Document:

exv4w1

 

Exhibit 4.1
	 	 	 
	

	NUMBER
	
	SHARES

	
        

        RBC 0068
        

      
	ReGen Biologics, Inc.
        
	
        

         
        

      

	 	A DELAWARE
        CORPORATION
	 
	 COMMON STOCK
	 
	CUSIP 75884M   10  4

	

	       THIS
        CERTIFIES THAT
	 	 SEE REVERSE FOR 

        CERTAIN DEFINITIONS

	
 
 
 
 
 
    
	    is the owner of
            	 	 
	

	FULLY PAID AND
        NONASSESSABLE SHARES OF COMMON STOCK, $0.01 PAR VALUE PER SHARE, OF

	
 	  
	

	
	ReGen Biologics, Inc.
	

	
	 	

	(the “Company”), transferable in
      person or by duly authorized attorney upon surrender of this Certificate
      properly endorsed. The holder hereof accepts said shares of common stock
      with notice of, and subject to, the provisions of the Company’s Certificate
      of Incorporation and Bylaws and all amendments thereto. This Certificate
      is not valid unless countersigned and registered by the Transfer Agent and
      Registrar.
	    WITNESS the facsimile
      seal of the Company and the facsimile signatures of its duly authorized
      officers.
	 	 	 
	 	
	 
	[SIG]
	ReGen Biologics, Inc.
	[SIG]

	
	[Seal]
	

	SECRETARY
	DELAWARE
	CHAIRMAN AND CHIEF EXECUTIVE OFFICER
	 	
	 
	 	 	 
	COUNTERSIGNED AND REGISTERED:

                              
                    
      EquiServe Trust Company, N.A.  
	 
	TRANSFER AGENT

        AND REGISTRAR 
	
	 
	 	 	 
	 	 	 
	AUTHORIZED OFFICER
	 	 
	 	 	 
	

 

	      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:
	 	 	 	 	 
	TEN COM	—	as tenants in common	UNIF GIFT MIN ACT–	________Custodian___________
	TEN ENT	—	as tenants by the entireties	 	(Cust)                            (Minor)
	JT TEN	—	as joint tenants with right of survivorship and not as
      tenants in common 	 	under Uniform Gifts to Minors Act___________
	 	 	 	 	            (State)
	 	 	 	 	 
	 	 	 	 	 
	 

	Additional abbreviations
        may also be used though not in the above list.

	 
	 
	For value received_______________________________________________________hereby
      sell, assign and transfer unto
	 	 	 	 	 
	Please insert Social Security
        or other 

        identifying number of assignee, if any
	 	 
	
 
 
	 	 
	 	 	 	 	 
	

	 
	

	Please print or
        typewrite name and address including postal zip code of assignee

	 	 	 	 	 
	

	 
	

	Shares of the Common Stock represented by the
      within Certificate, and do hereby irrevocably constitute and appoint
	 	 	 	 	Attorney

	
 
	to transfer the said stock on the books of
      the Company with full power of substitution in the premises.
	 	 	 	 	 
	Date:
	 	 	  
	 	 
	 	

      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. The signature
      of the person executing this power must be guaranteed by an Eligible Guarantor
      Institution such as a Commercial Bank, Trust Company, Securities Broker/Dealer,
      Credit Union, or Savings Association participating in a Medallion program
      approved by the Securities Transfer Association, Inc.exv4w5

 

ReGen Biologics, Inc.

NON-EMPLOYEE DIRECTOR SUPPLEMENTAL STOCK OPTION PLAN

(Amended and Restated Effective January 31, 2003)

Section 1. Purpose.

     The purpose of the Plan, as hereinafter set forth, is to enable the
Company to attract, retain and reward qualified non-employee directors by
offering them an opportunity to have a greater proprietary interest in and a
closer identity with the Company and its financial success.

     Options granted under this Plan shall be nonqualified stock options.

Section 2. Definitions.

     Board: The Board of Directors of the Company.

     Change in Control: The purchase or other acquisition by any person,
entity or group of persons, within the meaning of section 13(d) or 14(d) of the
Exchange Act or any comparable successor provisions, of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more of either the outstanding shares of common stock or the combined voting
power of the Company’s then outstanding voting securities entitled to vote
generally; the approval by the stockholders of the Company of a reorganization,
merger, or consolidation in each case, with respect to which persons who were
stockholders of the Company immediately prior to such reorganization, merger or
consolidation do not immediately thereafter, own more than 30% of the combined
voting power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated Company’s then outstanding securities; a
liquidation or dissolution of the Company; or of the sale of all or
substantially all of the Company’s assets.

