[Exhibit 10.1]


 


                  shares


 


PACE MEDICAL, INC.


 


NON-QUALIFIED STOCK OPTION
AGREEMENT


 


NON-QUALIFIED STOCK OPTION
AGREEMENT dated as of December 30, 2005 by and between PACE MEDICAL, INC., a Massachusetts corporation (hereinafter
called the “Corporation”), and                              
(hereinafter called the “Optionee”).


 


WHEREAS, the
Corporation desires to afford the Optionee the opportunity to purchase shares
of its Common Stock;


 


NOW, THEREFORE,
in consideration of the premises and of the mutual covenants and agreements
hereinafter set forth, the parties hereby mutually covenant and agree as
follows:


 


1.  Grant of Option.  Subject to the terms and conditions set forth
herein, the Corporation grants to the Optionee the right and option to purchase
from the Corporation at a price of $.30 per share up to but not exceeding in
the aggregate                    
(                 )
shares of the Corporation’s Common Stock, par value $.01 per share (the “Common
Stock”).


 


2.  Term.  This Agreement and the option granted hereby
shall terminate five (5) years from the date hereof but shall be subject to
earlier termination as herein provided. 
Upon termination, the option granted hereby shall thereupon expire and
thereafter shall not be exercisable.


 


3.  Exercise of Option.  (a) 
The option hereby granted may be exercised at any time or from time to
time in whole or in part during the term hereof.


 


(b)  Upon any
one exercise of the option granted hereby, the Optionee or his legal
representative may purchase all or any part of the shares of Common Stock as to
which such option is then exercisable, provided however, that no less than one
hundred (100) shares may be purchased upon any one exercise of such option
unless the number of shares purchased at such time is the total number of
shares in respect of which such option is then exercisable.


 


(c)  The option
hereby granted shall be exercised by the Optionee delivering to the Clerk of
the Corporation, from time to time, on any business day, written notice
specifying the number of shares the Optionee then desires to purchase, together
with 


 





















 


cash or a certified or bank cashier’s check to the order of the
Corporation for an amount in United States dollars equal to the option price of
such shares.


 


(d) Upon each such exercise, a certificate
representing the number of shares purchased shall be issued in the name of the
person or persons exercising the option granted hereby and delivered to the
Optionee.


 


4.  Restrictions on Issuance of Shares.  (a) 
Notwithstanding the provisions of Section 2 hereof, the Corporation may
delay the issuance of shares covered by the exercise of the option granted
hereby and the delivery of a certificate for such shares until


 


(i)  one of the following conditions shall be
satisfied:


 


(A)                              the
shares with respect to which the option granted hereby has been exercised are
at the time of the issuance of such shares effectively registered under the
Securities Act of 1933 as now in force or hereafter amended; or


 


(B)                                a
no-action letter in respect to the issuance of such shares shall have
been obtained by the Corporation from the Securities and Exchange Commission;
or


 


(C)                                counsel
for the Corporation shall have given an opinion, which opinion shall not be
unreasonably conditioned or withheld, that such shares are exempt from
registration under the Securities Act of 1933 as now in force or hereafter
amended; and


 


(ii)  one of the following conditions shall be
satisfied:


 


(A)                              approval
shall have been obtained from such federal and state governmental agencies,
other than the Securities and Exchange Commission, as may be required under any
applicable law, rule or regulation; or


 


(B)                                counsel
for the Corporation shall have given an opinion, which opinion shall not be
unreasonably conditioned or withheld, that no such approval is required.


 


(b)  It is
intended that all exercises of the option granted hereby shall be effective,
and the Corporation shall use its best efforts to bring about compliance with
the above conditions within a reasonable time, except that the Corporation
shall be under no obligation to cause a registration statement or a post-effective
amendment to any registration statement to be prepared at its expense or to
comply with Regulation A or any other exemption under the Securities Act of
1933 as now in force or hereafter amended, solely for the purpose of covering
the issuance of shares in respect of which 


 


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the option granted hereby may be exercised.  Therefore, the Optionee shall not be entitled
to any rights in any shares of Common Stock to be issued under the option
granted hereby until delivery of a certificate therefor by the Corporation.


