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Exhibit 10.1  

 
 

ALPHATEC HOLDINGS, INC.    
    
    2005 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN    
    

1.     DEFINITIONS. 

        Unless
otherwise specified or unless the context otherwise requires, the following terms, as used in this Alphatec Holdings, Inc. 2005 Employee, Director and Consultant Stock
Plan, have the following meanings: 

        Administrator means the Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the
Administrator means the Committee. 

        Affiliate means a corporation which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or
indirect. 

        Agreement means an agreement between the Company and a Participant delivered pursuant to the Plan, in such form as the Administrator shall
approve. 

        Board of Directors means the Board of Directors of the Company. 

        Change of Control shall occur on the date that: (i) any one person, entity or group acquires ownership of capital stock of the
Company that, together with the capital stock of the Company already held by such person, entity or group, constitutes more than 50% of the total fair market value or total voting power of the capital
stock of the Company; provided, however, if any one person, entity or group is considered to own more than 50% of the total fair market value or total voting power of the capital stock of the Company,
the acquisition of additional capital stock by the same person, entity or group shall not be deemed to be a Change of Control; (ii) a majority of members of the Board is replaced during any
12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or (iii) any
one person, entity or group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person, entity or group) assets from the Company
that have a total gross fair market value at least equal to 80% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions;
provided, however, a transfer of assets by the Company shall not deemed to be a Change of Control if the assets are transferred to (A) a shareholder of the Company (immediately before the asset
transfer) in exchange for or with respect to its capital stock in the Company, (B) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the
Company, (C) a person, entity or group that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding capital stock of the Company, or (D) an
entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person, entity or group described in subparagraph (C) above. In all respects, the
definition of "Change of Control" shall be interpreted to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the provisions of Treasury Notice 2005-1,
and any successor statute, regulation and guidance thereto. 

        Code means the United States Internal Revenue Code of 1986, as amended. 

        Committee means the committee of the Board of Directors to which the Board of Directors has delegated power to act under or pursuant to
the provisions of the Plan. 

        Common Stock means shares of the Company's Series A-1 Common Stock, $.0001 par value per share. 

        Company means Alphatec Holdings, Inc., a Delaware corporation. 

 

        Disability or Disabled means permanent and total disability as defined in
Section 22(e)(3) of the Code. 

        Employee means any employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an
officer or director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights under the Plan. 

        Fair Market Value of a Share of Common Stock means: 

	(a)
	If
the Common Stock is listed on a national securities exchange or traded in the over-the-counter market and sales prices are regularly reported for the Common
Stock, the closing or last price of the Common Stock on the composite tape or other comparable reporting system for the trading day immediately preceding the applicable date;

	(b)
	If
the Common Stock is not traded on a national securities exchange but is traded on the over-the-counter market, if sales prices are not regularly reported
for the Common Stock for the trading day referred to in clause (a), and if bid and asked prices for the Common Stock are regularly reported, the mean between the bid and the asked price for the
Common Stock at the close of trading in the over-the-counter market for the trading day on which Common Stock was traded immediately preceding the applicable date; and

	(c)
	If
the Common Stock is neither listed on a national securities exchange nor traded in the over-the-counter market, such value as the Administrator, in good
faith, shall determine. 

        ISO means an option meant to qualify as an incentive stock option under Section 422 of the Code. 

        Non-Qualified Option means an option which is not intended to qualify as an ISO. 

        Option means an ISO or Non-Qualified Option granted under the Plan. 

        Option Agreement means an agreement between the Company and a Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve. 

        Participant means an Employee, director or consultant of the Company or an Affiliate to whom one or more Stock Rights are granted under
the Plan. As used herein, "Participant" shall include "Participant's Survivors" where the context requires. 

        Plan means this Alphatec Holdings, Inc. 2005 Employee, Director and Consultant Stock Plan. 

        Shares means shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock
into which the Shares are changed or for which they are exchanged within the provisions of Paragraph 3 of the Plan. The Shares issued under the Plan may be authorized and unissued shares or
shares held by the Company in its treasury, or both. 

        Stock Grant means a grant by the Company of Shares under the Plan. 

        Stock Grant Agreement means an agreement between the Company and a Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve. 

        Stock Right means a right to Shares of the Company granted pursuant to the Plan—an ISO, a Non-Qualified Option or
a Stock Grant. 

        Survivor means a deceased Participant's legal representatives and/or any person or persons who acquired the Participant's rights to a
Stock Right by will or by the laws of descent and distribution. 

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2.     PURPOSES OF THE PLAN. 

        The
Plan is intended to encourage ownership of Shares by Employees and directors of and certain consultants to the Company in order to attract and retain such people, to induce them to
work for the benefit of the Company or of an Affiliate and to provide additional incentive for them to promote the
success of the Company or of an Affiliate. The Plan provides for the granting of ISOs, Non-Qualified Options and Stock Grants. 

3.     SHARES SUBJECT TO THE PLAN. 

        The
number of Shares which may be issued from time to time pursuant to this Plan shall be Six Hundred Thousand (600,000), or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 23 of the
Plan. All Shares reserved under this Plan may be granted as ISOs, Non-Qualified Options or Stock Grants. 

        If
an Option ceases to be "outstanding", in whole or in part (other than by exercise), or if the Company shall reacquire any Shares issued pursuant to a Stock Grant, the Shares which
were subject to such Option and any Shares so reacquired by the Company shall be available for the granting of other Stock Rights under the Plan. Any Option shall be treated as "outstanding" until
such Option is exercised in full, or terminates or expires under the provisions of the Plan, or by agreement of the parties to the pertinent Option Agreement. 

