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                                                                    EXHIBIT 10.4

                               MICRUS CORPORATION
                        2005 EMPLOYEE STOCK PURCHASE PLAN

      1.    ESTABLISHMENT OF PLAN.

      Micrus Corporation (the "COMPANY") proposes to grant options for purchase
of the Company's Common Stock (the "COMMON STOCK") to eligible employees of the
Company and its Participating Subsidiaries (as hereinafter defined) pursuant to
this 2005 Employee Stock Purchase Plan (this "PLAN"). For the purposes of this
Plan, "Parent Corporation" and "Subsidiary" shall have the same meanings as
"parent corporation" and "subsidiary corporation" in Sections 424(e) and 424(f),
respectively, of the Internal Revenue Code of 1986, as amended (the "CODE").
"Participating Subsidiaries" are Parent Corporations or Subsidiaries that the
Board of Directors of the Company (the "BOARD") designates from time to time as
corporations that shall participate in this Plan. The Company intends this Plan
to qualify as an "employee stock purchase plan" under Section 423 of the Code
(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 Section 423 of the Code shall have the same definition herein.

      2.    NUMBER OF SHARES.

      The total number of shares of Common Stock initially reserved and
available for issuance pursuant to this Plan shall be 500,000 (the "SHARE
LIMIT"), subject to adjustments effected in accordance with Section 15 of this
Plan. Notwithstanding the foregoing and subject to Section 15, the Share Limit
shall automatically increase on April 1, 2006 and April 1 of each year
thereafter until and including April 1, 2015 (unless the Plan is terminated
earlier in accordance with the provisions hereof) by the "ANNUAL INCREASE" which
shall consist of a number of shares equal to the lesser of (i) 500,000 shares,
(ii) two percent (2%) of the number of shares of common stock of the Company
Shares issued and outstanding on the immediately preceding March 31, or (iii) a
lesser number determined by the Committee, (as hereinafter defined) prior to
such April 1, provided, however, that the total number of shares available for
issuance under the Plan shall not exceed the initial Share Limit plus the
maximum potential cumulative Annual Increase. The Board may at such time as it
deems necessary implement a substantially similar plan for employees resident
outside the United States ("FOREIGN PLAN") in which case the Share Limit shall
be reduced by the number of shares issued under the Foreign Plan. Shares issued
under this Plan may consist, in whole or in part, of authorized and unissued
shares or treasury shares reacquired in private transactions or open market
purchases, but all shares issued under this Plan and the Foreign Plan shall be
counted against the Share Limit.

      3.    PURPOSE.

      The purpose of this Plan is to provide eligible employees of the Company
and Participating Subsidiaries with a convenient 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
Subsidiaries, and to provide an incentive for continued employment. For the
purposes of this Plan, "employee" shall mean any individual who is an employee
of the Company or a Participating Subsidiary. Whether an individual qualifies as
an

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employee shall be determined by the Committee, in its sole discretion. The
Committee shall be guided by the provisions of Treasury Regulation Section
1.421-7 and Section 3401(c) of the Code and the Treasury Regulations thereunder,
with the intent that the Plan cover all "employees" within the meaning of those
provisions other than those who are not eligible to participate in the Plan,
provided, however, that any determinations regarding whether an individual is an
"employee" shall be prospective only, unless otherwise determined by the
Committee (as hereinafter defined). Unless the Committee makes a contrary
determination, the employees of the Company shall, for all purposes of this
Plan, be those individuals who are carried as employees of the Company or a
Participating Subsidiary for regular payroll purposes or are on a leave of
absence for not more than 90 days. Any inquiries regarding eligibility to
participate in the Plan shall be directed to the Committee, whose decision shall
be final.

      4.    ADMINISTRATION.

      This Plan shall be administered by the Compensation Committee of the Board
(the "COMMITTEE"). Subject to the provisions of this Plan and the limitations of
Section 423 of the Code 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. 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
Board committees. All expenses incurred in connection with the administration of
this Plan shall be paid by the Company.