 


5.  Purchase for Investment.  (a) 
Unless the shares to be issued upon exercise of the option granted
hereby have been effectively registered under the Securities Act of 1933 as now
in force or hereafter amended, the Corporation shall be under no obligation to
issue any shares covered by such option unless the person who exercises such option,
in whole or in part, shall give a written representation to the Corporation
satisfactory in form and scope to the Corporation’s counsel and upon which, in
the opinion of such counsel the Corporation may reasonably rely, that he/she is
acquiring the shares issued to him pursuant to such exercise of such option as
an investment and not with a view to, or for sale in connection with, the
distribution of any such shares.


 


(b)  The
certificate for each share of Common Stock issued pursuant to such exercise of
the option granted hereby may bear a reference to the investment representation
made in accordance with this Section 5 and to the fact that no registration
statement has been filed with the Securities and Exchange Commission in respect
to such shares.


 


(c)  In the
event that the Corporation shall nevertheless, deem it necessary or desirable
to register under the Securities Act of 1933 or other applicable statutes any
shares with respect to which the option granted hereby shall have been
exercised, or to qualify any such shares for exemption from the Securities Act
of 1933 or other applicable statutes, then the Corporation shall take such
action at its own expense and may require from the Optionee such information in
writing for use in any registration statement, prospectus, preliminary
prospectus or offering circular as is reasonably necessary for such purpose and
may require reasonable indemnity to the Corporation and its officers and
directors from such holder against all losses, claims, damages, and liabilities
arising from such use of the information so furnished and caused by any untrue
statement of any material fact therein or caused by the omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made.


 


6.  Termination of Business Relationship.  (a)  The
option hereby granted shall terminate and be of no force or effect in the event
the Optionee ceases to serve as an employee, consultant, officer or director of
the Corporation or any subsidiary of the Corporation (such service is described
herein as maintaining or being involved in a “Business Relationship with the
Corporation”) for any reason, provided however, that in the event of the
termination of the Optionee’s employment such option may be exercised (to the
extent exercisable by the Optionee at the date of such termination) at any time
within three (3) months after the date of such termination, but in any event
not later than five (5) years from the date hereof and provided further,
however, that if the termination of the Optionee’s Business Relationship with
the Corporation shall result from the Optionee’s death, such option may be
exercised (to the extent exercisable by the Optionee at the date of his death)
by the Optionee’s personal representative or by 


 


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the person or persons to whom such option shall have been transferred
by will or by the laws of descent and distribution, at any time within three
(3) months after the date of the Optionee’s death but in any event not later
than five (5) years from the date hereof.


 


(b)  As used
herein, the term “subsidiary” shall mean any present or future corporation
which would be a “subsidiary corporation” of the Corporation, as the term is
defined in Section 424 of the Internal Revenue Code of 1986.


 


(c)  Whenever
the word “Optionee” is used in any provision of this Agreement under
circumstances where the provision should logically be construed to apply to the
estate, personal representative, or beneficiary to whom this option may be
transferred by will or by the laws of descent and distribution, it shall be
deemed to include such person.


 


7.  Assignability.  The option granted hereby is not assignable
or transferable by the Optionee otherwise than by will or the laws of descent
and distribution and is exercisable during the Optionee’s lifetime only by
him.  No assignment or transfer of such
option, or of the right represented thereby, whether voluntary or involuntary,
by operation of law or otherwise, except by will or the laws of descent and
distribution, shall vest in the assignee or transferee any interest or right
herein whatsoever, and immediately upon any attempt to assign or transfer such
option the same shall terminate and be of no force or effect.


 


8.  Limitation on Rights.  (a) 
The Optionee shall not be deemed for any purpose to be a shareholder of
the Corporation with respect to any shares as to which the option granted
hereby shall not have been exercised and payment and issuance made as herein
provided.  Nothing herein shall confer on
the Optionee any right to continue in the employ of the Corporation or its
subsidiaries, nor affect the right of the Corporation or its subsidiaries to
terminate the Optionee’s employment at any time without liability to the
Corporation.


 


(b)  The
existence of the option granted hereby shall not affect in any way the right or
power of the Corporation or its shareholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the
Corporation’s capital structure or its business, or any merger or consolidation
of the Corporation, or any issue of bonds, debentures, preferred or prior
preference stocks ahead of or convertible into, or otherwise affecting the
Common Stock or the rights thereof, or the dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.


