Exhibit 10.4

 

DERMIRA, INC.

 

2014 EMPLOYEE STOCK PURCHASE PLAN

 

1.                                      Purpose.  Dermira, Inc. adopted this
Plan effective as of the date of the IPO. The purpose of this Plan is to provide
eligible employees of the Company and the Participating Corporations with a
means of acquiring an equity interest in the Company through payroll deductions,
to enhance such employees’ sense of participation in the affairs of the Company
and Participating Corporations, and to provide an incentive for continued
employment. Capitalized terms not defined elsewhere in the text are defined in
Section 28.

 

2.                                      Establishment of Plan.  Dermira, Inc.
proposes to grant rights to purchase shares of Common Stock to eligible
employees of the Company and its Participating Corporations pursuant to this
Plan.  The Company intends this Plan to qualify as an “employee stock purchase
plan” under Code Section 423 (including any amendments to or replacements of
such Section), and this Plan shall be so construed.  Any term not expressly
defined in this Plan but defined for purposes of Code Section 423 shall have the
same definition herein.  In addition, with regard to offers of options to
purchase shares of the Common Stock under the Plan to employees outside the
United States working for a Subsidiary or an Affiliate of the Company that is
not a Subsidiary, the Board may offer a subplan or an option that is not
intended to meet the Code Section 423 requirements, provided, if necessary under
Code Section 423, that the other terms and conditions of the Plan are met. 
Subject to Section 14, a total of 301,724(1) Shares is reserved for issuance
under this Plan.  In addition, on each January 1 of each calendar year, the
aggregate number of shares of Common Stock reserved for issuance under the Plan
shall be increased automatically by the number of shares equal to one percent
(1%) of the total number of outstanding shares of Common Stock on the
immediately preceding December 31 (rounded down to the nearest whole share);
provided, that the Board or the Committee may in its sole discretion reduce the
amount of the increase in any particular year. Subject to Section 14, no more
than 6,034,482 shares of Common Stock may be issued over the term of this Plan. 
The number of shares initially reserved for issuance under this Plan and the
maximum number of shares that may be issued under this Plan shall be subject to
adjustments effected in accordance with Section 14 of this Plan.

 

3.                                      Administration.  The Plan will be
administered by the Compensation Committee of the Board or by the Board (either
referred to herein as the “Committee”).  Subject to the provisions of this Plan
and the limitations of Code Section 423 or any successor provision in the Code,
all questions of interpretation or application of this Plan shall be determined
by the Committee and its decisions shall be final and binding upon all
Participants.  The Committee will have full and exclusive discretionary
authority to construe, interpret and apply the terms of the Plan, to designate
the Participating Corporations, to determine when to grant options that are not
intended to meet Code Section 423 requirements and to determine eligibility and
decide upon any and all claims filed under the Plan.  Every finding, decision
and determination made by the Committee will, to the full extent permitted by
law, be final and binding upon all parties.  Notwithstanding any provision to
the contrary in this Plan, the Committee may adopt rules, sub-plans and/or
procedures relating to the operation and administration of the Plan to
accommodate requirements of local law and procedures outside of the United
States.  The Committee will have the authority to determine the Fair Market
Value of the Common Stock (which determination shall be final, binding and
conclusive for all purposes) in accordance with Section 8 below and to interpret
Section 8 of the Plan in connection with circumstances that impact the Fair
Market Value.  Members of the Committee shall receive no compensation for their
services in connection with the administration of this Plan, other than standard
fees as established from time to time by the Board for services rendered by
Board members serving on the Board or its committees.  All expenses incurred in

 

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(1)         Share numbers referred to in this 2014 Employee Stock Purchase Plan
reflect the 5.8-to-1 reverse stock split of the Company’s outstanding capital
stock that was effected on September 18, 2014.

 

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connection with the administration of this Plan shall be paid by the Company. 
For purposes of this Plan, the Committee may designate separate offerings under
the Plan (the terms of which need not be identical) in which eligible employees
of one or more Participating Corporations will participate, even if the dates of
the applicable Offering Periods of each such offering are identical.

 

4.                                      Eligibility.  Any employee of the
Company or the Participating Corporations is eligible to participate in an
Offering Period under this Plan, except that one or more of the following
categories of employees may be excluded from coverage under the Plan by the
Committee (other than where prohibited by applicable law):

 

(a)                                 employees who are not employed by the
Company or a Participating Corporation prior to the beginning of such Offering
Period or prior to such other time period as specified by the Committee;

 

(b)                                 employees who are customarily employed for
twenty (20) hours or less per week;

 

(c)                                  employees who are customarily employed for
five (5) months or less in a calendar year;

 

(d)                                 employees who, together with any other
person whose stock would be attributed to such employee pursuant to
Section 424(d) of the Code, own stock or hold options to purchase stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company or any of its Participating Corporations
or who, as a result of being granted an option under this Plan with respect to
such Offering Period, would own stock or hold options to purchase stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company or any of its Participating Corporations;

 

(e)                                  employees who do not meet any other
eligibility requirements that the Committee may choose to impose (within the
limits permitted by the Code); and

 

(f)                                   individuals who provide services to the
Company or any of its Participating Corporations as independent contractors who
are reclassified as common law employees for any reason except for federal
income and employment tax purposes.

 

The foregoing notwithstanding, an individual shall not be eligible if his or her
participation in the Plan is prohibited by the law of any country that has
jurisdiction over him or her, if complying with the laws of the applicable
country would cause the Plan to violate Code Section 423, or if he or she is
subject to a collective bargaining agreement that does not provide for
participation in the Plan.