4.     ADMINISTRATION OF THE PLAN. 

        The
Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee, in which case the Committee shall be
the Administrator. Subject to the provisions of the Plan, the Administrator is authorized to: 

	(a)
	Interpret
the provisions of the Plan or of any Option or Stock Grant and to make all rules and determinations which it deems necessary or advisable for the administration of the Plan;

	(b)
	Determine
which Employees, directors and consultants shall be granted Stock Rights;

	(c)
	Determine
the number of Shares for which a Stock Right or Stock Rights shall be granted, provided, however, that in no event shall Stock Rights with respect to more than 100,000
Shares be granted to any Participant in any fiscal year;

	(d)
	Specify
the terms and conditions upon which a Stock Right or Stock Rights may be granted; and

	(e)
	Adopt
any sub-plans applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to comply with or take advantage of any tax laws
applicable to the Company or to Plan Participants or to otherwise facilitate the administration of the Plan, which sub-plans may include additional restrictions or conditions applicable to
Options or Shares acquired upon exercise of Options. 

provided,
however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of preserving the tax status under Section 422 of the
Code of those Options which are designated as ISOs. Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of any Stock Right granted under
it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any
action under the Plan that would otherwise be the responsibility of the Committee. 

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        To
the extent permitted under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members
and may delegate all or any portion of its responsibilities and powers to any other person selected by it. The Board of Directors or the Committee may revoke any such allocation or delegation at any
time. 

5.     ELIGIBILITY FOR PARTICIPATION. 

        The
Administrator will, in its sole discretion, name the Participants in the Plan, provided, however, that each Participant must be an Employee, director or consultant of the Company or
of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of a Stock Right to a person not then an Employee, director or consultant
of the Company or of an Affiliate; provided, however, that the actual grant of such Stock Right shall be conditioned upon such person becoming eligible to become a Participant at or prior to the time
of the execution of the Agreement evidencing such Stock Right. ISOs may be granted only to Employees. Non-Qualified Options and Stock Grants may be granted to any Employee, director or
consultant of the Company or an Affiliate. The granting of any Stock Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant
of Stock Rights. 

6.     TERMS AND CONDITIONS OF OPTIONS. 

        Each
Option shall be set forth in writing in an Option Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The
Administrator may provide that Options be granted subject to such terms and conditions, consistent with the terms and conditions specifically required under this Plan, as the Administrator may deem
appropriate including, without limitation, subsequent approval by the shareholders of the Company of this Plan or any amendments thereto. The Option Agreements shall be subject to at least the
following terms and conditions: 

        (a)    Non-Qualified Options:    Each Option intended to be a Non-Qualified Option shall be
subject to the terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards for any such
Non-Qualified Option: 

	(i)
	Option
Price: Each Option Agreement shall state the option price (per share) of the Shares covered by each Option, which option price shall be determined by the
Administrator but shall not be less than the Fair Market Value per share of Common Stock.

	(ii)
	Each
Option Agreement shall state the number of Shares to which it pertains;

	(iii)
	Each
Option Agreement shall state the date or dates on which it first is exercisable and the date after which it may no longer be exercised, and may provide that the
Option rights accrue or become exercisable in installments over a period of months or years, or upon the occurrence of certain conditions or the attainment of stated goals or events; and

	(iv)
	Exercise
of any Option may be conditioned upon the Participant's execution of a share purchase agreement in form satisfactory to the Administrator providing for certain
protections for the Company and its other shareholders, including requirements that:

	(A)
	The
Participant's or the Participant's Survivors' right to sell or transfer the Shares may be restricted; and

	(B)
	The
Participant or the Participant's Survivors may be required to execute letters of investment intent and must also acknowledge that the Shares will bear legends noting any
applicable restrictions. 

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        (b)    ISOs:    Each Option intended to be an ISO shall be issued only to an Employee and be subject to the following
terms and conditions, with such additional restrictions or changes as the Administrator determines are appropriate but not in conflict with Section 422 of the Code and relevant regulations and
rulings of the Internal Revenue Service: 

	(i)
	Minimum
standards: The ISO shall meet the minimum standards required of Non-Qualified Options, as described in Paragraph 6(a) above, except
clause (i) thereunder.

	(ii)
	Option
Price: Immediately before the ISO is granted, if the Participant owns, directly or by reason of the applicable attribution rules in Section 424(d) of the
Code:

	(A)
	10%  or less of the total combined voting power of all classes of stock of the Company or an Affiliate, the Option price per share of
the Shares covered by each ISO shall not be less than 100% of the Fair Market Value per share of the Shares on the date of the grant of the Option; or

	(B)
	More
than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, the Option price per share of the Shares covered by each ISO shall not be less
than 110% of the said Fair Market Value on the date of grant.

	(iii)
	Term
of Option: For Participants who own:

	(A)
	10%  or less of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not
more than ten years from the date of the grant or at such earlier time as the Option Agreement may provide; or

	(B)
	More
than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than five years from the date of the grant
or at such earlier time as the Option Agreement may provide.

	(iv)
	Limitation
on Yearly Exercise: The Option Agreements shall restrict the amount of ISOs which may become exercisable in any calendar year (under this or any other ISO
plan of the Company or an Affiliate) so that the aggregate Fair Market Value (determined at the time each ISO is granted) of the stock with respect to which ISOs are exercisable for the first time by
the Participant in any calendar year does not exceed $100,000. 

