Document:

exv10w1

 

Exhibit 10.1

Artes Medical, Inc.

Annual Bonus Incentive Plan

(Approved April 10, 2007)

1. Objective

     The objective of the Annual Bonus Incentive Plan (the “Bonus Plan”) is to focus the efforts of
our executives and employees on achieving specific goals and objectives that are critical to the
success and long-term value of Artes Medical, Inc. (the “Company”). The Bonus Plan is designed to
align each eligible employee’s efforts with specific corporate and individual goals by providing
them with an opportunity to earn an annual cash bonus with the actual bonus amount paid determined
based on the Company’s success in achieving its corporate goals, the eligible employee’s success in
achieving his or her individual goals and the eligible employee’s position within the Company.

2. Effective Date and Expiration Date

     This Bonus Plan is effective for the Company’s fiscal year beginning on January 1,
2007 (the “Effective Date”), and will continue through the Company’s fiscal year ending on December
31, 2010, at which time the Bonus Plan will expire automatically (the “Expiration Date”).

3. Purpose

     The Bonus Plan is a performance-based cash incentive program designed to accomplish
the following objectives:

     (a) To link annual corporate and business priorities with individual and group performance
goals, reinforcing the concept that compensation is tied to overall corporate results as well as to
individual contributions and performance.

     (b) To reinforce a high performance culture which ties compensation awards to measurable
accountabilities and goal achievement.

     (c) To recognize and reward outstanding individual performance and to differentiate award
levels based on individual contributions.

     (d) To provide a competitive total compensation package that is typical in our industry in
order to attract, retain and motivate our talented employees.

4. Bonus Plan Administration

     (a) The Bonus Plan will be administered by the Compensation Committee (the
“Compensation Committee”, also referred to herein as the “Administrator”) of the Company’s Board of
Directors. The Compensation Committee has the authority to delegate all or part of its authority
and powers under the Bonus Plan to the Company’s Chief Executive Officer (“CEO”), other than with
respect to the bonus amounts offered or paid to the Company’s executive officers which are to be
determined by the Compensation Committee. Pursuant to such authority, the CEO, with assistance
from the Human Resources Department and our Executive Chairman of the Board, so long as he or she
is an employee of the Company (the “Executive Chairman”), will be responsible for implementing and
administering the Bonus Plan.

 

 

     (b) For each fiscal year under the Bonus Plan (a “Bonus Plan Year”), the CEO will recommend
specific written corporate goals for that Bonus Plan Year (the “Corporate Goals”). The
Compensation Committee in its sole discretion may accept or adjust the recommended Corporate Goals
provided by the CEO, and will be responsible for approving the final Corporate Goals applicable to
a Bonus Plan Year.

     (c) In connection with adopting this Bonus Plan, the CEO recommended and the Compensation
Committee approved specific target bonus award amounts (“Target Awards”) for eligible employees,
including the Company’s executive officers, for Bonus Plan Year 2007. As provided in Section 6(b)
below, the Target Awards are based on an employee’s position with the Company and are calculated as
a percentage of an employee’s base salary. The Target Awards approved by the Compensation
Committee for Bonus Plan Year 2007 will apply to future Bonus Plan Years, unless the Compensation
Committee in its sole discretion revises the Target Awards for a future Bonus Plan Year.

     (d) For each Bonus Plan Year, the CEO, with the assistance of the Human Resources Department
and the Executive Chairman, will be responsible for approving departmental goals for the Company’s
various departments (the “Departmental Goals”) and the individuals goals applicable to each
eligible employee (other than for the CEO and the Executive Chairman as discussed below) (the
“Individual Goals”). It is anticipated that Individual Goals for eligible employees will support
one or more Departmental Goals. The Individual Goals for the CEO and for the Executive Chairman
for each Bonus Plan Year will be the Corporate Goals, and any other objectives set by the
Compensation Committee for these individuals.

     (e) After the end of each Bonus Plan Year, the CEO will provide documentation to the
Compensation Committee evaluating the Company’s accomplishment of the approved Corporate Goals
along with a recommendation regarding the Company’s overall success in achieving the Corporate
Goals, expressed as a percentage. The Compensation Committee in its sole discretion may accept or
adjust the percentage recommended by the CEO, and will retain responsibility for determining the
Company’s success percentage in achieving the Corporate Goals for purposes of the Bonus Plan.

