EXHIBIT 10.21

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE,
AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE
RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS
PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND
QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.

 

MACROPORE BIOSURGERY, INC.

1997 STOCK OPTION AND STOCK PURCHASE PLAN

 

INCENTIVE STOCK OPTION AGREEMENT

4 Year Vesting – Month to Month

 

MacroPore Biosurgery, Inc., a Delaware corporation (the “Company”), hereby
grants an option to purchase shares of its Common Stock (the “Shares”) to the
optionee named below.  The terms and conditions of the option are set forth in
this cover sheet, in the attachment and in the Company’s 1997 Stock Option and
Stock Purchase Plan (the “Plan”).

 

Date of Option Grant:

 

Name of Optionee:

 

Optionee Social Security Number:

 

Shares of Common Stock Covered by Option:

 

Exercise Price per Share:

 

Vesting Start Date:

 

o                                    Check here if Optionee is a 10% owner (so
that exercise price must be 110% of fair market value and the Option term will
not exceed 5 years).

 

By signing this cover sheet, you agree to all of the terms and conditions
described in the attached Agreement and in the Plan, a copy of which is also
enclosed.

 

Optionee:

 

 

 

Company:

 

 

 

Christopher J. Calhoun, Chief Executive Officer

 

 

Attachment

 

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MACROPORE BIOSURGERY, INC.

1997 STOCK OPTION AND STOCK PURCHASE PLAN

 

INCENTIVE STOCK OPTION AGREEMENT

4 Year Vesting – Month to Month

 

Incentive Stock Option

 

This option is intended to be an incentive stock option under section 422 of the
Internal Revenue Code and will be interpreted accordingly.

 

 

 

Exercise and Vesting

 

This option becomes exercisable to the extent as shown in the schedule below.
This option shall vest as to 1/48th of the Shares on the one-month anniversary
of the Vesting Start Date and 1/48th of the Shares each full month of Service
thereafter.  The Shares shall be one hundred percent (100%) vested on the fourth
anniversary of the Vesting Start Date.

 

 

 

 

 

Notwithstanding the foregoing vesting schedule, upon a Change in Control, the
vesting schedule shall be accelerated so that you shall acquire a vested
interest in all then remaining unvested Shares.

 

 

 

 

 

No additional Shares shall vest after your Service to the Company has been
terminated for any reason or no reason.

 

 

 

 

 

Your Service shall cease when you cease to be actively employed by, or a
consultant or adviser to, the Company as determined in the sole discretion of
the Committee. A leave of absence, regardless of the reason, shall be deemed to
constitute the cessation of your Service unless such leave is authorized by the
Company, and you return within the time specified in such authorization.

 

 

 

Term

 

Your option will expire in any event at the close of business at Company
headquarters on the day before the 10th anniversary of the Date of Option Grant,
as shown on the cover sheet.  (It will expire earlier if your Service to the
Company terminates, as described below.)

 

 

 

Regular Termination

 

If your Service to the Company terminates for any reason except death or
Disability, then your option will expire at the close of business at Company
headquarters on the 90th day after your termination date.

 

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Death

 

In the event of your death while in Service, then your option will expire at the
close of business at Company headquarters on the date six (6) months after the
date of death.  During that six (6) month period, your estate or heirs may
exercise your option.

 

 

 

Disability

 

If your Service terminates because of your Disability, then your option will
expire at the close of business at Company headquarters on the date six (6)
months after your termination date.

 

 

 

 

 

However, for purposes of determining whether your option is entitled to ISO
status, unless your Disability satisfies the definition set forth in section
22(e)(3) of the Code (as cited below), ISO status will terminate three (3)
months after your termination date.

 

 

 

 

 

“Disability” means that you are unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment.

 

 

 

Leaves of Absence

 

For purposes of this option, your Service does not terminate when you go on a
bona fide leave of absence, that was approved by the Company in writing, if the
terms of the leave provide for continued service crediting, or when continued
service crediting is required by applicable law.  However, for purposes of
determining whether your option is entitled to ISO status, your Service will be
treated as terminating ninety (90) days after you went on leave, unless your
right to return to active work is guaranteed by law or a contract.  Your Service
terminates in any event when the approved leave ends, unless you immediately
return to active work.