      5.    ELIGIBILITY.

      Any employee of the Company or the Participating Subsidiaries is eligible
to participate in an Offering Period (as hereinafter defined) under this Plan
except the following:

            (a) employees who are not employed by the Company or a Participating
Subsidiary prior to the beginning of such Offering Period or prior to such other
time period as specified by the Committee, except that employees who are
employed on the effective date of the registration statement filed by the
Company with the Securities and Exchange Commission ("SEC") under the Securities
Act of 1933, as amended (the "SECURITIES ACT") registering the initial public
offering of the Company's Common Stock shall be eligible to participate in the
first Offering Period under the Plan;

            (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 Subsidiaries or who, as a result of being granted an
option under this Plan with respect to such Offering Period, would own stock

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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 Subsidiaries;

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

            (f) employees who reside in countries for whom such employees'
participation in the Plan would result in a violation under any corporate or
securities laws of such country of residence.

      6.    OFFERING DATES.

      Except as otherwise provided below, the offering periods of this Plan
(each, an "OFFERING PERIOD") shall be of six (6) months duration commencing on
or about November 1 and May 1 of each year and ending, respectively, on the next
following October 31 and April 30 (or at such other time or times as may be
determined by the Board of Directors); provided, however, that the first such
Offering Period shall commence on the first business day on which price
quotations for the Company's Common Stock are available on the Nasdaq National
Market (the "FIRST OFFERING DATE") and shall end on October 31, 2005 (the "FIRST
OFFERING PERIOD") and there will be no Offering Period commencing on May 1,
2005. The first business day of each Offering Period is referred to as the
"OFFERING DATE." The last business day of each Offering Period is referred to as
the "PURCHASE DATE." The Committee shall have the power to change the Offering
Dates, the Purchase Dates and the duration of Offering Periods without
stockholder approval if such change is announced prior to the relevant Offering
Period or prior to such other time period as specified by the Committee.

      7.    PARTICIPATION IN THIS PLAN.

      Eligible employees may become participants in an Offering Period under
this Plan on the Offering Date, after satisfying the eligibility requirements,
by delivering a subscription agreement to the Company prior to such Offering
Date, or such other time period as specified by the Committee, provided,
however, that all eligible employees employed on or before the First Offering
Date shall be automatically enrolled in the First Offering Period.
Notwithstanding the foregoing, (i) after the filing of an effective Registration
Statement pursuant to Form S-8 for shares under the Plan, an eligible employee
may elect to decrease the number of shares of Common Stock that such employee
would otherwise be permitted to purchase pursuant to Section 8 below for the
First Offering Period and/or may elect or may as a condition to remaining in the
Plan be required to elect to purchase shares of Common Stock for the First
Offering Period through payroll deductions by delivering a subscription
agreement to the Company within thirty (30) days following the First Offering
Date; and (ii) the Committee may set a later time for delivering the
subscription agreement authorizing payroll deductions for all eligible employees
with respect to a given Offering Period. Except as provided above with respect
to the First Offering Period, an eligible employee who does not deliver a
subscription agreement to the Company after becoming eligible to participate in
an Offering Period shall not participate in that Offering Period or any
subsequent Offering Period unless such employee

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enrolls in this Plan by delivering a subscription agreement with the Company
prior to such Offering Period, or such other time period as specified by the
Committee. Once an employee becomes a participant in an Offering Period by
filing a subscription agreement, such employee shall automatically participate
in the Offering Period commencing immediately following the last day of the
prior Offering Period unless the employee withdraws or is deemed to withdraw
from this Plan or terminates further participation in the Offering Period as set
forth in Section 12 below. Such participant is not required to file any
additional subscription agreement in order to continue participation in this
Plan.

      8.    GRANT OF OPTION ON ENROLLMENT.

      Enrollment by an eligible employee in this Plan with respect to an
Offering Period shall constitute the grant (as of the Offering Date) by the
Company to such employee of an option to purchase on the Purchase Date up to
that number of shares of Common Stock determined by a fraction, the numerator of
which is the amount accumulated in such employee's payroll deduction account
during such Offering Period and the denominator of which is ninety-five percent
(95%) of the fair market value of a share of the Company's Common Stock on the
Purchase Date (but in no event less than the par value of a share of the
Company's Common Stock), provided, however, that for the First Offering Period
the numerator shall be fifteen percent (15%) of the eligible employee's
compensation for such Offering Period, unless the employee otherwise elects to
decrease the percentage of such employee's compensation as provided in Section 7
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 11(c)
below with respect to the applicable Purchase Date, or (y) the maximum number of
shares which may be purchased pursuant to Section 11(b) below with respect to
the applicable Purchase Date. The fair market value of a share of the Company's
Common Stock shall be determined as provided in Section 9 below. Notwithstanding
the foregoing, in the event of a change in generally accepted accounting
principles which would adversely affect the accounting treatment applicable to
any current Offering Period, the Committee may make such changes to the number
of Shares purchased at the end of the Offering Period or the purchase price paid
as are allowable under generally accepted accounting principles and as it deems
necessary in the sole discretion of the Committee to avoid or minimize adverse
accounting consequences.

