Document:

Interpore Cross International 1999 Consulting Stock Option Plan

 EXHIBIT 10.3 
  
 THE INTERPORE CROSS INTERNATIONAL 
 1999 CONSULTANTS STOCK OPTION PLAN 
  
 Interpore International, Inc., a Delaware corporation, has adopted the 1999 Consultants Stock Option Plan (the “Plan”), effective March 9, 1999, for the benefit of its eligible consultants. 
  
 The purposes of this Plan are as follows: 
  
 (1) To provide an additional incentive for consultants to further the growth,
development and financial success of the Company by personally benefiting through the ownership of options with respect to Company stock which recognize such growth, development and financial success. 
  
 (2) To enable the Company to obtain and retain the services of key
consultants considered essential to the long range success of the Company by offering them an opportunity to own options with respect to Company stock which will reflect the growth, development and financial success of the Company. 
  
 ARTICLE I. 
 DEFINITIONS 
  
 1.1. General. Wherever the following terms are used in this Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. 
  
 1.2. Board. “Board” shall mean the Board of Directors of the Company. 
  
 1.3. Code. “Code” shall mean the Internal Revenue Code of 1986, as
amended. 
  
 1.4. Committee. “Committee” shall mean the
Stock Option and Compensation Committee of the Board, or another committee, or a subcommittee of the Board, appointed as provided in Section 6.1. 
  
 1.5. Common Stock. “Common Stock” shall mean the common stock of the Company, par value $0.01 per share. 
  
 1.6. Company. “Company” shall mean Interpore International, Inc., a
Delaware corporation. 
  
 1.7. Corporate Transaction.
“Corporate Transaction” shall mean the merger or consolidation of the Company with or into another corporation, the acquisition by another corporation or person of all or substantially all of the Company’s assets or 80% or more of the
Company’s then outstanding voting stock or the liquidation or dissolution of the Company. 
  
 1.8. Director. “Director” shall mean a member of the Board. 
  
 1.9. Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
  
 1.10. Fair Market Value. “Fair Market Value” of a share of Common
Stock as of a given date shall be (i) the closing price of a share of Common Stock on the principal exchange on which shares of Common Stock are then trading, if any, on the day previous to such date, or, if shares were not traded on the day
previous to such date, then on the next preceding trading day during which a sale occurred; or (ii) if such Common Stock is not traded on an exchange but is quoted on NASDAQ or a successor quotation system, (1) the last sales price (if the Common
Stock is then listed as a National Market Issue under the NASD National Market System) or (2) the mean between the closing representative bid and asked prices (in all other cases) for the Common Stock on the day previous to such date as reported by
NASDAQ or such successor quotation system; or (iii) if such Common Stock is not publicly traded on an exchange and not quoted on NASDAQ or a successor quotation system, the mean between the closing bid and asked prices for the Common Stock, on the
day previous to such date, as determined in good faith by the Committee; or (iv) if the Common Stock is not publicly traded, the fair market value established by the Committee acting in good faith. 
  

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 1.11. Independent Director. “Independent Director” shall mean a member of the Board who is not
an Employee of the Company. 
  
 1.12. Option. “Option”
shall mean a stock option granted under Article III of this Plan. All Options granted under this Plan shall be Non-Qualified Stock Options. “Non-Qualified Stock Option” shall mean an Option which is not meant to qualify as an
“incentive stock option” under Section 422 of the Code. 
  
 1.13. Option Agreement. “Option Agreement” shall mean an agreement between the Company and an Optionee that sets forth the terms, conditions and limitations applicable to an Option. 
  
 1.14. Optionee. “Optionee” shall mean a consultant granted an
Option under this Plan. 
  
 1.15. Plan. “Plan” shall
mean this Interpore Cross International 1999 Consultants Stock Option Plan. 
  
 1.16. QDRO. “QDRO” shall mean a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the regulations and rules
thereunder. 
  
 1.17. Rule 16b-3. “Rule 16b-3” shall
mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time. 
  
 1.18. Securities Act. “Securities Act” shall mean the Securities Act of 1933, as amended. 
  
 1.19. Subsidiary. “Subsidiary” shall mean any corporation in an
unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain. 
  
 1.20. Termination
of Consultancy. “Termination of Consultancy” shall mean the time when the engagement of an Optionee as a consultant to the Company or a Subsidiary is terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death or retirement; but excluding a termination where there is a simultaneous commencement of engagement of the Optionee as a consultant to or employment with the Company or any Subsidiary. The
Committee, in its sole discretion, shall determine the effect of all matters and questions relating to Termination of Consultancy, including, but not by way of limitation, all questions of whether a particular leave of absence constitutes a
Termination of Consultancy. Notwithstanding any other provision of this Plan, the Company and any Subsidiary has an absolute and unrestricted right to terminate a consultant’s service at any time for any reason whatsoever. 
  
 ARTICLE II. 
 SHARES SUBJECT TO PLAN 
  
 2.1. Shares Subject to Plan. The shares of stock subject to Options shall be Common Stock. The aggregate number of such shares which may be issued upon exercise of such Options under the Plan shall not exceed three
hundred thousand (300,000). The shares of Common Stock issuable upon exercise of such options may be either previously authorized but unissued shares or treasury shares. 
  
 2.2. Add-back of Options. If any Option under this Plan expires or is cancelled without having been fully exercised, or is
exercised in whole or in part for cash as permitted by this Plan, the number of shares subject to such Option but as to which such Option was not exercised or was exercised for cash prior to its expiration, cancellation or exercise may again be
optioned hereunder, subject to the limitations of Section 2.1. Furthermore, any shares subject to Options which are adjusted pursuant to Section 7.3 and become exercisable with respect to shares of stock of another corporation may again be optioned
hereunder, subject to the limitations of Section 2.1. Shares of Common Stock which are delivered by the Optionee or withheld by the Company upon the exercise of any Option under this Plan, in payment of the exercise price thereof or withholding
taxes thereon, may again be optioned hereunder, subject to the limitations of Section 2.1. 
  

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 ARTICLE III. 
 GRANTING OF OPTIONS 
  
 3.1. Eligibility. Any consultant who is not an employee of the Company or any Subsidiary and is selected by the Committee pursuant to Section 3.2(a)(i) shall be eligible to be granted an Option. 
  
 3.2. Granting of Options. 
  
 (a) The Committee shall from time to time, in its sole
discretion, and subject to applicable limitations of this Plan: 
  
 (i) Determine and select from among the key consultants (including consultants who have previously received Options under this Plan) such of them as in its opinion should be granted Options; 
  
 (ii) Determine the number of shares to be subject to such
Options granted to the selected key consultants; 
  
 (iii) Determine the terms and conditions of such Options, consistent with this Plan. 
  