     (f) The CEO, with the assistance of the Human Resources Department and the Executive Chairman,
will be responsible for ensuring that an evaluation of the accomplishment of the Departmental Goals
and the performance of each employee (other than the CEO and the Executive Chairman who will each
be evaluated by the Compensation Committee) related to the accomplishment of his or her Individual
Goals, expressed as a percentage, is conducted in accordance with the conditions of this Bonus
Plan. The Compensation Committee will also be responsible for determining whether the CEO and the
Executive Chairman accomplished the additional objectives, if any, set by the Compensation
Committee for these individuals. With respect to the Company’s other executive officers, the
Compensation Committee in its sole discretion may accept or adjust the Individual Goals success
percentage recommended by the CEO for the Company’s executive officers.

     (g) All determinations and decisions made by the Compensation Committee, the Board of
Directors and any delegate of the Compensation Committee pursuant to the provisions of the Bonus
Plan shall be final, conclusive and binding on all persons, and shall be given the maximum
deference permitted by law.

5. Eligibility

     Each full-time regular employee of the Company who provides at least three consecutive months
of service prior to the end of a Bonus Plan Year (a “Participant”) is eligible to participate in
the Bonus Plan. A Participant must also satisfy the following eligibility criteria in a given
Bonus Plan Year: (i) the

 

 

Participant must be a regular full-time employee of the Company as of both the last day of the
Bonus Plan Year (the “Determination Date”) and the date the award payment is made for a Bonus Plan
Year and (ii) the Participant must have had an acceptable performance rating on his or her most
recent performance review, and not be on a Performance Improvement Bonus Plan as of the
Determination Date.

6. Target Awards

     (a) The Company will provide or make a copy of the Bonus Plan available to each Participant.
The Company will inform each Participant about his or her Target Award for a Bonus Plan Year and
the Corporate Goals and the Individual Goals applicable to the Participant. A Target Award will be
prorated for an employee who is hired after the beginning of the Bonus Plan Year, based on the
number of months employed during such year. A Target Award for a Participant who changes positions
or salary grades in the middle of a Bonus Plan Year will be prorated based on the number of days
spent in each position and the applicable Target Awards for the former and current positions.

     (b) The Target Award percentages specified below are meant as guidelines, and will be utilized
for the Bonus Plan Year ending on December 31, 2007.

	 	 	 	 	 
	 	 	Title	 	Guidelines
	 
	Level 1

	 	Executive Chairman/Chief Executive Officer
	 	50% of base salary
	Level 2

	 	Chief Financial Officer
	 	35% of base salary
	Level 3

	 	Vice President Level
	 	30% of base salary
	Level 4

	 	Exec. Director Level
	 	25% of base salary
	Level 5

	 	Sr. Director Level
	 	15% of base salary
	Level 6

	 	Director/Sr Manager/Manager
	 	10% of base salary
	Level 7

	 	Individual Contributor
	 	5% of base salary

7. Target Award Payments

     (a) Performance Measures. The actual amount of cash paid to a Participant on his or
her Target Award (the “Target Award Payments”) will based upon the following two performance
measures: Corporate Goals (50% weighting) and Individual Goals (50% weighting).

     (b) Determination of Achievement of Corporate Goals. The first step in the
calculation of the amount of Target Award Payments will be a determination of the level of
accomplishment of the Corporate Goals for the applicable Bonus Plan Year. As outlined above, the
CEO will provide the Compensation Committee with documentation regarding the Company’s full or
partial achievement of each Corporate Goal, along with a recommended percentage reflecting the
Company’s overall achievement of the Corporate Goals. The Compensation Committee in its sole
discretion may accept or adjust the percentage recommended by the CEO, and will retain
responsibility for determining the Company’s percentage success in achieving the Corporate Goals
for purposes of the Bonus Plan.

