Exhibit 10.1


 


CONCEPTUS, INC.


STAND-ALONE
STOCK OPTION GRANT TO PATRICIA GRAY


 


EMPLOYMENT COMMENCEMENT
NONSTATUTORY STOCK OPTION


 


THIS EMPLOYMENT COMMENCEMENT NONSTATUTORY
STOCK OPTION (the “Agreement”), dated as of December 13, 2005, is made by
and between Conceptus, Inc., a Delaware corporation (the “Company”), and
Patricia Gray, an employee of the Company (the “Optionee”).


 


WHEREAS, the Board of Directors of the
Company has determined that it would be to the advantage and best interest of
the Company and its stockholders to grant the nonstatutory stock option
provided for herein (“the Option”) to Optionee in connection with his initial
commencement of employment with the Company and that such grant is an essential
inducement to Optionee’s commencing employment with the Company as its Vice
President, R&D and Operations.


 


NOW, THEREFORE, in consideration of the
mutual covenants herein contained and other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto do hereby agree as
follows:


 


1.                   Definitions.


 


(a)      “Acquisition” means (i) any
consolidation or merger of the Company with or into any other corporation or
other entity or person in which the stockholders of the Company prior to such
consolidation or merger own less than fifty percent (50%) of the Company’s
voting power immediately after such consolidation or merger, or (ii) a
sale of all or substantially all of the assets of the Company.


 


(b)      “Administrator” means the Board or a
committee of the Board designated by the Board as being responsible for
conducting the general administration of this Option, as applicable.


 


(c)      “Board” means the Board of Directors of
the Company.


 


(d)      “Code” means the Internal Revenue Code of
1986, as amended, or any successor statute or statutes thereto. Reference to
any particular Code section shall include any successor section.


 


(e)      “Common Stock” means the Common Stock of
the Company, par value $0.003 per share.


 


(f)       “Company” means Conceptus, Inc., a
Delaware corporation.


 


(g)      “Consultant” means any consultant or
adviser if: (i) the consultant or adviser renders bona fide services to
the Company or any Parent or Subsidiary of the Company; (ii) the services
rendered by the consultant or adviser are not in connection with the offer or
sale of securities in a capital-raising transaction and do not directly or
indirectly promote or maintain a market for the Company’s securities; and (iii) the
consultant or adviser is a natural person who has contracted directly with the
Company or any Parent or Subsidiary of the Company to render such services.


 


(h)      “Director” means a member of the Board.


 


(i)       “Employee” means any person, including an
Officer or Director, who is an employee (as defined in accordance with Section 3401(c) of
the Code) of the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.


 


(j)       “Exchange Act” means the Securities
Exchange Act of 1934, as amended, or any successor statute or statutes thereto.
Reference to any particular Exchange Act section shall include any
successor section.


 


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


 

















 


(i)       If the Common Stock is listed on any
established stock exchange or a national market system, including, without
limitation, the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for
a share of such stock (or the closing bid, if no sales were reported) as quoted
on such exchange or system on the day of determination (or the most recent day
which sales were reported if none were reported on such date), as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;


 


(ii)      If the Common Stock is regularly quoted by
a recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for a
share of the Common Stock on the last market trading day prior to the day of
determination;


 


or


 


(iii)     In the absence of an established market for
the Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Administrator.


 


(l)       “Officer” means a person who is an
officer of the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder.


 


(m)     “Parent” means any corporation, whether now
or hereafter existing (other than the Company), in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
last corporation in the unbroken chain owns stock possessing more than fifty
percent of the total combined voting power of all classes of stock in one of
the other corporations in such chain.


 


(n)      “Securities Act” means the Securities Act
of 1933, as amended, or any successor statute or statutes thereto. Reference to
any particular Securities Act section shall include any successor section.


 


(o)      “Service Provider” means an Employee,
Director or Consultant.


 


(p)      “Share” means a share of Common Stock, as
adjusted in accordance with Section 10 below.


 


(q)      “Subsidiary” means any corporation,
whether now or hereafter existing (other than the Company), in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing
more than fifty percent of the total combined voting power of all classes of
stock in one of the other corporations in such chain.