 

5.                                      Offering Dates.

 

(a)                                 While the Plan is in effect, the Committee
shall determine the duration and commencement date of each Offering Period,
provided that an Offering Period shall in no event be longer than twenty-seven
(27) months, except as otherwise provided by an applicable subplan. Each
Offering Period may consist of one or more Purchase Periods during which payroll
deductions of Participants are accumulated under this Plan.  While the Plan is
in effect, the Committee shall determine the duration and commencement date of
each Purchase Period, provided that a Purchase Period shall in no event end
later than the close of the Offering Period in which it begins. Purchase Periods
shall be consecutive.

 

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(b)                                 The initial Offering Period shall commence
on the Effective Date, and shall end with the Purchase Date that occurs on
November 15, 2016, or another date selected by the Committee which is
approximately twenty four months after the Effective Date, but no more than
twenty-seven (27) months after the Effective Date.  The initial Offering Period
shall consist of four Purchase Periods. The initial Purchase Period shall end on
the May 15 or November 15 that first occurs six (6) months or more after the
Effective Date, and subsequent six-month Purchase Periods shall occur until the
end of the initial Offering Period.  Thereafter, a twenty-four month Offering
Period shall commence on each May 15 and November 15, with each such Offering
Period consisting of four six-month Purchase Periods, except as otherwise
provided by an applicable subplan, or on such other date determined by the
Committee.  The Committee may at any time establish a different duration for an
Offering Period or Purchase Period to be effective after the next scheduled
Purchase Date.

 

6.                                      Participation in this Plan.

 

(a)                                 Any employee who is an eligible employee
determined in accordance with Section 4 immediately prior to the initial
Offering Period will be automatically enrolled in the initial Offering Period
under this Plan at a contribution level equal to fifteen percent (15%). 
Notwithstanding the foregoing, an eligible employee may elect to decrease his or
her contribution rate for the initial Offering Period under the Plan by
delivering a subscription agreement to the Company and/or by affecting such
decrease through an authorized third party administrator (the “Third Party
Administrator”), within thirty (30) days after the filing of an effective
registration statement pursuant to Form S-8, or such longer time as may be
determined by the Committee.

 

(b)                                 With respect to Offering Periods after the
initial Offering Period, an eligible employee determined in accordance with
Section 4 may elect to become a Participant by submitting a subscription
agreement, or electronic representation thereof, to the Company and/or via the
Third Party Administrator’s standard process, prior to the commencement of the
Offering Period to which such agreement relates in accordance with such rules as
the Committee may determine.

 

(c)                                  Once an employee becomes a Participant in
an Offering Period, then such Participant will automatically participate in each
subsequent Offering Period commencing immediately following the last day of the
prior Offering Period at the same contribution level unless the Participant
withdraws or is deemed to withdraw from this Plan or terminates further
participation in an Offering Period as set forth in Section 11 below or
otherwise notifies the Company of a change in the Participant’s contribution
letter by filing an additional subscription agreement or electronic
representation thereof with the Company and/or the Third Party Administrator,
prior to the next Offering Period.  A Participant that is automatically enrolled
in a subsequent Offering Period pursuant to this section is not required to file
any additional subscription agreement in order to continue participation in this
Plan.  A Participant who is not automatically enrolled pursuant to this section
is required to file a subscription agreement prior to the commencement of an
Offering Period (or such earlier date as the Committee may determine) to which
such agreement relates.

 

7.                                      Grant of Option on Enrollment.  Becoming
a Participant with respect to an Offering Period will constitute the grant (as
of the Offering Date) by the Company to such Participant of an option to
purchase on the Purchase Date up to that number of shares of Common Stock of the
Company determined by a fraction, the numerator of which is the amount of the
contribution level for such Participant multiplied by such Participant’s
Compensation (as defined in Section 9 below) during such Purchase Period and the
denominator of which is the lower of (i) eighty-five percent (85%) of the Fair
Market Value of a share of the Common Stock on the Offering Date (but in no
event less than the par

 

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value of a share of the Common Stock), or (ii) eighty-five percent (85%) of the
Fair Market Value of a share of the Common Stock on the Purchase Date (but in no
event less than the par value of a share of the Common Stock); provided,
however, that for the Purchase Period within the initial Offering Period the
numerator shall be fifteen percent (15%) of the Participant’s Compensation for
such Purchase Period, or such lower percentage as determined by the Committee
prior to the Effective Date or pursuant to a Participant’s election to lower the
amount as set forth in Section 6(a) above, and provided, further, that the
number of shares of Common Stock subject to any option granted pursuant to this
Plan shall not exceed the lesser of (x) the maximum number of shares set by the
Committee pursuant to Section 10(b) below with respect to the applicable
Purchase Date, or (y) the maximum number of shares which may be purchased
pursuant to Section 10(a) below with respect to the applicable Purchase Date.

 

8.                                      Purchase Price.  The Purchase Price per
share at which a share of Common Stock will be sold in any Offering Period shall
be eighty-five percent (85%) of the lesser of:

 

(a)                                 The Fair Market Value on the Offering Date;
or

 

(b)                                 The Fair Market Value on the Purchase Date.

