Document:

Exhibit
10.7

 

INCENTIVE
STOCK OPTION AGREEMENT

 

ALPHATEC
HOLDINGS, INC.

 

AGREEMENT made as of the       
day of             
200  , between Alphatec Holdings, Inc. (the “Company”), a Delaware
corporation, and                                     ,
an employee of the Company (the “Employee”).

 

WHEREAS, the Company
desires to grant to the Employee an Option to purchase shares of its Common
Stock, $.0001 par value per share (the “Shares”), under and for the purposes
set forth in the Company’s 2005 Employee, Director and Consultant Stock Plan,
as amended (the “Plan”);

 

WHEREAS, the Company and
the Employee understand and agree that any terms used and not defined herein
have the same meanings as in the Plan; and

 

WHEREAS, the Company and
the Employee each intend that the Option granted herein qualify as an ISO.

 

NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and for other good
and valuable consideration, the parties hereto agree as follows:

 

1.             GRANT OF OPTION.

 

The Company hereby grants
to the Employee the right and option to purchase all or any part of an
aggregate of                               
Shares, on the terms and conditions and subject to all the limitations set
forth herein, under United States securities and tax laws, and in the Plan,
which is incorporated herein by reference. The Employee acknowledges receipt of
a copy of the Plan.

 

2.             PURCHASE PRICE.

 

The purchase price of the
Shares covered by the Option shall be $    per Share, subject to
adjustment, as provided in the Plan, in the event of a stock split, reverse
stock split or other events affecting the holders of Shares after the date
hereof (the “Purchase Price”). Payment shall be made in accordance with
Paragraph 8 of the Plan.

 

3.             EXERCISABILITY OF OPTION.

 

Subject to the terms and
conditions set forth in this Agreement and the Plan, the Option granted hereby
shall become exercisable as follows:

 

 

	
  On the first
  anniversary of the date of this Agreement

  	
   

  	
  up to
                    
  Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On the second anniversary
  of the date of this Agreement

  	
   

  	
  an additional
                    
  Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On the third
  anniversary of the date of this Agreement

  	
   

  	
  an additional
                    
  Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On the fourth
  anniversary of the date of this Agreement

  	
   

  	
  an additional                   
  Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On the fifth
  anniversary of the date of this Agreement

  	
   

  	
  an additional
                    
  Shares

  	
   

  

 

 

The foregoing rights are
cumulative and are subject to the other terms and conditions of this Agreement
and the Plan.

 

Notwithstanding the
foregoing, in the event of a Change of Control, 100% of the Shares which would
have vested in each vesting installment remaining under this Option will be
vested for purposes of Section 23(b) of the Plan unless this Option has
otherwise expired or been terminated pursuant to its terms or the terms of the
Plan.

 

4.             TERM OF OPTION.

 

The Option shall
terminate ten years from the date of this Agreement or, if the Employee owns as
of the date hereof more than 10% of the total combined voting power of all
classes of capital stock of the Company or an Affiliate, five years from the
date of this Agreement, but shall be subject to earlier termination as provided
herein or in the Plan.

 

If the Employee ceases to
be an employee of the Company or of an Affiliate (for any reason other than the
death or Disability of the Employee or termination of the Employee’s employment
for Cause (as defined in the Plan)), the Option may be exercised, if it has not
previously terminated, within three months after the date the Employee ceases
to be an employee of the Company or an Affiliate, or within the originally
prescribed term of the Option, whichever is earlier, but may not be exercised
thereafter. In such event, the Option shall be exercisable only to the extent
that the Option has become exercisable and is in effect at the date of such
cessation of employment.

 

Notwithstanding the
foregoing, in the event of the Employee’s Disability or death within three
months after the termination of employment, the Employee or the Employee’s
Survivors may exercise the Option within one year after the date of the
Employee’s termination of employment, but in no event after the date of
expiration of the term of the Option.

 

In the event the Employee’s
employment is terminated by the Employee’s employer for Cause, the Employee’s
right to exercise any unexercised portion of this Option shall cease
immediately as of the time the Employee is notified his or her employment is
terminated for Cause, and this Option shall thereupon terminate. Notwithstanding
anything herein to the contrary, if subsequent to the Employee’s termination as
an employee, but prior to the exercise of the Option, the Board of Directors of
the Company determines that, either prior or subsequent

 

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to the Employee’s termination, the Employee engaged in conduct which
would constitute Cause, then the Employee shall immediately cease to have any
right to exercise the Option and this Option shall thereupon terminate.