 (b) Upon the selection of a key consultant to be granted an Option, the Committee shall instruct the Secretary of the Company to issue the
Option and may impose such conditions on the grant of the Option as it deems appropriate. Without limiting the generality of the preceding sentence, the Committee may, in its sole discretion and on such terms as it deems appropriate, require as a
condition on the grant of an Option to a consultant that the consultant surrender for cancellation some or all of the unexercised options which have been previously granted to him or her under this Plan or otherwise. An Option, the grant of which is
conditioned upon such surrender, may have an exercise price lower (or higher) than the exercise price of such surrendered option, may cover the same (or a lesser or greater) number of shares as such surrendered option, may contain such other terms
as the Committee deems appropriate, and shall be exercisable in accordance with its terms, without regard to the number of shares, price, exercise period or any other term or condition of such surrendered option. 
  
 ARTICLE IV. 
 TERMS OF OPTIONS 
  
 4.1. Option Agreement. Each Option shall be evidenced by a written Option Agreement, which shall be executed by the Optionee and an authorized officer of the Company and which shall contain such terms and conditions
as the Committee shall determine, consistent with this Plan. 
  
 4.2. Exercise Price. The price per share of the shares subject to each Option shall be set by the Committee and specified in the Option Agreement; provided, however, that such price shall be no less than the par value of a share of Common
Stock, unless otherwise permitted by applicable state law. 
  
 4.3. Option Term. The term of an Option shall be set by the Committee in its sole discretion. The Committee may extend the term of any outstanding Option in connection with any Termination of Consultancy of the Optionee, or amend any other
term or condition of such Option relating to such a termination. 
  
 4.4. Option Vesting. 
  
 (a) The period
during which the right to exercise an Option in whole or in part vests in the Optionee shall be set by the Committee and the Committee may determine that an Option may not be exercised in whole or in part for a specified period after it is granted.
At any time after grant of an Option, the Committee may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the period during which an Option vests. 
  
 (b) No portion of an Option which is unexercisable at the
Optionee’s Termination of Consultancy shall thereafter become exercisable, except as may be otherwise provided by the Committee either in the Option Agreement or by action of the Committee following the grant of the Option. 
  

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 4.5. Consideration. In consideration of the granting of an Option, the Optionee shall agree, in the
written Option Agreement, to render faithful and efficient services to the Company or a Subsidiary, with such duties and responsibilities as the Company or Subsidiary shall from time to time prescribe. Nothing in the Plan or any Option Agreement
shall confer upon any Optionee any right to continue as a consultant for the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and any Subsidiary, which are hereby expressly reserved, to discharge any
Optionee at any time for any reason whatsoever. 
  
 ARTICLE V.

 EXERCISE OF OPTIONS 
  
 5.1. Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional
shares and the Committee may require that, by the terms of the Option Agreement, a partial exercise be with respect to a minimum number of shares. 
  
 5.2. Manner of Exercise. All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the
Company or his or her office: 
  
 (a) A written
notice complying with the applicable rules established by the Committee stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Optionee or other person then entitled to exercise the Option or such portion;

  
 (b) Such representations and documents as the
Committee, in its sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal or state securities laws or regulations. The Committee may, in its sole discretion, also
take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to transfer agents and registrars; 
  
 (c) In the event that the Option shall be exercised pursuant
to Section 7.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option; and 
  
 (d) Full cash payment to the Secretary of the Company for the shares with respect to which the Option, or portion thereof, is exercised.
However, the Committee may, in its sole discretion (i) allow a delay in payment up to thirty (30) days from the date the Option, or portion thereof, is exercised; (ii) allow payment, in whole or in part, through the delivery of shares of Common
Stock owned by the Optionee, duly endorsed for transfer to the Company with a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof; (iii) allow payment, in whole or in part,
through the surrender of shares of Common Stock then issuable upon exercise of the Option having a Fair Market Value on the date of Option exercise equal to the aggregate exercise price of the Option or exercised portion thereof; (iv) allow payment,
in whole or in part, through the delivery of property of any kind which constitutes good and valuable consideration; (v) allow payment, in whole or in part, through the delivery of a full recourse promissory note bearing interest (at no less than
such rate as shall then preclude the imputation of interest under the Code) and payable upon such terms as may be prescribed by the Committee; (vi) allow payment, in whole or in part, through the delivery of a notice that the Optionee has placed a
market sell order with a broker with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the
Option exercise price; or (vii) allow payment through any combination of the consideration provided in the foregoing subparagraphs (ii), (iii), (iv), (v) and (vi). In the case of a promissory note, the Committee may also prescribe the form of such
note and the security to be given for such note. The Option may not be exercised, however, by delivery of a promissory note or by a loan from the Company when or where such loan or other extension of credit is prohibited by law. 
  
 5.3. Conditions to Issuance of Stock Certificates. The Company shall not be
required to issue or deliver any certificate or certificates for shares of stock purchased upon the exercise of any Option or portion thereof prior to fulfillment of all of the following conditions: 
  
 (a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; 
  

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 (b) The completion of any registration or other qualification of such shares under any
state or federal law, or under the rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body which the Committee shall, in its sole discretion, deem necessary or advisable; 
  
 (c) The obtaining of any approval or other clearance from
any state or federal governmental agency which the Committee shall, in its sole discretion, determine to be necessary or advisable; 
  
 (d) The lapse of such reasonable period of time following the exercise of the Option as the Committee may establish from time to time for
reasons of administrative convenience; and 
  
 (e) The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax. 
  
 5.4. Rights as Stockholders. The holders of Options shall not be, nor have any of the rights or privileges of, stockholders of the Company in respect of
any shares purchasable upon the exercise of any part of an Option unless and until certificates representing such shares have been issued by the Company to such holders. 
  
 5.5. Ownership and Transfer Restrictions. The Committee, in its sole discretion, may impose such restrictions on the
ownership and transferability of the shares purchasable upon the exercise of an Option as it deems appropriate. Any such restriction shall be set forth in the respective Option Agreement or other agreement between the Company and the holders of such
shares and may be referred to on the certificates evidencing such shares. 
  
 ARTICLE VI. 
 ADMINISTRATION 
  
 6.1. Compensation Committee. The Compensation Committee (or another committee or a subcommittee of the Board assuming the
functions of the Committee under this Plan) shall consist solely of two or more Independent Directors appointed by and holding office at the pleasure of the Board, each of whom is (i) a “non-employee director” (as defined by Rule 16b-3)
and (ii) to the extent required by the applicable provisions of Rule 16b-3, a “disinterested person” as defined by Rule 16b-3. Appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign
at any time by delivering written notice to the Board. Vacancies in the Committee may be filled by the Board. 
  
 6.2. Duties and Powers of Committee. It shall be the duty of the Committee to conduct the general administration of this Plan in accordance with its
provisions. The Committee shall have the power to interpret this Plan and the agreements pursuant to which Options are granted, and to adopt such rules for the administration, interpretation, and application of this Plan as are consistent therewith
and to interpret, amend or revoke any such rules. Any such grant under this Plan need not be the same with respect to each Optionee. In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of
the Committee under this Plan except with respect to matters which under Rule 16b-3 or any regulations or rules issued thereunder, are required to be determined in the sole discretion of the Committee. 
  
