Document:

Exhibit 10.11

 

GLAUKOS CORPORATION

 

STOCK OPTION AGREEMENT

 

THIS STOCK OPTION AGREEMENT (the “Agreement”), made as of this «DAY_1B» day of «MONTH_1A», by and between Glaukos Corporation, a Delaware corporation (the “Company”), and «OPTIONEE_2» (the “Option Holder”), is made with reference to the following facts:

 

A.                                    The Company is desirous of providing additional incentives to the Option Holder in rendering services to and on behalf of the Company and its parent and subsidiary corporations and, in order to accomplish this result, has determined to grant the Option Holder the right and option to purchase shares of Common Stock, $.001 par value, of the Company (the “Common Stock”) pursuant to the Company’s 2001 Stock Option Plan (the “Plan”) on the terms and conditions set forth herein.

 

B.                                    The Option Holder is desirous of accepting said stock option on the terms and conditions set forth herein.

 

NOW, THEREFORE, it is agreed as follows:

 

1.                                      Grant.  The Company hereby grants to the Option Holder the right and option to purchase, on the terms and conditions hereinafter set forth (the “Option”), all or any part of an aggregate of «NO_SHARES_3» shares of the Common Stock at the purchase price of «EXERCISE_PRICE_4» per share (the “Exercise Price”), exercisable from time to time in accordance with the provisions of this Agreement and the Plan pursuant to which this Agreement is being executed during a period expiring at the close of business ten (10) years from the date of

 

 

this Agreement (the “Expiration Date”).  This Option is not intended to be an “incentive stock option”.  This Option will not be treated as an “incentive stock option” as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations promulgated thereunder.

 

2.                                      Exercise of Option.

 

(a)                                 In order to exercise this Option, Option Holder shall take all of the following actions:  (i) delivering or mailing to the Company, Attention:  Corporate Secretary, a notice of exercise, in the form specified by the Company, specifying therein the number of shares of Common Stock he has elected to purchase, accompanied by (A) payment in cash or by check payable to the order of the Company for the Exercise Price multiplied by the number of shares to be purchased; (B) if required, the letter described in Paragraph 6; (ii) making appropriate arrangements with the Company for the satisfaction of the withholding requirements set forth in Paragraph 8 hereof; and (iii) executing and delivering to the Company the Acknowledgment and Statement of Decision Regarding Election Pursuant to Section 83(b) and a copy of the executed Election Pursuant to Section 83(b), if applicable, in accordance with Section 5 of the Optionee Restriction Agreement attached hereto as Exhibit “A” and being executed concurrently herewith.  Notwithstanding the foregoing, the aggregate purchase price to be paid upon any exercise of this Option may, if permissible under applicable state law and in the discretion of the Board of Directors of the Company (the “Board”), be paid (1) in installments or in whole or in part by a promissory note of the Option Holder (in a form reasonably satisfactory to the Company) and secured by a security interest in the shares issued upon such exercise (provided, however, that an amount equal to the par value of the Common Stock multiplied by the number of shares being issued upon exercise shall be paid in cash) and/or (2) in whole or in

 

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part by delivery to the Company of shares of Common Stock previously acquired by the Option Holder having a Fair Market Value (determined as of the date of exercise of this Option and in the manner set forth in the Plan) equal to the portion of the aggregate purchase price being paid by delivery of such shares and, in the case of (1) or (2), if and to the extent applicable, cash or a check (or, in the case of (2) only, a note) made payable to the Company for any remaining portion of the aggregate purchase price.   If so requested by the Board, prior to the acceptance of shares of Common Stock in satisfaction (in whole or in part) of the purchase price upon such exercise of this Option, the Option Holder shall supply the Board with written representations and warranties, including without limitation a representation and warranty that the Option Holder has good and marketable title to such shares, free and clear of liens and encumbrances.  The exercise of this Option shall not be deemed effective unless and until the Option Holder has complied with all of the provisions of this Paragraph 2(a).  No partial exercise of this Option may be for less than «MIN_EXERCISE_AMOUNT_5» shares and, in no event, shall the Company be required to issue fractional shares.

 

(b)                                 This Option shall be immediately exercisable in full as to all of the shares covered hereby.

 

3.                                      Termination.  The unexercised portion of this Option shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following:

 

(a)                                 the Expiration Date;

 

(b)                                 expiration of ninety (90) days from the date of termination of the Option Holder’s engagement as a consultant or advisor to the Company or its parent or subsidiary

 

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corporations (other than a termination described in subparagraph (d) below or on account of death); provided that if the Option Holder shall die during such ninety (90) day period, the provisions of subparagraph (c) below shall apply;

 

(c)                                  expiration of one (1) year following the date of the Option Holder’s death, if such death occurs during the Option Holder’s engagement as a consultant or advisor to the Company or its parent or subsidiary corporations;

 

(d)                                 expiration of one (1) year from the date of termination of the Option Holder’s engagement as a consultant or advisor to the Company or its parent or subsidiary corporations if such termination is attributable to a disability of the Option Holder within the meaning of Section 22(e)(3) of the Code.  The Board shall have the right to determine whether the Option Holder’s termination is attributable to a disability of the Option Holder within the meaning of Section 22(e)(3) of the Code, such determination of the Board to be final and conclusive;

 

(e)                                  upon the termination of the Option Holder’s engagement as a consultant or advisor to the Company or its parent or subsidiary corporations if such termination constitutes or is attributable to a breach by the Option Holder of his engagement agreement, if any, with the Company or its parent or subsidiaries or if the Option Holder is discharged for cause.  The Board shall have the right to determine whether the Option Holder has been discharged for cause and the date of such discharge; such determination of the Board to be final and conclusive.

 

Nothing contained herein or in the Plan shall obligate the Company or its parent or subsidiary corporations to continue to engage the Option Holder as a consultant or advisor or in any other capacity with the Company, nor confer upon the Option Holder any right to continue in

 

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such engagement or in any other capacity with the Company or its parent or subsidiary corporations, nor limit in any way the right of the Company or its parent or subsidiary corporations to amend, modify or terminate his compensation or engagement at any time.

 

4.                                      Non-Assignability.  This Option and the rights and privileges granted hereby shall not be transferred other than by will or by the laws of descent and distribution.  Upon any attempt to transfer this Option or any right or privilege granted hereby other than by will or by the laws of descent and distribution and contrary to the provisions hereof, this Option and said rights and privileges shall immediately become null and void.

 

5.                                      Anti-Dilution.  In the event that the shares of Common Stock subject to this Option shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether by reason of merger, consolidation, recapitalization, reclassification, split-up, combination of shares, or otherwise) or if the number of such shares of Common Stock shall be increased solely through the payment of a stock dividend, then there shall be substituted for or added to each share of stock of the Company theretofore appropriated or thereafter subject to this Option the number and kind of shares of stock or other securities into which each outstanding share of stock of the Company shall be so changed, or for which each such share shall be exchanged, or to which each such share shall be entitled, as the case may be.  This Option shall also be appropriately amended as to Exercise Price and other terms as may be necessary to reflect the foregoing events.  In the event there shall be any other change in the number or kind of the outstanding shares of stock of the Company subject to this Option, or of any stock or other securities into which such stock shall have been changed, or for which it shall have been exchanged, then if the Board, in its sole discretion, determines that such change equitably requires an adjustment in this Option, such

 

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adjustments shall be made in accordance with such determination.  The Option Holder understands that if, subsequent to the date of this Agreement, the Company issues additional shares of the Company’s securities, the percentage ownership of the Company represented by the number of shares of Common Stock subject to this Option will be proportionately reduced by each such issuance and that the number of shares covered hereby and the Exercise Price shall not be adjusted except as otherwise set forth in this Agreement.

 

Fractional shares resulting from any adjustment in this Option pursuant to this Paragraph 5 shall be eliminated.  Notice of any adjustment shall be given by the Company to the Option Holder, such adjustment (whether or not such notice is given) to be final and conclusive for all purposes hereof.