7.     TERMS AND CONDITIONS OF STOCK GRANTS. 

        Each
offer of a Stock Grant to a Participant shall state the date prior to which the Stock Grant must be accepted by the Participant, and the principal terms of each Stock Grant shall be
set forth in a Stock Grant Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Stock Grant Agreement shall be in a form
approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum
standards: 

	(a)
	Each
Stock Grant Agreement shall state the purchase price (per share), if any, of the Shares covered by each Stock Grant, which purchase price shall be determined by the Administrator
but shall not be less than the minimum consideration required by the Delaware General Corporation Law on the date of the grant of the Stock Grant;

	(b)
	Each
Stock Grant Agreement shall state the number of Shares to which the Stock Grant pertains; and

	(c)
	Each
Stock Grant Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to the Stock Grant, including the time and events upon which
such rights shall accrue and the purchase price therefor, if any. 

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8.     EXERCISE OF OPTIONS AND ISSUE OF SHARES. 

        An
Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or its designee, together with provision for payment of the full purchase price
in accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set forth in the Option Agreement. Such notice shall be
signed by the person exercising the Option, shall state the number of Shares with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Option
Agreement. Payment of the purchase price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check, or (b) at the
discretion of the Administrator, through delivery of shares of Common Stock having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Option and held for at
least six months, or (c) at the discretion of the Administrator, by having the Company retain from the Shares otherwise issuable upon exercise of the Option, a number of Shares having a Fair
Market Value equal as of the date of exercise to the exercise price of the Option, or (d) at the discretion of the Administrator, by delivery of the grantee's personal recourse note bearing
interest payable not less than annually at market rate on the date of exercise and at no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, or
(e) at the discretion of the Administrator, in accordance with a cashless exercise program established with a securities brokerage firm, and approved by the Administrator, or (f) at the
discretion of the Administrator, by any combination of (a), (b), (c), (d) and (e) above. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an
ISO as is permitted by Section 422 of the Code. 

        The
Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant's Survivors, as the case may be). In
determining what constitutes "reasonably promptly," it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation
(including, without limitation, state securities or "blue sky" laws) which requires the Company to take any action with respect to the Shares prior to their issuance. The Shares shall, upon delivery,
be fully paid, non-assessable Shares. 

        The
Administrator shall have the right to accelerate the date of exercise of any installment of any Option; provided that the Administrator shall not accelerate the exercise date of any
installment of any Option granted to an Employee as an ISO (and not previously converted into a
Non-Qualified Option pursuant to Paragraph 26) if such acceleration would violate the annual vesting limitation contained in Section 422(d) of the Code, as described in
Paragraph 6(b)(iv). 

        The
Administrator may, in its discretion, amend any term or condition of an outstanding Option provided (i) such term or condition as amended is permitted by the Plan,
(ii) any such amendment shall be made only with the consent of the Participant to whom the Option was granted, or in the event of the death of the Participant, the Participant's Survivors, if
the amendment is adverse to the Participant, and (iii) any such amendment of any ISO shall be made only after the Administrator determines whether such amendment would constitute a
"modification" of any Option which is an ISO (as that term is defined in Section 424(h) of the Code) or would cause any adverse tax consequences for the holder of such ISO. 

9.     ACCEPTANCE OF STOCK GRANT AND ISSUE OF SHARES. 

        A
Stock Grant (or any part or installment thereof) shall be accepted by executing the Stock Grant Agreement and delivering it to the Company or its designee, together with provision for
payment of the full purchase price, if any, in accordance with this Paragraph for the Shares as to which such Stock Grant is being accepted, and upon compliance with any other conditions set forth in
the Stock Grant Agreement. Payment of the purchase price for the Shares as to which such Stock Grant is being 

6

 

accepted
shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six
months and having a Fair Market Value equal as of the date of acceptance of the Stock Grant to the purchase price of the Stock Grant, or (c) at the discretion of the Administrator, by delivery
of the grantee's personal recourse note bearing interest payable not less than annually at no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, or
(d) at the discretion of the Administrator, by any combination of (a), (b) and (c) above. 

        The
Company shall then reasonably promptly deliver the Shares as to which such Stock Grant was accepted to the Participant (or to the Participant's Survivors, as the case may be),
subject to any escrow provision set forth in the Stock Grant Agreement. In determining what constitutes "reasonably promptly," it is expressly understood that the issuance and delivery of the Shares
may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or "blue sky" laws) which requires the Company to take any action with
respect to the Shares prior to their issuance. 

        The
Administrator may, in its discretion, amend any term or condition of an outstanding Stock Grant or Stock Grant Agreement provided (i) such term or condition as amended is
permitted by the Plan,
and (ii) any such amendment shall be made only with the consent of the Participant to whom the Stock Grant was made, if the amendment is adverse to the Participant. 

10.   RIGHTS AS A SHAREHOLDER. 

        No
Participant to whom a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such Stock Right, except after due exercise of the Option
or acceptance of the Stock Grant and tender of the full purchase price, if any, for the Shares being purchased pursuant to such exercise or acceptance and registration of the Shares in the Company's
share register in the name of the Participant. 

11.   ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS. 