 6.3. Majority Rule; Unanimous Written Consent. The Committee shall act by a
majority of its members in attendance at a meeting at which a quorum is present or by a memorandum or other written instrument signed by all members of the Committee. 
  
 6.4. Compensation; Professional Assistance; Good Faith Actions. Members of the Committee shall receive such compensation for
their services as members as may be determined by the Board. All expenses and liabilities which members of the Committee incur in connection with the administration of this Plan shall be borne by the Company. The Committee may, with the approval of
the Board, employ attorneys, consultants, accountants, appraisers, brokers, or other persons. The Committee, the Company and the Company’s officers and Directors shall be entitled to rely upon the advice, opinions or valuations of any such
persons. All actions taken and all interpretations and determinations made by the Committee or the Board in good faith shall be final and binding upon all Optionees, the Company and all other interested persons. No members of the Committee or Board
shall be personally liable for any action, determination or interpretation made in good faith with respect to this Plan or the 

  

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Options and all members of the Committee and the Board shall be fully protected by the Company in respect of any such action, determination or
interpretation. 
  
 ARTICLE VII. 
 MISCELLANEOUS PROVISIONS 
  
 7.1. Not Transferable. Options under this Plan may not be sold, pledged, assigned, or transferred in any manner other than by will or the laws of descent
and distribution or pursuant to a QDRO, unless and until such Options have been exercised, or the shares underlying such Options have been issued, and all restrictions applicable to such shares have lapsed. No Option or interest or right therein
shall be liable for the debts, contracts or engagements of the Optionee or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no
effect, except to the extent that such disposition is permitted by the preceding sentence. 
  
 During the lifetime of the Optionee only he or she may exercise an Option (or any portion thereof) granted to him or her under the Plan, unless it has been disposed of pursuant to a QDRO, in which case the Option may
be exercised only by the transferee. After the death of the Optionee, any exercisable portion of an Option may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Option Agreement, be exercised by his or her
personal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution. 
  
 7.2. Amendment, Suspension or Termination of this Plan. Except as otherwise provided in this Section 7.2, this Plan may be
wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board or the Committee. However, without approval of the Company’s stockholders given within twelve months before or after the
action by the Board or the Committee, no action of the Board or the Committee may, except as provided in Section 7.3, increase the limits imposed in Section 2.1 on the maximum number of shares which may be issued under this Plan, and no action of
the Committee or the Board may be taken that would otherwise require stockholder approval as a matter of applicable law, regulation or rule. No amendment, suspension or termination of this Plan shall, without the consent of the holder of Options,
alter or impair any rights or obligations under any Options theretofore granted, unless the applicable Option Agreement itself otherwise expressly so provides. No Options may be granted during any period of suspension or after termination of this
Plan, and in no event may any Option be granted under this Plan after the first to occur of the following events: 
  
 (a) The expiration of ten years from the date the Plan is adopted by the Board; or 
  
 (b) The expiration of ten years from the date the Plan is
approved by the Company’s shareholders under Section 7.4. 
  
 7.3. Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company and Other Corporate Events. 
  
 (a) Subject to Section 7.3(d), in the event that the Committee determines that any dividend or other distribution (whether in the form of
cash, Common Stock, other securities, or other property), recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, liquidation, dissolution, or sale,
transfer, exchange or other disposition of all or substantially all of the assets of the Company, or exchange of Common Stock or other securities of the Company (including, but not limited to, a Corporate Transaction), issuance of warrants or other
rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event, in the Committee’s sole discretion, affects the Common Stock such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Option, then the Committee shall, in such manner as it may deem equitable, adjust any or
all of 
  

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 (i) the number and kind of shares of Common Stock (or other securities or property) with
respect to which Options may be granted under the Plan (including, but not limited to, adjustments of the limitations in Section 2.1 on the maximum number and kind of shares which may be issued), 
  
 (ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options, and 
  
 (iii) the exercise price with respect to any Option. 
  
 (b) Subject to Section 7.3(d), in the event of any Corporate Transaction or other transaction or event described in Section 7.3(a) or any
unusual or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any affiliate, or of changes in applicable laws, regulations, or accounting principles, the Committee,
in its sole discretion, is hereby authorized to take any one or more of the following actions whenever the Committee determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to any Option under this Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles: 
  
 (i) In its sole discretion, and on such terms and conditions
as it deems appropriate, the Committee may provide, either by the terms of the applicable Option Agreement or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Optionee’s request, for
either the purchase of any such Option for an amount of cash equal to the amount that could have been attained upon the exercise of such Option or realization of the Optionee’s rights had such Option been currently exercisable or the
replacement of such Option with other rights or property selected by the Committee; 
  
 (ii) In its sole discretion, the Committee may provide, either by the terms of the applicable Option Agreement or by action taken prior to
the occurrence of such transaction or event that it cannot be exercised after such event; 
  
 (iii) In its sole discretion, and on such terms and conditions as it deems appropriate, the Committee may provide, either by the terms of
the applicable Option Agreement or by action taken prior to the occurrence of such transaction or event, that for a specified period of time prior to such transaction or event, such Option shall be exercisable as to all shares covered thereby,
notwithstanding anything to the contrary in (A) Section 4.4 or (B) the provisions of the applicable Option Agreement; 
  
 (iv) In its sole discretion, and on such terms and conditions as it deems appropriate, the Committee may provide, either by the terms of
the applicable Option Agreement or by action taken prior to the occurrence of such transaction or event, that upon such event, such Option shall be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be
substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; and 
  
 (v) In its sole discretion, and on such terms and conditions
as it deems appropriate, the Committee may make adjustments in the number and type of shares of Common Stock (or other securities or property) subject to outstanding Options and/or in the terms and conditions of (including the exercise price), and
the criteria included in, outstanding Options and Options which may be granted in the future. 
  
 (c) Subject to Sections 7.3(d) and 7.8, the Committee may, in its sole discretion, include such further provisions and limitations in any
Option Agreement as it may deem equitable and in the best interests of the Company. 
  
 (d) No adjustment or action described in this Section 7.3 or in any other provision of the Plan shall be authorized to the extent such
adjustment or action would result in short-swing profits liability under Section 16 of the Exchange Act or violate the exemptive conditions of Rule 16b-3 unless the Committee determines that the 

  

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Option is not to comply with such exemptive conditions. The number of shares of Common Stock subject to any Option shall always be rounded to the next whole
number. 
  
 (e) Notwithstanding the foregoing
provisions of this Section 7.3, in the event of any Corporate Transaction the Committee may, in its absolute discretion and on such terms and conditions as it deems appropriate, also provide, either by the terms of such Option or by a resolution
adopted prior to the occurrence of such Corporate Transaction each outstanding Option shall, immediately prior to the effective date of the Corporate Transaction, become fully exercisable for all of the shares of Common Stock at the time subject to
such Option and may be exercised for any or all of those shares as fully-vested shares of Common Stock. 
  