 

6.                                      Securities Law.  The shares of Common Stock subject to this Option have not been registered under the Securities Act of 1933, as amended (the “Act”), or registered or qualified under any applicable state securities laws.  Accordingly, the Option Holder agrees that he will take any shares of Common Stock acquired pursuant to the exercise hereof in good faith for purposes of investment and without a view to any distribution thereof in violation of the Act and the rules and regulations promulgated thereunder (or such applicable state securities laws).  The Option Holder understands that the Company will be relying upon the truth and accuracy of this representation in issuing the Common Stock without first registering the issuance thereof under the Act or under applicable state securities laws.  The Option Holder acknowledges that he is aware that the Common Stock issuable upon exercise hereof has not been registered (and there is no obligation on behalf of the Company to register such shares) under the Act (or such applicable state securities laws) and that such Common Stock will not be freely tradeable and must be held by him indefinitely or until such time, if any, as herein provided and until such

 

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Common Stock is either registered under the Act or transfers may be made pursuant to an exemption from such registration as is accorded by the Act or the rules and regulations promulgated thereunder (and such applicable state securities laws).  In this regard, the Option Holder acknowledges that he is also aware that, if the exemption under Rule 144 of the rules and regulations promulgated under the Act becomes applicable to the Common Stock, shares of the Common Stock may be sold pursuant to said Rule only (i) following the filing of any required reports by the Company under the Securities and Exchange Act of 1934, as amended, (ii) after the minimum holding period specified in said Rule has been satisfied, and (iii) thereafter, only in limited amounts in the manner prescribed in said Rule.

 

The Option Holder agrees that at the time of any exercise hereunder, he will provide the Company with a letter embodying the aforementioned expressions of understanding and intent and agrees that any shares issued to him following the exercise of any option arising hereunder may bear such restrictive legend as the Company may deem necessary to reflect the status of such shares under the Act (and such applicable state securities laws).  Before consenting to the removal of such legend and the transfer of any such shares, the Company may insist upon the delivery to it of an opinion from counsel, satisfactory to it, that the contemplated transfer does not constitute a violation of the Act (or such applicable state securities laws).

 

Notwithstanding the foregoing, the provisions of this Paragraph 6 shall be suspended and be of no force or effect during any period during which the shares of Common Stock subject to this Option are registered under the Act.

 

7.                                      Rights as a Stockholder.  Neither the Option Holder nor any other person legally entitled to exercise this Option shall be entitled to any of the rights or privileges of a stockholder

 

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of the Company in respect to any shares issuable upon any exercise of this Option unless and until a certificate or certificates representing such shares shall have been actually issued and delivered to him.

 

8.                                      Withholding Obligations.

 

(a)                                 The Option Holder hereby authorizes withholding from payroll and any other amounts payable to the Option Holder at the time the Option Holder exercises this Option, in whole or in part, or at any time thereafter as requested by the Company, and the Option Holder otherwise agrees to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate (as defined in the Plan), if any, which arise in connection with the exercise of this Option.

 

(b)                                 Upon the Option Holder’s request and subject to approval by the Company, in its sole discretion, and compliance with any applicable conditions or restrictions of law, the Company may withhold from fully vested shares of Common Stock otherwise issuable to the Option Holder upon the exercise of this Option a number of whole shares of Common Stock having a Fair Market Value (determined as of the date of exercise of this Option and in the manner set forth in the Plan) not in excess of the minimum amount of tax required to be withheld by law.  If the date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of this Option, share withholding pursuant to the preceding sentence shall not be permitted unless the Option Holder makes a proper and timely election under Section 83(b) of the Internal Revenue Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date

 

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of exercise of this Option.  Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of this Option that are otherwise issuable to the Option Holder upon such exercise.  Any adverse consequences to the Option Holder arising in connection with such share withholding procedure shall be the Option Holder’s sole responsibility.

 

(c)                                  Notwithstanding any provision herein to the contrary, the Option Holder may not exercise this Option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied.  Accordingly, the Option Holder may not be able to exercise this Option when desired even though this Option is vested, and the Company shall have no obligation to issue a certificate for such shares of Common Stock.

 

9.                                      Notices.  Whenever under this Agreement notice is required to be given in writing, it shall be deemed to have been duly given upon personal delivery, upon deposit with an air courier guaranteeing overnight delivery, or two (2) days after deposit in mail if mailed by registered or certified mail, postage prepaid, to the Company at the address set forth below or to Option Holder at the address set forth on the last page hereof (or to such other address as either party shall have indicated to the other party by notice in accordance with this Paragraph):

 

Company:                                                                                     Glaukos Corporation
 26051 Merit Circle, Suite 103
 Laguna Hills, CA 92653

 

10.                               Benefit.  Except as otherwise specifically provided herein, this Agreement shall be binding upon and shall operate for the benefit of the Company and the Option Holder and his Successors (as defined in the Plan).

 

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11.                               GOVERNING LAW.  THIS AGREEMENT AND ANY RIGHTS AND OBLIGATIONS ARISING HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

 

12.                               Entire Agreement.  This Agreement, the Plan and the Optionee Restriction Agreement (as defined below) together represent the entire agreement between the parties hereto regarding the options on the Company’s Common Stock granted hereunder and supersede any and all previous written or oral agreements or discussions between the parties and any other person or legal entity concerning the transactions contemplated herein or therein.  Except as otherwise expressly provided herein, this Agreement cannot be amended or modified except by a written instrument executed by the parties hereto.

 

13.                               Construction.  The headings of the Paragraphs are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  If any of the provisions of this Agreement shall be unlawful, void or for any reason unenforceable, they shall be deemed separable from, and shall in no way affect the validity or enforceability of, the remaining provisions of this Agreement.

 

14.                               Interpretation.  In interpreting any provision of this Agreement, the masculine shall include the feminine and neuter, and vice versa and the singular shall include the plural, and vice versa.

 

15.                               Further Acts.  The parties hereto agree to execute and deliver such further instruments as may be reasonably necessary to carry out the intent of this Agreement.

 

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16.                               Optionee Restriction Agreement.  Concurrently herewith, Option Holder has executed and delivered to the Company an Optionee Restriction Agreement in substantially the form of Exhibit “A” to this Agreement (the “Optionee Restriction Agreement”).

 

IN WITNESS WHEREOF, the parties have executed this Stock Option Agreement as of the day and year first above written.

 

 

	
GLAUKOS   CORPORATION
    	
 
    	
OPTION   HOLDER:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Thomas   W. Burns,
    	
 
    	
«OPTIONEE_2»
    
	
 
    	
President   and Chief Executive Officer
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Address   for Notice:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
«ADDRESS_6»
    

 

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CONSENT OF SPOUSE

 

The undersigned, the spouse of the Option Holder under the foregoing Stock Option Agreement (“Agreement”), does hereby consent to and approve of each of the terms and conditions of the Agreement and agrees that the undersigned’s interest in the Agreement and the shares of Common Stock issuable upon exercise of the option granted thereunder are subject to such terms and conditions.

 

Dated as of «DATE_1»

 

 

	
 
    	
 
    

 

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GLAUKOS CORPORATION

 

OPTIONEE RESTRICTION AGREEMENT

 

THIS OPTIONEE RESTRICTION AGREEMENT (the “Agreement”) is made and entered into as of «DATE_1» between Glaukos Corporation, a Delaware corporation (the “Company”), and «OPTIONEE_2» (“Optionee”).

 

R E C I T A L S:

 

A.                                    Optionee owns as of the date hereof an option granted by the Company to purchase all or any part of an aggregate of «NO_SHARES_3» shares (the “Shares”) of the Common Stock of the Company, par value $.001 per share, at a purchase price of «EXERCISE_PRICE_4» per Share.  The term “Shares” refers to all shares acquired or which could be acquired pursuant to such option and to all securities received in addition thereto or in replacement thereof, pursuant to or in consequence of any stock dividend, stock split, recapitalization, merger, reorganization, exchange of shares or other similar event.

 

B.                                    In order to provide assurance to certain present and future holders (collectively, the “Investors”) of the Preferred Stock of the Company (the “Preferred Shares”) and thereby to assist in future equity financings of the Company, Optionee is willing to enter into this Agreement for the benefit of the Company, the Investors and any other person or entity who holds stock of the Company from time to time.