 


2.                   Grant
of Option. In consideration of Optionee’s agreement to render services to the
Company and for other good and valuable consideration, the Company grants to
Optionee an Option to purchase the Common Stock (the “Shares”) set forth below,
at the exercise price set forth below (the “Exercise Price”), subject to the
terms and conditions of this Agreement. The terms of Optionee’s grant are set
forth below:


 


	
  Date of Grant:

  	
   

  	
  December 13, 2005

  
	
   

  	
   

  	
   

  
	
  Vesting Commencement Date:

  	
   

  	
  December 13, 2005

  
	
   

  	
   

  	
   

  
	
  Exercise Price per Share:

  	
   

  	
  $13.39

  
	
   

  	
   

  	
   

  
	
  Total Number of Shares Granted:

  	
   

  	
  100,000

  
	
   

  	
   

  	
   

  
	
  Total Exercise Price:

  	
   

  	
  $1,339,000

  
	
   

  	
   

  	
   

  
	
  Term/Expiration Date:

  	
   

  	
  December 13, 2015

  



 


This Option is a nonstatutory stock option
and is not intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code.


 

















 


3.                   Exercise
and Vesting Schedule. The Shares subject to this Option shall vest and become
exercisable according to the following schedule:


 


12.5% of the Shares subject to this Option
shall vest and become exercisable upon Optionee’s completion of six (6) months
of service as a Service Provider measured from the Vesting Commencement Date,
and 1/48th of the Shares subject to this Option shall vest each month
thereafter, subject to the Optionee continuing to be a Service Provider on such
dates.


 


For purposes of this Agreement, Shares
subject to this Option shall vest and become exercisable based on Optionee’s
continuous status as a Service Provider.


 


4.                   Exercise
of Option.


 


(a)      Right to Exercise.


 


(i)       This Option shall become exercisable
cumulatively according to the vesting schedule set out in Section 3
above.


 


(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 Optionee’s continuous status as an Employee
or Consultant, the exercisability of this Option is governed by Sections 7, 8,
9 and 10 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 Section 2 above.


 


(b)      Method of Exercise. This Option shall be
exercisable by delivery of an exercise notice, in the form attached as Exhibit A
(the “Exercise Notice”), which shall state the election to exercise this
Option, the number of Shares in respect of which this Option is being exercised
(the “Exercised Shares”), and such other representations and agreements as may be
required by the Company. The Exercise Notice shall be completed by Optionee and
delivered to the President, the Chief Financial Officer or Secretary of the
Company. The Exercise Notice shall be accompanied by payment of the aggregate
Exercise Price as to all Exercised Shares, including payment of any applicable
withholding tax. This Option shall be deemed to be exercised upon receipt by
the Company of such fully-executed Exercise Notice accompanied by such
aggregate Exercise Price and payment of any applicable withholding tax, which may be
paid by the withholding of shares otherwise issuable upon exercise having a
Fair Market Value equal to the statutory minimum amount required to be
withheld.


 


5.                   Method
of Payment. Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of Optionee:


 


(a)       cash,


 


(b)      check,


 


(c)       with the consent of the Administrator,
other Shares which (x) in the case of Shares acquired from the Company, have
been owned by the Optionee for more than six (6) months on the date of
surrender, and (y) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which such Option shall be
exercised,


 


(d)      with the consent of the Administrator,
surrendered Shares then issuable upon exercise of the Option having a Fair
Market Value on the date of exercise equal to the aggregate exercise price of
the Option or exercised portion thereof,


 


(e)       property of any kind which constitutes
good and valuable consideration,


 

















 


(f)       with the consent of the Administrator,
delivery of a notice that the Holder has placed a market sell order with a
broker with respect to Shares then issuable upon exercise of the Option and
that the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the Option exercise
price, provided that payment of such proceeds is then made to the Company upon
settlement of such sale, or


 


(g)      with the consent of the Administrator, any
combination of the foregoing methods of payment.


 


6.                   Restrictions
on Exercise. No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and such exercise comply with all relevant provisions of
law, including, without limitation, the Securities Act, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of the Nasdaq Stock
Market or any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with
respect to such compliance. Assuming such compliance, for income tax purposes
the Exercised Shares shall be considered transferred to Optionee on the date
this Option is exercised with respect to such Exercised Shares. As a condition
to the exercise of this Option, the Company may require the person
exercising this Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.


 


7.                   Termination
of Relationship. In the event the Optionee ceases to be a Service Provider
(other than by reason of Optionee’s death or the total and permanent disability
of Optionee as defined in Code Section 22(e)(3)), Optionee may exercise
this Option to the extent this Option was vested at the date on which Optionee’s
status as Service Provider terminates, but only within three (3) months
from such date (and in no event later than the expiration date of the term of
this Option as set forth in Section 2). To the extent that Optionee was
not entitled to exercise this Option at the date of such termination, or if
Optionee does not exercise this Option (which Optionee was entitled to
exercise) within the time specified herein, this Option shall terminate.