 7.4. Approval of Plan by Stockholders. This Plan will be submitted for the approval of the Company’s stockholders within twelve months after the date
of the Board’s initial adoption of this Plan. Options may be granted prior to such stockholder approval, provided that such Options shall not be exercisable prior to the time when this Plan is approved by the stockholders, and provided further
that if such approval has not been obtained at the end of said twelve-month period, all Options previously granted under this Plan shall thereupon be cancelled and become null and void. 
  
 7.5. Tax Withholding. The Company shall be entitled to require payment in cash or deduction from other compensation payable
to each Optionee of any sums required by federal, state or local tax law to be withheld with respect to the issuance, vesting or exercise of any Option. The Committee may, in its sole discretion, allow such Optionee to elect to have the Company
withhold shares of Common Stock otherwise issuable under such Option (or allow the return of shares of Common Stock) having a Fair Market Value equal to the sums required to be withheld. 
  
 7.6. Loans. The Committee may, in its sole discretion, extend one or more loans to key consultants in connection with the
exercise of an Option granted under this Plan. The terms and conditions of any such loan shall be set by the Committee. 
  
 7.7. Forfeiture Provisions. Pursuant to its general authority to determine the terms and conditions applicable to Options under the Plan consistent with
the provisions of the Plan, the Committee shall have the right (to the extent consistent with the applicable exemptive conditions of Rule 16b-3) to provide, in the terms of Options granted under the Plan, or to require the Optionee to agree by
separate written instrument, that (a) any proceeds, gains or other economic benefit actually or constructively received by the Optionee upon any receipt or exercise of the Option or upon the receipt or resale of any Common Stock underlying such
Option, must be paid to the Company, and (b) the Option shall terminate and any unexercised portion of such Option (whether or not vested) shall be forfeited, if (i) the Optionee incurs a Termination of Consultancy prior to a specified date, or
within a specified time period following receipt or exercise of the Option, or (ii) the Optionee at any time, or during a specified time period, engages in any activity in competition with the Company, or which is inimical, contrary or harmful to
the interests of the Company, as further defined by the Committee. 
  
 7.8. Limitations Applicable to Section 16 Persons and Performance-Based Compensation. Notwithstanding any other provision of this Plan, the Plan and any Option granted to any individual who is then subject to Section 16 of the Exchange Act
shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent
permitted by applicable law, the Plan and Options granted hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 
  
 7.9. Effect of Plan Upon Options and Compensation Plans. The adoption of this Plan shall not affect any other compensation
or incentive plans in effect for the Company or any Subsidiary. Nothing in this Plan shall be construed to limit the right of the Company (a) to establish any other forms of incentives or compensation for Employees, Directors or consultants of the
Company or any Subsidiary or (b) to grant or assume options or other rights otherwise than under this Plan in connection with any proper corporate purpose including but not by way of limitation, the grant or assumption of options in connection with
the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, firm or association. 
  

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 7.10. Compliance with Laws. This Plan, the granting and vesting of Options under this Plan and the
issuance and delivery of shares of Common Stock under Options granted hereunder are subject to compliance with all applicable federal and state laws, rules and regulations (including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under this Plan shall be
subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all
applicable legal requirements. To the extent permitted by applicable law, the Plan and the Options granted hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 
  
 7.11. Titles. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Plan. 
  
 7.12. Governing Law. This Plan and any agreements hereunder shall be administered, interpreted and enforced under the internal laws of the state of Delaware without regard to conflicts of laws thereof. 
  

 A-91995 Stock Option Plan

 EXHIBIT 10.4 
  
 1995 STOCK OPTION PLAN 
  
 OF 
  
 INTERPORE INTERNATIONAL 
  
 Interpore International, a corporation organized under the laws of the State of California, hereby adopts this 1995 Stock Option Plan of Interpore International effective as of January 1, 1995. The purposes of this
Plan are as follows: 
  
 (1) To further the growth, development
and financial success of the Company by providing additional incentives to certain of its Directors, Officers, Employees and consultants who have been or will be given responsibility for the management or administration of the Company’s
business affairs, by assisting them to become owners of the Company’s Common Stock and thus to benefit directly from its growth, development and financial success. 
  
 (2) To enable the Company to obtain and retain the services of the type of professional, technical and managerial employees
considered essential to the long-range success of the Company by providing and offering them an opportunity to become owners of the Company’s Common Stock under options, including options that are intended to qualify as “incentive stock
options” under Section 422 of the Code. 
  
 ARTICLE I

  
 DEFINITIONS 
  
 Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary. The masculine pronoun shall include the feminine and neuter and the singular shall include the plural, where the context so indicates. 
  
 Section 1.1 Board 
  
 “Board” shall mean the Board of Directors of the Company.

  
 Section 1.2 Code 
  
 “Code” shall mean the Internal Revenue Code of 1986, as amended.

  
 Section 1.3 Committee

  
 “Committee” shall mean the Stock Option Committee
of the Board, appointed as provided in Section 7.1. 
  
 Section 1.4 Company 
  
 “Company” shall mean Interpore International. 
  

 Section 1.5 Director 
  
 “Director” shall mean a member of the Board. 
  
 Section 1.6 Employee 
  
 “Employee” shall mean any employee (as defined in accordance with
the regulations and revenue rulings then applicable under Section 3401(c) of the Code) of the Company, or of any corporation which is then a Parent Corporation or a Subsidiary, whether such employee is so employed at the time this Plan is adopted or
becomes so employed subsequent to the adoption of this Plan. 
  
 Section 1.7 Exchange Act 
  
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
  
 Section 1.8 Incentive Stock Option 
  
 “Incentive Stock Option” shall mean an Option which qualifies under Section 422 of the Code and which is
designated as an Incentive Stock Option by the Committee. 
  
 Section 1.9 Non-Qualified Option 
  
 “Non-Qualified Option” shall mean an Option which is not an Incentive Stock Option and which is designated as a Non-Qualified Option by the Committee. 
  
 Section 1.10 Officer 
  
 “Officer” shall mean an officer of the Company, as defined in Rule
16a-1(f) under the Exchange Act, as such Rule may be amended in the future. 
  
 Section 1.11 Option 
  
 “Option” shall mean an option to purchase Common Stock of the Company, granted under the Plan. “Options” includes both Incentive Stock Options and Non-Qualified Options. 
  
 Section 1.12 Optionee 
  
 “Optionee” shall mean a Director, Officer, Employee or consultant
to whom an Option is granted under the Plan. 
  
 Section 1.13 Parent Corporation 
  
 “Parent Corporation” shall mean any corporation in an unbroken chain of corporations ending with the Company if each of the corporations other than the Company then owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. 
  