 


9.  Adjustments Upon Changes in Capitalization.  (a) 
The shares with respect to which the option granted hereby is granted
are shares of the Common Stock as constituted on the date of this Agreement,
but if and whenever, prior to the delivery by the Corporation of all of the
shares of Common Stock with respect to which this option is granted, the
Corporation shall effect a subdivision or consolidation of shares, or other 


 


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capital readjustment, or the payment of a stock dividend, or other
increase or decrease of the number of shares of Common Stock outstanding,
without receiving compensation therefor in money, services or property, then


 


(i)                  in the event of
any increase in the number of such shares outstanding, the number of shares of
Common Stock then remaining subject to option hereunder shall be
proportionately increased (except that any fraction of a share resulting from
any such adjustment shall be excluded from the operation of this Agreement),
and the cash consideration payable per share shall be proportionately reduced,
and


 


(ii)               in the event of a
reduction in the number of such shares outstanding, the number of shares of
Common Stock then remaining subject to option hereunder shall be
proportionately reduced (except that any fractional shares resulting from any
such adjustment shall be excluded from the operation of this Agreement), and
the cash consideration payable per share shall be proportionately increased.


 


(b)  In the
event of (i) any merger of one or more other corporations with the Corporation
or any consolidation of the Corporation and one or more other corporations in
which the Corporation is not the surviving or resulting corporation or (ii) any
merger of one or more other corporations with the Corporation or any
consolidation of the Corporation and one or more other corporations in which
the Corporation shall be the surviving or resulting corporation and the then
issued and outstanding shares of Common Stock shall be converted into and/or
exchanged for cash and/or any securities of any other corporation, then, in any
such case and without the need for any further action by the Corporation or its
stockholders, this Agreement and the option granted hereby shall terminate as
of the effective time of the merger or consolidation and thereupon be of no
force or effect, and the holder hereof shall, at no additional cost, be
entitled solely to receive (at such effective time and otherwise in the form
and manner provided by the terms of the agreement of merger or consolidation)
an amount of the consideration payable under the terms of such agreement equal
to the excess of (i) the aggregate consideration (valued in accordance with the
terms thereof) to which the holder hereof would have been entitled pursuant to
the terms of such agreement if, immediately prior to such effective time, the
holder hereof had been the holder of record of a number of shares of Common
Stock equal to the aggregate number of shares of Common Stock as to which this
Agreement was exercisable immediately prior to such effective time over (ii)
the aggregate exercise price payable hereunder with respect to such number of
shares.  In the event of any other merger
or consolidation in which the Corporation is the surviving or resulting
corporation, this Agreement and the option granted hereby shall remain in full
force and effect in accordance with its terms. 
In the event of any dissolution or liquidation of the Corporation, this
Agreement and the option granted hereby shall terminate and thereupon be of no
force or effect.


 


10.  Miscellaneous.  (a) 
This Agreement is the sole and only agreement between the parties hereto
with respect to the subject matter hereof and may not be 


 


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modified or amended except by a subsequent written agreement duly
executed by the parties hereto.


 


(b)  The
Corporation shall at all times during the term of the option granted hereby
reserve and keep available such number of shares of Common Stock as will be
sufficient to satisfy the requirements of such option.


 


(c)  Any notice
which either party hereto may be required or permitted to give to the other
shall be in writing, and may be delivered personally or by mail, postage
prepaid, addressed as follows:  To the
Corporation (Attention to the Clerk), at its principal office at 391 Totten
Pond Road, Waltham, Massachusetts 02154, or at such other address as the
Corporation, by notice to the Optionee, may designate in writing from time to
time; and to the Optionee at his address as the Optionee, by notice to the
Clerk of the Corporation, may designate in writing from time to time.


 


(d)  This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.


 


IN WITNESS WHEREOF,
the Corporation has caused this Non-Qualified Stock Option Agreement to be
executed by its duly-authorized officer, and the Optionee has hereunto
set his hand and seal, all on the day and year first above written.


 


	
   

  	
  PACE MEDICAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Steven E. Hanson, President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   - Optionee

  
						



 


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