 

In the event of the
Disability of the Employee, as determined in accordance with the Plan, the
Option shall be exercisable within one year after the Employee’s termination of
employment or, if earlier, within the term originally prescribed by the Option.
In such event, the Option shall be exercisable:

 

(a)                                  to
the extent that the Option has become exercisable but has not been exercised as
of the date of Disability; and

 

(b)                                 in
the event rights to exercise the Option accrue periodically, to the extent of a
pro rata portion through the date of Disability of any additional vesting
rights that would have accrued on the next vesting date had the Employee not
become Disabled. The proration shall be based upon the number of days accrued
in the current vesting period prior to the date of Disability.

 

In the event of the death
of the Employee while an employee of the Company or of an Affiliate, the Option
shall be exercisable by the Employee’s Survivors within one year after the date
of death of the Employee or, if earlier, within the originally prescribed term
of the Option. In such event, the Option shall be exercisable:

 

(x)                                   to
the extent that the Option has become exercisable but has not been exercised as
of the date of death; and

 

(y)                                 in
the event rights to exercise the Option accrue periodically, to the extent of a
pro rata portion through the date of death of any additional vesting rights
that would have accrued on the next vesting date had the Employee not died. The
proration shall be based upon the number of days accrued in the current vesting
period prior to the Employee’s date of death.

 

5.             METHOD OF EXERCISING OPTION.

 

Subject to the terms and
conditions of this Agreement, the Option may be exercised by written notice to
the Company or its designee, in substantially the form of Exhibit A
attached hereto. Such notice shall state the number of Shares with respect to
which the Option is being exercised and shall be signed by the person
exercising the Option. Payment of the purchase price for such Shares shall be
made in accordance with Paragraph 8 of the Plan. The Company shall deliver such
Shares as soon as practicable after the notice shall be received, provided,
however, that the Company may delay issuance of such Shares until completion of
any action or obtaining of any consent, which the Company deems necessary under
any applicable law (including, without limitation, state securities or “blue
sky” laws). The Shares as to which the Option shall have been so exercised
shall be registered in the Company’s share register in the name of the person
so exercising the Option (or, if the Option shall be exercised by the Employee
and if the Employee shall so request in the notice exercising the Option, shall
be registered in the name of the Employee and another person jointly, with
right of survivorship) and shall be delivered as provided above to or upon the
written order of the person exercising the

 

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Option. In the event the Option shall be exercised, pursuant to Section
4 hereof, by any person other than the Employee, such notice shall be
accompanied by appropriate proof of the right of such person to exercise the
Option. All Shares that shall be purchased upon the exercise of the Option as
provided herein shall be fully paid and nonassessable.

 

6.             PARTIAL EXERCISE.

 

Exercise of this Option
to the extent above stated may be made in part at any time and from time to
time within the above limits, except that no fractional share shall be issued
pursuant to this Option.

 

7.             NON-ASSIGNABILITY.

 

The Option shall not be
transferable by the Employee otherwise than by will or by the laws of descent
and distribution. The Option shall be exercisable, during the Employee’s
lifetime, only by the Employee (or, in the event of legal incapacity or
incompetency, by the Employee’s guardian or representative) and shall not be
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process.
Any attempted transfer, assignment, pledge, hypothecation or other disposition
of the Option or of any rights granted hereunder contrary to the provisions of
this Section 7, or the levy of any attachment or similar process upon the
Option shall be null and void.

 

8.             NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

 

The Employee shall have
no rights as a stockholder with respect to Shares subject to this Agreement
until registration of the Shares in the Company’s share register in the name of
the Employee. Except as is expressly provided in the Plan with respect to
certain changes in the capitalization of the Company, no adjustment shall be
made for dividends or similar rights for which the record date is prior to the
date of such registration.

 

9.             ADJUSTMENTS.

 

The Plan contains provisions
covering the treatment of Options in a number of contingencies such as stock
splits and mergers. Provisions in the Plan for adjustment with respect to stock
subject to Options and the related provisions with respect to successors to the
business of the Company are hereby made applicable hereunder and are
incorporated herein by reference; provided, however, that in the event of a
Change of Control, 100% of the Shares which would have vested in each vesting
installment remaining under this Option will be vested for purposes of Section
23(b) of the Plan.

 

10.           TAXES.

 

The Employee acknowledges
that any income or other taxes due from him or her with respect to this Option
or the Shares issuable pursuant to this Option shall be the Employee’s
responsibility.