 

THE PARTIES AGREE AS FOLLOWS:

 

1.                                      Company’s Right of First Refusal Respecting Shares.

 

1.1                               Right of First Refusal.  Subject to Section 1.5, in the event that the Optionee proposes to sell, pledge, or otherwise transfer any Shares, the Company shall have a right of first refusal (the “Right of First Refusal”) with respect to such Shares.  Optionee shall give a written notice (the “Transfer Notice”) to the Company describing fully any proposed transfer of Shares, 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 shall be signed both by the Optionee and by the proposed transferee.  The Company shall have the right to purchase all, but not less than all, of the Shares subject to the Transfer Notice at a price per share equal to the lower of (i) the proposed per share transfer price, or (ii) the fair market value of a share of Common Stock of the Company, as most recently determined by the Board of Directors of the Company prior to delivery of the Transfer Notice, by delivery of a notice of exercise of the Company’s Right of First Refusal within thirty (30) days after the date the Transfer Notice is delivered to the Company.  The Company’s rights under this Section 1.1 shall be freely assignable, in whole or in part.

 

1.2                               Transfer of Exercised Shares.  If the Company fails to exercise the Right of First Refusal within thirty (30) days from the date the Transfer Notice is delivered to the Company, the Optionee may, not later than ninety (90) days following delivery to the Company of the Transfer Notice, conclude a transfer of the Shares subject to the Transfer Notice on the

 

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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 the Optionee, shall again be subject to the Right of First Refusal and shall require compliance by the Optionee with the procedure described in Section 1.1 of this Agreement.  If the Company exercises the Right of First Refusal, the parties shall consummate the sale of Shares on the terms set forth in the Transfer Notice; provided, however, in the event the Transfer Notice provides for payment for the Shares other than in cash, the Company shall have the option of paying for the Shares by the discounted cash equivalent of the consideration described in the Transfer Notice.

 

1.3                               Binding Effect.  The Right of First Refusal shall inure to the benefit of the successors and assigns of the Company and shall be binding upon any transferee of Shares other than a transferee acquiring Shares in a transaction where the Company failed to exercise the Right of First Refusal (a “Free Transferee”) or a transferee of a Free Transferee.

 

1.4                               Termination of the Company’s Right of First Refusal.  Notwithstanding anything in this Section 1, the Company shall have no Right of First Refusal, and Optionee shall have no obligation to comply with the procedures in Sections 1.1 through 1.3 after the earlier of (i) the Company’s initial registered public offering of Common Stock to the public generally, or (ii) the date ten (10) years after the date of this Agreement.

 

1.5                               Limitations to Rights.  Without regard and not subject to the provisions of Sections 1.1 and 2.1;

 

(i)                                     The Optionee may sell or otherwise assign for consideration Shares to any or all of his ancestors, descendants, spouse, or members of his immediate family, or to a custodian, trustee (including a trustee of a voting trust), executor, or other fiduciary for the account of his ancestors, descendants, spouse, or members of his immediate family, provided that each such transferee or assignee, prior to the completion of the sale, transfer, or assignment, shall have executed documents assuming the obligations of the Optionee under this Agreement with respect to the transferred securities.

 

(ii)                                  To the extent permitted by the Company, the Optionee may sell or transfer Shares in the first firmly underwritten public offering of securities of the Company registered under the Securities Act of 1933, as amended (the “Act”).

 

2.                                      Rights of Co-Sale.

 

2.1                               The Rights of Investors.  If at any time Optionee proposes to sell any Shares to parties other than the Investors or their assignees or transferees (the “Eligible Holders”) in a transaction (the “Transaction”) not registered under the Act in reliance upon a claimed exemption thereunder, then to the extent the Company has not exercised its Right of First Refusal as to any Shares being sold, any Eligible Holder (a “Selling Holder”) which notifies the Company in writing, within thirty (30) days after receipt of the notification from the Optionee referred to in Section 2.2, shall have the opportunity to sell a pro rata portion of Shares which the Optionee proposes to sell to such third party in the Transaction; whereupon the Optionee shall assign so much of his interest in the agreement of sale as the Selling Holder shall be entitled to

 

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and shall request hereunder, and the Selling Holder shall assume such part of the obligations of the Optionee under such agreement as shall relate to the sale of the Shares by the Selling Holder.  For the purposes of this Section 2, the “pro rata portion” which the Selling Holder shall be entitled to sell shall be an amount of shares equal to the total amount of Shares proposed to be sold multiplied by a fraction, the numerator of which is the number of shares of Common Stock issuable upon conversion of the Preferred Shares and shares of Common Stock owned by a Selling Holder, and the denominator of which is the total number of such shares owned by all participating Selling Holders and the Optionee.  Each Selling Holder shall notify the Optionee whether it elects to sell an amount equal to, more than or less than its pro rata portion of the Shares so offered.  Each Selling Holder shall be entitled to apportion Shares to be sold among its partners and affiliates, provided that such Selling Holder notifies the Company of such allocation.

 

2.2                               Notice.  Prior to any sale by the Optionee of any Shares, the Optionee shall notify each Eligible Holder and the Company, in writing, of his intention to sell such securities, setting forth the general terms under which he proposes to make such sale.  Such notice shall be signed by the third parties, or a representative of such third parties, or shall be accompanied by a letter of intent signed by the third parties or representatives of such third parties, to whom the sale, assignment or transfer is proposed and shall indicate the third parties’ concurrence with the description of the terms.

 

2.3                               Failure to Notify.  If within thirty (30) days after the Optionee gives his notice to the Eligible Holders, the Eligible Holders do not notify the Company that they desire to sell all of their pro rata portion of the Shares described in such notice at the price and on the terms and conditions set forth therein, then the Optionee may, not later than ninety (90) days following delivery of the notice under Section 2.2, as to the Shares to which the Eligible Holders do not indicate a desire to sell, conclude a transfer on the terms and conditions described in the notice.  In the event the Optionee has not sold the Shares or entered into an agreement to sell the Shares within such ninety (90) days, the Optionee shall not thereafter sell any Shares without first notifying the Eligible Holders and the Company in the manner provided above.  The exercise or non-exercise of the right to participate in one or more sales of Shares made by the Optionee shall not adversely affect an Eligible Holder’s right to participate in subsequent sales of Shares by the Optionee pursuant to Section 2.1 hereof.

 

2.4                               Termination.  The obligations of the Optionee under this Section 2 shall terminate and be of no further force and effect upon the occurrence the earlier of the two events described in subsection 1.4 of this Agreement.

 

3.                                      Market Standoff.  Optionee hereby agrees that if so requested by the Company or any representative of the underwriters in connection with any registration of the offering of any securities of the Company under the Act, Optionee shall not sell or otherwise transfer any Shares for a period of one hundred eighty (180) days following the effective date of a Registration Statement filed under the Act; provided, however, that such restriction shall apply only to the first two Registration Statements of the Company to become effective under the Act which include securities to be sold on behalf of the Company to the public in an underwritten public offering under the Act.  The Company may impose stop-transfer instructions with respect to

 

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securities subject to the foregoing restrictions until the end of such one hundred eighty (180) day period.

 

4.                                      Company’s Right to Repurchase Upon Termination of Engagement.

 

4.1                               Repurchase Right.  The Shares shall be subject to a right (but not obligation) of repurchase in favor of the Company (the “Right of Repurchase”).  If the Optionee’s engagement as a consultant or advisor to the Company or an affiliate terminates for any reason whatsoever (the “Engagement Termination”) before the Right of Repurchase expires in accordance with Schedule 1 hereto, the Company may purchase Shares subject to the Right of Repurchase at a purchase price per share equal to the purchase price per share paid by the Optionee for the Shares (exclusive of any taxes paid upon acquisition of the stock).  The Optionee may not dispose of or transfer any Shares while such Shares are subject to the Right of Repurchase and any such attempted transfer shall be null and void.  The Company’s rights under this Section 4.1 shall be freely assignable, in whole or in part.

 

4.2                               Repurchase Procedure.  The Company’s Right of Repurchase shall terminate if not exercised by written notice from the Company to the Optionee within ninety (90) days from the date on which the Company learns of the Engagement Termination.  If the Company exercises its Right of Repurchase, the Optionee shall promptly endorse and deliver to the Company the stock certificates representing the Shares being repurchased, and the Company shall then pay promptly (but in no event later than ninety (90) days after the date of Engagement Termination), pursuant to the provisions of Section 4.3 of this Agreement, the total repurchase price to the Optionee.