 

9.                                      Payment of Purchase Price; Payroll
Deduction Changes; Share Issuances.

 

(a)                                 The Purchase Price of the shares is
accumulated by regular payroll deductions made during each Offering Period,
unless the Committee determines with respect to categories of Participants
outside the United States that contributions may be made in another form
(including payment by check at the end of a Purchase Period) due to local legal
requirements.  The deductions are made as a percentage of the Participant’s
Compensation in one percent (1%) increments not less than one percent (1%), nor
greater than fifteen percent (15%) or such lower limit set by the Committee. 
“Compensation” shall mean base salary and regular hourly wages (or in foreign
jurisdictions, equivalent cash compensation); however, the Committee may at any
time prior to the beginning of an Offering Period determine that for that and
future Offering Periods, Compensation shall mean all W-2 cash compensation,
including without limitation base salary or regular hourly wages, bonuses,
incentive compensation, commissions, overtime, shift premiums, plus draws
against commissions (or in foreign jurisdictions, equivalent cash
compensation).  For purposes of determining a Participant’s Compensation, any
election by such Participant to reduce his or her regular cash remuneration
under Sections 125 or 401(k) of the Code (or in foreign jurisdictions,
equivalent salary deductions) shall be treated as if the Participant did not
make such election.  Payroll deductions shall commence on the first payday
following the last Purchase Date (with respect to the initial Offering Period,
as soon as practicable following the effective date of filing with the U.S.
Securities and Exchange Commission a securities registration statement for the
Plan) and shall continue to the end of the Offering Period unless sooner altered
or terminated as provided in this Plan.  Notwithstanding the foregoing, the
terms of any subplan may permit matching shares without the payment of any
purchase price.

 

(b)                                 Subject to Section 25 below and to the
rules of the Committee, a Participant may decrease the rate of payroll
deductions during an Offering Period by filing with the Company a new
authorization for payroll deductions, with the new rate to become effective no
later than the second payroll period commencing after the Company’s receipt of
the authorization and continuing for the remainder of the Offering Period unless
changed as described below.  A decrease in the rate of payroll deductions may be
made twice during an Offering Period or more frequently under rules determined
by the Committee.  A Participant may increase or decrease the rate of payroll
deductions for any subsequent Offering Period by filing with the Company a new
authorization for payroll deductions, prior to the beginning of such Offering
Period, or such other time period as specified by the Committee.

 

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(c)                                  Subject to Section 25 below and to the
rules of the Committee, a Participant may reduce his or her payroll deduction
percentage to zero during an Offering Period by filing with the Company a
request for cessation of payroll deductions. Such reduction shall be effective
beginning no later than the second payroll period after the Company’s receipt of
the request and no further payroll deductions will be made for the duration of
the Offering Period.  Payroll deductions credited to the Participant’s account
prior to the effective date of the request shall be used to purchase shares of
Common Stock in accordance with Section (e) below.  A reduction of the payroll
deduction percentage to zero shall be treated as such Participant’s withdrawal
from such Offering Period, and the Plan, effective as of the day after the next
Purchase Date following the filing date of such request with the Company.

 

(d)                                 All payroll deductions made for a
Participant are credited to his or her account under this Plan and are deposited
with the general funds of the Company, except to the extent required to be
segregated due to local legal restrictions outside the United States.  No
interest accrues on the payroll deductions, except to the extent required due to
local legal requirements.  All payroll deductions received or held by the
Company may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such payroll deductions, except to the
extent necessary to comply with local legal requirements outside the United
States.

 

(e)                                  On each Purchase Date, so long as this Plan
remains in effect and provided that the Participant has not submitted a signed
and completed withdrawal form before that date which notifies the Company and/or
the Third Party Administrator that the Participant wishes to withdraw from that
Offering Period under this Plan and have all payroll deductions accumulated in
the account maintained on behalf of the Participant as of that date returned to
the Participant, the Company shall apply the funds then in the Participant’s
account to the purchase of whole shares of Common Stock reserved under the
option granted to such Participant with respect to the Offering Period to the
extent that such option is exercisable on the Purchase Date.  The Purchase Price
per share shall be as specified in Section 8 of this Plan.  Any fractional
share, as calculated under this Section (e), shall be rounded down to the next
lower whole share, unless the Committee determines with respect to all
Participants that any fractional share shall be credited as a fractional share.
Any amount remaining in a Participant’s account on a Purchase Date which is less
than the amount necessary to purchase a full share of Common Stock shall be
carried forward into the next Purchase Period or Offering Period, as the case
may be (except to the extent required due to local legal requirements outside
the United States), as otherwise determined by the Committee.  In the event that
this Plan has been oversubscribed, all funds not used to purchase shares on the
Purchase Date shall be returned to the Participant, without interest (except to
the extent required due to local legal requirements outside the United States). 
No Common Stock shall be purchased on a Purchase Date on behalf of any employee
whose participation in this Plan has terminated prior to such Purchase Date,
except to the extent required due to local legal requirements outside the United
States.

 

(f)                                   As promptly as practicable after the
Purchase Date, the Company shall issue shares for the Participant’s benefit
representing the shares purchased upon exercise of his or her option.

 

(g)                                  During a Participant’s lifetime, his or her
option to purchase shares hereunder is exercisable only by him or her.  The
Participant will have no interest or voting right in shares covered by his or
her option until such option has been exercised.

 

(h)                                 To the extent required by applicable
federal, state, local or foreign law, a Participant shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company or any
Subsidiary or Affiliate, as applicable, may withhold, by any method permissible
under the applicable law, the amount necessary for

 

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the Company or Subsidiary or Affiliate, as applicable, to meet applicable
withholding obligations, including any withholding required to make available to
the Company or Subsidiary or Affiliate, as applicable, any tax deductions or
benefits attributable to the sale or early disposition of shares of Common Stock
by a Participant. The Company shall not be required to issue any shares of
Common Stock under the Plan until such obligations are satisfied.