     Code: The Internal Revenue Code of 1986, as amended from time to time.

     Committee: A committee composed of at least two Non-Employee Directors,
within the meaning of Rule 16b-3(b)(3) of the Securities and Exchange
Commission, who are responsible for the administration of the Plan in
accordance with Section 3. Members of the Committee shall be designated by the
Chairman of the Board and shall include the Chairman of the Board if that is
consistent with the preceding sentence.

     Common Stock: The common stock, $0.01 par value, of the Company or such
other class of shares or other securities as may be applicable pursuant to the
provisions of Section 8.

     Company: ReGen Biologics, Inc., a Delaware corporation, its subsidiary or
subsidiaries, and any successor thereto.

     Disabled or Disability: Permanent and total disability, as defined in
Code Section 22(e)(3). A Participant shall not be considered Disabled unless
the Committee

Non-Employee Director Supplement
Stock Option Plan – page 1 of 1

 

 

determines that the Disability arose prior to such Participant’s
termination of membership on the Board.

     Exchange Act: The Securities Exchange Act of 1934, as amended from time
to time.

     Fair Market Value: The amount determined by the Committee from time to
time, using such good faith valuation methods as it deems appropriate, except
that as long as the Common Stock is traded on NASDAQ or a recognized stock
exchange, it shall mean the average of the highest and lowest quoted selling
prices for the shares on the relevant date, or, if there were no sales on such
date, the weighted average of the means between the highest and the lowest
quoted selling prices on the nearest day before and the nearest day after the
relevant date, as prescribed by Treasury Regulation Section 20.2031-2(b)(2), as
reported in the Wall Street Journal or a similar publication selected by the
Committee.

     Option: A nonqualified stock option to purchase shares of Common Stock
granted to a Participant pursuant to Section 6.

     Participant: Any non-employee member of the Board.

     Plan: The ReGen Biologics, Inc. Non-Employee Director Supplemental Stock
Option Plan, as amended from time to time.

Section 3. Administration.

          (a) Committee. The Plan shall be administered by the Committee.

          (b) Authority of the Committee. The Committee shall have the authority to
construe and interpret the Plan and to establish, amend or waive rules and
regulations for its administration. Subject to the limitations of the express
provisions of the Plan, Options may be subject to such provisions as the
Committee shall deem advisable, and may be amended by the Committee from time
to time; provided that no such amendment may adversely affect the rights of the
holder of an Option without such holder’s consent.

          (c) Powers of the Committee. The Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the administration of the
Plan and may rely upon any opinion received from any such counsel or consultant
and any computation received from any such consultant or agent.

          (d) Indemnification. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option awarded under it. To the maximum extent permitted by applicable law,
each member of the Committee shall be indemnified and held harmless by the
Company against any cost or expense (including legal fees) or liability
(including any sum paid in settlement of a claim with the approval of the
Company) arising out of any act or omission to act in connection with the Plan
unless arising out of such member’s own fraud or bad faith. Such
indemnification shall be in addition to any rights of indemnification the
members may have as members of the Board or under the by-laws of the Company.

Non-Employee Director Supplement
Stock Option Plan – page 2 of 2

 

 

          (e)  Authority of the Board. In addition to the authority otherwise
expressly granted to the Board under the Plan, the Board at its discretion may
carry out any of the functions of the Committee as set forth in the Plan, in
which capacity the Board and the members thereof shall
have all of the authority, powers and rights of the Committee and the
members thereof as set forth in the Plan.

Section 4. Common Stock Subject to Plan.

     The aggregate shares of Common Stock that may be issued under the Plan
shall not exceed 500,000, as adjusted in accordance with the provisions of
Section 8.

     In the event of a lapse, expiration, termination, forfeiture or
cancellation of any Option granted under the Plan without the issuance of
shares, the Common Stock subject to or reserved for such Option may be used
again for new grants of Options hereunder; provided that in no event may the
number of shares of Common Stock issued hereunder exceed the total number of
shares reserved for issuance. Any shares of Common Stock withheld or
surrendered to pay withholding taxes pursuant to Section 11(e) or withheld or
surrendered in full or partial payment of the exercise price of an Option
pursuant to Section 6(e) shall be added to the aggregate shares of Common Stock
available for issuance.

Section 5. Eligibility.

     Options shall be granted under the Plan solely to individuals who are
non-employee members of the Board on the date of grant (“Participants”).

Section 6. Terms and Conditions of Options.