      9.    PURCHASE PRICE.

            (a) The purchase price per share at which a share of Common Stock
shall be sold in any Offering Period shall be ninety-five percent (95%) of the
fair market value on the Purchase Date.

      For the purposes of this Plan, the term "FAIR MARKET VALUE" means, as of
any date, the value of a share of the Company's Common Stock determined as
follows:

            (a) if such Common Stock is then quoted on the Nasdaq National
Market, its closing price on the Nasdaq National Market on the date of
determination as reported in The Wall Street Journal;

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            (b) 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

            (c) if such Common Stock is publicly traded but is not quoted on the
Nasdaq National 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.

      Notwithstanding the foregoing, for purposes of the First Offering Date,
fair market value shall be the price per share at which shares of the Company's
Common Stock are initially offered for sale to the public by the Company's
underwriters in the initial public offering of the Company's Common Stock
pursuant to a registration statement filed with the SEC under the Securities
Act.

      10.   PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE
OF SHARES.

            (a) The purchase price of the shares is accumulated by regular
payroll deductions made during each Offering Period; provided, however, that for
the First Offering Period, the purchase price of the shares shall be paid by the
eligible employee in cash on the Purchase Date for the First Offering Period
unless the eligible employee elects to purchase such shares through payroll
deductions, after the filing of an effective Form S-8 registration statement
pursuant to the second sentence of Section 7 above, within thirty (30) days
following the First Offering Date. 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 all W-2 cash compensation, including, but
not limited to, base salary, wages, bonuses, incentive compensation,
commissions, overtime, shift premiums, plus draws against commissions, provided,
however that compensation shall not include any long term disability or workmens
compensation payments, car allowances, relocation payments or expense
reimbursements and further provided, however, that 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 shall be
treated as if the participant did not make such election. Except as otherwise
provided in this Plan, payroll deductions shall commence on the first payday of
the Offering Period and shall continue to the end of the Offering Period unless
sooner altered or terminated as provided in this Plan.

            (b) A participant may increase or decrease the rate of payroll
deductions during an Offering Period by filing with the Company a new
authorization for payroll deductions, in which case the new rate shall become
effective for the next payroll period commencing after the Company's receipt of
the authorization and shall continue for the remainder of the Offering Period
unless changed as described below. Such change in the rate of payroll deductions
may be made at any time during an Offering Period, but not more than one (1)
change to increase and one (1) change to decrease deductions may be made
effective during any Offering Period; provided however that a change to decrease
payroll deductions to zero shall be

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governed by Section 10(c) below. 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.

            (c) 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
with the next payroll period after the Company's receipt of the request and no
further payroll deductions shall 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
of the Company in accordance with Section 10(e) below. A participant may not
resume making payroll deductions during the Offering Period in which he or she
reduced his or her payroll deductions to zero.

            (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. No interest accrues on the payroll deductions. 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.

            (e) On each Purchase Date, for 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 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 9 of this Plan. Any cash remaining in a participant's
account after such purchase of shares shall be refunded to such participant in
cash, without interest, provided, however, that any amount remaining in such
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, without
interest, into the next Offering Period, as the case may be. 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. 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.

            (f) As soon 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 shall have
no interest or voting rights in shares covered by his or her option until such
option has been exercised.

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      11.   LIMITATIONS ON SHARES TO BE PURCHASED.

            (a) No participant shall be entitled to purchase stock under this
Plan at a rate which, when aggregated with his or her rights to purchase stock
under all other employee stock purchase plans of the Company or any Subsidiary,
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
the employee participates in this Plan. The Company shall 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) No participant shall be entitled to purchase more than the
Maximum Share Amount (as defined below) on any single Purchase Date. Prior to
the commencement of any Offering Period or prior to such time period as
specified by the Committee, the Committee may, in its sole discretion, set a
maximum number of shares which may be purchased by any employee at any single
Purchase Date (hereinafter the "MAXIMUM SHARE AMOUNT") or change the Maximum
Share Amount. The initial Maximum Share Amount shall be 2,500 shares. If a new
Maximum Share Amount is set, then all participants must be notified of such
Maximum Share Amount prior to the commencement of the next Offering Period. 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 employees participating in this Plan exceeds the number of shares then
available for issuance under this Plan, then the Company shall 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 shall 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 11
shall be returned to the participant as soon as practicable after the end of the
applicable Offering Period, without interest.