        By
its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (a) by will or by the laws of descent and distribution, or
(b) as approved by the Administrator in its discretion and set forth in the applicable Option Agreement or Stock Grant Agreement. Notwithstanding the foregoing, an ISO transferred except in
compliance with clause (a) above shall no longer qualify as an ISO. The designation of a beneficiary of a Stock Right by a Participant, with the prior approval of the Administrator and in such
form as the Administrator shall prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except as provided above, a Stock Right shall only be exercisable or may only be accepted,
during the Participant's lifetime, only by such Participant (or by his or her legal 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 any Stock Right or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and void. 

12.   EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR
DISABILITY. 

        Except
as otherwise provided in a Participant's Option Agreement, in the event of a termination of service (whether as an employee, director or consultant) with the Company or an
Affiliate before the Participant has exercised an Option, the following rules apply: 

	(a)
	A
Participant who ceases to be an employee, director or consultant of the Company or of an Affiliate (for any reason other than termination "for cause", Disability, or death for which 

7

 

events
there are special rules in Paragraphs 13, 14, and 15, respectively), may exercise any Option granted to him or her to the extent that the Option is exercisable on the date of such termination
of service, but only within such term as the Administrator has designated in a Participant's Option Agreement. 

	(b)
	Except
as provided in Subparagraph (c) below, or Paragraph 14 or 15, in no event may an Option intended to be an ISO, be exercised later than three months after the
Participant's termination of employment.

	(c)
	The
provisions of this Paragraph, and not the provisions of Paragraph 14 or 15, shall apply to a Participant who subsequently becomes Disabled or dies after the termination of
employment, director status or consultancy, provided, however, in the case of a Participant's Disability or death within three months after the termination of employment, director status or
consultancy, the Participant or the Participant's Survivors may exercise the Option within one year after the date of the Participant's termination of service, but in no event after the date of
expiration of the term of the Option.

	(d)
	Notwithstanding
anything herein to the contrary, if subsequent to a Participant's termination of employment, termination of director status or termination of consultancy, but prior to
the exercise of an Option, the Board of Directors determines that, either prior or subsequent to the Participant's termination, the Participant engaged in conduct which would constitute "cause", then
such Participant shall forthwith cease to have any right to exercise any Option.

	(e)
	A
Participant to whom an Option has been granted under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability (any disability other
than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone,
to have terminated such Participant's employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide.

	(f)
	Except
as required by law or as set forth in a Participant's Option Agreement, Options granted under the Plan shall not be affected by any change of a Participant's status within or
among the Company and any Affiliates, so long as the Participant continues to be an employee, director or consultant of the Company or any Affiliate. 

13.   EFFECT ON OPTIONS OF TERMINATION OF SERVICE "FOR CAUSE". 

        Except
as otherwise provided in a Participant's Option Agreement, the following rules apply if the Participant's service (whether as an employee, director or consultant) with the Company
or an Affiliate is terminated "for cause" prior to the time that all his or her outstanding Options have been exercised: 

	(a)
	All
outstanding and unexercised Options as of the time the Participant is notified his or her service is terminated "for cause" will immediately be forfeited.

	(b)
	For
purposes of this Plan, "cause" shall include (and is not limited to) dishonesty with respect to the Company or any Affiliate, insubordination, substantial malfeasance or
non-feasance of duty, unauthorized disclosure of confidential information, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure,
non-competition or similar agreement between the Participant and the Company, and conduct substantially prejudicial to the business of the Company or any Affiliate. The determination of
the Administrator as to the existence of "cause" will be conclusive on the Participant and the Company.

	(c)
	"Cause"
is not limited to events which have occurred prior to a Participant's termination of service, nor is it necessary that the Administrator's finding of "cause" occur prior to 

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termination.
If the Administrator determines, subsequent to a Participant's termination of service but prior to the exercise of an Option, that either prior or subsequent to the Participant's
termination the Participant engaged in conduct which would constitute "cause", then the right to exercise any Option is forfeited. 

	(d)
	Any
provision in an agreement between the Participant and the Company or an Affiliate, which contains a conflicting definition of "cause" for termination and which is in effect at the
time of such termination, shall supersede the definition in this Plan with respect to that Participant. 

14.   EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY. 

        Except
as otherwise provided in a Participant's Option Agreement, a Participant who ceases to be an employee, director or consultant of the Company or of an Affiliate by reason of
Disability may exercise any Option granted to such Participant: 

	(a)
	To
the extent that the Option has become exercisable but has not been exercised on 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 Participant 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. 

        A
Disabled Participant may exercise such rights only within the period ending one year after the date of the Participant's termination of employment, directorship or consultancy, as the
case may be, notwithstanding that the Participant might have been able to exercise the Option as to some or all of the Shares on a later date if the Participant had not become Disabled and had
continued to be an employee, director or consultant or, if earlier, within the originally prescribed term of the Option. 

        The
Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another
agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for by the Company. 

15.   EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT. 

        Except
as otherwise provided in a Participant's Option Agreement, in the event of the death of a Participant while the Participant is an employee, director or consultant of the Company
or of an Affiliate, such Option may be exercised by the Participant's Survivors: 

	(a)
	To
the extent that the Option has become exercisable but has not been exercised on the date of death; and

	(b)
	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 Participant not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant's date of death. 

        If
the Participant's Survivors wish to exercise the Option, they must take all necessary steps to exercise the Option within one year after the date of death of such Participant,
notwithstanding that the decedent might have been able to exercise the Option as to some or all of the Shares on a later date if he or she had not died and had continued to be an employee, director or
consultant or, if earlier, within the originally prescribed term of the Option. 