 


8.                   Disability
of Optionee. In the event the Optionee ceases to be a Service Provider as a
result of Optionee’s total and permanent disability as defined in Code Section 22(e)(3),
Optionee may exercise this Option for a period of twelve (12) months
following termination of Optionee’s status as a Service Provider by reason of disability
(but in no event later than the expiration date of the term of this Option as
set forth in Section 2). To the extent that Optionee was not entitled to
exercise this Option in this period, or if Optionee does not exercise this
Option (which Optionee was entitled to exercise) within the time specified
herein, this Option shall terminate.


 


9.                   Death
of Optionee. If an Optionee dies while a Service Provider, the Option may be
exercised, but only to the extent that the Option is vested on the date of death,
for twelve (12) months following the Optionee’s termination. If, at the time of
death, the Optionee is not vested as to this entire Option, the Shares covered
by the unvested portion of the Option shall immediately cease to be issuable
under the Option. The Option may be exercised by the executor or
administrator of the Optionee’s estate or, if none, by the person(s) entitled
to exercise the Option under the Optionee’s will or the laws of descent or
distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate.


 


10.             Adjustments
Upon Changes in Capitalization, Merger or Asset Sale.


 


(a)      In the event that the Administrator
determines that any dividend or other distribution (whether in the form of
cash, Common Stock, other securities, or other property), recapitalization,
reclassification, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, liquidation,
dissolution, or sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, or exchange of Common Stock or
other securities of the Company, issuance of warrants or other rights to
purchase Common Stock or other securities of the Company, or other similar corporate
transaction or event, in the Administrator’s sole discretion, affects the
Common Stock such that an adjustment is determined by the Administrator to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended by the Company to be made available under this
Agreement, then the Administrator shall, in such manner as it may deem
equitable, adjust any or all of:


 


(i)       the number and kind of shares of Common
Stock (or other securities or property) subject to this Option; and


 

















 


(ii)      the Exercise Price.


 


(b)      In the event of any transaction or event
described in Section 10(a), the Administrator, in its sole discretion, and
on such terms and conditions as it deems appropriate, by action taken prior to
the occurrence of such transaction or event and either automatically or upon
the Optionee’s request, is hereby authorized to take any one or more of the
following actions whenever the Administrator determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended by the Company to be made available under this
Agreement or to facilitate such transaction or event:


 


(i)       To provide for either the purchase of the
Option for an amount of cash equal to the amount that could have been obtained
upon the exercise of this Option or realization of the Optionee’s rights had
this Option been currently exercisable or fully vested or the replacement of
this Option with other rights or property selected by the Administrator in its
sole discretion;


 


(ii)      To provide that the Option shall be
exercisable as to all shares covered thereby, notwithstanding anything to the
contrary in this Agreement;


 


(iii)     To provide that the Option be assumed by
the successor or survivor corporation, or a parent or subsidiary thereof, or
shall be substituted for by similar options, rights or awards covering the
stock of the successor or survivor corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares and
prices;


 


(iv)     To make adjustments in the number and type
of shares of Common Stock (or other securities or property) subject to this
Option and/or in the terms and conditions (including the exercise price), and
the criteria included in the Option; and


 


(v)      To provide that immediately upon the
consummation of such event, this Option shall not be exercisable and shall
terminate; provided, that for a specified period of time prior to such event,
this Option shall be exercisable as to all Shares covered thereby, and the
restrictions imposed under this Agreement upon some or all Shares may be
terminated, notwithstanding anything to the contrary in this Agreement.


 


(c)      If the Company undergoes an Acquisition,
then any surviving corporation or entity or acquiring corporation or entity, or
affiliate of such corporation or entity, may assume this Option or may substitute
similar stock awards (including an award to acquire the same consideration paid
to the stockholders in the transaction described in this subsection 10(c))
for this Option. In the event any surviving corporation or entity or acquiring
corporation or entity in an Acquisition, or affiliate of such corporation or
entity, does not assume this Option or does not substitute similar stock awards
for this Option, then (i) if Optionee’s status as a Service Provider has
not terminated prior to such event, the vesting of this Option (and, if
applicable, the time during which this Option may be exercised) shall be
accelerated and made fully exercisable and all restrictions thereon shall lapse
at least ten (10) days prior to the closing of the Acquisition (and the
Option terminated if not exercised prior to the closing of such Acquisition),
and (ii) if Optionee’s status as a Service Provider not terminated prior
to such event then this Option shall be terminated if not exercised prior to
the closing of the Acquisition.