 

10.                               Limitations on Shares to be Purchased.

 

(a)                                 No Participant shall be entitled to purchase
stock under any Offering Period at a rate which, when aggregated with such
Participant’s rights to purchase stock, that are also outstanding in the same
calendar year(s) (whether under other Offering Periods or other employee stock
purchase plans of the Company, its Parent and its Subsidiaries), exceeds $25,000
in Fair Market Value, determined as of the Offering Date, (or such other limit
as may be imposed by the Code) for each calendar year in which such Offering
Period is in effect (hereinafter the “Maximum Share Amount”).  The Company may
automatically suspend the payroll deductions of any Participant as necessary to
enforce such limit provided that when the Company automatically resumes such
payroll deductions, the Company must apply the rate in effect immediately prior
to such suspension.

 

(b)                                 The Committee may, in its sole discretion,
set a lower maximum number of shares which may be purchased by any Participant
during any Offering Period than that determined under Section 10(a) above, which
shall then be the Maximum Share Amount for subsequent Offering Periods;
provided, however, in no event shall a Participant be permitted to purchase more
than 1,551 Shares during any one Purchase Period, irrespective of the Maximum
Share Amount set forth in (a) and (b) hereof.  If a new Maximum Share Amount is
set, then all Participants will be notified of such Maximum Share Amount prior
to the commencement of the next Offering Period for which it is to be
effective.  The Maximum Share Amount shall continue to apply with respect to all
succeeding Offering Periods unless revised by the Committee as set forth above.

 

(c)                                  If the number of shares to be purchased on
a Purchase Date by all Participants exceeds the number of shares then available
for issuance under this Plan, then the Company will make a pro rata allocation
of the remaining shares in as uniform a manner as shall be reasonably
practicable and as the Committee shall determine to be equitable.  In such
event, the Company will give written notice of such reduction of the number of
shares to be purchased under a Participant’s option to each Participant
affected.

 

(d)                                 Any payroll deductions accumulated in a
Participant’s account which are not used to purchase stock due to the
limitations in this Section 10, and not covered by Section 9(e), shall be
returned to the Participant as soon as administratively practicable after the
end of the applicable Purchase Period, without interest (except to the extent
required due to local legal requirements outside the United States).

 

11.                               Withdrawal.

 

(a)                                 Each Participant may withdraw from an
Offering Period under this Plan pursuant to a method specified for such purpose
by the Company.  Such withdrawal may be elected at any time prior to the end of
an Offering Period, or such other time period as specified by the Committee.

 

(b)                                 Upon withdrawal from this Plan, the
accumulated payroll deductions shall be returned to the withdrawn Participant,
without interest (except to the extent required due to local legal requirements
outside the United States), and his or her interest in this Plan shall
terminate.  In the event a

 

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Participant voluntarily elects to withdraw from this Plan, he or she may not
resume his or her participation in this Plan during the same Offering Period,
but he or she may participate in any Offering Period under this Plan which
commences on a date subsequent to such withdrawal by filing a new authorization
for payroll deductions in the same manner as set forth in Section 6 above for
initial participation in this Plan.

 

(c)                                  To the extent applicable, if the Fair
Market Value on the first day of the current Offering Period in which a
Participant is enrolled is higher than the Fair Market Value on the first day of
any subsequent Purchase Period, the current Offering Period shall end, a new
Offering Period shall begin and the Company will automatically enroll such
Participant in the subsequent Offering Period.  Any funds accumulated in a
Participant’s account prior to the first day of such subsequent Offering Period
will be applied to the purchase of shares on the Purchase Date immediately prior
to the first day of such subsequent Offering Period, if any.

 

12.                               Termination of Employment.  Termination of a
Participant’s employment for any reason, including retirement, death,
disability, or the failure of a Participant to remain an eligible employee of
the Company or of a Participating Corporation, immediately terminates his or her
participation in this Plan.  In such event, accumulated payroll deductions
credited to the Participant’s account will be returned to him or her or, in the
case of his or her death, to his or her legal representative, without interest
(except to the extent required due to local legal requirements outside the
United States).  For purposes of this Section 12, an employee will not be deemed
to have terminated employment or failed to remain in the continuous employ of
the Company or of a Participating Corporation in the case of sick leave,
military leave, or any other leave of absence approved by the Company; provided
that such leave is for a period of not more than ninety (90) days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute.  The Company will have sole discretion to determine whether a
Participant has terminated employment and the effective date on which the
Participant terminated employment, regardless of any notice period or garden
leave required under local law.

 

13.                               Return of Payroll Deductions.  In the event a
Participant’s interest in this Plan is terminated by withdrawal, termination of
employment or otherwise, or in the event this Plan is terminated by the Board,
the Company shall deliver to the Participant all accumulated payroll deductions
credited to such Participant’s account.  No interest shall accrue on the payroll
deductions of a Participant in this Plan (except to the extent required due to
local legal requirements outside the United States).

 

14.                               Capital Changes.  If the number of outstanding
shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company, without consideration, then the Committee
shall adjust the number and class of Common Stock that may be delivered under
the Plan, the Purchase Price per share and the number of shares of Common Stock
covered by each option under the Plan which has not yet been exercised, and the
numerical limits of Sections 2 and 10 shall be proportionately adjusted, subject
to any required action by the Board or the stockholders of the Company and in
compliance with applicable securities laws; provided that fractions of a share
will not be issued.

 

15.                               Nonassignability.  Neither payroll deductions
credited to a Participant’s account nor any rights with regard to the exercise
of an option or to receive shares under this Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Section 22 below) by the
Participant.  Any such attempt at assignment, transfer, pledge or other
disposition shall be void and without effect.