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16.   EFFECT OF TERMINATION OF SERVICE ON STOCK GRANTS. 

        In
the event of a termination of service (whether as an employee, director or consultant) with the Company or an Affiliate for any reason before the Participant has accepted a Stock
Grant, such offer shall terminate. 

        For
purposes of this Paragraph 16 and Paragraph 17 below, a Participant to whom a Stock Grant has been offered and accepted under the Plan who is absent from work with the
Company or with an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not,
during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant's employment, director status or consultancy with the Company or with an
Affiliate, except as the Administrator may otherwise expressly provide. 

        In
addition, for purposes of this Paragraph 16 and Paragraph 17 below, any change of employment or other service within or among the Company and any Affiliates shall not be
treated as a termination of employment, director status or consultancy so long as the Participant continues to be an employee, director or consultant of the Company or any Affiliate. 

17.   EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR
DISABILITY. 

        Except
as otherwise provided in a Participant's Stock Grant Agreement, in the event of a termination of service (whether as an employee, director or consultant), other than termination
"for cause," Disability, or death for which events there are special rules in Paragraphs 18, 19, and 20, respectively, before all Company rights of repurchase shall have lapsed, then the Company shall
have the right to repurchase that number of Shares subject to a Stock Grant as to which the Company's repurchase rights have not lapsed. 

18.   EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE "FOR CAUSE".  

        Except as otherwise provided in a Participant's Stock Grant Agreement, the following rules apply if the Participant's service (whether as an employee, director or
consultant) with the Company or an Affiliate is terminated "for cause": 

	(a)
	All
Shares subject to any Stock Grant shall be immediately subject to repurchase by the Company at the purchase price, if any, thereof.

	(b)
	For
purposes of this Plan, "cause" shall include (and is not limited to) dishonesty with respect to the employer, insubordination, substantial malfeasance or non-feasance
of duty, unauthorized disclosure of confidential information, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or similar
agreement between the Participant and the Company, and conduct substantially prejudicial to the business of the Company or any Affiliate. The determination of the Administrator as to the existence of
"cause" will be conclusive on the Participant and the Company.

	(c)
	"Cause"
is not limited to events which have occurred prior to a Participant's termination of service, nor is it necessary that the Administrator's finding of "cause" occur prior to
termination. If the Administrator determines, subsequent to a Participant's termination of service, that either prior or subsequent to the Participant's termination the Participant engaged in conduct
which would constitute "cause," then the Company's right to repurchase all of such Participant's Shares shall apply.

	(d)
	Any
provision in an agreement between the Participant and the Company or an Affiliate, which contains a conflicting definition of "cause" for termination and which is in effect at the 

10

 

time
of such termination, shall supersede the definition in this Plan with respect to that Participant. 

19.   EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY. 

        Except
as otherwise provided in a Participant's Stock Grant Agreement, the following rules apply if a Participant ceases to be an employee, director or consultant of the Company or of an
Affiliate by reason of Disability: to the extent the Company's rights of repurchase have not lapsed on the date of Disability, they shall be exercisable; provided, however, that in the event such
rights of repurchase lapse periodically, such rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant through the date of Disability as would have lapsed had
the Participant not become Disabled. The proration shall be based upon the number of days accrued prior to the date of Disability. 

        The
Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another
agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for by the Company. 

20.   EFFECT ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT. 

        Except
as otherwise provided in a Participant's Stock Grant Agreement, the following rules apply in the event of the death of a Participant while the Participant is an employee, director
or consultant of the Company or of an Affiliate: to the extent the Company's rights of repurchase have not lapsed on the date of death, they shall be exercisable; provided, however, that in the event
such rights of repurchase
lapse periodically, such rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant through the date of death as would have lapsed had the Participant not died.
The proration shall be based upon the number of days accrued prior to the Participant's death. 

21.   PURCHASE FOR INVESTMENT. 

        Unless
the offering and sale of the Shares to be issued upon the particular exercise or acceptance of a Stock Right 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(s) or accept(s) such Stock Right shall warrant to the Company, prior to the receipt of such Shares, 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 the certificate(s) evidencing their Shares issued pursuant to such exercise or such grant: 

"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." 

11

 

	(b)
	At
the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued upon such particular exercise or acceptance in
compliance with the 1933 Act without registration thereunder. 

22.   DISSOLUTION OR LIQUIDATION OF THE COMPANY. 

        Upon
the dissolution or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised and all Stock Grants which have not been
accepted will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant's Survivors have not otherwise terminated and expired, the Participant or the
Participant's Survivors will have the right immediately prior to such dissolution or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable or subject to
acceptance as of the date immediately prior to such dissolution or liquidation. 

23.   ADJUSTMENTS. 

        Upon
the occurrence of any of the following events, a Participant's rights with respect to any Stock Right granted to him or her hereunder shall be adjusted as hereinafter provided,
unless otherwise specifically provided in a Participant's Option Agreement or Stock Grant Agreement: 

        (a)    Stock Dividends and Stock Splits.    If (i) the shares of Common Stock shall be subdivided or combined
into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock, the number of shares of Common Stock deliverable
upon the exercise or acceptance of such Stock Right may be appropriately increased or decreased proportionately, and appropriate adjustments may be made including, in the purchase price per share, to
reflect such events. The number of Shares subject to the limitation in Paragraph 4(c) shall also be proportionately adjusted upon the occurrence of such events. 

