SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

Current Report

Pursuant To Section 13 or 14(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) ~~January~~December 330, 2005

PACE MEDICAL, INC.

(Exact Name of Registrant As Specified In Its Charter)

MASSACHUSETTS	0-16257	04-2867416
(State if Other Jurisdiction of	(Commission File Number)	(I.R.S. Employer Identification
Incorporation)		No.)
391 Totten Pond Road, Waltham,
Massachusetts 02451		02451
(Address of Principal Executive		(Zip Code)
Offices)

MASSACHUSETTS

(~~781)~~State ~~890-5656~~if Other Jurisdiction of Incorporation)

(Registrant’s Telephone Number, Including Area Code)

0-16257		04-2867416
(Commission File Number)		(I.R.S. Employer Identification No.)

391 Totten Pond Road, Waltham, Massachusetts 02451		02451
(Address of Principal Executive Offices)		(Zip Code)

~~N/A~~(781) 890-5656

(~~Former~~Registrant’s ~~Name~~Telephone ~~or Former Address~~Number, ifIncluding ~~Changed~~Area ~~Since Last Report~~Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions N/A.2. below):

~~o Written~~(Former Name ~~communications~~or ~~pursuant~~Former toAddress, ~~Rule~~if ~~425~~Changed ~~under~~Since ~~the Securities~~Last ~~Act (17 CFR 230.425~~Report)

~~o Soliciting~~Check ~~material~~the ~~pursuant~~appropriate tobox ~~Rule~~below ~~14a~~if the Form 8-12K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the ~~Exchange~~following ~~Act~~provisions (17see ~~CFR~~General ~~240~~Instructions A.~~14a-12~~2. below):

o ~~Pre-commencement~~ Written communications pursuant to Rule ~~14d-2(b)~~ 425 under the ~~Exchange~~Securities Act (17 CFR ~~240~~230.~~14d-2(b~~425))

o ~~Pre-commencement~~ Soliciting ~~communications~~ material pursuant to Rule ~~13e4(c)~~ 14a-12 under the Exchange Act (17 CFR 240.~~13e~~14a-~~4(c~~12))

~~ITEM~~o Pre-commencement communications ~~1.01.~~pursuant ~~ENTRY~~to ~~INTO~~Rule A14d-2(b) ~~MATERIAL~~under ~~DEFINITIVE~~the ~~AGREEMENT~~Exchange Act (17 CFR 240.14d-2(b))

~~On January 3, 2005, Pace Medical, Inc. (the “Company”)~~o Pre-commencement ~~granted~~communications pursuant to ~~Steven~~Rule ~~E. Hanson, in connection with his appointment as the Company’s new President and Chief Executive Officer, options~~ 13e4(~~the “Options”~~c) tounder ~~acquire up to 400,000 shares of~~ the ~~Company’s~~Exchange ~~Common~~Act ~~Stock, $.01 par value~~ (~~the~~17 ~~“Common~~CFR ~~Stock”), at an exercise price of $0~~240.~~28 per share, representing the last trading price of the Common Stock on the Over~~13e-~~the-Counter Bulletin Board on December 31, 2004. The Options have a term of five~~ 4(5c) ~~years and were exercisable in full on the date of grant.~~)

~~The~~ITEM ~~foregoing summary of the stock option agreement does not purport to be complete and is qualified in its entirety by reference to the stock option agreement which is attached hereto as Exhibit 10.~~1.01. ~~and incorporated~~ENTRY byINTO ~~reference~~MATERIAL ~~into~~DEFINITIVE ~~this report~~AGREEMENTS.

~~ITEM~~On 3December 30, 2005, Pace Medical, Inc.02 (the “Company”) granted to the following executive officers and directors of the Company options (the “Options”) to acquire the number of shares of the Company’s Common Stock, $.01 ~~UNREGISTERED~~par ~~SALES~~value OF(the ~~EQUITY~~“Common ~~SECURITIES~~Stock”) set forth below opposite his respective name at an exercise price of $0.30 per share, representing the last trading price of the Common Stock on December 29, 2005:

As described in Item 1.01 above, the Company entered into a Stock Option Agreement with Steven E. Hanson in connection with his appointment as President and Chief Executive Officer, pursuant to which Mr. Hanson was granted the Options at an exercise price of $0.28. Neither the Options or the shares of the Common Stock issuable upon exercise thereof were registered under the Securities Act of 1933 (the “Act”). The Company granted the Options in a transaction exempt from the registration requirements of the Act by virtue of the exemption provided for in Section 4(2) of the Act. Please see the discussion under Item 1.01 of this Current Report on Form 8-K for additional information regarding the transaction.