 

16.                               Use of Participant Funds and Reports.  The
Company may use all payroll deductions received or held by it under the Plan for
any corporate purpose, and the Company will not be required to

 

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segregate Participant payroll deductions (except to the extent required due to
local legal requirements outside the United States).  Until shares are issued,
Participants will only have the rights of an unsecured creditor unless otherwise
required under local law.  Each Participant shall receive, or have access to,
promptly after the end of each Purchase Period a report of his or her account
setting forth the total payroll deductions accumulated, the number of shares
purchased, the Purchase Price thereof and the remaining cash balance, if any,
carried forward or refunded, as determined by the Committee, to the next
Purchase Period or Offering Period, as the case may be.

 

17.                               Notice of Disposition.  Each U.S. taxpayer
Participant shall notify the Company in writing if the Participant disposes of
any of the shares purchased in any Offering Period pursuant to this Plan if such
disposition occurs within two (2) years from the Offering Date or within one
(1) year from the Purchase Date on which such shares were purchased (the
“Notice Period”).  The Company may, at any time during the Notice Period, place
a legend or legends on any certificate representing shares acquired pursuant to
this Plan requesting the Company’s transfer agent to notify the Company of any
transfer of the shares.  The obligation of the Participant to provide such
notice shall continue notwithstanding the placement of any such legend on the
certificates.

 

18.                               No Rights to Continued Employment.  Neither
this Plan nor the grant of any option hereunder shall confer any right on any
employee to remain in the employ of the Company or any Participating
Corporation, or restrict the right of the Company or any Participating
Corporation to terminate such employee’s employment.

 

19.                               Equal Rights And Privileges.  All eligible
employees granted an option under this Plan that is intended to meet the Code
Section 423 requirements shall have equal rights and privileges with respect to
this Plan or within any separate offering under the Plan so that this Plan
qualifies as an “employee stock purchase plan” within the meaning of Section 423
or any successor provision of the Code and the related regulations.  Any
provision of this Plan which is inconsistent with Section 423 or any successor
provision of the Code shall, without further act or amendment by the Company or
the Committee, be reformed to comply with the requirements of Section 423.  This
Section 19 shall take precedence over all other provisions in this Plan.

 

20.                               Notices.  All notices or other communications
by a Participant to the Company under or in connection with this Plan shall be
deemed to have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the Company for the
receipt thereof.

 

21.                               Term; Stockholder Approval.  This Plan will
become effective on the Effective Date.  This Plan shall be approved by the
stockholders of the Company, in any manner permitted by applicable corporate
law, within twelve (12) months before or after the date this Plan is adopted by
the Board.  No purchase of shares that are subject to such stockholder approval
before becoming available under this Plan shall occur prior to stockholder
approval of such shares and the Committee may delay any Purchase Date and
postpone the commencement of any Offering Period subsequent to such Purchase
Date as deemed necessary or desirable to obtain such approval (provided that if
a Purchase Date would occur more than twenty-four (24) months after commencement
of the Offering Period to which it relates, then such Purchase Date shall not
occur and instead such Offering Period shall terminate without the purchase of
such shares and Participants in such Offering Period shall be refunded their
contributions without interest).  This Plan shall continue until the earlier to
occur of (a) termination of this Plan by the Board (which termination may be
effected by the Board at any time pursuant to Section 25 below), (b) issuance of
all of the shares of Common Stock reserved for issuance under this Plan, or
(c) the tenth anniversary of the Effective Date under the Plan.

 

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22.                               Designation of Beneficiary.

 

(a)                                 If provided in the subscription agreement, a
Participant may file a written or electronic designation of a beneficiary who is
to receive any shares and cash, if any, from the Participant’s account under
this Plan in the event of such Participant’s death subsequent to the end of a
Purchase Period but prior to delivery to him of such shares and cash.  In
addition, a Participant may file a written or electronic designation of a
beneficiary who is to receive any cash from the Participant’s account under this
Plan in the event of such Participant’s death prior to a Purchase Date.  Such
form shall be valid only if it was filed with the Company and/or the Third Party
Administrator at the prescribed location before the Participant’s death.

 

(b)                                 Such designation of beneficiary may be
changed by the Participant at any time by written notice filed with the Company
at the prescribed location before the Participant’s death.  In the event of the
death of a Participant and in the absence of a beneficiary validly designated
under this Plan who is living at the time of such Participant’s death, the
Company shall deliver such cash to the executor or administrator of the estate
of the Participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares or cash to the spouse or, if no spouse is known to the Company, then
to any one or more dependents or relatives of the Participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the
Company may designate.

 

23.                               Conditions Upon Issuance of Shares; Limitation
on Sale of Shares.  Shares shall not be issued with respect to an option unless
the exercise of such option and the issuance and delivery of such shares
pursuant thereto shall comply with all applicable provisions of law, domestic or
foreign, including, without limitation, the Securities Act, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange or automated quotation system upon which the shares may then be
listed, exchange control restrictions and/or securities law restrictions outside
the United States, and shall be further subject to the approval of counsel for
the Company with respect to such compliance.  Shares may be held in trust or
subject to further restrictions as permitted by any subplan.

 

24.                               Applicable Law.  The Plan shall be governed by
the substantive laws (excluding the conflict of laws rules) of the State of
Delaware.