        (b)    Corporate Transactions.    If the Company is to be consolidated with or acquired by another entity in a merger,
sale of all or substantially all of the Company's assets other than a transaction to merely change the state of incorporation (a "Corporate Transaction"), the Administrator or the board of directors
of any entity assuming the obligations of the Company hereunder (the "Successor Board"), shall, as to outstanding Options, either (i) make appropriate provision for the continuation of such
Options by substituting on an equitable basis for the Shares then subject to such Options either the consideration payable with respect to the outstanding shares of Common Stock in connection with the
Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon written notice to the Participants, provide that all Options must be exercised (either to the extent then
exercisable or, at the discretion of the Administrator, all Options being made fully exercisable for purposes of this Subparagraph), within a specified number of days of the date of such notice, at
the end of which period the Options shall terminate; or (iii) terminate all Options in exchange for a cash payment equal to the excess of the Fair Market Value of the Shares subject to such
Options (either to the extent then exercisable or, at the discretion of the Administrator, all Options being made fully exercisable for purposes of this Subparagraph) over the exercise price thereof. 

        Notwithstanding
the foregoing, in the event the Corporate Transaction also constitutes a Change of Control, then all Options outstanding on the date of the Corporate Transaction become
100% fully vested. 

        With
respect to outstanding Stock Grants, the Administrator or the Successor Board, shall either (i) make appropriate provisions for the continuation of such Stock Grants by
substituting on an equitable basis for the Shares then subject to such Stock Grants either the consideration payable with respect to the outstanding Shares of Common Stock in connection with the
Corporate Transaction or 

12

 

securities
of any successor or acquiring entity; or (ii) upon written notice to the Participants, provide that all Stock Grants must be accepted (to the extent then subject to acceptance)
within a specified number of days of the date of such notice, at the end of which period the offer of the Stock Grants shall terminate; or (iii) terminate all Stock Grants in exchange for a
cash payment equal to the excess of the Fair Market Value of the Shares subject to such Stock Grants over the purchase price thereof, if any. In addition, in the event of a Corporate Transaction, the
Administrator may waive any or all Company repurchase rights with respect to outstanding Stock Grants. 

        (c)    Recapitalization or Reorganization.    In the event of a recapitalization or reorganization of the Company
other than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, a Participant upon
exercising or accepting a Stock Right after the recapitalization or reorganization shall be entitled to receive for the purchase price paid upon such exercise or acceptance the number of replacement
securities which would have been received if such Stock Right had been exercised or accepted prior to such recapitalization or reorganization. 

        (d)    Modification of ISOs.    Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph (a),
(b) or (c) above with respect to ISOs shall be made only after the Administrator determines whether such adjustments would constitute a "modification" of such ISOs (as that term is
defined in Section 424(h) of the Code) or would cause any adverse tax consequences for the holders of such ISOs. If the Administrator determines that such adjustments made with respect to ISOs
would constitute a modification of such ISOs, it may refrain from making such adjustments, unless the holder of an ISO specifically requests in writing that such adjustment be made and such writing
indicates that the holder has full knowledge of the consequences of such "modification" on his or her income tax treatment with respect to the ISO. 

24.   ISSUANCES OF SECURITIES. 

        Except
as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Stock Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid
in cash or in property (including without limitation, securities) of the Company prior to any issuance of Shares pursuant to a Stock Right. 

25.   FRACTIONAL SHARES. 

        No
fractional shares shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market
Value thereof. 

26.   CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs. 

        The
Administrator, at the written request of any Participant, may in its discretion take such actions as may be necessary to convert such Participant's ISOs (or any portions thereof)
that have not been exercised on the date of conversion into Non-Qualified Options at any time prior to the expiration of such ISOs, regardless of whether the Participant is an employee of
the Company or an Affiliate at the time of such conversion. At the time of such conversion, the Administrator (with the consent of the Participant) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Administrator in its discretion may determine, provided that such conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be
deemed to give any Participant the right to have such Participant's ISOs converted into Non-Qualified Options, and no such conversion shall occur until and unless the Administrator takes
appropriate action. The Administrator, with the consent of the 

13

 

Participant,
may also terminate any portion of any ISO that has not been exercised at the time of such conversion. 

27.   WITHHOLDING. 

        In
the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other amounts are required by applicable
law or
governmental regulation to be withheld from the Participant's salary, wages or other remuneration in connection with the exercise or acceptance of a Stock Right or in connection with a Disqualifying
Disposition (as defined in Paragraph 28) or upon the lapsing of any right of repurchase, the Company may withhold from the Participant's compensation, if any, or may require that the
Participant advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the statutory minimum amount of such withholdings unless a different
withholding arrangement, including the use of shares of the Company's Common Stock or a promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof, the fair market
value of the shares withheld for purposes of payroll withholding shall be determined in the manner provided in Paragraph 1 above, as of the most recent practicable date prior to the date of
exercise. If the fair market value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance the difference in cash to the Company or
the Affiliate employer. The Administrator in its discretion may condition the exercise of an Option for less than the then Fair Market Value on the Participant's payment of such additional
withholding. 

28.   NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. 

        Each
Employee who receives an ISO must agree to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any shares acquired pursuant to the
exercise of an ISO. A Disqualifying Disposition is defined in Section 424(c) of the Code and includes any disposition (including any sale or gift) of such shares before the later of
(a) two years after the date the Employee was granted the ISO, or (b) one year after the date the Employee acquired Shares by exercising the ISO, except as otherwise provided in
Section 424(c) of the Code. If the Employee has died before such stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter. 