      12.   WITHDRAWAL.

            (a) Each participant may withdraw from an Offering Period under this
Plan by signing and delivering to the Company a written notice to that effect on
a form provided for such purpose. 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, and
his or her interest in this Plan shall terminate. In the event a 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 7 above for initial
participation in this Plan.

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      13.   TERMINATION OF EMPLOYMENT.

      Termination of a participant's employment for any reason, including
retirement, death or the failure of a participant to remain an eligible employee
of the Company or of a Participating Subsidiary, shall immediately terminate his
or her participation in this Plan. In such event, the payroll deductions
credited to the participant's account shall be returned to him or her or, in the
case of his or her death, to his or her legal representative, without interest.
For purposes of this Section 13, an employee shall not be deemed to have
terminated employment or failed to remain in the continuous employ of the
Company or of a Participating Subsidiary in the case of sick leave, military
leave, or any other leave of absence approved by the Board, provided, however
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.

      14.   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
payroll deductions credited to such participant's account. No interest shall
accrue on the payroll deductions of a participant in this Plan.

      15.   CAPITAL CHANGES.

      Subject to any required action by the stockholders of the Company, the
number and type of shares of Common Stock covered by each option under this Plan
which has not yet been exercised and the number and type of shares of Common
Stock which have been authorized for issuance under this Plan, including the
Annual Increase, but have not yet been placed under option (collectively, the
"RESERVES"), as well as the price per share of Common Stock covered by each
option under this Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding shares of Common Stock of the Company resulting from a stock
split or the payment of a stock dividend (but only on the Common Stock), any
other increase or decrease in the number of issued and outstanding shares of
Common Stock effected without receipt of any consideration by the Company or
other change in the corporate structure or capitalization affecting the
Company's present Common Stock, provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Committee, whose determination shall be final, binding and conclusive. Except as
expressly provided herein, no issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an option.

      In the event of the proposed dissolution or liquidation of the Company,
the Offering Period shall terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Committee. The Committee
may, in the exercise of its sole discretion in such instances, declare that this
Plan shall terminate as of a date fixed by the Committee and give each
participant the right to purchase shares under this Plan prior to such
termination. In the event of (i) a merger or consolidation in which the Company
is not the surviving corporation

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(other than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other transaction
in which there is no substantial change in the stockholders of the Company or
their relative stock holdings and the options under this Plan are assumed,
converted or replaced by the successor corporation, which assumption shall be
binding on all participants), (ii) a merger in which the Company is the
surviving corporation but after which the stockholders of the Company
immediately prior to such merger (other than any stockholder that merges, or
which owns or controls another corporation that merges, with the Company in such
merger) cease to own their shares or other equity interest in the Company, (iii)
the sale of all or substantially all of the assets of the Company, or (iv) the
acquisition, sale, or transfer of more than 50% of the outstanding shares of the
Company by tender offer or similar transaction, the Plan shall continue with
regard to Offering Periods that commenced prior to the closing of the proposed
transaction and shares shall be purchased based on the Fair Market Value of the
surviving corporation's stock on an upcoming Purchase Date, unless otherwise
provided by the Committee.

      The Committee may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, or in the event of the Company being consolidated with or merged into any
other corporation.

      16.   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 shall, the laws of descent and distribution or as provided in
Section 23 below) by the participant. Any such attempt at assignment, transfer,
pledge or other disposition shall be void and without effect.

      17.   REPORTS.

      Individual accounts shall be maintained for each participant in this Plan.
Each participant shall receive, as soon as practicable after the end of each
Offering Period, a report of his or her account setting forth the total payroll
deductions accumulated, the number of shares purchased, the per share price
thereof and the remaining cash balance, if any, carried forward to the next
Offering Period.

      18.   NOTICE OF DISPOSITION.

      Each 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

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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.