 

25.                               Amendment or Termination.  The Committee, in
its sole discretion, may amend, suspend, or terminate the Plan, or any part
thereof, at any time and for any reason. If the Plan is terminated, the
Committee, in its discretion, may elect to terminate all outstanding Offering
Periods either immediately or upon completion of the purchase of shares of
Common Stock on the next Purchase Date (which may be sooner than originally
scheduled, if determined by the Committee in its discretion), or may elect to
permit Offering Periods to expire in accordance with their terms (and subject to
any adjustment pursuant to Section 14). If an Offering Period is terminated
prior to its previously-scheduled expiration, all amounts then credited to
Participants’ accounts for such Offering Period, which have not been used to
purchase shares of Common Stock, shall be returned to those Participants
(without interest thereon, except as otherwise required under local laws) as
soon as administratively practicable. Further, the Committee will be entitled to
establish rules to change the Purchase Periods and Offering Periods, limit the
frequency and/or number of changes in the amount withheld during a Purchase
Period or an Offering Period, establish the exchange ratio applicable to amounts
withheld or contributed in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a Participant in order to
adjust for delays or mistakes in the administration of the Plan, establish
reasonable waiting and

 

9

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adjustment periods and/or accounting and crediting procedures to ensure that
amounts applied toward the purchase of Common Stock for each Participant
properly correspond with amounts withheld from the Participant’s base salary,
regular hourly wages or other eligible compensation, and establish such other
limitations or procedures as the Committee determines in its sole discretion
advisable which are consistent with the Plan. Such actions will not require
stockholder approval or the consent of any Participants.  However, no amendment
shall be made without approval of the stockholders of the Company (obtained in
accordance with Section 21 above) within twelve (12) months of the adoption of
such amendment (or earlier if required by Section 21) if such amendment would:
(a) increase the number of shares that may be issued under this Plan; or
(b) change the designation of the employees (or class of employees) eligible for
participation in this Plan.  In addition, in the event the Committee determines
that the ongoing operation of the Plan may result in unfavorable financial
accounting consequences, the Committee may, in its discretion and, to the extent
necessary or desirable, modify, amend or terminate the Plan to reduce or
eliminate such accounting consequences including, but not limited to: 
(i) amending the definition of compensation, including with respect to an
Offering Period underway at the time; (ii) altering the Purchase Price for any
Offering Period including an Offering Period underway at the time of the change
in Purchase Price; (iii) shortening any Offering Period by setting a Purchase
Date, including an Offering Period underway at the time of the Committee action;
(iv) reducing the maximum percentage of compensation a participant may elect to
set aside as payroll deductions; and (v) reducing the maximum number of shares
of Common Stock a Participant may purchase during any Offering Period.  Such
modifications or amendments will not require approval of the stockholders of the
Company or the consent of any Participants.

 

26.                               Corporate Transactions.  In the event of a
Corporate Transaction (as defined below), each outstanding right to purchase
Common Stock will be assumed or an equivalent option substituted by the
successor corporation or a parent or a subsidiary of the successor corporation. 
In the event that the successor corporation refuses to assume or substitute for
the purchase right, the Offering Period with respect to which such purchase
right relates will be shortened by setting a new Purchase Date (the “New
Purchase Date”) and will end on the New Purchase Date.  No new Purchase Period
shall commence following the execution of a definitive agreement whereby the
Company will consummate a Corporate Transaction if such transaction is
consummated. The New Purchase Date shall occur on or prior to the consummation
of the Corporate Transaction, as determined by the Committee and the Plan shall
terminate on the consummation of the Corporate Transaction.

 

27.                               Code Section 409A; Tax Qualification.

 

(a)                           Options granted under the Plan generally are
exempt from the application of Section 409A of the Code.  However, options
granted to U.S. taxpayers which are not intended to meet the Code Section 423
requirements are intended to be exempt from the application of Section 409A of
the Code under the short-term deferral exception and any ambiguities shall be
construed and interpreted in accordance with such intent.  Subject to
Section (b), options granted to U.S. taxpayers outside of the Code Section 423
requirements shall be subject to such terms and conditions that will permit such
options to satisfy the requirements of the short-term deferral exception
available under Section 409A of the Code, including the requirement that the
shares of Common Stock subject to an option be delivered within the short-term
deferral period.  Subject to Section (b), in the case of a Participant who would
otherwise be subject to Section 409A of the Code, to the extent the Committee
determines that an option or the exercise, payment, settlement or deferral
thereof is subject to Section 409A of the Code, the option shall be granted,
exercised, paid, settled or deferred in a manner that will comply with
Section 409A of the Code, including Treasury regulations and other interpretive
guidance issued thereunder, including without limitation any such regulations or
other guidance that may be issued after the Effective Date.

 

10

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Notwithstanding the foregoing, the Company shall have no liability to a
Participant or any other party if the option that is intended to be exempt from
or compliant with Section 409A of the Code is not so exempt or compliant or for
any action taken by the Committee with respect thereto.

 

(b)                           Although the Company may endeavor to (i) qualify
an option for favorable tax treatment under the laws of the United States or
jurisdictions outside of the United States or (ii) avoid adverse tax treatment
(e.g., under Section 409A of the Code), the Company makes no representation to
that effect and expressly disavows any covenant to maintain favorable or avoid
unfavorable tax treatment, notwithstanding anything to the contrary in this
Plan, including Section (a).  The Company shall be unconstrained in its
corporate activities without regard to the potential negative tax impact on
Participants under the Plan.

 

28.                               Definitions.

 

(a)                           “Affiliate” means (i) any entity that, directly or
indirectly, is controlled by, controls or is under common control with, the
Company and (ii) any entity in which the Company has a significant equity
interest, in either case as determined by the Committee, whether now or
hereafter existing.

 

(b)                           “Board” shall mean the Board of Directors of the
Company.