 

 

 

 

 

The Company determines which leaves count for this purpose, and when your
Service terminates for all purposes under the Plan.

 

 

 

Restrictions on Exercise

 

The Company will not permit you to exercise this option if the issuance of
Shares at that time would violate any law or regulation.

 

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Notice of Exercise

 

When you wish to exercise this option, you must notify the Company by filing the
proper notice of exercise form at the address given on the form, a copy of which
is attached hereto.  Your notice must specify how many Shares you wish to
purchase.  Your notice must also specify how your Shares should be registered
(in your name only or in your and your spouse’s names as community property or
as joint tenants with right of survivorship).  The notice will be effective when
it is received by the Company.

 

 

 

 

 

If someone else wants to exercise this option after your death, that person must
prove to the Company’s satisfaction that he or she is entitled to do so.

 

 

 

Periods of Nonexercisability

 

Any other provision of this Agreement notwithstanding, the Company shall have
the right to designate one or more periods of time, each of which shall not
exceed one hundred eighty (180) days in length, during which this option shall
not be exercisable if the Company determines (in its sole discretion) that such
limitation on exercise could in any way facilitate a lessening of any
restriction on transfer pursuant to the Securities Act of 1933, as amended (the
“Securities Act”) or any state securities laws with respect to any issuance of
securities by the Company, facilitate the registration or qualification of any
securities by the Company under the Securities Act or any state securities laws,
or facilitate the perfection of any exemption from the registration or
qualification requirements of the Securities Act or any applicable state
securities laws for the issuance or transfer of any securities.  Such limitation
on exercise shall not alter the vesting schedule set forth in this Agreement
other than to limit the periods during which this option shall be exercisable.

 

 

 

Form of Payment

 

When you submit your notice of exercise, you must include payment of the option
price for the Shares you are purchasing.  Payment may be made in one (or a
combination) of the following forms:

 

 

 

 

 

•                                          Your personal check, a cashier’s
check or a money order.

 

 

 

 

 

•                                          Common Stock which has already been
owned by you for any time period specified by the Committee and which is
surrendered to the Company.  The value of the Stock, determined as of the
effective date of the option exercise, will be applied to the option price.

 

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•                                          To the extent that a public market
for the Shares exists as determined by the Company, by delivery (on a form
prescribed by the Committee) of an irrevocable direction to a securities broker
to sell Shares and to deliver all or part of the sale proceeds to the Company in
payment of the aggregate Exercise Price.

 

 

 

Withholding Taxes

 

You will not be allowed to exercise this option unless you make acceptable
arrangements to pay any withholding or other taxes that may be due as a result
of the option exercise or the sale of Shares acquired upon exercise of this
option.

 

 

 

Market Stand-Off Agreement

 

In connection with any underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the
Securities Act, including the Company’s initial public offering, you shall not
sell, make any short sale of, loan, hypothecate, pledge, grant any option for
the purchase of, or otherwise dispose or transfer for value or agree to engage
in any of the foregoing transactions with respect to any Shares without the
prior written consent of the Company or its underwriters, for such period of
time after the effective date of such registration statement, not to exceed one
hundred eighty (180) days as may be requested by the Company or such
underwriters.

 

 

 

 

 

In order to enforce the provisions of this paragraph, the Company may impose
stop-transfer instructions with respect to the Shares until the end of the
applicable stand-off period.

 

 

 

Restrictions on Resale

 

By signing this Agreement, you agree not to sell any option Shares at a time
when applicable laws, regulations or Company or underwriter trading policies
prohibit a sale.

 

 

 

 

 

You represent and agree that the Shares to be acquired upon exercising this
option will be acquired for investment, and not with a view to the sale or
distribution thereof.

 

 

 

 

 

In the event that the sale of Shares under the Plan is not registered under the
Securities Act but an exemption is available which requires an investment
representation or other representation, you shall represent and agree at the
time of exercise to make such representations as are deemed necessary or
appropriate by the Company and its counsel as a condition of issuance of the
Shares to you by the Company.