 


(d)      The existence of this Agreement and the
Option shall not affect or restrict in any way the right or power of the
Company or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any
issue of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to
or affect the Common Stock or the rights thereof or which are convertible into
or exchangeable for Common Stock, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.


 


11.             Non-Transferability
of Option. This Option may not be transferred in any manner otherwise than
by will or by the laws of descent or distribution and 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 Optionee.


 

















 


12.             Term
of Option. This Option may be exercised only within the term set out in Section 2
and may be exercised during such term only in accordance with the terms of
this Agreement.


 


13.             Powers
of the Administrator. The Administrator shall have the authority, in its
discretion, to interpret this Option; to accelerate or defer (with the consent
of Optionee) the exercise date of this Option; and to make all other
determinations deemed necessary or advisable for the administration of this
Option. Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions arising
under this Option.


 


14.             Successors
and Assigns. Subject to the provisions of Section 10 above, the Company may assign
any of its rights under this Option to single or multiple assignees, and this
Option shall inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Option shall be
binding upon Optionee and his heirs, executors, administrators, successors and
assigns.


 


15.             Interpretation.
Any dispute regarding the interpretation of this Agreement shall be submitted
by Optionee or by the Company forthwith to the Administrator, which shall review
such dispute at its next regular meeting. The resolution of such a dispute by
the Administrator shall be final and binding on the Company and on Optionee.


 


16.             Notices.
Any notice required or permitted hereunder shall be given in writing and shall
be deemed effectively given upon personal delivery or upon deposit in the
United States mail by certified mail, with postage and fees prepaid, addressed
to the other party at its address as shown below beneath its signature, or to
such other address as such party may designate in writing from time to
time to the other party.


 


17.             Further
Instruments. The parties agree to execute such further instruments and to take
such further action as may be reasonably necessary to carry out the
purposes and intent of this Option.


 


18.             Entire
Agreement; Governing Law; Severability. This Option and the exhibit hereto
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest
except by means of a writing signed by the Company and Optionee. This Agreement
is governed by the internal substantive laws, but not the choice of law rules,
of California. Should any provision of this Option be determined by a court of
law to be illegal or unenforceable, the other provisions shall nevertheless
remain effective and shall remain enforceable.


 


19.             Shareholder
Approval Not Required. Rule 4350(i) promulgated by the National
Associat ion of Securities Dealers, Inc. (“NASD”) generally requires
shareholder approval for stock option plans or other equity compensation arrangements
adopted by companies whose securities are listed on the Nasdaq Stock Market
pursuant to which options or stock may be acquired by officers, directors,
employees, or consultants of such companies. NASD Rule 4350(i)(1)(A)(iv) provides
an exception to this requirement for issuances of securities to a person not
previously an employee or director of the issuer, or following a bona fide
period of non-employment, as an inducement material to the individual’s
entering into employment with the issuer, provided such issuances are approved
by either the issuer’s compensation committee comprised of a majority of
independent directors or a majority of the issuer’s independent directors. The
grant of this Option is made to the Optionee, who has not previously been an
employee or director of the Company, as an inducement material to the Optionee’s
entering into employment with the Company, and this Option has been approved by
the Company’s compensation committee comprised of a majority of the Company’s
independent directors or a majority of the Company’s independent directors.
Accordingly, pursuant to NASD Rule 4350(i)(1)(A)(iv), the issuance of this
Option and the Shares issuable upon exercise of this Option are not subject to
the approval of the Company’s shareholders.


 


20.             NO
GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY
BY CONTINUING AS AN EMPLOYEE OR CONSULTANT AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE


 

















 


TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD,
OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT
TO TERMINATE OPTIONEE’S RELATIONSHIP AS AN EMPLOYEE OR CONSULTANT AT ANY TIME,
WITH OR WITHOUT CAUSE.


 


By your
signature and the signature of the Company’s representative below, you and the
Company agree that this Option is granted under and governed by the terms of
this Agreement. Optionee has reviewed the Option, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee further agrees to notify the
Company upon any change in the residence address indicated below.


 


	
  OPTIONEE:

  	
   

  	
  CONCEPTUS, INC.

  
	
   

  	
   

  	
   

  
	
  /s/ Patricia Gray

  	
   

  	
   

  	
  By:

  	
  /s/ Gregory E. Lichtwardt

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Patricia Gray

  	
   

  	
  Name: Gregory E. Lichtwardt

  
	
   

  	
   

  	
   

  
	
  Date: December 13, 2005

  	
   

  	
  Title: Executive Vice President

  
	
   

  	
   

  	
   

  
	
  Residence Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Residence
  Address]