 

(c)                            “Code” shall mean the Internal Revenue Code of
1986, as amended.

 

(d)                           “Common Stock” shall mean the common stock of the
Company.

 

(e)                            “Company” shall mean Dermira, Inc., a Delaware
corporation.

 

(f)                             “Corporate Transaction” means the occurrence of
any of the following events: (i) any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined
in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power
represented by the Company’s then outstanding voting securities; or (ii) the
consummation of the sale or disposition by the Company of all or substantially
all of the Company’s assets; or (iii) the consummation of a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving
entity or its parent outstanding immediately after such merger or consolidation.

 

(g)                            “Effective Date” shall mean the date on which the
Registration Statement covering the initial public offering of the shares of
Common Stock is declared effective by the U.S. Securities and Exchange
Commission.

 

(h)                           “Exchange Act” shall mean the Securities Exchange
Act of 1934, as amended.

 

(i)                               “Fair Market Value” shall mean, as of any
date, the value of a share of Common Stock determined as follows:

 

11

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(i)                               if such Common Stock is publicly traded and is
then listed on a national securities exchange, its closing price on the date of
determination on the principal national securities exchange on which the Common
Stock is listed or admitted to trading as reported in The Wall Street Journal or
such other source as the Committee deems reliable; or

 

(ii)                            if such Common Stock is publicly traded but is
neither listed nor admitted to trading on a national securities exchange, the
average of the closing bid and asked prices on the date of determination as
reported in The Wall Street Journal or such other source as the Committee deems
reliable; or

 

(iii)                         if such Common Stock is publicly traded but is
neither quoted on the Nasdaq Market nor listed or admitted to trading on a
national securities exchange, the average of the closing bid and asked prices on
the date of determination as reported in The Wall Street Journal or such other
source as the Committee deems reliable; or

 

(iv)                        with respect to the initial Offering Period, Fair
Market Value on the Offering Date shall be the price at which shares of Common
Stock are offered to the public pursuant to the Registration Statement covering
the initial public offering of shares of Common Stock; and

 

(v)                           if none of the foregoing is applicable, by the
Committee in good faith.

 

(j)                                    “IPO” shall mean the initial public
offering of Common Stock.

 

(k)                                 “Offering Date” shall mean the first
business day of each Offering Period.  However, for the initial Offering Period
the Offering Date shall be the Effective Date.

 

(l)                                     “Offering Period” shall mean a period
with respect to which the right to purchase Common Stock may be granted under
the Plan, as determined by the Committee pursuant to Section 5(a).

 

(m)                             “Parent” shall have the same meaning as “parent
corporation” in Sections 424(e) and 424(f) of the Code.

 

(n)                                 “Participant” shall mean an eligible
employee who meets the eligibility requirements set forth in Section 4 and who
is either automatically enrolled in the initial Offering Period or who elects to
participate in this Plan pursuant to Section 6(b).

 

(o)                                 “Participating Corporation” shall mean any
Parents or Subsidiary or Affiliate that the Board designates from time to time
as a corporation that shall be eligible to participate in this Plan, provided,
however, that employees of Affiliates that are designated for participation may
be granted only options that do not intend to comply with the Code Section 423
requirements.

 

(p)                                 “Plan” shall mean this Dermira, Inc. 2014
Employee Stock Purchase Plan.

 

(q)                                 “Purchase Date” shall mean the last U.S.
business day of each Purchase Period.

 

(r)                                    “Purchase Period” shall mean a period
during which contributions may be made toward the purchase of Common Stock under
the Plan, as determined by the Committee pursuant to Section 5(b).

 

12

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(s)                                   “Purchase Price” shall mean the price at
which Participants may purchase a share of Common Stock under the Plan, as
determined pursuant to Section 8.

 

(t)                                    “Subsidiary” shall have the same meaning
as “subsidiary corporation” in Sections 424(e) and 424(f) of the Code.

 

13

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DERMIRA, INC. (THE “COMPANY”)

2014 EMPLOYEE STOCK PURCHASE PLAN (“ESPP”)

FORM - IPO

ENROLLMENT/CHANGE FORM

 

SECTION 1:

 

CHECK DESIRED ACTION:

AND COMPLETE SECTIONS:

 

 

 

 

ACTIONS

 

o       Confirm / Change Contribution Percentage

2 + 4 + 7

 

 

o       Opt out

2 + 5 + 7

 

 

 

 

SECTION 2:

 

Name:

 

 

 

PERSONAL DATA

 

Home Address:

 

 

 

 

 

Social Security No.:  ooo-oo-oooo

 

 

 

SECTION 3:

 

ENROLLMENT CONFIRMED

 

I understand that my enrollment in the ESPP is effective at the beginning of the
Offering Period and as a result of that enrollment I am electing to purchase
shares of the Common Stock of the Company pursuant to the ESPP.  I understand
that the stock certificate(s) for the shares purchased on my behalf will be
issued in street name and deposited directly into my brokerage account.  I
hereby agree to take all steps, and sign all forms, required to establish an
account with the Company’s broker for this purpose.

 

My participation will continue as long as I remain eligible, unless I withdraw
from the ESPP by filing a new Enrollment/Change Form with the Company.  I
understand that I must notify the Company of any disposition of shares purchased
under the ESPP.