 2 

 Section 1.14 Plan 
  
 “Plan” shall mean this Stock Option Plan of Interpore
International. 
  
 Section 1.15 Rule
16b-3 
  
 “Rule 16b-3” shall mean that certain Rule
16b-3 under the Exchange Act, as such Rule may be amended in the future. 
  
 Section 1.16 Secretary 
  
 “Secretary” shall mean the Secretary of the Company. 
  
 Section 1.17 Securities Act 
  
 “Securities Act” shall mean the Securities Act of 1933, as amended. 
  
 Section 1.18 Stock Appreciation Right 
  
 “Stock Appreciation Right” shall mean a stock appreciation right granted under the Plan. 
  
 Section 1.19 Subsidiary 
  
 “Subsidiary” shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain. 
  
 Section
1.20 Termination of Employment 
  
 “Termination
of Employment” shall mean the time when the employee-employer relationship, directorship or consulting relationship between the Optionee and the Company, a Parent Corporation or a Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation, discharge, death or retirement, but excluding terminations where there is a simultaneous reemployment by the Company, a Parent Corporation or a Subsidiary. The Committee, in its
absolute discretion, shall determine the effect of all other matters and questions relating to Termination of Employment, including, but not by way of limitation, the question of whether a Termination of Employment resulted from a discharge for good
cause, and all questions of whether particular leaves of absence constitute Terminations of Employment; provided, however, that, with respect to Incentive Stock Options, a leave of absence shall constitute a Termination of Employment if, and to the
extent that, such leave of absence interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section. 
  

 3 

 ARTICLE II 
  
 SHARES SUBJECT TO PLAN 
  
 Section 2.1 Shares Subject to Plan: Aggregate Option Grants 
  
 The shares of stock subject to Options shall be shares of the Company’s Common Stock. The aggregate number of such
shares which may be issued upon exercise of Options and Stock Appreciation Rights shall, effective as of January 1, 1995, be equal to 3% of the number of shares of the Company’s Common Stock issued and outstanding as of December 31, 1994, and
commencing with the first business day of each fiscal year of the Company thereafter beginning with January 1, 1996, such maximum number of shares reserved for issuance hereunder shall be increased by a number equal to 3% of the number of shares of
Common Stock issued and outstanding as of December 31 of the immediately preceding year; provided, however, that the aggregate number of shares which may be issued upon exercise of Options granted hereunder shall not exceed 1,500,000. 
  
 Notwithstanding anything herein to the contrary, options covering in excess
of an aggregate of 100,000 shares of Common Stock may not be granted to any executive officer during any calendar year. 
  
 Section 2.2 Unexercised Options 
  

If any Option expires or is cancelled (other than upon exercise of a related Stock Appreciation Right) without having been fully exercised, the number
of shares subject to such Option but as to which such Option was not exercised prior to its expiration or cancellation may again be optioned hereunder, subject to the limitations of Section 2.1. 
  
 Section 2.3 Exercised Stock Appreciation
Rights 
  
 Notwithstanding Section 2.2, to the extent that a
Stock Appreciation Right shall have been exercised for cash, the number of shares subject to the related Option, or portion thereof, may again be optioned hereunder, subject to the limitations of Section 2.1. 
  
 Section 2.4 Changes in Company’s Shares

  
 In the event that the outstanding shares of Common Stock of
the Company are hereafter changed into or exchanged for a different number or kind of shares or other securities of the Company, or of another corporation, by reason of reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, stock dividend or combination of shares, appropriate adjustments shall be made by the Committee in the number and kind of shares for the purchase of which Options may be granted, including adjustments of the limitations in Section 2.1 on
the maximum number and kind of shares which may be issued on exercise of Options. 
  

 4 

 ARTICLE III 
  
 GRANTING OF OPTIONS 
  
 Section 3.1 Eligibility 
  
 Any Director, Officer, Employee or consultant of the Company or of any corporation which is then a Parent Corporation or a Subsidiary shall be eligible to
be granted Options, except as provided in Section 3.2. 
  
 Section 3.2 Qualification of Incentive Stock Options 
  
 No Incentive Stock Option shall be granted unless such Option, when granted, qualifies as an “incentive stock option” under Section 422 of the Code. 
  
 Section 3.3 Granting of Options 
  
 (a) The Committee shall from time to time, in its absolute discretion:

  
 (i) Select from among the Directors,
Officers, Employees or consultants (including those to whom Options and/or Stock Appreciation Rights have been previously granted under the Plan) such of them as in its opinion should be granted Options; and 
  
 (ii) Determine the number of shares to be subject to such
Options granted to such selected Director, Officer, Employee or consultant, and determine whether such Options are to be Incentive Stock Options or Non-Qualified Options (or to give the Optionee a choice in that regard); and 
  
 (iii) Determine the terms and conditions of such Options,
consistent with the Plan. 
  
 (b) Upon the selection of a
Director, Officer, Employee or consultant to be granted an Option, the Committee shall instruct the Secretary to issue such Option and may impose such conditions on the grant of such Option as it deems appropriate. Without limiting the generality of
the preceding sentence, the Committee may, in its discretion and on such terms as it deems appropriate, require as a condition on the grant of an Option to an Employee that the Employee surrender for cancellation some or all of the unexercised
Options which have been previously granted to such Optionee. An Option the grant of which is conditioned upon such surrender may have an Option price lower (or higher) than the Option price of the surrendered Option, may cover the same (or a lesser
or greater) number of shares as the surrendered Option, may contain such other terms as the Committee deems appropriate and shall be exercisable in accordance with its terms, without regard to the number of shares, price, Option period or any other
term or condition of the surrendered Option. 
  

 5 

 ARTICLE IV 
  
 TERMS OF OPTIONS 
  
 Section 4.1 Option Agreement 
  
 Each Option shall be evidenced by a written Stock Option Agreement, which shall be executed by the Optionee and an authorized Officer of the Company and
which shall contain such terms and conditions as the Committee shall determine, consistent with the Plan. Stock Option Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to. qualify such Options
as “incentive stock options” under Section 422 of the Code. 
  
 Section 4.2 Option Price 
  
 (a) The price of the shares subject to each Option shall be set by the Committee; provided, however, that the price per share shall be not less than 100% of the fair market value of such shares on the date such Option is granted; provided,
further, that, in the case of an Incentive Stock Option, the price per share shall not be less than 110% of the fair market value of such shares on the date such Option is granted in the case of an individual then owning (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company, any Subsidiary or any Parent Corporation. 
  