 

4

 

In the event of a
Disqualifying Disposition (as defined in Section 15 below) or if the Option is
converted into a Non-Qualified Option and such Non-Qualified Option is
exercised, the Company may withhold from the Employee’s remuneration, if any,
the minimum statutory amount of Federal, state and local withholding taxes
attributable to such amount that is considered compensation includable in such
person’s gross income. At the Company’s discretion, the amount required to be
withheld may be withheld in cash from such remuneration, or in kind from the
Shares otherwise deliverable to the Employee on exercise of the Option. The
Employee further agrees that, if the Company does not withhold an amount from
the Employee’s remuneration sufficient to satisfy the Company’s income tax
withholding obligation, the Employee will reimburse the Company on demand, in
cash, for the amount under-withheld.

 

11.           PURCHASE FOR INVESTMENT.

 

Unless the offering and
sale of the Shares to be issued upon the particular exercise of the Option
shall have been effectively registered under the Securities Act of 1933, as now
in force or hereafter amended (the “1933 Act”), the Company shall be under no
obligation to issue the Shares covered by such exercise unless and until the
following conditions have been fulfilled:

 

(a)                                  The
person(s) who exercise the Option shall warrant to the Company, at the time of
such exercise, that such person(s) are acquiring such Shares for their own
respective accounts, for investment, and not with a view to, or for sale in
connection with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions of the
following legend which shall be endorsed upon any certificate(s) evidencing the
Shares issued pursuant to such exercise:

 

“The shares represented
by this certificate have been taken for investment and they may not be sold or
otherwise transferred by any person, including a pledgee, unless (1) either (a)
a Registration Statement with respect to such shares shall be effective under
the Securities Act of 1933, as amended, or (b) the Company shall have received
an opinion of counsel satisfactory to it that an exemption from registration
under such Act is then available, and (2) there shall have been compliance with
all applicable state securities laws;” and

 

(b)                                 If
the Company so requires, the Company shall have received an opinion of its
counsel that the Shares may be issued upon such particular exercise in
compliance with the 1933 Act without registration thereunder. Without limiting
the generality of the foregoing, the Company may delay issuance of the Shares
until completion of any action or obtaining of any consent, which the Company
deems necessary under any applicable law (including without limitation state
securities or “blue sky” laws).

 

5

 

12.           RESTRICTIONS ON TRANSFER OF SHARES.

 

12.1         If, in connection with a registration
statement filed by the Company pursuant to the 1933 Act, the Company or its
underwriter so requests, the Employee will agree not to sell any Shares for a
period not to exceed 180 days following the effectiveness of such registration.

 

12.2         The Employee acknowledges and agrees
that neither the Company, its shareholders nor its directors and officers, has
any duty or obligation to disclose to the Employee any material information
regarding the business of the Company or affecting the value of the Shares
before, at the time of, or following a termination of the employment of the
Employee by the Company, including, without limitation, any information
concerning plans for the Company to make a public offering of its securities or
to be acquired by or merged with or into another firm or entity.

 

13.           NO OBLIGATION TO EMPLOY.

 

The Company is not by the
Plan or this Option obligated to continue the Employee as an employee of the
Company or an Affiliate. The Employee acknowledges: (a) that the Plan is
discretionary in nature and may be suspended or terminated by the Company at
any time; (b) that the grant of the Option is a one-time benefit which does not
create any contractual or other right to receive future grants of options, or
benefits in lieu of options; (c) that all determinations with respect to any
such future grants, including, but not limited to, the times when options shall
be granted, the number of shares subject to each option, the option price, and
the time or times when each option shall be exercisable, will be at the sole
discretion of the Company; (d) that the Employee’s participation in the Plan is
voluntary; (e) that the value of the Option is an extraordinary item of
compensation which is outside the scope of the Employee’s employment contract,
if any; and (f) that the Option is not part of normal or expected compensation
for purposes of calculating any severance, resignation, redundancy, end of
service payments, bonuses, long-service awards, pension or retirement benefits
or similar payments.

 

14.           OPTION IS INTENDED TO BE AN ISO.

 

The parties each intend
that the Option be an ISO so that the Employee (or the Employee’s Survivors)
may qualify for the favorable tax treatment provided to holders of Options that
meet the standards of Section 422 of the Code. Any provision of this Agreement
or the Plan which conflicts with the Code so that this Option would not be
deemed an ISO is null and void and any ambiguities shall be resolved so that
the Option qualifies as an ISO. Nonetheless, if the Option is determined not to
be an ISO, the Employee understands that neither the Company nor any Affiliate
is responsible to compensate him or her or otherwise make up for the treatment
of the Option as a Non-Qualified Option and not as an ISO. The Employee should
consult with the Employee’s own tax advisors regarding the tax effects of the
Option and the requirements necessary to obtain favorable tax treatment under
Section 422 of the Code, including, but not limited to, holding period
requirements.