     Each Option granted under the Plan shall be evidenced by an agreement, in
a form approved by the Committee, which shall be subject to the following terms
and conditions and to such other terms and conditions as the Committee may deem
appropriate that are not inconsistent with the provisions of the Plan:

          (a) Timing of Option Grants and Number of Underlying Shares. Options
shall be granted to such Participants as the Committee may designate at such
time or times as the Committee may determine. Each Option agreement shall
designate the number of shares of common Stock to which they pertain.

          (b) Exercise Price. The per share exercise price of each Option granted
under the Plan shall be no less than the Fair Market Value per share of Common
Stock at the date the Option is granted.

          (c) Vesting of Options. Each Option agreement shall specify the manner in
which the Option shall vest.

          (d) Option Period. Each Option agreement shall specify the period for
which the Option thereunder is granted and shall provide that the Option shall
expire at the end of such period.

Non-Employee Director Supplement
Stock Option Plan – page 3 of 3

 

 

          (e) Payment. The exercise price of an Option shall be paid in full at the
time of exercise (i) in cash, (ii) through the surrender of previously-acquired
shares of Common Stock having a Fair Market Value equal to the exercise price
of the Option provided that such
previously-acquired shares have been held by the Participant for at least
six months, unless the Committee in its discretion permits the use of shares
held less than six months, (iii) through the withholding by the Company (at the
election of the Participant) of shares of Common Stock having a Fair Market
Value equal to the exercise price, provided that the Participant attests in a
manner acceptable to the Committee that he or she holds previously-acquired
shares equal in number to the number of shares withheld by the Company and has
held such shares for at least six months, (iv) through the withholding by the
Company (at the discretion of the Committee) of shares of Common Stock having a
Fair Market Value equal to the exercise price, or (v) by a combination of (i),
(ii) (iii) and (iv), in the discretion of the Committee.

Section 7. Treatment of Options upon Termination.

          (a) Termination due to Disability or Death. Upon the termination of a
Participant’s membership on the Board by reason of Disability or death, such
Participant’s Options shall become or remain fully vested and shall be
exercisable by such Participant (or, in the case of death, by his or her
estate) for not later than the earlier of one year after the termination date
or the expiration of the term of the Options.

          (b) Termination Other than for Cause. Except as otherwise determined by
the Committee in its sole discretion and set forth in the relevant grant
agreement, upon the termination of a Participant’s membership on the Board or
for any reason other than for Cause (as defined in Section 7(c)), Disability or
death, such Participant’s Options (to the extent vested prior to such
termination) may be exercised by such Participant during the three-month period
commencing on the date of termination, but not later than the expiration of the
term of the Options. If a Participant dies during such three month period, his
or her estate may exercise the Options (to the extent such Options were vested
and exercisable prior to death), but not later than the earlier of one year
after the date or the expiration of the term of the Options.

          (c) Termination for Cause. Upon termination of a Participant’s membership
on the Board for Cause (as defined below), the Participant’s right to exercise
his or her Options shall terminate at the time notice of termination is given
by the Company to such Participant. For purposes of this provision,
substantial cause shall include:

               (i) The commission of an action against or in derogation of the
interests of the Company which constitutes an act of fraud, dishonesty or
moral turpitude or which, if proven in a court of law, would constitute a
violation of a criminal code or similar law;

               (ii) A material breach of any material duty or obligation imposed
upon the Participant by the Company;

               (iii) Divulging the Company’s information; or

               (iv) The performance of any similar action that the Committee, in
its sole discretion, may deem to be sufficiently injurious to the
interests of the Company so as to constitute substantial cause for
termination.

Non-Employee Director Supplement
Stock Option Plan – page 4 of 4

 

 

Section 8. Adjustment Provisions.

