Exhibit 10.48

 

ARTHROCARE CORPORATION

 

AMENDED AND RESTATED 2003 INCENTIVE STOCK PLAN

 

STOCK OPTION AGREEMENT

 

ArthroCare Corporation (the “Company”), pursuant to its Amended and Restated
2003 Incentive Stock Plan (the “Plan”), hereby grants to the Optionee listed
below (“Optionee”), an option to purchase the number of shares of the Company’s
Common Stock set forth below, subject to the terms and conditions of the Plan
and this Stock Option Agreement. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Stock Option
Agreement.

 

I. NOTICE OF STOCK OPTION GRANT

 

Optionee:     Date of Grant:     Vesting Commencement Date:     Exercise Price
per Share:   $ Total Number of Shares Granted:     Total Exercise Price:   $
Term/Expiration Date:   7 years from Date of Grant

 

Type of Option:   ¨  Incentive Stock Option    ¨  Nonstatutory Stock Option
Vesting Schedule:   The Shares subject to this Option shall vest according to
the following schedule:     [Twenty-five percent (25%) of the Shares subject to
the Option (rounded down to the next whole number of shares) shall vest one year
after the Vesting Commencement Date, and one forty-eighth (1/48th) of the Shares
subject to the Option (rounded down to the next whole number of shares) shall
vest on the first day of each full month thereafter, so that all of the Shares
shall be vested on the first day of the forty-eighth (48th) month after the
Vesting Commencement Date.]     or     [One forty-eighth (1/48th) of the Shares
subject to the Option (rounded down to the next whole number of shares) shall
vest one month after the Vesting Commencement Date, and one forty-eighth
(1/48th) of the Shares subject to the Option (rounded down to the next whole
number of shares) shall vest on the first day of each full month thereafter, so
that all of the Shares shall be vested on the first day of the forty-eighth
(48th) month after the Vesting Commencement Date.]

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Termination Period:   This Option may be exercised, to the extent vested, for
thirty (30) days after the termination of the Optionee’s Continuous Status as an
Employee or Consultant, or such longer period as may be applicable upon the
death or Disability of Optionee as provided herein (or, if not provided herein,
then as provided in the Plan), but in no event later than the Term/Expiration
Date as provided above.

 

II. AGREEMENT

 

1. Grant of Option. The Company hereby grants to the Optionee an Option to
purchase the Common Stock (the “Shares”) set forth in the Notice of Grant, at
the exercise price per share set forth in the Notice of Grant (the “Exercise
Price”). Notwithstanding anything to the contrary anywhere else in this Option
Agreement, this grant of an Option is subject to the terms, definitions and
provisions of the Plan adopted by the Company, which is incorporated herein by
reference.

 

If designated in the Notice of Grant as an Incentive Stock Option, this Option
is intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code; provided, however, that to the extent that the aggregate Fair Market
Value of stock with respect to which Incentive Stock Options (within the meaning
of Code Section 422, but without regard to Code Section 422(d)), including the
Option, are exercisable for the first time by the Optionee during any calendar
year (under the Plan and all other incentive stock option plans of the Company
or any Subsidiary) exceeds $100,000, such options shall be treated as not
qualifying under Code Section 422, but rather shall be treated as Nonstatutory
Stock Options to the extent required by Code Section 422. 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 these rules, the Fair Market
Value of stock shall be determined as of the time the option with respect to
such stock is granted.

 

2. Exercise of Option. This Option is exercisable as follows:

 

(a) Right to Exercise.

 

(i) This Option shall be exercisable cumulatively according to the vesting
schedule set out in the Notice of Grant. For purposes of this Stock Option
Agreement, Shares subject to this Option shall vest based on Optionee’s
Continued Status as an Employee or Consultant.

 

(ii) This Option may not be exercised for a fraction of a Share.

 

(iii) In the event of Optionee’s death, Disability or other termination of the
Optionee’s Status as an Employee or Consultant, the exercisability of the Option
is governed by Sections 5, 6 and 7 below.

 

(iv) In no event may this Option be exercised after the date of expiration of
the term of this Option as set forth in the Notice of Grant.