 

15.           NOTICE TO COMPANY OF DISQUALIFYING
DISPOSITION.

 

The Employee agrees to
notify the Company in writing immediately after the Employee makes a
Disqualifying Disposition of any of the Shares acquired pursuant to the
exercise of the Option. A Disqualifying Disposition is defined in Section
424(c) of the Code and includes any

 

6

 

disposition (including any sale) of such Shares before the later of (a)
two years after the date the Employee was granted the Option or (b) one year
after the date the Employee acquired Shares by exercising the Option, except as
otherwise provided in Section 424(c) of the Code. If the Employee has died
before the Shares are sold, these holding period requirements do not apply and
no Disqualifying Disposition can occur thereafter.

 

16.           NOTICES.

 

Any notices required or
permitted by the terms of this Agreement or the Plan shall be given by
recognized courier service, facsimile, registered or certified mail, return
receipt requested, addressed as follows:

 

	
  If to the Company:

  	
   

  	
  Alphatec Holdings, Inc.

  
	
   

  	
   

  	
  21051 Palomar Airport
  Road

  
	
   

  	
   

  	
  Carlsbad, CA 92011

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to the Participant:

  	
   

  	
   

  

 

or to such other address
or addresses of which notice in the same manner has previously been given. Any
such notice shall be deemed to have been given upon the earlier of receipt, one
business day following delivery to a recognized courier service or three
business days following mailing by registered or certified mail.

 

17.           GOVERNING LAW.

 

This Agreement shall be
construed and enforced in accordance with the law of the State of Delaware,
without giving effect to the conflict of law principles thereof. For the
purpose of litigating any dispute that arises under this Agreement, the parties
hereby consent to exclusive jurisdiction in Delaware and agree that such litigation
shall be conducted in the state courts of Delaware or the federal courts of the
United States for the District of Delaware.

 

18.           BENEFIT OF AGREEMENT.

 

Subject to the provisions
of the Plan and the other provisions hereof, this Agreement shall be for the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.

 

19.           ENTIRE AGREEMENT.

 

This Agreement, together
with the Plan, embodies the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior oral
or written agreements and understandings relating to the subject matter hereof.
No statement, representation, warranty, covenant or agreement not expressly set
forth in this Agreement shall affect or be used to interpret, change or
restrict, the express terms and provisions of this Agreement, provided,
however, in any event, this Agreement shall be subject to and governed by the
Plan.

 

7

 

20.           MODIFICATIONS AND AMENDMENTS.

 

The terms and provisions
of this Agreement may be modified or amended as provided in the Plan.

 

21.           WAIVERS AND CONSENTS.

 

Except as provided in the
Plan, the terms and provisions of this Agreement may be waived, or consent for
the departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent
shall be deemed to be or shall constitute a waiver or consent with respect to
any other terms or provisions of this Agreement, whether or not similar. Each
such waiver or consent shall be effective only in the specific instance and for
the purpose for which it was given, and shall not constitute a continuing
waiver or consent.

 

22.           DATA PRIVACY.

 

By entering into this
Agreement, the Employee: (a) authorizes the Company and each Affiliate, and any
agent of the Company or any Affiliate administering the Plan or providing Plan
recordkeeping services, to disclose to the Company or any of its Affiliates
such information and data as the Company or any such Affiliate shall request in
order to facilitate the grant of options and the administration of the Plan;
(b) waives any data privacy rights he or she may have with respect to such information;
and (c) authorizes the Company and each Affiliate to store and transmit such
information in electronic form.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

8

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Employee has hereunto set his or her hand, all
as of the day and year first above written.

 

 

	
   

  	
  ALPHATEC HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Employee

  
					

 

9

 

Exhibit A

 

NOTICE OF EXERCISE
OF INCENTIVE STOCK OPTION

 

TO:         Alphatec Holdings, Inc.

 

Ladies and Gentlemen:

 

I hereby exercise my
Incentive Stock Option to purchase                   
shares (the “Shares”) of Common Stock, $.0001 par value, of Alphatec Holdings,
Inc. (the “Company”), at the exercise price
of $per share, pursuant to and subject to the terms of that certain Incentive
Stock Option Agreement between the undersigned and the Company dated                               ,
200   .

