown in these instruments, or to such other address as such
party may designate in writing from time to time to the other party.


 


END OF
AGREEMENT


 


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EXHIBIT A


 


CRDENTIA CORP. 2004 STOCK INCENTIVE PLAN


 


EXERCISE NOTICE


 


Crdentia Corp.


 


5001 LBJ Freeway, Suite 850

Dallas, Texas 75244


 


Attention:
Secretary


 


1.                                       Exercise
of Option. Effective as of today,                       ,
              
the undersigned (the “Grantee”) hereby elects to exercise the Grantee’s option
to purchase                   
shares of the Common Stock (the “Shares”) of Crdentia Corp. (the “Company”)
under and pursuant to the Company’s 2004 Stock Incentive Plan, as amended from
time to time (the “Plan”) and the Non-Qualified Stock Option Award Agreement
(the “Option Agreement”) and Notice of Stock Option Award (the “Notice”) dated           ,
200  . Unless otherwise defined herein, the terms defined in the Plan
shall have the same defined meanings in this Exercise Notice.


 


2.                                       Representations
of the Grantee. The Grantee acknowledges that the Grantee has received,
read and understood the Notice, the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.


 


3.                                       Rights
as Stockholder. Until the stock certificate evidencing such Shares is
issued (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such stock certificate promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued, except as
provided in Section 10 of the Plan.


 


4.                                       Delivery
of Payment. The Grantee herewith delivers to the Company the full Exercise
Price for the Shares, which, to the extent selected, shall be deemed to be
satisfied by use of the broker-dealer sale and remittance procedure to pay the
Exercise Price provided in Section 3(d) of the Option Agreement.


 


5.                                       Tax
Consultation. The Grantee understands that the Grantee may suffer adverse
tax consequences as a result of the Grantee’s purchase or disposition of the
Shares. The Grantee represents that the Grantee has consulted with any tax
consultants the Grantee deems advisable in connection with the purchase or disposition
of the Shares and that the Grantee is not relying on the Company for any tax
advice.


 


6.                                       Taxes.
The Grantee agrees to satisfy all applicable foreign, federal, state and local
income and employment tax withholding obligations and herewith delivers to the
Company the full amount of such obligations or has made arrangements acceptable
to the Company to satisfy such obligations.


 


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7.                                       Successors
and Assigns. The Company may assign any of its rights under this Exercise
Notice to single or multiple assignees, and this agreement shall inure to the
benefit of the successors and assigns of the Company. This Exercise Notice
shall be binding upon the Grantee and his or her heirs, executors,
administrators, successors and assigns.


 


8.                                       Construction.
The captions used in this Exercise Notice are inserted for convenience and
shall not be deemed a part of this agreement for construction or interpretation.
Except when otherwise indicated by the context, the singular shall include the
plural and the plural shall include the singular. Use of the term “or” is not
intended to be exclusive, unless the context clearly requires otherwise.


 


9.                                       Administration
and Interpretation. The Grantee hereby agrees that any question or dispute
regarding the administration or interpretation of this Exercise Notice shall be
submitted by the Grantee or by the Company to the Administrator. The resolution
of such question or dispute by the Administrator shall be final and binding on
all persons.


 


10.                                 Governing
Law; Severability. This Exercise Notice is to be construed in accordance
with and governed by the internal laws of the State of Texas without giving
effect to any choice of law rule that would cause the application of the laws
of any jurisdiction other than the internal laws of the State of Texas to the
rights and duties of the parties. Should any provision of this Exercise Notice
be determined by a court of law to be illegal or unenforceable, such provision
shall be enforced to the fullest extent allowed by law and the other provisions
shall nevertheless remain effective and shall remain enforceable.


 


11.                                 Notices.
Any notice required or permitted hereunder shall be given in writing and shall
be deemed effectively given upon personal delivery, upon deposit for delivery
by an internationally recognized express mail courier service or upon deposit
in the United States mail by certified mail (if the parties are within the
United States), with postage and fees prepaid, addressed to the other party at
its address as shown below beneath its signature, or to such other address as
such party may designate in writing from time to time to the other party.


 


12.                                 Further
Instruments. The parties agree to execute such further instruments and to
take such further action as may be reasonably necessary to carry out the
purposes and intent of this agreement.


 


13.                                 Entire
Agreement. The Notice, the Plan and the Option Agreement are incorporated
herein by reference and together with this Exercise Notice constitute the
entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and the Grantee with respect to the subject matter hereof, and may not
be modified adversely to the Grantee’s interest except by means of a writing
signed by the Company and the Grantee. Nothing in the Notice, the Plan, the
Option Agreement and this Exercise Notice (except as expressly provided
therein) is intended to confer any rights or remedies on any persons other than
the parties. 


 


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  Submitted by:

  	
  Accepted by:

  
	
   

  	
   

  
	
  GRANTEE:

  	
  CRDENTIA CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
  (Signature)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  Address:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5001 LBJ
  Freeway, Suite 850

  
	
   

  	
   

  	
  Dallas, Texas
  75244

  
									



 


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