 

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The Company’s Right of First Refusal

 

In the event that you propose to sell, pledge or otherwise transfer to a third
party any Shares acquired under this Agreement, or any interest in such Shares,
the Company shall have the “Right of First Refusal” with respect to all (and not
less than all) of such Shares.  If you desire to transfer  Shares acquired under
this Agreement, you must give a written notice to the Company describing fully
the proposed transfer, including the number of Shares proposed to be
transferred, the proposed transfer price and the name and address of the
proposed transferee (the “Transfer Notice”).  The Transfer Notice shall be
signed both by you and by the proposed new transferee and must constitute a
binding commitment of both parties to the transfer of the Shares.  The Company
shall have the right to purchase all, and not less than all, of the Shares on
the terms of the proposal described in the Transfer Notice (subject, however, to
any change in such terms permitted in the next paragraph) by delivery of a
notice of exercise of the Right of First Refusal within thirty (30) days after
the date when the Transfer Notice was received by the Company.

 

 

 

 

 

If the Company fails to exercise its Right of First Refusal before or within
thirty (30) days after the date when it received the Transfer Notice, you may,
not later than ninety (90) days following receipt of the Transfer Notice by the
Company, conclude a transfer of the Shares subject to the Transfer Notice on the
terms and conditions described in the Transfer Notice.  Any proposed transfer on
terms and conditions different from those described in the Transfer Notice, as
well as any subsequent proposed transfer by you, shall again be subject to the
Right of First Refusal and shall require compliance with the procedure described
in the paragraph above.  If the Company exercises its Right of First Refusal,
the parties shall consummate the sale of the Shares on the terms set forth in
the Transfer Notice within sixty (60) days after the date when the Company
received the Transfer Notice (or within such longer period as may have been
specified in the Transfer Notice); provided, however, that in the event the
Transfer Notice provided that payment for the Shares was to be made in a form
other than lawful money paid at the time of transfer, the Company shall have the
option of paying for the Shares with lawful money equal to the present value of
the consideration described in the Transfer Notice.

 

 

 

 

 

The Company’s Right of First Refusal shall inure to the benefit of its
successors and assigns, shall be freely assignable in whole or in part and shall
be binding upon any transferee of the Shares.

 

 

 

 

 

The Company’s Right of First Refusal shall terminate in the event that Stock is
listed on an established stock exchange or is quoted regularly on the Nasdaq
Stock Market.

 

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Transfer of Option

 

Prior to your death, only you may exercise this option.  You cannot transfer or
assign this option.  For instance, you may not sell this option or use it as
security for a loan.  If you attempt to do any of these things, this option will
immediately become invalid.  You may, however, dispose of this option in your
will, or you may designate a beneficiary to exercise this option.

 

 

 

 

 

Regardless of any marital property settlement agreement, the Company is not
obligated to honor a notice of exercise from your spouse or former spouse, nor
is the Company obligated to recognize such individual’s interest in your option
in any other way.

 

 

 

No Retention Rights

 

Your option or this Agreement do not give you the right to be retained by the
Company (or any subsidiaries) in any capacity.  The Company (and any
subsidiaries) reserve the right to terminate your Service at any time and for
any reason.

 

 

 

Shareholder Rights

 

You, or your estate or heirs, have no rights as a shareholder of the Company
until a certificate for your option Shares has been issued.  No adjustments are
made for dividends or other rights if the applicable record date occurs before
your stock certificate is issued, except as described in the Plan.

 

 

 

Adjustments

 

In the event of a stock split, a stock dividend or a similar change in the
Company stock, the number of Shares covered by this option and the exercise
price per share may be adjusted pursuant to the Plan.  Your option shall be
subject to the terms of the agreement of merger, liquidation or reorganization
in the event the Company is subject to such corporate activity.

 

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Legends

 

All certificates representing the Shares issued upon exercise of this option
shall, where applicable, have endorsed thereon the following legends:

 

 

 

 

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF
A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE INITIAL HOLDER HEREOF.  SUCH
AGREEMENT PROVIDES FOR CERTAIN TRANSFER RESTRICTIONS, INCLUDING RIGHTS OF FIRST
REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SECURITIES AND CERTAIN REPURCHASE
RIGHTS IN FAVOR OF THE COMPANY UPON TERMINATION OF SERVICE WITH THE COMPANY. 
THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH
AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.”

 

 

 

 

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED
PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF
THE COMPANY IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS ARE NOT
REQUIRED.”