 

I understand the nature
of the investment I am making and the financial risks thereof. I am aware that
it is my responsibility to have consulted with competent tax and legal advisors
about the relevant Federal, state and local income tax and securities laws
affecting the exercise of the Option and the purchase and subsequent sale of
the Shares.

 

I am paying the option exercise price for the Shares
as follows:

 

Please issue the Shares
(check one):

 

o to me; or

 

o to me and                                            ,
as joint tenants with right of survivorship,

 

at the following address:

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

A-1

 

My
mailing address for shareholder communications, if different from the address
listed above, is:

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Employee (signature)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security Number

  
				

 

A-2Exhibit 10.8

 

RESTRICTED STOCK AGREEMENT

 

ALPHATEC HOLDINGS, INC.

 

AGREEMENT
made as of the     day of             ,
200   (the “Grant Date”), between Alphatec Holdings, Inc. (the “Company”),
a Delaware corporation, and               
(the “Participant”).

 

WHEREAS,
the Company has adopted the Alphatec Holdings, Inc. 2005 Employee,
Director and Consultant Stock Plan, as amended (the
“Plan”) to promote the interests of the Company by providing an incentive for
employees, directors and consultants of the Company or its Affiliates;

 

WHEREAS,
pursuant to the provisions of the Plan, the Company desires to offer for sale
to the Participant shares of the Company’s Common Stock, $.0001 par value per
share (“Common Stock”), in accordance with the provisions of the Plan, all on
the terms and conditions hereinafter set forth;

 

WHEREAS,
Participant wishes to accept said offer; and

 

WHEREAS,
the parties hereto understand and agree that any terms used and not defined
herein have the meanings ascribed to such terms in the Plan and that any and
all references herein to employment of the Participant by the Company shall
include the Participant’s employment or service as an employee, director or
consultant of the Company or any Affiliate.

 

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

 

1.                                       Terms
of Purchase. The Participant hereby accepts the offer of the Company to
issue to the Participant, in accordance with the terms of the Plan and this
Agreement,                          Shares of the Company’s Common Stock (such shares, subject to
adjustment pursuant to Section 23
of the Plan and Subsection 2.1(g) hereof, the “Granted Shares”) at a
purchase price per share of $       (the “Purchase
Price”), receipt of which is hereby
acknowledged by the Participant’s prior service to the Company and which amount
will be reported as income on the Participant’s W-2 for this calendar year .

 

2.1.                              Company’s
Lapsing Repurchase Right.

 

(a)                                  Lapsing
Repurchase Right. Except as set forth in Subsections 2.1(b) and 2.1(c) hereof,
in the event that for any reason the Participant no longer is an employee,
director or consultant of the Company or an Affiliate prior to the fifth (5) anniversary
of the Grant Date (the Termination”),
the Participant (or the Participant’s Survivor) shall, on the date of
Termination, immediately forfeit to the Company (or its designee), all or any part of
the Granted Shares which have not yet lapsed in accordance with the schedule set
forth in clauses (i), (ii) and (iii) below (the “Lapsing Repurchase
Right”).

 

 

(i)                                     If the Participant’s Termination is
prior to the first anniversary of the Grant Date, all of the Granted Shares
acquired by the Participant hereunder shall be forfeited to the Company.

 

(ii)                                  If
the Participant’s Termination is on or after the first anniversary of the Grant
Date, all of the Granted Shares less 20% of the Granted Shares for each full
12-month period elapsed after the Grant Date that the Participant continues to
serve as an employee, director or consultant of the Company or an Affiliate
shall be forfeited to the Company.

 

(iii)                               Notwithstanding anything
to the contrary contained in this Agreement, in the event the Company or an
Affiliate terminates the Participant’s employment or service for Cause (as
defined in the Plan) or in the
event the Administrator determines, within 90 days after the Participant’s
Termination, that either prior or subsequent to the Participant’s Termination
the Participant engaged in conduct that would constitute Cause, all of the
Granted Shares then held by the Participant shall be forfeited to the Company
immediately as of the time the Participant is notified that he or she has been
terminated for Cause or that he or she engaged in conduct which would
constitute Cause.