 

4.3                               Repurchase Payment.  If, at the time of repurchase, any notes are outstanding which represent any portion of the total purchase price for Shares being so repurchased, the repurchase price shall be paid first by cancellation of any obligation for accrued but unpaid interest under such notes, next by cancellation of principal under such notes, and finally by payment of cash or check.

 

4.4                               Binding Effect.  The Company’s Right of Repurchase shall inure to the benefit of the successors and assigns of the Company and shall be binding upon the Optionee and any representative, executor, administrator, heir, or legatee of the Optionee.

 

5.                                      Taxes.  Concurrently with the exercise of the option to which this Agreement is an exhibit, the Optionee shall execute and deliver to the Company a copy of the Acknowledgment and Statement of Decision Regarding Election Pursuant to Section 83(b) of the Internal Revenue Code (the “Acknowledgement”) attached hereto as Exhibit 5A.  The Optionee shall execute and submit with the Acknowledgement a copy of the Election Pursuant to Section 83(b) of the Code, attached hereto as Exhibit 5B, if the Optionee has indicated in the Acknowledgment his or her decision to make such an election.  The Optionee should consult his or her own tax advisor to determine if there is a comparable election to file in the state of his or her residence and whether such filing is desirable under the circumstances.  The Company may withhold from the Optionee’s wages, or require the Optionee to pay to the Company, any applicable withholding or employment taxes resulting from the lapse of any restrictions imposed on the Shares.

 

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6.                                      Stock Certificate Restrictive Legends.  Stock certificates evidencing Shares may bear such restrictive legends as the Company and the Company’s counsel deem necessary or advisable under applicable law or pursuant to this Agreement, including, without limitation, the following legends:

 

“THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A RIGHT OF FIRST REFUSAL BY THE COMPANY AND A RIGHT OF CO-SALE ON THE PART OF CERTAIN STOCKHOLDERS PURSUANT TO THE PROVISIONS OF AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL PURCHASER OF SUCH SECURITIES RELATING TO SUCH SECURITIES, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT.”

 

“THE SECURITIES REPRESENTED HEREBY MAY BE SUBJECT TO A RIGHT OF REPURCHASE BY THE COMPANY, PURSUANT TO THE PROVISIONS OF AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL PURCHASER OF SUCH SECURITIES RELATING TO SUCH SECURITIES SHOULD THE PERSON INITIALLY ISSUED THESE SECURITIES CEASE TO BE ENGAGED AS A CONSULTANT OR ADVISOR TO THE COMPANY OR ANY AFFILIATE THEREOF.”

 

“THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR A PERIOD OF 180 DAYS FOLLOWING THE EFFECTIVE DATE OF A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, FOR AN OFFERING OF THE COMPANY’S SECURITIES AS MORE FULLY PROVIDED IN THE AGREEMENT RELATING TO THE OPTION TO PURCHASE SUCH SECURITIES BETWEEN THE COMPANY AND THE ORIGINAL PURCHASER OF SUCH SECURITIES.”

 

7.                                      Binding Effect.  Subject to the limitations set forth in this Agreement, this Agreement shall be binding upon, and inure to the benefit of, the executors, administrators, heirs, legal representatives, successors, and assigns of the parties hereto.

 

8.                                      Damages.  Optionee shall be liable to the Company for all costs and damages, including incidental and consequential damages, resulting from a disposition of Shares which is not in conformity with the provisions of this Agreement.

 

9.                                      Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts entered into and wholly to be performed within the State of California by California residents.  The parties

 

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agree that the exclusive jurisdiction and venue of any action with respect to this Agreement shall be in the Superior Court of California for the County of Orange or the United States District Court for the Central District of California, and each of the parties hereby submits itself to the exclusive jurisdiction and venue of such courts for the purpose of such action.  The parties agree that service of process in any such action may be effected by delivery of the summons to the parties in the manner provided for delivery of notices set forth in Section 10.

 

10.                               Notices.  All notices and other communications under this Agreement shall be in writing.  Unless and until Optionee is notified in writing to the contrary, all notices, communications and documents directed to the Company and related to the Agreement, if not delivered by hand, shall be mailed, addressed as follows:

 

GLAUKOS CORPORATION

26051 Merit Circle, Suite 103
 Laguna Hills, CA 92653
 Attention: President

 

Unless and until the Company is notified in writing to the contrary, all notices, communications and documents intended for Optionee and related to this Agreement, if not delivered by hand, shall be mailed to Optionee’s last known address as shown on the Company’s books.  Notices and communications shall be mailed by registered or certified mail, return receipt requested, postage prepaid.  All notices related to this Agreement shall be deemed received upon delivery or, if mailed, within five (5) days after mailing in accordance with this Section 10.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	
 
    	
 
    	
GLAUKOS   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Thomas   W. Burns,
    
	
 
    	
 
    	
 
    	
President   and Chief Executive Officer
    

 

Optionee hereby accepts and agrees to be bound by all of the terms and conditions of this Agreement.

 

	
 
    	
 
    	
Optionee:
    	
 
    
	
 
    	
 
    	
 
    	
«OPTIONEE_2»
    

 

Optionee’s spouse indicates by the execution of this Agreement «GENDER_7» consent to be bound by the terms herein as to «GENDER_7» interests, whether as community property or otherwise, if any, in the Shares.

 

	
 
    	
 
    	
Optionee’s   Spouse:
    	
 
    

 

6

 

EXHIBIT 5A

 

ACKNOWLEDGMENT AND STATEMENT

 

OF DECISION REGARDING ELECTION

 

PURSUANT TO SECTION 83(b) OF

 

THE INTERNAL REVENUE CODE

 

The undersigned (which term includes the undersigned’s spouse), a holder of shares of common stock of GLAUKOS CORPORATION, a Delaware corporation (the “Company”), hereby states as follows:

 

1.             The undersigned acknowledges receipt of a copy of the Company’s Optionee Restriction Agreement (the “Agreement”).  The undersigned has carefully reviewed the Agreement.

 

2.             The undersigned either [check as applicable]:

 

o            (a)           has consulted, and has been fully advised by, the undersigned’s own tax advisor,                                                   , whose business address is                                                                                    , regarding the federal, state and local tax consequences of the Agreement, and particularly regarding the advisability of making elections pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), and pursuant to the corresponding provisions, if any, of applicable state laws; or

 

o            (b)           has knowingly chosen not to consult such a tax advisor.

 

3.             The undersigned hereby states that the undersigned has decided [check as applicable]:

 

o            (a)           to make an election pursuant to Section 83(b) of the Code, and is submitting to the Company an executed form which is attached as Exhibit 5B to the Agreement; or

 

o            (b)           not to make an election pursuant to Section 83(b) of the Code.

 

4.             Neither the Company nor any subsidiary or representative of the Company had made any warranty or representation to the undersigned with respect to the tax consequences of the Agreement or of the making or failure to make an election pursuant to Section 83(b) of the Code or the corresponding provisions, if any, of applicable state law.

 

5.             The undersigned is also submitting to the Company an executed original of an election, if any is made, of the undersigned pursuant to provisions of state law corresponding to

 

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Section 83(b) of the Code, if any, which are applicable to the undersigned’s purchase of shares under the Agreement.

 

 

	
Date:
    	
                                    ,   20
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
[Purchaser]
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
                                    ,   20
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
[Purchaser]
    

 

2

 

EXHIBIT 5B

 

ELECTION PURSUANT TO SECTION 83(b) OF THE

 

INTERNAL REVENUE CODE

 

The undersigned hereby elects pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), to include in the undersigned’s gross income the excess (if any) of (x) the fair market value of the property described below, over (y) the amount the undersigned paid for such property plus, if the shares to which this election relates were acquired by exercise of an “incentive stock option” within the meaning of Section 422 of the Code, the amount excluded from the undersigned’s income pursuant to Sections 421 and 422 of the Code.  This election is made to the same effect, and with the same limitations, with respect to the analogous provisions of Sections 83(b) (and, if applicable, Sections 421 and 422) of the Code under any applicable state statute.  Pursuant to applicable Treasury Regulations the following information is provided:

 

1.             The undersigned’s name, address and taxpayer identification (social security) number are:

 

Name:

 

Address:

 

Social Security #:

 

2.             The property with respect to which the election is made consists of                      shares of Common Stock of GLAUKOS CORPORATION, a Delaware corporation (the “Company”).