 

 

 

Applicable Law

 

This Agreement will be interpreted and enforced under the laws of the State of
California without regard to conflicts of laws provisions thereof.

 

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The Plan and Other Agreements

 

The text of the Plan is incorporated in this Agreement by reference.  Certain
capitalized terms used in this Agreement are defined in the Plan.

 

 

 

 

 

This Agreement and the Plan constitute the entire understanding between you and
the Company regarding this option.  Any prior agreements, commitments or
negotiations concerning this option are superseded.

 

 

 

Special Notice to California Residents

 

MacroPore’s Plan does not allow for transferability by instrument to an inter
vivos or testamentary trust, or by gift to immediate family as defined in 17 CFR
240.16a-1(e), of options that are granted pursuant to the Plan, nor does
MacroPore’s Plan allow for transferability by will or the laws or descent or
distribution of rights to purchase MacroPore’s common stock that are granted
pursuant to the Plan.

 

By signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above and in the Plan.

 

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NOTICE OF EXERCISE OF STOCK OPTION

 

MacroPore Biosurgery, Inc.

6740 Top Gun Street

San Diego, CA 92121

Attn:  Chief Financial Officer

 

Re:                               Exercise of Stock Option to Purchase Shares of
Company Stock

 

Ladies and Gentlemen:

 

Pursuant to the Stock Option Agreement dated                    (the “Stock
Option Agreement”), between MacroPore Biosurgery, Inc., a Delaware corporation
(the “Company”), and the undersigned, I hereby elect to purchase
                       shares of the common stock of the Company (the “Shares”),
at the price of $                       per Share.  My check in the amount of 
$                  and the executed Assignment Separate from Certificate are
enclosed.   The Shares are to be issued and registered in the name(s) of:

 

 

The undersigned understands there may be tax consequences as a result of the
purchase or disposition of the Shares.  The undersigned represents that he/she
has received and reviewed the Plan’s federal income tax information and
consulted with any tax consultants he/she deems advisable in connection with the
purchase or disposition of the Shares and the undersigned is not relying on the
Company for any tax advice.

 

The undersigned acknowledges that he/she has received, read and understood the
Stock Option Agreement and agrees to abide by and be bound by their terms and
conditions.  The undersigned represents that the Shares are being acquired
solely for his/her own account and not as a nominee for any other party, or for
investment, and that the undersigned purchaser will not offer, sell or otherwise
dispose of any such Shares except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws.

 

Dated:

 

 

 

 

 

 

 

 

 

 

(Signature)

 

 

 

 

 

 

 

 

(Please Print Name)

 

 

 

 

Social Security No.

 

 

 

 

 

 

 

 

 

 

(Full Address)

 

 

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Internal Revenue Service Center

Re:                               Protective Election Under Section 83(b) of the
Internal Revenue Code of 1986

 

Ladies and Gentlemen:

 

I hereby make a protective election under section 83(b) of the Internal Revenue
Code of 1986 to include in gross income on the date of transfer any excess of
fair market value over purchase price with respect to the transfer of the
property described below if such property is sold in a disqualifying disposition
under section 422 of the Code:

 

1.                                       Name:

 

2.                                       Address:               

 

3.                                       Social Security Number:

 

4.                                       Tax Year of Election:  Calendar Year
of                   .

 

5.                                       Description of Property:               
shares of Common Stock of MacroPore Biosurgery, Inc., a Delaware corporation
(the “Company”).

 

6.                                       Date of Property
Transfer:                                .

 

7.                                       Nature of Property Restrictions: 
Property is subject to the Company’s right to repurchase the stock at the
undersigned’s original purchase price if the undersigned ceases to be associated
with the Company, which right will generally lapse over a designated four (4)
year period.

 

8.                                       Fair Market Value at the Time of
Transfer:  $         per share for an aggregate of $           .  The Fair
Market Value at the time of transfer was determined without regard to any lapse
restrictions as defined in section 1.83-3(i) of the Income Tax Regulations.

 

9.                                       Amount Paid for Property: 
$              per share for an aggregate of $             .

 

10.                                 A copy of this election has been furnished
to the Company, the person for whom the services are performed.

 

 

 

Sincerely,

 

 

 

 

 

 

 

 

Signature

 

 

 

 

 

 

 

 

 

Date

 

 

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