 

(b)                                 Effect
of Termination for Disability or upon Death. Except as otherwise provided
in Subsection 2.1(a)(iii) above, the following rules apply if
the Participant’s Termination is by reason of Disability or death:  to the extent the Company’s Lapsing
Repurchase Right has not lapsed as of the date of Disability or death, as case may be,
the Participant shall forfeit to the Company any or all of the Granted Shares
subject to such Lapsing Repurchase Right; provided, however, that the Company’s
Lapsing Repurchase Right shall be deemed to have lapsed to the extent of a pro
rata portion of the Granted Shares through the date of Disability or death, as
would have lapsed had the Participant not become Disabled or died, as the case may be.
The proration shall be based upon the number of days accrued in such current
vesting period prior to the Participant’s date of Disability or death, as the
case may be.

 

(c)                                  Effect of Change in Control. Except as otherwise provided in Subsection 2.1(a)(iii) above,
the Company’s Lapsing Repurchase Right shall terminate, and the Participant’s
ownership of all Granted Shares then owned by the Participant shall become
vested, in the event of a Change of Control of the Company.

 

(d)                                 Escrow.
The certificates representing all Granted Shares acquired by the Participant
hereunder which from time to time are subject to the Lapsing Repurchase Right
shall be delivered to the Company and the Company shall hold such Granted
Shares in escrow as provided in this Subsection 2.1(d). Promptly following
receipt by the Company of a written request from the Participant, the Company
shall release from escrow and deliver to the Participant a certificate for the
whole number of Granted Shares, if any, as to which the Company’s Lapsing
Repurchase Right has lapsed. In the event of a forfeiture to the Company of
Granted Shares subject to the Lapsing Repurchase Right, the Company shall
release from escrow and cancel a certificate for the number of Granted Shares
so forfeited. Any securities distributed in respect of the Granted Shares held
in escrow, including, without limitation, shares issued as a result of stock
splits, stock dividends or other recapitalizations, shall also be held in
escrow in the same manner as the Granted Shares.

 

2

 

(e)                                  Prohibition
on Transfer. The Participant recognizes and agrees that all Granted Shares
which are subject to the Lapsing Repurchase Right may not be sold,
transferred, assigned, hypothecated, pledged, encumbered or otherwise disposed
of, whether voluntarily or by operation of law, other than to the Company (or
its designee). The Company shall not be required to transfer any Granted Shares
on its books which shall have been sold, assigned or otherwise transferred in
violation of this Subsection 2.1(e), or to treat as the owner of such
Granted Shares, or to accord the right to vote as such owner or to pay
dividends to, any person or organization to which any such Granted Shares shall
have been so sold, assigned or otherwise transferred, in violation of this Subsection 2.1(e).

 

(f)                                    Failure
to Deliver Granted Shares to be Repurchased. In the event that the Granted
Shares to be forfeited to the Company under this Agreement are not in the
Company’s possession pursuant to Subsection 2.1(d) above or otherwise
and the Participant or the Participant’s Survivor fails to deliver such Granted
Shares to the Company (or its designee), the Company may immediately take
such action as is appropriate to transfer record title of such Granted Shares
from the Participant to the Company (or its designee) and treat the Participant
and such Granted Shares in all respects as if delivery of such Granted Shares
had been made as required by this Agreement. The Participant hereby irrevocably
grants the Company a power of attorney which shall be coupled with an interest
for the purpose of effectuating the preceding sentence.

 

(g)                                 Adjustments.
The Plan contains provisions covering the treatment of Shares in a number of
contingencies such as stock splits and mergers. Provisions in the Plan for
adjustment with respect to the Shares and the related provisions with respect
to successors to the business of the Company are hereby made applicable
hereunder and are incorporated herein by reference.

 

2.2                                 Other
Restrictions.

 

(a)                                  If,
in connection with a registration statement filed by the Company pursuant to
the Securities Act of 1933, as amended (the “1933 Act”), the Company or its
underwriter so requests, the Participant will agree not to sell any of his or
her Granted Shares whether or not the Lapsing Repurchase Right has lapsed for a
period not to exceed the lesser of: (i) 180 days following the
effectiveness of such registration statement or (ii) such period as the
officers and directors of the Company agree not to sell their Common Stock of
the Company.

 

(b)                                 The
Participant acknowledges and agrees that neither the Company, its shareholders
nor its directors and officers, has any duty or obligation to disclose to the
Participant any material information regarding the business of the Company or
affecting the value of the Shares before, at the time of, or following a
Termination, including, without limitation, any information concerning plans
for the Company to make a public offering of its securities or to be acquired
by or merged with or into another firm or entity.