     (c) Determination of Achievement of Individual Goals. The second step in the
calculation of the amount of Target Award Payments will be a determination of the level of
accomplishment of each Participant’s Individual Goals for the applicable Bonus Plan Year. This will
be determined based on the Participant’s annual review as follows: each Participant will provide to
his or her respective supervisor a written summary of the Participant’s Individual Goal
accomplishments during the applicable Bonus Plan Year, including a proposed overall percentage
accomplishment. The Participant’s supervisor will be responsible for evaluating the Participant’s
accomplishments of his or her Individual Goals and determining the overall percentage
accomplishment by the Participant. The supervisor’s assessment and

 

 

determination will be reviewed by the Human Resources Department and reviewed by the CEO to ensure
that similar performance standards are applied throughout the Company. The CEO in his or her sole
discretion may accept or adjust the percentage recommended by the supervisor. Notwithstanding the
foregoing, the Compensation Committee shall retain responsibility for evaluating the performance of
the CEO and the Executive Chairman related to the accomplishment of their respective Individual
Goals. The Compensation Committee will also be responsible for approving the percentage
accomplishment of Individual Goals for each of the other executive officers.

     (d) Calculation of a Participant’s Target Award. The final step in the determination
of the amount of a Participant’s Target Award Payment will be a calculation of the average of the
Corporate Goals percentage accomplishments and the Participant’s Individual Goal percentage
accomplishments which will then will be multiplied by the Participant’s Target Award.

	 	 	 	 	 	 	 
	Example:	 	Target Award Calculation	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Position:
	 	Senior Director
	 	 
	 
	 	 	 	 	 	 
	 

	 	Base Salary:
	 	$100,000 	 	 
	 
	 	 	 	 	 	 
	 

	 	Target Award Opportunity percentage:
	 	15% 	 	 
	 
	 	 	 	 	 	 
	 

	 	Target Award Opportunity compensation:
	 	$15,000 	 	 
	 
	 	 	 	 	 	 
	 

	 	Corporate Goal Percent Accomplished
	 	95% 	 	 
	 
	 	 	 	 	 	 
	 

	 	Individual Goal Percent Accomplished
	 	85% 	 	 
	 
	 	 	 	 	 	 
	 

	 	Average Goal Percent Accomplished
	 	90% 	 	 
	 
	 	 	 	 	 	 
	

	 	Target Award Payment (90% x $15,000)
	 	$13,500 	 	 
	 

	 	 	 	 	 	 

8. Payment of the Target Awards

     (a) The actual Target Award Payments can range from 0 to 100% of the Target Amounts.
However, to reward exceptional performance in certain circumstances, a Participant may receive a
Target Award Payment above or below the indicated Target Amount as determined by overall Corporate
Goal and Individual Goal percentage achievement.

     (b) Target Award Payments will be made as soon as practicable after the end of a Bonus Plan
Year, but in any event not later than March 31st of the next fiscal year. Target Award Payments to
the CEO and to the Chief Financial Officer will be made only after the completion and issuance of
the Company’s year-end audited financial statements.

     (c) All Target Award Payments shall be paid from the general assets of the Company. Target
Award Payments shall be unsecured, unfunded obligations of the Company. To the extent they have
any rights under this Bonus Plan, each Participant’s rights shall be those of unsecured creditors
of the Company.

9. Bonus Plan Changes; No Entitlement

     The Company reserves the right in its absolute discretion to suspend or terminate the Bonus
Plan at any time or to alter the terms and conditions under which Target Award Payments will be
paid. Such discretion may be exercised any time before, during, and after a Bonus Plan Year is
completed. No

 

 

Participant shall have any vested right to receive any Target Award Payment until actual
payment of such compensation. Nothing in this Bonus Plan is intended to create an entitlement to
any employee for any payment hereunder.

10. General Provisions

     (a) Tax Withholding. The Company shall withhold all applicable taxes for any Target
Award Payment, including any federal, state or local income and employment taxes.