 

3.             The date on which the above property was transferred to the undersigned was                         , 20    , and the taxable year to which this election relates is 20    .

 

4.             The above property is subject to the following restrictions:  (a) a right of repurchase by the Company at the initial purchase price, if the undersigned ceases to be an employee of, or a consultant to, the Company or an affiliate of the Company; and (b) a right of first refusal by the Company should the undersigned wish to transfer the shares to a person or entity other than the Company.

 

5.             The fair market value of the above property at the time of transfer (determined without regard to any restrictions other than those which by their terms will never lapse) is $                     per share.

 

6.             The amount paid for the above property by the undersigned was $                     per share.

 

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7.             A copy of this election has been furnished to the Company, and a copy will be filed with the income tax return of the undersigned to which this election relates.

 

8.             If the shares to which this election relates were acquired by exercise of an “incentive stock option” within the meaning of Section 422 of the Code, this election is protective only, is made solely to bar application of Section 83(a) of the Code, and is not an election of the undersigned actually to recognize income which apart from this election is protected from recognition by Sections 421 and 422 of the Code.  However, the undersigned does intend for this election to be an effective election under Section 83(b) of the Code for all purposes of the Alternative Minimum Tax, and in particular for purposes of computing the adjustment described in Section 56(b)(3) of the Code.

 

If the shares to which this election relates were acquired by exercise of an incentive stock option, the amount expressly excluded from income pursuant to Sections 421 and 422 of the Code is $                     per share.

 

Dated:                                                     , 20    .

 

 

	
 
    	
 
    

 

2

 

SCHEDULE 1 OF THE
 OPTIONEE STOCK RESTRICTION
 AGREEMENT

 

The Right of Repurchase shall expire on «VESTING_DATE_8» with respect to twenty-five percent (25%) of the total number of Shares and thereafter with respect to an additional 1/36 of the total remaining number of Shares at the end of each of the immediately following calendar months.

 

The Right of Repurchase shall expire with respect to all of the Shares acquired upon the consummation of a Company Sale.  For purposes hereof, a “Company Sale” shall mean (1) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger, stock purchase or consolidation) or (2) a sale of all or substantially all of the assets of the Company; unless the Company’s stockholders of record as constituted immediately prior to any such transaction will, immediately after such transaction (by virtue of securities issued as consideration for the Company’s capital stock, assets or otherwise) hold more than fifty percent (50%) of the voting power of the surviving or acquiring entity.

 

 

	
Initialed   by:
    	
 
    	
GLAUKOS   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Thomas W. Burns,
    
	
 
    	
 
    	
 
    	
President and Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Optionee:
    	
 
    
	
 
    	
 
    	
 
    	
«OPTIONEE_2»
    
					

 

1Exhibit 10.12

 

GLAUKOS CORPORATION

 

2011 STOCK PLAN

 

1.                                      Purposes of the Plan.  The purposes of this 2011 Stock Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Service Providers and to promote the success of the Company’s business.  Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant of an option and subject to the applicable provisions of Section 422 of the Code and the regulations and interpretations promulgated thereunder.  Stock purchase rights may also be granted under the Plan.

 

2.                                      Definitions.  As used herein, the following definitions shall apply:

 

(a)                                 “Administrator” means the Board or its Committee appointed pursuant to Section 4 of the Plan.

 

(b)                                 “Affiliate” means an entity other than a Subsidiary (as defined below) which, together with the Company, is under common control of a third person or entity.

 

(c)                                  “Applicable Laws” means the legal requirements relating to the administration of stock option and restricted stock purchase plans, including under applicable U.S. state corporate laws, U.S. federal and applicable state securities laws, other U.S. federal and state laws, the Code, any Stock Exchange rules or regulations and the applicable laws, rules and regulations of any other country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan, as such laws, rules, regulations and requirements shall be in place from time to time.

 

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

 

(e)                                  “Change of Control” means (1) a sale of all or substantially all of the Company’s assets, or (2) any merger, consolidation or other business combination transaction of the Company with or into another corporation, entity or person, other than a transaction in which the holders of at least a majority of the shares of voting capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting capital stock of the Company (or the surviving entity) outstanding immediately after such transaction, or (3) the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company.  Notwithstanding the foregoing, only a Change in Control event that also qualifies as a “change in the ownership” or a “change in the  effective control” of the Company or a “change in the ownership of a substantial portion” of the assets of the Company within the meaning of Treasury Regulation Section 1.409A-3(i)(5) shall be recognized as a Change of Control for purposes of triggering exercise, distribution or settlement rights under any Option or Stock Purchase Right granted under this Plan that is subject to Code Section 409A.

 

 

(f)                                   “Code” means the Internal Revenue Code of 1986, as amended.

 

(g)                                  “Committee” means one or more committees or subcommittees of the Board appointed by the Board to administer the Plan in accordance with Section 4 below.

 

(h)                                 “Common Stock” means the Common Stock of the Company.

 

(i)                                     “Company” means Glaukos Corporation, a Delaware corporation.

 

(j)                                    “Consultant” means any person, including an advisor, who is engaged by the Company or any Parent, Subsidiary or Affiliate to render services and is compensated for such services.

 

(k)                                 “Continuous Service Status” means the absence of any interruption or termination of service as a Service Provider.  Continuous Service Status as a Service Provider shall not be considered interrupted in the case of:  (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Administrator, provided that such leave is for a period of not more than ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or between the Company, its Parents, Subsidiaries, Affiliates or their respective successors.

 

(l)                                     “Corporate Transaction” means a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, entity or person, or the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company .

 

(m)                             “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code; provided, however, that for purposes of exercising any Option or Stock Purchase Right which is subject to Section 409A of the Code, “Disability” means that the subject individual is considered “disabled” within the meaning of Treasury Regulation Sections 1.409A-3(a)(2) and (i)(4), as determined by the Administrator in its sole discretion.

 

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

 

(o)                                 “Employee” means any person employed by the Company or any Parent, Subsidiary or Affiliate, with the status of employment determined based upon such factors as are deemed appropriate by the Administrator in its discretion, subject to any requirements of the Code or the Applicable Laws.  The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company.

 

(p)                                 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

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(q)                                 “Fair Market Value” means, as of any date, the fair market value of the Common Stock, as determined by the Administrator in good faith on such basis as it deems appropriate and applied consistently with respect to Participants by the reasonable application of a reasonable valuation method in accordance with Treasury Regulation Section 1.409A-1(b)(5)(iv)(B).  Whenever possible, the determination of Fair Market Value shall be based upon the closing price for the Shares as reported in The Wall Street Journal for the applicable date and otherwise made in accordance with such other method for determining Fair Market Value for publicly traded stock as is appropriate and permitted under Code Section 409A, in the discretion of the Administrator.

 

(r)                                    “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, as designated in the applicable Option Agreement.

 

(s)                                   “Listed Security” means any security of the Company that is listed or approved for listing on a national securities exchange or designated or approved for designation as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.

 

(t)                                    “Named Executive” means any individual who, on the last day of the Company’s fiscal year, is the chief executive officer of the Company (or is acting in such capacity) or among the four most highly compensated officers of the Company (other than the chief executive officer).  Such officer status shall be determined pursuant to the executive compensation disclosure rules under the Exchange Act.

 

(u)                                 “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option, as designated in the applicable Option Agreement.

 

(v)                                 “Option” means a stock option granted pursuant to the Plan.

 

(w)                               “Option Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of an Option granted under the Plan and includes any documents attached to or incorporated into such Option Agreement, including, but not limited to, a notice of stock option grant and a form of exercise notice.

 

(x)                                 “Option Exchange Program” means a program approved by the Administrator whereby outstanding Options are exchanged for Options with a lower exercise price or are amended to decrease the exercise price as a result of a decline in the Fair Market Value of the Common Stock.

 

(y)                                 “Optioned Stock” means the Common Stock subject to an Option.

 

(z)                                  “Optionee” means a Service Provider who receives an Option.

 

(aa)                          “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code, or any successor provision.

 

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(bb)                          “Participant” means any holder of one or more Options or Stock Purchase Rights, or the Shares issuable or issued upon exercise of such awards, under the Plan.