 

3.                                       Legend.
In addition to any legend required pursuant to the Plan, all certificates
representing the Granted Shares to be issued to the Participant pursuant to
this Agreement shall have endorsed thereon a legend substantially as follows:

 

3

 

“The
shares represented by this certificate are subject to restrictions set forth in
a Restricted Stock Agreement dated as of             ,
200   with this Company, a copy of which Agreement is available for
inspection at the offices of the Company or will be made available upon
request.”

 

4.                                       Securities Law Compliance. The Participant specifically acknowledges
and agrees that any sales of Granted Shares shall be made in accordance with
the requirements of the Securities Act of 1933, as amended.

 

5.                                       Rights
as a Stockholder. The Participant shall have all the rights of a
stockholder with respect to the Granted Shares, including voting and dividend
rights, subject to the transfer and other restrictions set forth herein and in
the Plan.

 

6.                                       Incorporation
of the Plan. The Participant specifically understands and agrees that the
Granted Shares issued under the Plan are being sold to the Participant pursuant
to the Plan, a copy of which Plan the Participant acknowledges he or she has
read and understands and by which Plan he or she agrees to be bound. The provisions
of the Plan are incorporated herein by reference.

 

7.                                       Tax
Liability of the Participant and Payment of Taxes. The Participant
acknowledges and agrees that any income or other taxes due from the Participant
with respect to the Granted Shares issued pursuant to this Agreement,
including, without limitation, the Lapsing Repurchase Right, shall be the
Participant’s responsibility. Without limiting the foregoing, the Participant
agrees that, to the extent that the lapsing of restrictions on disposition of
any of the Granted Shares or the declaration of dividends on any such shares
before the lapse of such restrictions on disposition results in the Participant’s
being deemed to be in receipt of earned income under the provisions of the
Code, the Company shall be entitled to immediate payment from the Participant
of the amount of any tax required to be withheld by the Company.

 

Upon
execution of this Agreement, the Participant may file an election under Section 83
of the Code in substantially the form attached as Exhibit A. The
Participant acknowledges that if he does not file such an election, as the
Granted Shares are released from the Lapsing Repurchase Right in accordance
with Section 2.1, the Participant will have income for tax purposes equal
to the fair market value of the Granted Shares at such date, less the price
paid for the Granted Shares by the Participant.

 

8.                                       Equitable
Relief. The Participant specifically acknowledges and agrees that in the
event of a breach or threatened breach of the provisions of this Agreement or
the Plan, including the attempted transfer of the Granted Shares by the
Participant in violation of this Agreement, monetary damages may not be
adequate to compensate the Company, and, therefore, in the event of such a
breach or threatened breach, in addition to any right to damages, the Company
shall be entitled to equitable relief in any court having competent
jurisdiction. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available to it for any such breach or threatened
breach.

 

9.                                       No
Obligation to Maintain Relationship. The Company is not by the Plan or this
Agreement obligated to continue the Participant as an employee, director or
consultant of the 

 

4

 

Company or an Affiliate. The
Participant acknowledges:  (a) that
the Plan is discretionary in nature and may be suspended or terminated by
the Company at any time; (b) that the grant of the Shares is a one-time
benefit which does not create any contractual or other right to receive future
grants of shares, or benefits in lieu of shares; (c) that all
determinations with respect to any such future grants, including, but not
limited to, the times when shares shall be granted, the number of shares to be
granted, the purchase price, and the time or times when each share shall be
free from a lapsing repurchase right, will be at the sole discretion of the
Company; (d) that the Participant’s participation in the Plan is
voluntary; (e) that the value of the Shares is an extraordinary item of
compensation which is outside the scope of the Participant’s employment
contract, if any; and (f) that the Shares are not part of normal or
expected compensation for purposes of calculating any severance, resignation,
redundancy, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments.

 

10.                                 Notices.
Any notices required or permitted by the terms of this Agreement or the Plan
shall be given by recognized courier service, facsimile, registered or
certified mail, return receipt requested, addressed as follows:

 

	
  If to the
  Company:

  	
   

  	
  Alphatec
  Holdings, Inc. 

  2051 Palomar Airport Road 

  Carlsbad, CA 92011

  
	
   

  	
   

  	
   

  
	
  If to the
  Participant:

  	
   

  	
   

  

 

or to such other
address or addresses of which notice in the same manner has previously been
given. Any such notice shall be deemed to have been given on the earliest of
receipt, one business day following delivery by the sender to a recognized
courier service, or three business days following mailing by registered or
certified mail.

 

11.                                 Benefit
of Agreement. Subject to the provisions of the Plan and the other
provisions hereof, this Agreement shall be for the benefit of and shall be
binding upon the heirs, executors, administrators, successors and assigns of
the parties hereto.