(b) For purposes of the Plan, the fair market value of a share of the Company’s Common Stock as of a given date shall be: (i) the closing price of
a share of the Company’s Common Stock on the principal exchange on which shares of the Company’s Common Stock are then trading, if any, on the day previous to such date, or, if shares were not traded on the day previous to such date, then
on the next preceding trading day during which a sale occurred; or (ii) if such Common Stock is not traded on an exchange but is quoted on NASDAQ or a successor quotation system, (1) the last sales price (if the Company’s Common Stock is then
listed as a National Market Issue under the NASD National Market System) or (2) the mean between the closing representative bid and asked prices (in all other cases) for the Company’s Common Stock on the day previous to such date as reported by
NASDAQ or such successor quotation system; or (iii) if such Common Stock is not publicly traded on an exchange and not quoted on NASDAQ or a successor quotation system, the mean between the closing bid and asked prices for the Company’s Common
Stock, on the day previous to such date, as determined in good faith by the Committee; or (iv) if the Company’s Common Stock is not publicly traded, the fair market value established by the Committee acting in good faith. 
  
 Section 4.3 Commencement of Exercisability

  
 (a) Except as the Committee may otherwise provide, no Option
may be exercised in whole or in part during the first year after such Option is granted. 
  
 (b) Subject to the provisions of Sections 4.3(a), 4.3(c), 4.3(d) and 8.3, Options shall become exercisable at such times and in such installments (which may be cumulative) as the Committee shall provide in the terms
of each individual Option; provided, however, that by a resolution adopted after an Option is granted the Committee may, on such terms and conditions 

  

 6 

 
as it may determine to be appropriate and subject to Sections 4.3(d) and 8.3, accelerate the time at which such Option or any portion thereof may be
exercised. 
  
 (c) No portion of an Option which is unexercisable
at Termination of Employment shall thereafter become exercisable. 
  
 (d) To the extent that the aggregate fair market value of stock with respect to which “incentive stock options” (within in the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code) are exercisable
for the first time by an Optionee during any calendar year (under the Plan and all other incentive stock option plans of the Company, any Subsidiary and any Parent Corporation) exceeds $100,000, such options shall be taxed as Non-Qualified Options.
The rule set forth in the preceding sentence shall be applied by taking options into account in the order in which they were granted. For purposes of this Section 4.3(d), the fair market value of stock shall be determined as of the time the option
with respect to such stock is granted. 
  
 Section 4.4 Expiration of Options 
  
 (a)
No Option may be exercised to any extent by anyone after the first to occur of the following events: 
  
 (i) The expiration of ten years from the date the Option was granted; or 
  
 (ii) With respect to an Incentive Stock Option in the case of an Optionee owning (within the meaning of
Section 424(d) of the Code), at the time the Incentive Stock Option was granted, more than 10% of the total combined voting power of all classes of stock of the Company, any Subsidiary or any Parent Corporation, the expiration of five years from the
date the Incentive Stock Option was granted; or 
  
 (iii) Except in the case of any Optionee who is disabled (within the meaning of Section 22(e)(3) of the Code), the expiration of three months from the date of the Optionee’s Termination of Employment for any reason other than such
Optionee’s death unless the Optionee dies within said three-month period; or 
  
 (iv) In the case of an Optionee who is disabled (within the meaning of Section 22(e)(3) of the Code), the expiration of one year from the
date of the Optionee’s Termination of Employment for any reason other than such Optionee’s death unless the Optionee dies within said one-year period; or 
  
 (v) The expiration of one year from the date of the Optionee’s death. 
  
 (b) Subject to the provisions of Section 4.4(a), the Committee shall provide,
in the terms of each individual Option, when such Option expires and becomes unexercisable; and (without limiting the generality of the foregoing) the Committee may provide in the terms of individual Options that said Options expire immediately upon
a Termination of Employment for any reason. 
  

 7 

 Section 4.5 Consideration 
  
 In consideration of the granting of an Option, the Optionee shall agree, in
the written Stock Option Agreement, to remain in the employ, of the Company, a Parent Corporation or a Subsidiary for a period of at least one year after the Option is granted. Nothing in this Plan or in any Stock Option Agreement hereunder shall
confer upon any Optionee any right to continue in the employ of the Company, any Parent Corporation or any Subsidiary or shall interfere with or restrict in any way the rights of the Company, its Parent Corporations and its Subsidiaries, which are
hereby expressly reserved, to discharge any Optionee at any time for any reason whatsoever, with or without cause. 
  
 Section 4.6 Adjustments in Outstanding Options 
  
 In the event that the outstanding shares of the stock subject to Options are changed into or exchanged for a different
number or kind of shares of the Company or other securities of the Company by reason of merger, consolidation, recapitalization, reclassification, stock split-up, stock dividend or combination of shares, the Committee shall make an appropriate and
equitable adjustment in the number and kind of shares as to which all outstanding Options, or portions thereof then unexercised, shall be exercisable, to the end that after such event the Optionee’s proportionate interest shall be maintained as
before the occurrence of such event. Such adjustment in an outstanding Option shall be made without change in the total price applicable to the Option or the unexercised portion of the Option (except for any change in the aggregate price resulting
from rounding-off of share quantities or prices) and with any necessary corresponding adjustment in Option price per share; provided, however, that, in the case of Incentive Stock Options, each such adjustment shall be made in such manner as not to
constitute a “modification” within the meaning of Section 424(h)(3) of the Code. Any such adjustment made by the Committee shall be final and binding upon all Optionees, the Company and all other interested persons. 
  
 Section 4.7 Merger, Consolidation, Acquisition,
Liquidation or Dissolution 
  
 Notwithstanding the provisions
of Section 4.6, in its absolute discretion, and on such terms and conditions as it deems appropriate, the Committee may provide by the terms of any Option that such Option cannot be exercised after the merger or consolidation of the Company with or
into another corporation, the acquisition by another corporation or person of all or substantially all of the Company’s assets or 80% or more of the Company’s then outstanding voting stock or the liquidation or dissolution of the Company;
and if the Committee so provides, it may, in its absolute discretion and on such terms and conditions as it deems appropriate, also provide, either by the terms of such Option or by a resolution adopted prior to the occurrence of such merger,
consolidation, acquisition, liquidation or dissolution, that, for some period of time prior to such event, such Option shall be exercisable as to all shares covered thereby, notwithstanding anything to the contrary in Section 4.3(b) and/or any
installment provisions of such Option, but subject to Section 4.3(d). 
  

 8 

 ARTICLE V 
  
 EXERCISE OF OPTIONS 
  
 Section 5.1 Person Eligible to Exercise 
  
 During the lifetime of the Optionee, only the Optionee may exercise an Option (or any portion thereof) granted to the
Optionee; provided, however, an Option (or portion thereof) which has been transferred pursuant to a qualified domestic relations order as defined in, and to the extent not prohibited by, the Code may be exercised by the person to whom such Option
(or portion thereof) has been transferred. After the death of the Optionee, any exercisable portion of an Option may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Stock Option Agreement, be exercised by
his personal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution. 
  
 Section 5.2 Partial Exercise 
  
 At any time and from time to time prior to the time when any exercisable Option or exercisable portion thereof becomes
unexercisable under the Plan or the applicable Stock Option Agreement, such Option or portion thereof may be exercised in whole or in part; provided, however, that the Company shall not be required to issue fractional shares and the Committee may,
by the terms of the Option, require any partial exercise to be with respect to a specified minimum number of shares. 
  