 

(cc)                            “Plan” means this 2011 Stock Plan.

 

(dd)                          “Reporting Person” means an officer, Director, or greater than ten percent stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange Act.

 

(ee)                            “Restricted Stock” means Shares acquired pursuant to a grant of a Stock Purchase Right under Section 10 below.

 

(ff)                              “Restricted Stock Purchase Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of a Stock Purchase Right granted under the Plan and includes any documents attached to such agreement.

 

(gg)                            “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.

 

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

 

(ii)                                  “Share” means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan.

 

(jj)                                “Stock Exchange” means any stock exchange or consolidated stock price reporting system on which prices for the Common Stock are quoted at any given time.

 

(kk)                          “Stock Purchase Right” means the right to purchase Common Stock pursuant to Section 10 below.

 

(ll)                                  “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, or any successor provision.

 

(mm)                  “Ten Percent Holder” means a person who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary.

 

3.                                      Stock Subject to the Plan.  Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be sold under the Plan is One Million One Hundred Seventy-Two Thousand Fifty-Seven (1,172,057) shares.  The Shares may be authorized, but unissued, or reacquired Common Stock.  If an award should expire or become unexercisable for any reason without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares that were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan.  In addition, any Shares which are retained by the Company upon exercise of an award in order to satisfy the exercise or purchase price for such award or any withholding taxes due with respect to such exercise or purchase shall be treated as not issued and shall continue to be available under the Plan.  Shares issued under the Plan and later repurchased by the Company pursuant to any repurchase right which the Company may have shall be available for future grant under the Plan.

 

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4.                                      Administration of the Plan.

 

(a)                                 General.  The Plan shall be administered by the Board or a Committee, or a combination thereof, as determined by the Board.  The Plan may be administered by different administrative bodies with respect to different classes of Participants and, if permitted by the Applicable Laws, the Board may authorize one or more officers to make awards under the Plan.

 

(b)                                 Committee Composition.  If a Committee has been appointed pursuant to this Section 4, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board.  From time to time the Board may increase the size of any Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies (however caused) and remove all members of a Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws and, in the case of a Committee administering the Plan in accordance with the requirements of Rule 16b-3 or Section 162(m) of the Code, to the extent permitted or required by such provisions.  The Committee shall in all events conform to any requirements of the Applicable Laws.

 

(c)                                  Powers of the Administrator.  Subject to the provisions of the Plan and in the case of a Committee, the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion:

 

(i)                                     to determine the Fair Market Value of the Common Stock, in accordance with Section 2(q) of the Plan, provided that such determination shall be applied consistently with respect to Participants under the Plan;

 

(ii)                                  to select the Service Providers to whom Plan awards may from time to time be granted;

 

(iii)                               to determine whether and to what extent Plan awards are granted;

 

(iv)                              to determine the number of Shares to be covered by each award granted;

 

(v)                                 to approve the form(s) of agreement(s) used under the Plan;

 

(vi)                              to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder, which terms and conditions include but are not limited to the exercise or purchase price, the time or times when awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, any pro rata adjustment to vesting as a result of a Participant’s transitioning from full- to part-time service (or vice versa), and any restriction or limitation regarding any Option, Optioned Stock, Stock Purchase Right or Restricted Stock, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

 

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(vii)                           to determine whether and under what circumstances an Option may be settled in cash under Section 9(c) instead of Common Stock;

 

(viii)                        to implement an Option Exchange Program on such terms and conditions as the Administrator in its discretion deems appropriate, provided that no amendment or adjustment to an Option that would materially and adversely affect the rights of any Optionee shall be made without the prior written consent of the Optionee;

 

(ix)                              to adjust the vesting of an Option held by a Service Provider as a result of a change in the terms or conditions under which such person is providing services to the Company;

 

(x)                                 to construe and interpret the terms of the Plan and awards granted under the Plan, which constructions, interpretations and decisions shall be final and binding on all Participants; and

 

(xi)                              in order to fulfill the purposes of the Plan and without amending the Plan, to modify grants of Options or Stock Purchase Rights to Participants who are foreign nationals or employed outside of the United States in order to recognize differences in local law, tax policies or customs.

 

5.                                      Eligibility.

 

(a)                                 Recipients of Grants.  Nonstatutory Stock Options and Stock Purchase Rights may be granted to Service Providers.  Incentive Stock Options may be granted only to Employees, provided that Employees of Affiliates shall not be eligible to receive Incentive Stock Options.

 

(b)                                 Type of Option.  Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.

 

(c)                                  ISO $100,000 Limitation.  Notwithstanding any designation under Section 5(b) above, to the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock Options.  For purposes of this Section 5(c), Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares subject to an Incentive Stock Option shall be determined as of the date of the grant of such Option.

 

(d)                                 No Employment Rights.  The Plan shall not confer upon any Participant any right with respect to continuation of an employment or consulting relationship with the Company, nor shall it interfere in any way with such Participant’s right or the Company’s right to terminate the employment or consulting relationship at any time for any reason.

 

6.                                      Term of Plan.  The Plan shall become effective upon its adoption by the Board of Directors.  The Plan shall remain effective until terminated under Section 15 of the Plan, provided that no Option or Stock Purchase Right shall be granted hereunder more than ten (10) years after adoption of the Plan by the Board.

 

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7.                                      Term of Option.  The term of each Option shall be the term stated in the Option Agreement; provided that the term shall be no more than one hundred twenty (120) months from the date of grant thereof or such shorter term as may be provided in the Option Agreement and provided further that, in the case of an Incentive Stock Option granted to a person who at the time of such grant is a Ten Percent Holder, the term of the Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

 

8.                                      Option Exercise Price and Consideration.

 

(a)                                 Exercise Price.  The per Share exercise price for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the Administrator and set forth in the Option Agreement, but shall be subject to the following:

 

(i)                                     In the case of an Incentive Stock Option

 

(A)                               granted to an Employee who at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or

 

(B)                               granted to any other Employee, the per Share exercise price shall be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

(ii)                                  In the case of a Nonstatutory Stock Option

 

(A)                               granted on any date on which the Common Stock is not a Listed Security, the per Share exercise price shall be no less than the price per Share required by the Applicable Laws and, if there is no such requirement, shall be such price as is determined by the Administrator; or

 

(B)                               granted on any date on which the Common Stock is a Listed Security to any eligible person, the per share Exercise Price shall be such price as determined by the Administrator provided that if such eligible person is, at the time of the grant of such Option, a Named Executive of the Company, the per share Exercise Price shall be no less than one hundred percent (100%) of the Fair Market Value on the date of grant if such Option is intended to qualify as performance-based compensation under Section 162(m) of the Code.

 

(iii)                               Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other Corporate Transaction; provided, however, that for any Nonstatutory Stock Option which is subject to Code Section 409A because it is granted with a per Share exercise price that is less than one hundred percent (100%) of the Fair Market Value per Share as of the date of grant, the Option Agreement shall contain such provisions as necessary to comply with Code Section 409A.

 

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(b)                                 Permissible Consideration.  The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant) and may consist entirely of (1) cash; (2) check; (3) subject to any requirements of the Applicable Laws (including without limitation Section 153 of the Delaware General Corporation Law), delivery of Optionee’s promissory note having such recourse, interest, security and redemption provisions as the Administrator determines to be appropriate after taking into account the potential accounting consequences of permitting an Optionee to deliver a promissory note; (4) cancellation of indebtedness; (5) other Shares that have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is exercised, provided that in the case of Shares acquired, directly or indirectly, from the Company, such Shares must have been owned by the Optionee for more than six (6) months on the date of surrender (or such other period as may be required to avoid the Company’s incurring an adverse accounting charge); (6) if, as of the date of exercise of an Option the Company then is permitting employees to engage in a “same-day sale” cashless brokered exercise program involving one or more brokers, through such a program that complies with the Applicable Laws (including without limitation the requirements of Regulation T and other applicable regulations promulgated by the Federal Reserve Board) and that ensures prompt delivery to the Company of the amount required to pay the exercise price and any applicable withholding taxes; or (7) any combination of the foregoing methods of payment.  In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company and the Administrator may, in its sole discretion, refuse to accept a particular form of consideration at the time of any Option exercise.

 

9.                                      Exercise of Option.

 

(a)                                 General.