      19.   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 Subsidiary, or restrict the right of the Company or any
Participating Subsidiary to terminate such employee's employment.

      20.   EQUAL RIGHTS AND PRIVILEGES.

      All eligible employees shall have equal rights and privileges with respect
to this 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, the Committee or the Board, be reformed to comply with
the requirements of Section 423. This Section 20 shall take precedence over all
other provisions in this Plan.

      21.   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.

      22.   TERM; STOCKHOLDER APPROVAL.

      After this Plan is adopted by the Board, this Plan shall become effective
on the First Offering Date (as defined above). 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 pursuant to this Plan shall occur prior to such
stockholder approval. 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), (b) issuance of all of the shares of Common Stock reserved
for issuance under this Plan, or (c) twenty (20) years from the adoption of this
Plan by the Board.

      23.   DESIGNATION OF BENEFICIARY.

            (a) A participant may file a written 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 an Offering Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written 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.

            (b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a

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beneficiary validly designated under this Plan who is living at the time of such
participant's death, the Company shall deliver such shares or 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
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.

      24.   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 Securities Exchange Act
of 1934, as amended, 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, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

      25.   APPLICABLE LAW.

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

      26.   AMENDMENT OR TERMINATION.

      The Board may at any time amend, terminate or extend the term of this
Plan, except that any such termination cannot affect options previously granted
under this Plan, nor may any amendment make any change in an option previously
granted which would adversely affect the right of any participant, nor may any
amendment be made without approval of the stockholders of the Company obtained
in accordance with Section 22 above within twelve (12) months of the adoption of
such amendment (or earlier if required by Section 22) if such amendment would:

            (a) increase the number of shares that may be issued under this
Plan;

            (b) change the designation of the employees (or class of employees)
eligible for participation in this Plan; or

            (c) otherwise require stockholder approval under applicable law or
the requirements of any stock exchange or consolidated listing system on which
the Company's stock is then listed.

      Notwithstanding the foregoing, the Board may make such amendments to the
Plan as the Board determines to be advisable and which do not cause unfavorable
accounting treatment, including changes with respect to current Offering
Periods, if the continuation of the Plan or any Offering Period would result in
financial accounting treatment for the Plan that is different from the financial
accounting treatment in effect on the date this Plan is adopted by the Board.

                                      -11-

<PAGE>

                               MICRUS CORPORATION

                        2005 EMPLOYEE STOCK PURCHASE PLAN
                             SUBSCRIPTION AGREEMENT

                                                            New Election _______
                                                      Change of Election _______

      1. I, ________________________, hereby elect to participate in the Micrus
Corporation 2005 Employee Stock Purchase Plan (the "Plan") for the Offering
Period commencing ______________, ____ , and subscribe to purchase shares of the
Company's Common Stock in accordance with this Subscription Agreement and the
terms of the Plan.

      2. I elect to have Contributions in the amount of ____% of my
Compensation, as those terms are defined in the Plan, applied to this purchase.
I understand that this amount must not be less than 1% and not more than 15% of
my Compensation during the Offering Period. (Please note that no fractional
percentages are permitted).

      3. I hereby authorize payroll deductions from each paycheck during the
Offering Period at the rate stated in Item 2 of this Subscription Agreement. I
understand that all payroll deductions made by me shall be credited to my
account under the Plan and that I may not make any additional payments into such
account. I understand that all payments made by me shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price determined
in accordance with the Plan, and that no interest shall accrue on such amounts
at any time. I further understand that, except as otherwise set forth in the
Plan, shares will be purchased for me automatically on the Purchase Date of each
Offering Period unless I become ineligible to continue participating in the Plan
or I otherwise withdraw from the Plan by giving written notice to the Company
for such purpose.

      4. I understand that I may discontinue at any time prior to the Purchase
Date my participation in the Plan as provided in Section 12 of the Plan. I
understand that I may change the rate of deductions for future Offering Periods
by filing a new Subscription Agreement, and any such change will be effective as
of the beginning of the next Offering Period. In addition, I acknowledge that,
unless I withdraw from the Plan as provided in Section 12 of the Plan or
otherwise become ineligible to participate in the Plan, my election as set forth
above will continue to be effective for each successive Offering Period.

      5. I have received a copy of the Company's most recent description of the
Plan and a copy of the complete "Micrus Corporation 2005 Employee Stock Purchase
Plan." I understand that my participation in the Plan is in all respects subject
to the terms of the Plan, which governs the terms of this Subscription
Agreement.