 

 

 

SECTION 4:

 

ELECT / CHANGE CONTRIBUTION PERCENTAGE

 

I hereby authorize the Company to withhold from each of my paychecks such amount
as is necessary to equal at the end of the applicable Offering Period       %
(the percentage must be a whole number from 1%, up to a maximum of 15%) of my
Compensation (as provided in Section 9 of the ESPP) paid during such Offering
Period as long as I continue to participate in the ESPP.  I may reduce the
amount of my contribution effective no later than the second payroll period
after the form is received by the Company by inserting my desired contribution
percentage here:      % (the reduced percentage must be a whole number from 1%,
up to a maximum of 14%). That amount will be applied to the purchase of shares
of the Common Stock pursuant to the ESPP.

 

Note:                       You may decrease your contribution percentage to a
percentage other than 0% twice within an Offering Period to be effective during
that Offering Period.  A change will become effective no later than the second
payroll period after the form is received by the Company.  You may not increase
your contribution at any time within an Offering Period.  An increase in your
contribution percentage can only take effect with the next Offering Period.

 

 

 

SECTION 5:

 

OPT OUT

 

I understand that my enrollment in the ESPP is effective at the beginning of the
Offering Period.  I hereby withdraw from the ESPP and elect 0% contribution.

 

Note:                       No contributions will be deducted from your salary
if you elect to opt out of the ESPP.  You may next enroll in the new Offering
Period.

 

 

 

SECTION 6:

 

ELECTRONIC DELIVERY AND ACCEPTANCE

 

The Company may, in its sole discretion, decide to deliver any documents related
to current or future participation in the ESPP by electronic means.  I hereby
consent to receive such documents by electronic delivery and agree to
participate in the ESPP through an on-line or electronic system established and
maintained by the Company or a third party designated by the Company.

 

--------------------------------------------------------------------------------

 

SECTION 7:

 

ACKNOWLEDGMENT AND SIGNATURE

 

I acknowledge that I have received a copy of the ESPP Prospectus (which
summarizes the major features of the ESPP).  I have read the Prospectus and my
signature below indicates that I hereby agree to be bound by the terms of the
ESPP.

 

 

 

 

 

Signature:

 

 

Date:

 

 

--------------------------------------------------------------------------------

 

DERMIRA, INC. (THE “COMPANY”)

2014 EMPLOYEE STOCK PURCHASE PLAN (“ESPP”)

ENROLLMENT/CHANGE FORM

 

SECTION 1:

 

CHECK DESIRED ACTION:

AND COMPLETE SECTIONS:

 

 

 

 

ACTIONS

 

o       Enroll in the ESPP

2 + 3 + 4 + 7

 

 

o       Elect / Change Contribution Percentage

2 + 4 + 7

 

 

o       Discontinue Contributions

2 + 5 + 7

 

 

 

 

SECTION 2:

 

Name:

 

 

 

PERSONAL DATA

 

Home Address:

 

 

 

 

 

Social Security No.:  ooo-oo-oooo

 

 

 

SECTION 3:

 

ENROLL

 

o                                    I hereby elect to participate in the ESPP,
effective at the beginning of the next Offering Period.  I elect to purchase
shares of the Common Stock of the Company pursuant to the ESPP.  I understand
that the stock certificate(s) for the shares purchased on my behalf will be
issued in street name and deposited directly into my brokerage account.  I
hereby agree to take all steps, and sign all forms, required to establish an
account with the Company’s broker for this purpose.

 

My participation will continue as long as I remain eligible, unless I withdraw
from the ESPP by filing a new Enrollment/Change Form with the Company.  I
understand that I must notify the Company of any disposition of shares purchased
under the ESPP.

 

 

 

SECTION 4:

 

ELECT/CHANGE CONTRIBUTION PERCENTAGE

 

I hereby authorize the Company to withhold from each of my paychecks such amount
as is necessary to equal at the end of the applicable Offering Period       % of
my Compensation (as provided in Section 9 of the ESPP) paid during such Offering
Period as long as I continue to participate in the ESPP.  That amount, plus any
accumulated payroll deductions thus far during the current Offering Period if
this is a change, will be applied to the purchase of shares of the Common Stock
pursuant to the ESPP.  The percentage must be a whole number (from 1%, up to a
maximum of 15%, with respect to enrollment or an increase in contribution
percentage; from 0%, up to a maximum of 14% for a decrease in contribution
percentage).

 

If this is a change to my current enrollment, this represents an o-increase
o-decrease to my contribution percentage.

 

Note:                       You may not increase your contribution at any time
within an Offering Period.  You may decrease your contribution percentage to a
percentage other than 0% twice within an Offering Period to be effective during
that Offering Period.  A change will become effective no later than the second
payroll period after the form is received by the Company.  An increase in your
contribution percentage can only take effect with the next Offering Period.

 

 

 

SECTION 5:

 

DISCONTINUE CONTRIBUTIONS

 

o                 I hereby elect to stop my contributions under the ESPP,
effective as soon as reasonably practicable after this form is received by the
Company. Accumulated payroll deductions will be returned to me without interest,
pursuant to Section 11 of the ESPP.

 

 

--------------------------------------------------------------------------------

 

SECTION 6:

 

ELECTRONIC DELIVERY AND ACCEPTANCE

 

The Company may, in its sole discretion, decide to deliver any documents related
to current or future participation in the ESPP by electronic means.  I hereby
consent to receive such documents by electronic delivery and agree to
participate in the ESPP through an on-line or electronic system established and
maintained by the Company or a third party designated by the Company.

 

 

 

SECTION 7:

 

ACKNOWLEDGMENT AND SIGNATURE

 

I acknowledge that I have received a copy of the ESPP Prospectus (which
summarizes the major features of the ESPP).  I have read the Prospectus and my
signature below indicates that I hereby agree to be bound by the terms of the
ESPP.

 

 

 

 

 

Signature:

 

 

Date:

 

 

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