 

(i)                                     Exercisability. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator, consistent with the term of the Plan and reflected in the Option Agreement, including vesting requirements and/or performance criteria with respect to the Company and/or the Optionee; provided however that, if required under the Applicable Laws, the Option (or Shares issued upon exercise of the Option) shall comply with the requirements of Section 260.140.41 of the Rules of the California Corporations Commissioner.

 

(ii)                                  Leave of Absence.  The Administrator shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any unpaid leave of absence; provided, however, that in the absence of such determination, vesting of Options shall be tolled during any such unpaid leave (unless otherwise required by the Applicable Laws).  In the event of military leave, vesting shall toll during any unpaid portion of such leave, provided that, upon a Participant’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given vesting credit with respect to Options to the same extent as would have applied had the Participant continued to provide services to the Company throughout the leave on the same terms as he or she was providing services immediately prior to such leave.

 

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(iii)                               Minimum Exercise Requirements.  An Option may not be exercised for a fraction of a Share.  The Administrator may require that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent an Optionee from exercising the full number of Shares as to which the Option is then exercisable.

 

(iv)                              Procedures for and Results of Exercise.  An Option shall be deemed exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and the Company has received full payment for the Shares with respect to which the Option is exercised.  Full payment may, as authorized by the Administrator, consist of any consideration and method of payment allowable under Section 8(b) of the Plan, provided that the Administrator may, in its sole discretion, refuse to accept any form of consideration at the time of any Option exercise.

 

(v)                                 Rights as Stockholder.  Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option.  No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 13 of the Plan.

 

(b)                                 Termination of Employment or Consulting Relationship.  Except as otherwise set forth in this Section 9(b), the Administrator shall establish and set forth in the applicable Option Agreement the terms and conditions upon which an Option shall remain exercisable, if at all, following termination of an Optionee’s Continuous Service Status, which provisions may be waived or modified by the Administrator at any time.  Unless the Administrator otherwise provides in the Option Agreement, to the extent that the Optionee is not vested in Optioned Stock at the date of termination of his or her Continuous Service Status, or if the Optionee (or other person entitled to exercise the Option) does not exercise the Option to the extent so entitled within the time specified in the Option Agreement or below (as applicable), the Option shall terminate and the Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan.  In no event may any Option be exercised after the expiration of the Option term as set forth in the Option Agreement (and subject to Section 7).

 

The following provisions (1) shall apply to the extent an Option Agreement does not specify the terms and conditions upon which an Option shall terminate upon termination of an Optionee’s Continuous Service Status, and (2) establish the minimum post-termination exercise periods that may be set forth in an Option Agreement:

 

(i)                                     Termination other than Upon Disability or Death.  In the event of termination of Optionee’s Continuous Service Status other than under the circumstances set forth in subsections (ii) and (iii) below, such Optionee may exercise an Option for thirty (30) days following such termination, or such longer period of time as specified in the Option Agreement, and in the case of an Incentive Stock Option, in no event later than the earlier of three (3) months after the date of termination and the expiration of the term of the Option as set forth in the Option Agreement, in each case to the extent the Optionee was vested in the Optioned Stock as of the date of such termination.  No termination shall be deemed to occur and this Section 9(b)(i) shall not apply if (A) the Optionee is a Consultant who becomes an Employee, or (B) the Optionee is an Employee who becomes a Consultant.

 

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(ii)                                  Disability of Optionee.  In the event of termination of an Optionee’s Continuous Service Status as a result of his or her Disability, such Optionee may exercise an Option at any time within one (1) year following such termination to the extent the Optionee was vested in the Optioned Stock as of the date of such termination.

 

(iii)                               Death of Optionee.  In the event of the death of an Optionee during the period of Continuous Service Status since the date of grant of the Option, or within three (3) months following termination of Optionee’s Continuous Service Status, the Option may be exercised by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance at any time within twelve (12) months following the date of death, but only to the extent the Optionee was vested in the Optioned Stock as of the date of death or, if earlier, the date the Optionee’s Continuous Service Status terminated.

 

(c)                                  Buyout Provisions.  The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted under the Plan based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made.

 

10.                               Stock Purchase Rights.

 

(a)                                 Rights to Purchase.  When the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer.  In the case of a Stock Purchase Right granted prior to the date, if any, on which the Common Stock becomes a Listed Security and if required by the Applicable Laws at that time, the purchase price of Shares subject to such Stock Purchase Rights shall not be less than one hundred percent (100%) of the Fair Market Value of the Shares as of the date of the offer, or, in the case of a Ten Percent Holder, the price shall not be less than one hundred percent (100%) of the Fair Market Value of the Shares as of the date of the offer.  If the Applicable Laws do not impose the requirements set forth in the preceding sentence and with respect to any Stock Purchase Rights granted after the date, if any, on which the Common Stock becomes a Listed Security, the purchase price of Shares subject to Stock Purchase Rights shall be as determined by the Administrator.  The offer to purchase Shares subject to Stock Purchase Rights shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.  If the price to be paid and any other terms cause the Stock Purchase Right to be subject to Code Section 409A, then the applicable Restricted Stock Purchase Agreement shall comply with all applicable requirement of Code Section 409A, including, without limitation, permissible distribution/settlement events or dates, proper time and method of settlement, proper timing of deferral and exercise/settlement elections, and other applicable provisions.

 

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(b)                                 Repurchase Option.

 

(i)                                     General.  Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s Continuous Service Status with the Company for any reason (including death or Disability).  Subject to any requirements of the Applicable Laws, the terms of the Company’s repurchase option (including without limitation the price at which, and the consideration for which, it may be exercised, and the events upon which it shall lapse) shall be as determined by the Administrator in its sole discretion and reflected in the Restricted Stock Purchase Agreement.

 

(ii)                                  Leave of Absence.  The Administrator shall have the discretion to determine whether and to what extent the lapsing of Company repurchase rights shall be tolled during any unpaid leave of absence; provided, however, that in the absence of such determination, such lapsing shall be tolled during any such unpaid leave (unless otherwise required by the Applicable Laws).  In the event of military leave, the lapsing of Company repurchase rights shall toll during any unpaid portion of such leave, provided that, upon a Participant’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given “vesting” credit with respect to Shares purchased pursuant to the Restricted Stock Purchase Agreement to the same extent as would have applied had the Participant continued to provide services to the Company throughout the leave on the same terms as he or she was providing services immediately prior to such leave.

 

(c)                                  Other Provisions.  The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion.  In addition, the provisions of Restricted Stock Purchase Agreements need not be the same with respect to each purchaser.

 

(d)                                 Rights as a Stockholder.  Once the Stock Purchase Right is exercised, the purchaser shall have the rights equivalent to those of a stockholder, and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company.  No adjustment will be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 13 of the Plan.

 

11.                               Taxes.

 

(a)                                 As a condition of the grant, vesting or exercise of an Option or Stock Purchase Right granted under the Plan, the Participant (or in the case of the Participant’s death, the person exercising the Option or Stock Purchase Right) shall make such arrangements as the Administrator may require for the satisfaction of any applicable federal, state, local or foreign withholding tax obligations that may arise in connection with such grant, vesting or exercise of the Option or Stock Purchase Right or the issuance of Shares.  The Company shall not be required to issue any Shares under the Plan until such obligations are satisfied.  If the Administrator allows the withholding or surrender of Shares to satisfy a Participant’s tax withholding obligations under this Section 11 (whether pursuant to Section 11(c), (d) or (e), or otherwise), the Administrator shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes.

 

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(b)                                 In the case of an Employee and in the absence of any other arrangement, the Employee shall be deemed to have directed the Company to withhold or collect from his or her compensation an amount sufficient to satisfy such tax obligations from the next payroll payment otherwise payable after the date of an exercise of the Option or Stock Purchase Right.

 

(c)                                  This Section 11(c) shall apply only after the date, if any, upon which the Common Stock becomes a Listed Security.  In the case of a Participant other than an Employee (or in the case of an Employee where the next payroll payment is not sufficient to satisfy such tax obligations, with respect to any remaining tax obligations), in the absence of any other arrangement and to the extent permitted under the Applicable Laws, the Participant shall be deemed to have elected to have the Company withhold from the Shares to be issued upon exercise of the Option or Stock Purchase Right that number of Shares having a Fair Market Value determined as of the applicable Tax Date (as defined below) equal to the amount required to be withheld.  For purposes of this Section 11, the Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined under the Applicable Laws (the “Tax Date”).