29.   TERMINATION OF THE PLAN. 

        The
Plan will terminate on the date which is ten years from the earlier of the date of its adoption by the Board of Directors and the date
of its approval by the shareholders of the Company. The Plan may be terminated at an earlier date by vote of the shareholders or the Board of Directors of the Company; provided, however, that any such
earlier termination shall not affect any Agreements executed prior to the effective date of such termination. 

30.   AMENDMENT OF THE PLAN AND AGREEMENTS. 

        The
Plan may be amended by the shareholders of the Company. The Plan may also be amended by the Administrator, including, without limitation, to the extent necessary to qualify any or
all outstanding Stock Rights granted under the Plan or Stock Rights to be granted under the Plan for favorable federal income tax treatment (including deferral of taxation upon exercise) as may be
afforded incentive stock options under Section 422 of the Code, and to the extent necessary to qualify the shares issuable upon exercise or acceptance of any outstanding Stock Rights granted,
or Stock Rights to be granted, under the Plan for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers. Any amendment approved by
the Administrator which the Administrator determines is of a scope that requires shareholder approval shall be subject to obtaining such shareholder approval. Any modification or amendment of the Plan 

14

 

shall
not, without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her. With the consent of the Participant affected, the
Administrator may amend outstanding Agreements in a manner which may be adverse to the Participant but which is not inconsistent with the Plan. In the discretion of the Administrator, outstanding
Agreements may be amended by the Administrator in a manner which is not adverse to the Participant. 

31.   EMPLOYMENT OR OTHER RELATIONSHIP. 

        Nothing
in this Plan or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director status of a Participant, nor to
prevent a Participant from terminating his or her own employment, consultancy or director status or to give any Participant a right to be retained in employment or other service by the Company or any
Affiliate for any period of time. 

32.   GOVERNING LAW. 

        This
Plan shall be construed and enforced in accordance with the law of the State of Delaware. 

15

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Exhibit 10.2  

 
 

NON-QUALIFIED STOCK OPTION AGREEMENT    
    
    ALPHATEC HOLDINGS, INC.    
    

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

        WHEREAS,
the Company desires to grant to the Participant an Option to purchase shares of its Series A-1 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 (the "Plan"); 

        WHEREAS,
the Company and the Participant 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 Participant each intend that the Option granted herein shall be a Non-Qualified Option. 

        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 Participant 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 Participant 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 (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, but shall be subject to earlier termination as provided herein or in the Plan. 

        If
the Participant ceases to be an employee, director or consultant of the Company or of an Affiliate (for any reason other than the death or Disability of the Participant or termination
of the Participant 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 Participant ceases to be an employee,
director or consultant 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, directorship or consultancy. 

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

        In
the event the Participant's employment, directorship or consultancy is terminated by the Company or an Affiliate for Cause, the Participant's right to exercise any unexercised portion
of this Option shall cease immediately as of the time the Participant is notified his or her employment, directorship or consultancy is terminated for Cause, and this Option shall thereupon terminate.
Notwithstanding anything herein to the contrary, if subsequent to the Participant's termination, but prior to the exercise of the Option, the Board of Directors of the Company determines that, either
prior or subsequent to
the Participant's termination, the Participant engaged in conduct which would constitute Cause, then the Participant 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 Participant, as determined in accordance with the Plan, the Option shall be exercisable within one year after the Participant's termination of
service 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 Participant 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 Participant while an employee, director or consultant of the Company or of an Affiliate, the Option shall be exercisable by the Participant's Survivors
within one year after the date of death of the Participant 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 Participant not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant's date of death. 

2

 

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 a certificate or
certificates representing 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 certificate or certificates for 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 Participant and if the Participant shall so request in the notice exercising the Option, shall be registered in the name of the Participant 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 Option. In the event the Option shall be exercised, pursuant to Section 4
hereof, by any person other than the Participant, 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 Participant otherwise than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined
by the Code or Title I of the Employee Retirement Income Security Act or the rules thereunder. Except as provided in the previous sentence, the Option shall be exercisable, during the Participant's
lifetime, only by the Participant (or, in the event of legal incapacity or incompetency, by the Participant'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
Participant 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
Participant. 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 

3

 

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
Participant acknowledges that upon exercise of the Option the Participant will be deemed to have taxable income measured by the difference between the then fair market value of the
Shares received upon exercise and the price paid for such Shares pursuant to this Agreement. The Participant 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 Participant's responsibility. 

        The
Participant agrees that the Company may withhold from the Participant'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 Participant on exercise of the Option. The Participant further agrees that, if the Company does not withhold an amount from the Participant's
remuneration sufficient to satisfy the Company's income tax withholding obligation, the Participant 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 the 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). 

12.   RESTRICTIONS ON TRANSFER OF SHARES. 

12.1    Upon
acquiring any Shares pursuant to the exercise of the Option, the Participant agrees to become a party to the Stockholders Agreement dated March 17, 2005 between the
Company and its stockholders (the "Stockholders Agreement"), and Participant agrees to execute any certificates or 

4

 

other
documentation that the Company deems appropriate in order for the Participant to become a party to the Stockholders Agreement. The Shares acquired by the Participant pursuant to the exercise of
the Option granted hereby shall not be transferred by the Participant except as permitted in the Stockholders Agreement. 

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

12.3    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 of the employment of the Participant 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. 