 Section 5.3 Manner of Exercise 
  
 An exercisable Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary or his office of all of the following
prior to the time when such Option or such portion becomes unexercisable under the Plan or the applicable Stock Option Agreement: 
  
 (a) Notice in writing signed by the Optionee or other person then entitled to exercise such Option or portion, stating that such Option or portion is
exercised, such notice complying with all applicable rules established by the Committee; and 
  
 (b) (i) Full payment (in cash or by check) for the shares with respect to which such Option or portion is thereby exercised; or 
  

(ii) With the consent of the Committee, (A) shares of the Company’s Common Stock owned by the Optionee duly endorsed for transfer
to the Company, or (B) subject to the timing requirements of Section 5.4, shares of the Company’s Common Stock issuable to the Optionee upon exercise of the Option, with a fair market value (as determined under Section 4.2(b)) on the date of
Option exercise equal to the aggregate Option price of the shares with respect to which such Option or portion is thereby exercised; or 
  

 9 

 (iii) With the consent of the Committee, a full recourse promissory note bearing interest
(at no less than such rate as shall then preclude the imputation of interest under the Code or any successor provision) and payable upon such terms as may be prescribed by the Committee. The Committee may also prescribe the form of such note and the
security to be given for such note. No Option may, however, be exercised by delivery of a promissory note or by a loan from the Company when or where such loan or other extension of credit is prohibited by law; or 
  
 (iv) With the consent of the Committee, any combination of
the consideration provided in the foregoing subsections (i), (ii) and (iii); and 
  
 (c) The payment to the Company (or other employer corporation) of all amounts which it is required to withhold under federal, state or local law in connection with the exercise of the Option or a portion thereof. All
or any part of such payment may be made, with the consent of the Committee, (i) subject to the timing requirements of Section 5.4, with shares of the Company’s Common Stock issuable to the Optionee upon exercise of the Option, or (ii) with
shares of the Company’s Common Stock owned by the Optionee duly endorsed for transfer, in each case, valued in accordance with Section 4.2(b) at the date of Option exercise. 
  
 (d) Such representations and documents as the Committee, in its absolute discretion, deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act and any other federal or state securities laws or regulations. The Committee may, in its absolute discretion, also take whatever additional actions it deems appropriate to effect such
compliance including, without limitation, placing legends on share certificates and issuing stop-transfer orders to transfer agents and registrars; and 
  
 (e) In the event that the Option or portion thereof shall be exercised pursuant to Section 5.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option or portion thereof. 
  
 Notwithstanding anything herein to the contrary, an Optionee may satisfy the requirements of subsection (b) and (c) of this Section 5.3 concerning payment
for the shares and all applicable withholding taxes, with the consent of the Committee, through the delivery to the Secretary or his office of (i) an irrevocable written exercise notice containing instructions to the Company to deliver to
Optionee’s broker the certificate(s) representing the shares with respect to which such Option or portion is thereby exercised and (ii) a copy of Optionee’s irrevocable written instructions to such broker to deliver to the Company, within
five business days from the date of the Company’s receipt of such exercise notice, full payment (in cash or by check) for the shares with respect to which such Option or portion is thereby exercised and all amounts which the Company is required
to withhold under federal, state or local law in connection with the exercise of the Option or portion thereof. Provided the Optionee complies with clauses (i) and (ii) above and the Company receives such full payment the Optionee shall be deemed to
have exercised such Option on the date of the Company’s receipt of the deliveries specified in clauses (i) and (ii) above. 
  

 10 

 Section 5.4 Certain Timing Requirements 
  
 Shares of the Company’s Common Stock issuable to the Optionee upon
exercise of the Option may be used to satisfy the Option price or the tax withholding consequences of such exercise only (i) during the period beginning on the third business day following the date of release of the quarterly or annual summary
statement of sales and earnings of the Company and ending on the twelfth business day following such date or (ii) pursuant to an irrevocable written election by the Optionee to use shares of the Company’s Common Stock issuable to the Optionee
upon exercise of the Option to pay all or pan of the Option price or the withholding taxes (subject to the approval of the Committee) made at least six months prior to the payment of such Option price or withholding taxes. 
  
 Section 5.5 Conditions to Issuance of Stock
Certificates 
  
 The shares of stock issuable and deliverable
upon the exercise of an Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. The Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or portion thereof prior to fulfillment of all of the following conditions: 
  
 (a) The admission of such shares to listing on all stock exchanges on which such class of stock is then listed; and 
  
 (b) The completion of any registration or other qualification of such shares
under any state or federal law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Committee shall, in its absolute discretion, deem necessary or advisable; and

  
 (c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and 
  
 (d) The payment to the Company (or other employer corporation) of all amounts which it is required to withhold under federal, state or local law in
connection with the exercise of the Option; and 
  
 (e) The lapse
of such reasonable period of time following the exercise of the Option as the Committee may establish from time to time for reasons of administrative convenience. 
  
 Section 5.6 Rights as Shareholders 
  
 The holders of Options shall not be, nor have any of the rights or
privileges of, shareholders of the Company in respect of any shares purchasable upon the exercise of any part of an Option unless and until certificates representing such shares have been issued by the Company to such holders. 
  

 11 

 Section 5.7 Transfer Restrictions 
  
 Unless otherwise approved in writing by the Committee, no shares acquired
upon exercise of any Option by any Officer may be sold, assigned, pledged, encumbered or otherwise transferred until at least six months have elapsed from (but excluding) the date that such Option was granted. The Committee, in its absolute
discretion, may impose such other restrictions on the transferability of the shares purchasable upon the exercise of an Option as it deems appropriate. Any such other restriction shall be set forth in the respective Stock Option Agreement and may be
referred to on the certificates evidencing such shares. The Committee may require the Employee to give the Company prompt notice of any disposition of shares of stock, acquired by exercise of an Incentive Stock Option, within two years from the date
of granting such Option or one year after the transfer of such shares to such Employee. The Committee may direct that the certificates evidencing shares acquired by exercise of an Option refer to such requirement to give prompt notice of
disposition. 
  
 ARTICLE VI 
  
 STOCK APPRECIATION RIGHTS 
  
 Section 6.1 Grant of Stock Appreciation Rights

  
 A Stock Appreciation Right may be granted to any Employee who
receives a grant of an Option under the Plan. A Stock Appreciation Right may be granted in connection and simultaneously with the grant of an Option or with respect to a previously granted Option. A Stock Appreciation Right shall be subject to such
terms and conditions not inconsistent with the Plan as the Committee shall impose, including the following: 
  
 (a) A Stock Appreciation Right shall be related to a particular Option and shall be exercisable only to the extent the related Option is exercisable.