      6. Shares purchased for me under the Plan should be issued in the name(s)
of (name of employee or employee and spouse only):

                                      -12-

<PAGE>

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

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

      7. I understand that this tax summary is only a summary and is subject to
change. I further understand that I should consult a tax advisor concerning the
tax implications of the purchase and sale of stock under the Plan.

      Early Disposition (Prior to Expiration of Holding Periods): I understand
that if I dispose of any shares received by me pursuant to the Plan within 2
years after the Offering Date (the first day of the Offering Period during which
I purchased such shares) or within 1 year after the Purchase Date, I will be
treated for federal income tax purposes as having received ordinary compensation
income at the time of such disposition in an amount equal to the excess of the
fair market value of the shares on the Purchase Date over the price which I paid
for the shares, regardless of whether I disposed of the shares at a price less
than their fair market value at the Purchase Date. The remainder of the gain or
loss, if any, recognized on such disposition will be treated as capital gain or
loss.

      I hereby agree to notify the Company in writing within 30 days after the
date of any such disposition, and I will make adequate provision for federal,
state or other tax withholding obligations, if any, which arise upon the
disposition of the Common Stock. The Company shall be entitled, to the extent
required by applicable law, to withhold from my Compensation any amount
necessary to comply with applicable tax withholding requirements with respect to
the purchase or sale of shares under the Plan.

      Disposition After Holding Periods: If I dispose of such shares at any time
after expiration of the 2-year and 1-year holding periods, I understand that I
will be treated for federal income tax purposes as having received compensation
income only to the extent of an amount equal to the lesser of (a) the excess of
the fair market value of the shares at the time of such disposition over the
purchase price which I paid for the shares under the option, or (b) 15% of the
fair market value of the shares on the Offering Date. The remainder of the gain
or loss, if any, recognized on such disposition will be treated as capital gain
or loss.

      8. I hereby agree to be bound by the terms of the Plan. The effectiveness
of this Subscription Agreement is dependent upon my eligibility to participate
in the Plan.

NAME (print):_________________________________________________

SIGNATURE:____________________________________________________

SOCIAL SECURITY #:____________________________________________

DATE:_________________________________________________________

SPOUSE'S SIGNATURE (necessary
if beneficiary is not spouse):

______________________________________________________________
(Signature)

______________________________________________________________
(Print name)

                                      -13-

<PAGE>

                               MICRUS CORPORATION

                        2005 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

      I, __________________________, hereby elect to withdraw my participation
in the Micrus Corporation 2005 Employee Stock Purchase Plan (the "Plan") for the
Offering Period that began on _________ ___, _____. This withdrawal covers all
Contributions credited to my account and is effective on the date designated
below.

      I understand that all Contributions credited to my account will be paid to
me within ten (10) business days of receipt by the Company of this Notice of
Withdrawal and that my option for such Offering Period will automatically
terminate, and that no further Contributions for the purchase of shares can be
made by me during such Offering Period.

      I further understand and agree that I shall be eligible to participate in
succeeding offering periods only by delivering to the Company a new Subscription
agreement.

Dated:___________________

_________________________
Signature of Employee

_________________________
Social Security Number

<PAGE>

                               MICRUS CORPORATION

                        2005 EMPLOYEE STOCK PURCHASE PLAN

                             BENEFICIARY DESIGNATION

      In the event of my death, I hereby designate the following as my
beneficiary to receive all payments and shares due to me under the Micrus
Corporation 2005 Employee Stock Purchase Plan. I understand that my Beneficiary
Designation will be effective upon acknowledgement of receipt by Micrus
Corporation

BENEFICIARY:

NAME: (Please print)

_____________________________________           Relationship: __________________

(First)       (Middle)        (Last)

_____________________________________

(Address)

_____________________________________

SIGNATURE:___________________________                 DATE: ____________________

Print Name:__________________________

SOCIAL SECURITY #:___________________

SPOUSE'S SIGNATURE (necessary if beneficiary is not Employee's spouse):

_____________________________________
(Signature)

_____________________________________
(Print name)

MAIL OR DELIVER THIS FORM TO:____________________________________________

ACKNOWLEDGEMENT OF RECEIPT BY MICRUS CORPORATION:

By:__________________________________                 Dated:____________________
Title:exhibit 10.7

 

Exhibit 10.7

November 15, 2004

Mr. John Kilcoyne

5265 Caminito Esquisito

San Diego, CA 92130

Dear John:

This letter will confirm our offer to you
President and CEO for Micrus Corporation (“Micrus”).
An outline of the terms of this offer follows:

	 	 	 
	
    
    Salary:
    

    	 	
    A salary of $250,000 annually paid bi-monthly.
    