 

(d)                                 If permitted by the Administrator, in its discretion, a Participant may satisfy his or her tax withholding obligations upon exercise of an Option or Stock Purchase Right by surrendering to the Company Shares that have a Fair Market Value determined as of the applicable Tax Date equal to the amount required to be withheld.  In the case of shares previously acquired from the Company that are surrendered under this Section 11(d), such Shares must have been owned by the Participant for more than six (6) months on the date of surrender (or such other period of time as is required for the Company to avoid adverse accounting charges).

 

(e)                                  Any election or deemed election by a Participant to have Shares withheld to satisfy tax withholding obligations under Section 11(c) or (d) above shall be irrevocable as to the particular Shares as to which the election is made and shall be subject to the consent or disapproval of the Administrator.  Any election by a Participant under Section 11(d) above must be made on or prior to the applicable Tax Date.

 

(f)                                   In the event an election to have Shares withheld is made by a Participant and the Tax Date is deferred under Section 83 of the Code because no election is filed under Section 83(b) of the Code, the Participant shall receive the full number of Shares with respect to which the Option or Stock Purchase Right is exercised but such Participant shall be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date.

 

12.                               Non-Transferability of Options and Stock Purchase Rights.

 

(a)                                 General.  Except as set forth in this Section 12, Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution.  The designation of a beneficiary by an Optionee will not constitute a transfer.  An Option or Stock Purchase Right may be exercised, during the lifetime of the holder of an Option or Stock Purchase Right, only by such holder or a transferee permitted by Section 9 or this Section 12.

 

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(b)                                 Limited Transferability Rights.  Notwithstanding anything else in this Section 12, and subject to Applicable Laws, the Administrator may in its discretion grant Nonstatutory Stock Options that may be transferred by instrument to an inter vivos or testamentary trust in which the Options are to be passed to beneficiaries upon the death of the trustor (settlor) or by gift or pursuant to domestic relations orders to “Immediate Family Members” (as defined below) of the Optionee. “Immediate Family Member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships), any person sharing the Optionee’s household (other than a tenant or employee), a trust in which these persons have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Optionee) control the management of assets, and any other entity in which these persons (or the Optionee) own more than fifty percent (50%) of the voting interests.

 

13.                               Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions.

 

(a)                                 Changes in Capitalization.  Subject to any action required under Applicable Laws by the stockholders of the Company, the number of Shares covered by each outstanding award and the number of Shares that have been authorized for issuance under the Plan but as to which no awards have yet been granted or that have been returned to the Plan upon cancellation or expiration of an award, as well as the price per Share covered by each such outstanding award, shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination, recapitalization or reclassification of the Common Stock, or any other distribution of the Company’s equity securities or increase or decrease in the number of issued Shares effected without receipt of consideration by the Company; 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 Administrator, whose determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no issuance 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 subject to an award.

 

(b)                                 Dissolution or Liquidation.  In the event of the dissolution or liquidation of the Company, each Option and Stock Purchase Right will terminate immediately prior to the consummation of such action, unless otherwise determined by the Administrator.

 

(c)                                  Corporate Transaction.  In the event of a Corporate Transaction (including without limitation a Change of Control), each outstanding Option or Stock Purchase Right shall be assumed or an equivalent option or right shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation (the “Successor Corporation”), unless the Successor Corporation does not agree to assume the award or to substitute an equivalent option or right, in which case such Option or Stock Purchase Right shall terminate upon the consummation of the transaction.

 

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For purposes of this Section 13(c), an Option or a Stock Purchase Right shall be considered assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Transaction or a Change of Control, as the case may be, each holder of an Option or Stock Purchase Right would be entitled to receive upon exercise of the award the same number and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to such transaction, the holder of the number of Shares covered by the award at such time (after giving effect to any adjustments in the number of Shares covered by the Option or Stock Purchase Right as provided for in this Section 13); provided that if such consideration received in the transaction is not solely common stock of the Successor Corporation, the Administrator may, with the consent of the Successor Corporation, provide for the consideration to be received upon exercise of the award to be solely common stock of the Successor Corporation equal to the Fair Market Value of the per Share consideration received by holders of Common Stock in the transaction.

 

(d)                                 Certain Distributions.  In the event of any distribution to the Company’s stockholders of securities of any other entity or other assets (other than dividends payable in cash or stock of the Company) without receipt of consideration by the Company, the Administrator may, in its discretion, appropriately adjust the price per Share covered by each outstanding Option or Stock Purchase Right to reflect the effect of such distribution.

 

14.                               Time of Granting Options and Stock Purchase Rights.  The date of grant of an Option or Stock Purchase Right shall, for all purposes, be the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such other date as is determined by the Administrator, provided that in the case of any Incentive Stock Option, the grant date shall be the later of the date on which the Administrator makes the determination granting such Incentive Stock Option or the date of commencement of the Optionee’s employment relationship with the Company.  Notice of the determination shall be given to each Service Provider to whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.

 

15.                               Amendment and Termination of the Plan.

 

(a)                                 Authority to Amend or Terminate.  The Board may at any time amend, alter, suspend or discontinue the Plan, but no amendment, alteration, suspension or discontinuation (other than an adjustment pursuant to Section 13 above) shall be made that would materially and adversely affect the rights of any Optionee or holder of Stock Purchase Rights under any outstanding grant, without his or her consent.  In addition, to the extent necessary and desirable to comply with the Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required.

 

(b)                                 Effect of Amendment or Termination.  Except as to amendments which the Administrator has the authority under the Plan to make unilaterally, no amendment or termination of the Plan shall materially and adversely affect Options or Stock Purchase Rights already granted, unless mutually agreed otherwise between the Optionee or holder of the Stock Purchase Rights and the Administrator, which agreement must be in writing and signed by the Optionee or holder and the Company.

 

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16.                               Conditions Upon Issuance of Shares.  Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver any Shares under the Plan unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel.  As a condition to the exercise of an Option or Stock Purchase Right, the Company may require the person exercising the award 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 law. Shares issued upon exercise of awards granted prior to the date on which the Common Stock becomes a Listed Security shall be subject to a right of first refusal in favor of the Company pursuant to which the Participant will be required to offer Shares to the Company before selling or transferring them to any third party on such terms and subject to such conditions as is reflected in the applicable Option Agreement or Restricted Stock Purchase Agreement.

 

17.                               Reservation of Shares.  The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

 

18.                               Agreements.  Options and Stock Purchase Rights shall be evidenced by Option Agreements and Restricted Stock Purchase Agreements, respectively, in such form(s) as the Administrator shall from time to time approve.

 

19.                               Stockholder Approval.  If required by the Applicable Laws, continuance of the Plan shall be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted.  Such stockholder approval shall be obtained in the manner and to the degree required under the Applicable Laws.

 

20.                               409A Compliance.  The Company intends that this Plan shall comply with Code Section 409A to the extent that statute applies to any Option or Stock Purchase Right granted hereunder, but nothing in this Plan or in any Option Agreement or Restricted Stock Purchase Agreement governed by this Plan shall constitute a guarantee of such compliance nor of any particular tax treatment of any such award.  The Company, the Board (and its members individually), the Administrator (and its members individually), and all shareholders, officers, parents, subsidiaries, affiliates, successors, assigns and representatives of the Company shall have no liability to any person claiming any interest in or rights under any Option or Stock Purchase Right granted under the Plan for any taxes, interest, penalties or damages resulting from any non-compliance with Codes Section 409A, nor for any cost or expense (including the fees of attorneys or other professional advisors) incurred by any such person in connection with any determination whether  a violation of Code Section 409A occurred or in connection with contesting, paying or settling any claim relating to such a determination or violation.

 

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Amendment to 2011 Stock Plan

 

Of

 

Glaukos Corporation

 

Effective as of July 17, 2014, the first sentence of Section 3 of the 2011 Stock Plan of Glaukos Corporation was amended to read in its entirety as follows:

 

“Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be sold under the Plan is Eight Million One Hundred Twenty-Three Thousand Three Hundred Thirteen (8,123,313).”

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