 

(b) Method of Exercise. This Option shall be exercisable by written Notice in a
form designated by the Company. The Notice must state the number of Shares for
which the Option is being exercised, and such other representations and
agreements with respect to such shares of Common Stock as may be required by the
Company pursuant to the provisions of the Plan. The Notice must be signed by the
Optionee and shall be delivered in person or by certified mail to the Secretary
of the Company. The Notice must be accompanied by payment of the Exercise Price,
including payment of any applicable withholding tax. This Option shall be deemed
to be exercised upon receipt by the Company of such written Notice accompanied
by the Exercise Price and payment of any applicable withholding tax.

 

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No Shares shall be issued pursuant to the exercise of an Option unless such
issuance and such exercise comply with all relevant provisions of law and the
requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to such Shares.

 

3. Lock-Up Period. Optionee hereby agrees that if so requested by the Company or
any representative of the underwriters (the “Managing Underwriter”) in
connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period (or such
longer period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the “Market Standoff Period”) following
the effective date of a registration statement of the Company filed under the
Securities Act. The Company may impose stop-transfer instructions with respect
to securities subject to the foregoing restrictions until the end of such Market
Standoff Period.

 

4. Method of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination thereof, subject to the consent of the
Administrator:

 

(a) cash;

 

(b) check;

 

(c) delivery of a properly executed exercise notice together with such other
documentation as the Administrator and the broker, if applicable, shall require
to effect an exercise of the option and delivery to the Company of the sale or
loan proceeds required to pay the exercise price;

 

(d) a reduction in the amount of any Company liability to the Optionee,
including any liability attributable to the Optionee’s participation in any
Company-sponsored deferred compensation program or arrangement;

 

(e) any combination of the foregoing methods of payment; or

 

(f) such other consideration and method of payment for the issuance of Shares to
the extent permitted by Applicable Laws.

 

5. Termination of Relationship. Upon termination of Optionee’s Continuous Status
as an Employee or Consultant, other than upon the Optionee’s death or
Disability, the Optionee may exercise his or her Option, but only within such
period of time as is specified in the Notice of Grant, and only to the extent
that the Optionee was entitled to exercise it at the date of termination (but in
no event later than the expiration of the term of such Option as set forth in
the Notice of Grant). If, after the termination, the Optionee does not exercise
his or her Option within the time specified by the Administrator, the Option
shall terminate.

 

6. Disability of Optionee. In the event that an Optionee’s Continuous Status as
an Employee or Consultant terminates as a result of the Optionee’s Disability,
the Optionee may exercise this Option at any time within twelve (12) months from
the date of such termination, but only to the extent that the Optionee was
entitled to exercise it at the date of such termination (but in no event later
than the expiration of the of the term of his or her Option as set forth in the
Notice of Grant). If, after termination, the Optionee does not exercise his or
her Option within the time specified herein, the Option shall terminate.

 

7. Death of Optionee. In the event of the death of an Optionee, the Optionee may
be exercised at any time within twelve (12) months following the date of death
(but in no event later than the expiration of the term of such Option as set
forth in the notice of Grant), by the Optionee’s estate or by a

 

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person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent that the Optionee was entitled to exercise the Option at
the date of death. If, after death, the Optionee’s estate or a person who
acquired the right to exercise the Option by bequest or inheritance does not
exercise the Option within the time specified herein, the Option shall
terminate.

 

8. Non-Transferability of Option. This Option may not be transferred in any
manner except by will or by the laws of descent or distribution . It may be
exercised during the lifetime of Optionee only by Optionee. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.

 

9. Term of Option. This Option may be exercised only within the term set out in
the Notice of Grant.

 

10. Governing Law. This Option shall be governed by and construed in accordance
with the laws of the State of Delaware.

 

[Signature page follows]

 

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This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original and all of which shall constitute one document.

 

ARTHROCARE CORPORATION By:  

 

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Name:  

 

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Title:  

 

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OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL
OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS AGREEMENT, NOR IN THE PLAN WHICH IS INCORPORATED HEREIN BY
REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH
OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S EMPLOYMENT OR
CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.

 

Optionee acknowledges receipt of a copy of the Plan and represents that he is
familiar with the terms and provisions thereof. Optionee hereby accepts this
Option subject to all of the terms and provisions hereof. Optionee has reviewed
the Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company upon any change in the residence address indicated below.

 

Dated:                       

 

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    [OPTIONEE] (Signature)     Residence Address:    

 

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