12.4    All
certificates representing the Shares to be issued to the Participant pursuant to this Agreement shall have endorsed thereon a legend substantially as follows: "The shares
represented by this certificate are subject to restrictions set forth in an Non-Qualified Stock Option Agreement
dated                        , 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." 

13.   NO OBLIGATION TO MAINTAIN RELATIONSHIP. 

        The
Company is not by the Plan or this Option obligated to continue the Participant as an employee, director or consultant of the 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 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 Participant'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 Participant'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.   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.

6110 Corte Del Cedro

Carlsbad, CA 92009
	

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. 

5

 

15.   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. 

16.   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. 

17.   ENTIRE AGREEMENT. 

        This
Agreement, together with the Plan and the Stockholders Agreement, 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. 

18.   MODIFICATIONS AND AMENDMENTS. 

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

19.   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. 

20.   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
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] 

6

 

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

	 	 	ALPHATEC HOLDINGS, INC.
	

 	
 	
By:	

	 	 	Name:	 
	 	 	Title:	 
	

 	
 	

 Participant

7

  

Exhibit A  

 
 

NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION    
    
    [Form for Unregistered Shares]

To:
Alphatec Holdings, Inc. 

Ladies
and Gentlemen: 

        I
hereby exercise my Non-Qualified Stock Option to purchase                        shares (the "Shares") of Series A-1 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 Non-Qualified Stock Option Agreement
between the undersigned and the Company dated            , 200  . 

        I
am aware that the Shares have not been registered under the Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws. I understand that the reliance by the
Company on exemptions under the 1933 Act is predicated in part upon the truth and accuracy of the statements by me in this Notice of Exercise. 

        I
hereby represent and warrant that (1) I have been furnished with all information which I deem necessary to evaluate the merits and risks of the purchase of the Shares;
(2) I have had the opportunity to ask questions concerning the Shares and the Company and all questions posed have been answered
to my satisfaction; (3) I have been given the opportunity to obtain any additional information I deem necessary to verify the accuracy of any information obtained concerning the Shares and the
Company; and (4) I have such knowledge and experience in financial and business matters that I am able to evaluate the merits and risks of purchasing the Shares and to make an informed
investment decision relating thereto. 

        I
hereby represent and warrant that I am purchasing the Shares for my own personal account for investment and not with a view to the sale or distribution of all or any part of the
Shares. 

        I
understand that because the Shares have not been registered under the 1933 Act, I must continue to bear the economic risk of the investment for an indefinite time and the Shares cannot
be sold unless the Shares are subsequently registered under applicable federal and state securities laws or an exemption from such registration requirements is available. 

        I
agree that I will in no event sell or distribute or otherwise dispose of all or any part of the Shares unless (1) there is an effective registration statement under the 1933 Act
and applicable state securities laws covering any such transaction involving the Shares or (2) the Company receives an opinion of my legal counsel (concurred in by legal counsel for the
Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration. 

        I
consent to the placing of a legend on my certificate for the Shares stating that the Shares have not been registered and setting forth the restriction on transfer contemplated hereby
and to the placing of a stop transfer order on the books of the Company and with any transfer agents against the Shares until the Shares may be legally resold or distributed without restriction. 

        I
understand that at the present time Rule 144 of the Securities and Exchange Commission (the "SEC") may not be relied on for the resale or distribution of the Shares by me. I
understand that the Company has no obligation to me to register the sale of the Shares with the SEC and has not represented to me that it will register the sale of the Shares. 

        I
understand the terms and restrictions on the right to dispose of the Shares set forth in the 2005 Employee, Director and Consultant Stock Plan and the Non-Qualified Stock
Option Agreement, both 

A-1

 

of
which I have carefully reviewed. I consent to the placing of a legend on my certificate for the Shares referring to such restriction and the placing of stop transfer orders until the Shares may be
transferred in accordance with the terms of such restrictions. 

        I
have considered the Federal, state and local income tax implications of the exercise of my 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 stock certificate for the Shares (check one): 

        o  to
me; or 

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

and mail the certificate to me at the following address: 

	

	
 	

 
	

	
 	

 
	

	
 	

 

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

	

	
 	

 
	

	
 	

 
	

	
 	

 

	

 	
 	

Very truly yours,
	

 	
 	

 Participant (signature)
	

 	
 	

 Print Name
	

 	
 	

 Date
	

 	
 	

 Social Security Number

A-2

  

Exhibit A  

 
 

[Form for Registered Shares]    
    
    NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION    

TO:
Alphatec Holdings, Inc. 

IMPORTANT
NOTICE: This form of Notice of Exercise may only be used at such time as the Company has filed a Registration Statement with the Securities and Exchange Commission under which the issuance
of the Shares for which this exercise is being made is registered and such Registration Statement remains effective. 

Ladies
and Gentlemen: 

        I
hereby exercise my Non-Qualified Stock Option to purchase                        shares (the "Shares") of the Series A-1
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 Non-Qualified 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: 

	

 	
 	

	
 	

 
	

 	
 	

	
 	

 
	

 	
 	

	
 	

 

B-1

 

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

	

	
 	

 
	

	
 	

 
	

	
 	

 

	

 	
 	

Very truly yours,
	

 	
 	

 Participant (signature)
	

 	
 	

 Print Name
	

 	
 	

 Date
	

 	
 	

 Social Security Number

B-2

QuickLinks

NON-QUALIFIED STOCK OPTION AGREEMENT ALPHATEC HOLDINGS, INC.

NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION [Form for Unregistered Shares]

[ Form for Registered Shares ] NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION

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