     (b) No Effect on Employment. Nothing in the Bonus Plan shall interfere with or limit
in any way the right of the Company to terminate any Participant’s employment at any time, with or
without cause. Employment with the Company is on an at-will basis only. The Company expressly
reserves the right, which may be exercised at any time, to terminate any individual’s employment
with or without cause without regard to the effect it might have upon him or her as a Participant
under this Bonus Plan. A Bonus Plan Participant who voluntarily resigns his or her employment
terminates voluntarily prior to the date upon which Target Award Payments are payable under this
Bonus Plan will not be eligible to receive a Target Award Payment. If a Participant’s employment
is terminated involuntarily by the Company without cause (as determined by the Company) during a
Bonus Plan Year, or prior to the date upon which Target Award Payments are payable under this Bonus
Plan, it will be at the absolute and sole discretion of the Company whether or not a Target Award
Payment will be made under this Bonus Plan.

     (b) Severability. In the event any provision of the Bonus Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the
Bonus Plan, and the Bonus Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.

     (c) Nontransferability. No Target Award Opportunity or Payment granted under the
Bonus Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, by the laws of descent and distribution. All rights with respect to a Target
Award Opportunity or Payment granted to a Participant will be available during his or her lifetime
only to the Participant.

     (d) Governing Law. The Bonus Plan and all Target Award Opportunities and Payments
shall be construed in accordance with and governed by the laws of the State of California, but
without regards to its conflict of law provisions.

     (e) Entire Agreement. This Bonus Plan is the entire understanding between the Company
and a Participant regarding the subject matter of this Bonus Plan and supersedes all prior bonus or
commission incentive bonus plans, or employment contracts, or any written or verbal representations
regarding the subject matter of this Bonus Plan. Participation in this Bonus Plan during a Bonus
Plan Year will not convey any entitlement to participate in this or future Bonus Plans or to the
same or similar bonus benefits. Target Award Payments under this Bonus Plan are an extraordinary
item of compensation that are outside the normal or expected compensation for the purpose of
calculating any extra benefits, termination, severance, bonuses, long-term service awards, overtime
premiums, pension or retirement benefits or other similar payment.exv4w8

 

Exhibit 4.8

Form of
Stock Certificate

	CUSIP 74972L 10 2

 

 

	THE BOARD OF THIS CORPORATION HAS THE AUTHORITY TO CREATE AND DETERMINE THE RELATIVE RIGHTS AND
PREFERENCES OF CLASSES OR SERIES OF SHARES OF CAPITAL STOCK OTHER THAN COMMON STOCK. THIS
CORPORATION WILL FURNISH TO ANY SHAREHOLDER UPON WRITTEN REQUEST SENT TO ITS PRINCIPAL EXECUTIVE
OFFICES, AND WITHOUT CHARGE, A FULL STATEMENT OF THE BOARD’S AUTHORITY TO CREATE AND DETERMINE THE
RELATIVE RIGHTS AND PREFERENCES OF CLASSES OR SERIES OF SHARES OF CAPITAL STOCK AS WELL AS THE
DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF THE SHARES OF EACH CLASS OR SERIES
THEN OUTSTANDING OR AUTHORIZED TO BE ISSUED. The following abbreviations, when used in the
inscription on the face of this certificate, shall be construed as though they were written out in
full according to applicable laws or regulations: UTMA —  ___Custodian ___
TEN COM — as tenants in common (Cust) (Minor) TEN ENT — as tenants by entireties under Uniform
Transfers to Minors JT TEN — as joint tenants with right of survivorship Act
___and not as tenants in common (State) Additional abbreviations may also be
used though not in above list. For value received ___hereby sell, assign, and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE
NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE) Shares of the capital stock represented by the
within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said
stock on the books of the within-named Corporation with full power of substitution in the premises.
Dated ___X X NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATEVER. SIGNATURE GUARANTEED ALL GUARANTEES MUST BE MADE BY A FINANCIAL INSTITUTION
(SUCH AS A BANK OR BROKER) WHICH IS A PARTICIPANT IN THE SECURITIES TRANSFER AGENTS MEDALLION
PROGRAM (“STAMP”), THE NEW YORK STOCK EXCHANGE, INC. MEDALLION SIGNATURE PROGRAM (“MSP”), OR THE
STOCK EXCHANGES MEDALLION PROGRAM (“SEMP”) AND MUST NOT BE DATED. GUARANTEES BY A NOTARY PUBLIC ARE
NOT ACCEPTABLE.

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