 

12.                                 Governing
Law. This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware, without giving effect to the conflict of law
principles thereof. For the purpose of litigating any dispute that arises under
this Agreement, whether at law or in equity, the parties hereby consent to
exclusive jurisdiction in Delaware and agree that such litigation shall be
conducted in the state courts of Delaware or
the federal courts of the United States for the District of Delaware.

 

13.                                 Severability.
If any provision of this Agreement is held to be invalid or unenforceable by a
court of competent jurisdiction, then such provision or provisions shall be
modified to the extent necessary to make such provision valid and enforceable,
and to the extent that this is impossible, then such provision shall be deemed
to be excised from this Agreement, and the validity, legality and
enforceability of the rest of this Agreement shall not be affected thereby.

 

5

 

14.                                 Entire
Agreement. This Agreement, together with the Plan, constitutes the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior oral or written agreements and
understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement not expressly set forth in this
Agreement shall affect or be used to interpret, change or restrict the express
terms and provisions of this Agreement provided, however, in any event, this
Agreement shall be subject to and governed by the Plan.

 

15.                                 Modifications
and Amendments; Waivers and Consents. The terms and provisions of this
Agreement may be modified or amended as provided in the Plan. Except as
provided in the Plan, the terms and provisions of this Agreement may be
waived, or consent for the departure therefrom granted, only by written
document executed by the party entitled to the benefits of such terms or
provisions. No such waiver or consent shall be deemed to be or shall constitute
a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.

 

16.                                 Counterparts.
This Agreement may be executed in one or more counterparts, and by
different parties hereto on separate counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

 

17.                                 Data
Privacy. By entering into this Agreement, the Participant:  (a) authorizes the Company and each
Affiliate, and any agent of the Company or any Affiliate administering the Plan
or providing Plan record keeping services, to disclose to the Company or any of
its Affiliates such information and data as the Company or any such Affiliate
shall request in order to facilitate the grant of Shares and the administration
of the Plan; (b) waives any data privacy rights he or she may have
with respect to such information; and (c) authorizes the Company and each
Affiliate to store and transmit such information in electronic form.

 

[THE NEXT PAGE IS
THE SIGNATURE PAGE]

 

6

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

 

	
   

  	
  ALPHATEC
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print name:

  

 

7

 

EXHIBIT A

 

Election to Include Gross Income in Year

of Transfer Pursuant to Section 83(b)

of the Internal Revenue Code of 1986, as amended

 

In accordance with Section 83(b) of the Internal
Revenue Code of 1986, as amended (the “Code”), the undersigned hereby elects to
include in his gross income as compensation for services the excess, if any, of
the fair market value of the property (described below) at the time of transfer
over the amount paid for such property.

 

The following sets
for the information required in accordance with the Code and the regulations
promulgated hereunder:

 

1.                                       The
name, address and social security number of the undersigned (the “Taxpayer”)
are:

 

	
  Name:

  
	
  Address:

  
	
  Social Security
  No.:

  

 

2.                                       The
description of the property with respect to which the election is being made is
as follows:

 

            
(   ) shares (the “Shares”) of Common Stock, $.0001 par value
per share, of Alphatec Holdings, Inc., a Delaware corporation (the “Company”).

 

3.                                       This
election is made for the calendar year     , with respect
to the transfer of the property to the Taxpayer on                  
(the “Grant Date”).

 

4.                                       Description
of restrictions:  The property is subject
to the following restrictions:

 

In the
event the Taxpayer’s employment with the Company or an Affiliate is terminated,
the Company may repurchase all or any portion of the Shares determined as
set forth below at the acquisition price paid by the Taxpayer:

 

A.                                   If
the termination takes place on or prior to              ,
200 , the Company’s purchase option will apply to all of the Shares.

 

B.                                     If
the termination takes place after           ,
200 , the number of Shares to which the Company’s purchase option applies
shall be               
(   ) Shares less                     
(   ) Shares for each full twelve (12) month period elapsed
after the Grant Date if the Taxpayer is employed by the Company or an
Affiliate.

 

A-1

 

5.                                       The
fair market value at time of transfer (determined without regard to any
restrictions other than restrictions which by their terms will never lapse) of
the property with respect to which this election is being made was not more
than $     per Share.

 

6.                                       The
amount paid by the Taxpayer for said property was $    per
Share.

 

7.                                       A
copy of this statement has been furnished to the Company.

 

Signed this     
day of         , 200 .

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  

 

A-2

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