Name:	Position:	No. of Shares:

Steven E. Hanson	Chief Executive Officer President; Director	200,000

Derrick Ebden	Director	75,000

George F. Harrington	Director	75,000

Ralph E. Hanson	Chairman of the Board, Treasurer, Director	125,000

OnThe ~~January 3, 2005, the Company also granted options~~Options tohave ~~another~~a ~~employee~~term of ~~the~~five ~~Company~~(5) toyears ~~acquire~~and anwere aggregate of 25,000 shares of Common Stock at an exercise price of $0.28 per share, representing the last trading price of the Common Stock on the Over-the-Counter Bulletin Board on December 31, 2004. The option was exercisable in full on the date of grant ~~and has a term of 5 years~~. ~~Neither~~The ~~the~~foregoing ~~option~~summary ~~or the shares~~ of the ~~Common~~Options ~~Stock~~does ~~issuable~~not ~~upon~~purport ~~exercise~~to ~~thereof~~be ~~were~~complete ~~registered~~and ~~under~~is ~~the~~qualified ~~Act. The Company issued the options~~ in aits ~~transaction~~entirety ~~exempt~~by reference ~~from~~to the ~~registration~~form ~~requirements~~ of ~~the~~stock ~~Act~~option byagreement ~~virtue~~which ofis ~~the~~attached ~~exemption~~hereto ~~provided~~as Exhibit ~~for~~10.1 inand ~~Section~~incorporated ~~4(2)~~by ofreference ~~the~~into ~~Act~~this report.

ITEM 53.02. ~~DEPARTURE~~UNREGISTERED OFSALES ~~PRINCIPAL OFFICER; APPOINTMENT~~ OF ~~PRINCIPAL~~EQUITY ~~OFFICER~~SECURITIES.

OnAs ~~January~~described in 3,Item ~~2005~~1.01 above, ~~Ralph~~the E.Company ~~Hanson~~entered ~~resigned as~~into ~~President~~Stock ~~and~~Option ~~Chief~~Agreements ~~Executive~~with ~~Officer~~each of its directors and ~~Steven~~executive E.officers ~~Hanson~~pursuant ~~was~~to ~~appointed~~which asoptions to acquire an ~~President~~aggregate ~~and~~of ~~Chief~~475,000 ~~Executive~~were ~~Officer.~~ granted by the Company, in each case at an exercise ~~Ralph~~price Eof $0.30 ~~Hanson~~per ~~will~~share. Neither ~~remain~~the Options asnor ~~Chairman~~the shares of the ~~Board. For~~Common Stock issuable upon exercise thereof were registered under the ~~past~~Securities 11Act ~~years,~~of ~~Steven~~1933 E(the “Act”). The ~~Hanson~~Company granted the Options in transactions ~~served~~exempt asfrom ~~President~~the registration requirements of ~~Centerpulse~~the ~~Dental,~~Act aby ~~division~~virtue of ~~Sulzermedica,~~the ~~which~~exemption ~~was~~provided ~~acquired~~for byin ~~Zimmer~~Section ~~Dental,~~4(2) ~~Inc. During~~of the ~~period~~Act. Please ~~1982~~see tothe ~~1992,~~discussion ~~Steven~~under ~~served~~Item in1.01 ~~various~~of this ~~positions~~Current ~~with Intermedics,~~Report ~~Inc.~~on ~~(later~~Form ~~called~~8-K ~~Sulzer~~for ~~Intermedics,~~additional ~~Inc~~information regarding the transaction.),

2On December 30, 2005, the Company also granted options to other employees of the Company to acquire an aggregate of 150,000 shares of Common Stock, in each case at an exercise price of $0.30 per share, representing the last trading price of the Common Stock on December 29, 2005. The options were all exercisable in full on the date of grant and have a term of 5 years. The foregoing summary of the Options does not purport to be complete and is qualified in its entirety by reference to the form of stock option agreement which is attached hereto as Exhibit 10.1 and incorporated by reference into this report. Neither the options nor the shares of the Common Stock issuable upon exercise thereof were registered under the Act. The Company issued the

also a division of Sulzermedica. He initially served as Director - International, and later, as Vice President - International. From 1977 to 1982, Steven served as Vice President — Sales and Marketing, of American Pacemaker Corporation until its acquisition by Intermedics, Inc. Steven E. Hanson is the son of Ralph E Hanson.2

~~ITEM~~options ~~9.01.~~in transactions ~~FINANCIAL~~exempt ~~STATEMENTS~~from ~~AND~~the ~~EXHIBITS~~registration requirements of the Act by virtue of the exemption provided for in Section 4(2) of the Act.

~~(c) Exhibits~~ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

~~EXHIBIT NO. DESCRIPTION~~(d) Exhibits

10.1 Non-Qualified Stock Option Agreement dated as of January 3, 2005, between Pace Medical, Inc. and Steven E. Hanson.

EXHIBIT NO.		DESCRIPTION

10.1		Form of Non-Qualified Stock Option Agreement dated as of December 30, 2005

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	PACE MEDICAL, INC.
Dated: January 7, 2005
Dated: January 6, 2006
	By:	/s/ Steven E. Hanson
		Steven E. Hanson, Chief Executive Officer

EXHIBIT INDEX

EXHIBIT NO.		DESCRIPTION
10.1		Form of Non-Qualified Stock Option Agreement dated as of ~~January~~December 330, 2005~~, between Pace Medical, Inc. and Steven E. Hanson.~~

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