	 
	
    
    Bonus:
    

    	 	
    Annual cash bonus based on achievement of
    mutually agreeable Company and personal goals equal to a maximum
    of 30% percent of salary.
    
	 
	
    
    Equity Participation:
    

    	 	
    A grant of options under Micrus Stock Option Plan
    to purchase 700,000 shares of common stock at a price to be
    approved by the Micrus Board of Directors. The options will vest
    over 48 months. Any unvested options will immediately vest upon
    change of control. (See Note 1).
    
	 
	
    
    Benefits:
    

    	 	
    As an employee of the company you will be
    eligible to receive the following benefits; health insurance,
    401(K) participation, vacation; sick leave and holidays.
    
	 
	
    
    Vacation:
    

    	 	
    Three weeks per full year /240 hours of maximum
    accrual. Employee may take accrued vacation after six months of
    continuous employment.
    
	 
	
    
    Relocation:
    

    	 	
    The Company will lease a mutually acceptable
    one-bedroom apartment for your initial relocation for a one-year
    period.

Following twelve months of employment, you will consider moving your
family to the San Francisco peninsula area.
    
	 
	
    
    Start Date:
    

    	 	
    November 29, 2004
    
	 
	
    
    Employment:
    

    	 	
    This offer is good through Thursday November 18,
    2004.
    

Micrus Corporation abides by employment at-will,
which permits the Company to change the terms and conditions of
employment with or without notice, including but not limited to
termination, demotion, promotion, transfer, compensation,
benefits, duties and location

	 	 	 	 	 	 	 
	

	MICRUS CORPORATION 610 PALOMAR AVENUE SUNNYVALE, CA 94085	 	TEL
408-830-5900 FAX 408-830-5910 WEBSITE www.micruscorp.com
    

 

 

of work. Neither this offer letter nor any other written or
verbal communications are intended to create a contract of
employment or a promise of long-term employment. All employment
with the company is at-will. If you are terminated without cause
you will receive salary continuation for a period of six months.

All new employees must complete a 90-day introductory period.
The introductory period in no way effects the at-will status of
all employees. The Immigration Reform and Control Act of 1986
requires all new employees to provide proof of citizenship
and/or right to work documentation acceptable to the Immigration
and Naturalization Services is enclosed for your review.

As a condition of employment, you will be required to sign the
standard Micrus Employee Proprietary Information and Inventions
Agreement, which will apply during your employment with the
Company and thereafter. The Agreement is enclosed for your
review. Upon acceptance of this offer of employment, the
Agreement must be signed in the presence of, and witnessed by
your hiring manager or the Director of Human Resources.

This letter sets forth our complete understanding regarding the
matters addressed herein and supersedes all previous agreements
or understanding between you and the Company, whether written or
oral.

I believe that you can bring a significant amount of experience
and knowledge to this position at Micrus. In return, Micrus is
an excellent opportunity for you to achieve further career and
financial success. I look forward to working with you toward the
success of Micrus’s exciting opportunities.

Please confirm your acceptance of the offer as outlined herein
by signing both copies of this letter and returning one to us in
the envelope provided. If you have any questions, or if anything
in this letter is not consistent with your understanding of our
offer, please call me immediately. This offer is withdrawn if
not accepted by Thursday, November 18, 2004.

	 	 	 
	
    
    Sincerely,
    

    	 	
    Agreed and Accepted,
    
	 
	
    
    /s/ MICHAEL R. HENSON
    

    	 	
    /s/ JOHN KILCOYNE
    
	
	 	

	
    
    Michael R. Henson
    

    	 	
    John Kilcoyne
    
	
    
    Chairman
    

    	 	
    President and Chief Executive Officer
    

MRH/ms

Enclosures

		
	Note 1: 	
    If Micrus completes a private financing greater than
    $5 million within 12 months, Mr. Kilcoyne will
    receive options to maintain his pro rata ownership.

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