  
 (b) A Stock Appreciation Right shall be granted to the
Optionee to the maximum extent of 50% of the number of shares subject to the simultaneously or previously granted Option. 
  
 (c) A Stock Appreciation Right shall entitle the Optionee (or other person entitled to exercise the Option pursuant to Section 5.1) to surrender
unexercised a portion of the Option to which the Stock Appreciation Right relates to the Company and to receive from the Company in exchange therefor an amount, payable in shares of the Company’s Common Stock (valued pursuant to Section 4.2(b))
or, in the discretion of the Committee, in cash, determined by multiplying the lesser of (i) the difference obtained by subtracting the Option exercise price per share of the Company’s Common Stock subject to the related Option from the fair
market value (as determined under Section 4.2(b)) of a share of the Company’s Common Stock on the date of exercise of the Stock Appreciation Right or (ii) two times the Option exercise price per share of the Company’s Common Stock subject
to the related Option, by the number of shares of the Company’s Common Stock subject to the related Option with respect to which the Stock Appreciation Right shall have been exercised. 
  

 12 

 Section 6.2 Exercise of Stock Appreciation Rights 
  
 (a) No Stock Appreciation Right shall be exercisable during the first six
months after a Stock Appreciation Right is granted with respect to an outstanding Option. 
  
 (b) A Stock Appreciation Right may be exercised for cash only (i) during the period beginning on the third business day following the date of release of the quarterly or annual summary statement of sales and earnings
of the Company and ending on the twelfth business day following such date or (ii) pursuant to an irrevocable written election by the Employee to receive cash, in whole or in part, upon exercise of his Stock Appreciation Right ‘(subject to the
approval of the Committee) made at least six months prior to the exercise of the Stock Appreciation Right. 
  
 ARTICLE VII 
  
 ADMINISTRATION 
  
 Section
7.1 Stock Option Committee 
  
 The Stock Option
Committee shall consist of two or more Directors, appointed by and holding office at the pleasure of the Board, each of whom is a “disinterested person” as defined by Rule 16b-3 and an “outside director” within the meaning of
Section 162(m)(4)(C)(ii) of the Code. Appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering written notice to the Board. Vacancies in the Committee ~hall be filled
by the Board. 
  
 Section 7.2 Duties
and Powers of Committee 
  
 It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance with its provisions. The Committee shall have the power to interpret the Plan and the Options and to adopt such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret, amend or revoke any such rules. Any such interpretations and rules in regard to Incentive Stock Options shall be consistent with the basic purpose of the Plan to grant “incentive stock
options” within the meaning of Section 422 of the Code. The Board shall have no right to exercise any of the rights or duties of the Committee under the Plan. 
  
 Section 7.3 Majority Rule 
  
 The Committee shall act by a majority of its members in office. The Committee may act either by vote at a meeting or by a
memorandum or other written instrument signed by a majority of the Committee. 
  
 Section 7.4 Compensation: Professional Assistance: Good Faith Actions 
  
 Members of the Committee shall receive such compensation for their services as members as may be determined by the Board. All expenses and liabilities
incurred by members of the Committee in connection with the administration of the Plan shall be borne by the 

  

 13 

 
Company. The Committee may employ attorneys, consultants, accountants, appraisers, brokers or other persons. The Committee, the Company and its Officers and
Directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon all Optionees, the
Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Options, and all members of the Committee shall be
fully protected by the Company in respect to any such action, determination or interpretation. 
  
 ARTICLE VIII 
  
 OTHER
PROVISIONS 
  
 Section 8.1 Options
and Stock Appreciation Rights Not Transferable 
  
 No Option,
Stock Appreciation Right or interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Optionee or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect; provided, however, that nothing in this Section 8.1 shall prevent transfers by will or by the applicable laws of descent and distribution, or, to the extent not prohibited by the
Code, pursuant to a qualified domestic relations order (as defined in the Code). 
  
 Section 8.2 Amendment, Suspension or Termination of the Plan 
  
 The Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time
by the Committee. However, without approval of the Company’s shareholders given within 12 months before or after the action by the Committee, no action of the Committee may, except as provided in Section 2.4, increase any limit imposed in
Section 2.1 on the maximum number of shares which may be issued on exercise of Options, materially modify the eligibility requirements of Section 3.1, reduce the minimum Option price requirements of Section 4.2(a), extend the limit imposed in this
Section 8.2 on the period during which Options or Stock Appreciation Rights may be granted or amend or modify the Plan in a manner requiring shareholder approval under Rule 16b-3. Neither the amendment, suspension nor termination of the Plan shall,
without the consent of the holder of the Option or Stock Appreciation Right, alter or impair any rights or obligations under any Option or Stock Appreciation Right theretofore granted. No Option or Stock Appreciation Right may be granted during any
period of suspension nor after termination of the Plan, and in no event may any Option or Stock Appreciation Right be granted under this Plan after the first to occur of the following events: 
  
 (a) The expiration of ten years from the date the Plan is adopted by the
Board; or 
  

 14 

 (b) The expiration of ten years from the date the Plan is approved by the Company’s shareholders
under Section 8.3. 
  
 Section 8.3
Approval of Plan by Shareholders 
  
 This Plan will be
submitted for the approval of the Company’s shareholders within 12 months after the date of the Board’s initial adoption of the Plan. Options and Stock Appreciation Rights may be granted prior to such shareholder approval; provided,
however, that such Options and Stock Appreciation Rights shall not be exercisable prior to the time when the Plan is approved by the shareholders; provided, further, that if such approval has not been obtained at the end of said 12-month period, all
Options and Stock Appreciation Rights previously granted under the Plan shall thereupon be cancelled and become null and void. The Company shall take such actions with respect to the Plan as may be necessary to satisfy the requirements of Rule
16b-3(b). 
  
 Section 8.4 Effect of
Plan Upon Other Option and Compensation Plans 
  
 The
adoption of this Plan shall not affect any other compensation or incentive plans in effect for the Company, any Parent Corporation or any Subsidiary. Nothing in this Plan shall be construed to limit the right of the Company, any Parent Corporation
or any Subsidiary (a) to establish any other forms of incentives or compensation for employees of the Company, any Parent Corporation or any Subsidiary or (b) to grant or assume options otherwise than under this Plan in connection with any proper
corporate purpose, including, but not by way of limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, firm or
association. 
  
 Section 8.5 Titles

  
 Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of the Plan. 
  
 Section 8.6 Conformity to Securities Laws 
  
 The Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including without limitation Rule 16b-3. Notwithstanding anything herein to the contrary, the Plan shall be administered, and Options shall be granted and may be exercised, only in such a mariner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and Options granted hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 
  
 * * * * 
  

 15 

 I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of Interpore
International on April 15, 1994 and by the shareholders of Interpore International on June 17, 1994. 
  
 Executed on this              day of
                    , 1995. 
  

	
	
	 
	 Richard L. Harrison, Secretary

  

 16

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