     In the event of a stock split, stock dividend, recapitalization,
reclassification or combination of shares, merger, sale of assets or similar
event, the Committee shall adjust equitably (a) the number and class of shares
or other securities that are reserved for issuance under the Plan, (b) the
number and class of shares or other securities that are subject to outstanding
Options, and (c) the appropriate Fair Market Value and other price
determinations applicable to Options. The Committee shall make all
determinations under this Section 8, and all such determinations shall be
conclusive and binding. Notwithstanding the foregoing, in the event of a stock
split, stock dividend, reverse stock split, or substantially similar
transaction (the “Event”): (1) the number of shares subject to each
then-outstanding Option shall be automatically adjusted so that upon exercise
of each such Option, the holder of the Option shall be entitled to receive the
number of shares of Common Stock which the holder would have been entitled to
receive after the Event had the Option been exercised immediately before the
earlier of the date of the consummation of the Event or the record date of the
Event (the “Event Date”); (2) the exercise price of a share of Common Stock
subject to each then-outstanding Option shall be automatically adjusted to
equal the exercise price per share set forth in the Option agreement, divided
by the “Adjustment Factor” (the “Adjustment Factor” shall equal the number (or
fractional number) of shares of Common Stock that the holder of one share of
Common Stock before the Event Date would hold after the Event Date); (3) the
number of shares of Common Stock available for issuance under the Plan
immediately after the Event Date shall be automatically adjusted to equal the
number of shares available for issuance under the Plan immediately prior to the
Event Date, multiplied by the Adjustment Factor; (4) any per share exercise
price containing a fraction of a cent shall be rounded up to the next highest
cent; (5) any Option to purchase fractional shares shall be automatically
eliminated; and (6) any share limits with a fractional amount shall be rounded
down to the next lowest whole number. The automatic adjustments described in
the foregoing sentence shall not be made to the extent that the Committee
determines in its discretion that the automatic adjustment(s) would result in a
charge for financial accounting purposes or would not constitute an equitable
adjustment under the circumstances. In such cases, the Committee shall
determine the appropriate adjustments to be made to outstanding awards, per
share exercise prices, and the share limits set forth in the Plan, and the
Committee’s determination shall be binding and conclusive.

Section 9. Term of Plan.

     The Plan shall continue until terminated by the Board or until no Common
Stock remains available for issuance under Section 4, whichever occurs first.

Section 10. Change in Control.

     In the event of a Change in Control, all outstanding Options shall fully
vest in each Participant.

Non-Employee Director Supplement
Stock Option Plan – page 5 of 5

 

 

Section 11. General Provisions.

          (a) Board Membership. Nothing in the Plan or in any related instrument
shall confer upon any Participant any right to continue as a member of the
Board or shall affect the right of the Company to terminate the Board
membership of any Participant with or without cause.

          (b) Legality of Issuance of Shares. No Common Stock shall be issued
pursuant to the exercise of an Option unless and until all legal requirements
applicable to such issuances have been satisfied.

          (c) Ownership of Common Stock Allocated to Plan. No Participant
(individually or as a member of a group), and no beneficiary or other person
claiming under or through such Participant, shall have any right, title or
interest in or to any Common Stock allocated or reserved for purposes of the
Plan or subject to any Option, except as to shares of Common Stock, if any, as
shall have been issued to such Participant or beneficiary.

          (d) Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Virginia.

          (e) Withholding of Taxes. The Company may withhold, or allow a
Participant to remit to the Company, any Federal, state or local taxes required
by law to be withheld with respect to any event giving rise to income tax
liability with respect to an Option. In order to satisfy all or any portion of
such income tax liability, a Participant may elect to surrender Common Stock
that would otherwise have been issued to the Participant pursuant to the
exercise of an Option, provided that the number of shares of such withheld or
surrendered Common Stock shall not be greater than the amount that is
necessary to satisfy the minimum withholding obligation of the Company that
arises with respect to the Option.

          (f) Nontransferability. During the lifetime of a Participant, any Option
granted to him or her shall be exercisable only by him or her by his or her
guardian or legal representative. No Option shall be assignable or
transferable, except by will or by laws of descent and distribution, and no
option shall be subjected to any encumbrance, pledge or charge of any nature.

Section 12. Amendment or Discontinuance of Plan.

     The Board, acting by a majority of its members, without further action on
the part of the stockholders, may from time to time alter, amend or suspend the
Plan or any Option granted hereunder or may at any time terminate the Plan;
provided, however, that the Board may not take any action that would cause the
Plan to fail to comply with Rule 16b-3(b)(3) of the Securities and Exchange
Commission or any other applicable law or any applicable exchange requirements;
and provided further that no such action shall materially and adversely affect
any outstanding Options without consent of the respective Participants.

Section 13. Effective Date of Plan.

     The Plan as adopted by the Board and approved by stockholders was
originally effective on January 1, 1999. The Plan was amended and restated by
the Board and approved by

Non-Employee Director Supplement
Stock Option Plan – page 6 of 6

 

 

shareholders effective on January 1, 2000, and was amended again on
December 9, 2000, and April 5, 2001. The Plan was amended and such amendment
was approved by shareholders again in 2001, such amendment being effective
January 1, 2001. The Plan is intended to apply to the supplemental grant of an
Option to purchase 16,700 shares of Common Stock to each non-employee director
by the Board on January 16, 1999. The Plan, as amended and restated herein, is
effective on January 31, 2003.

Non-Employee Director Supplement
Stock Option Plan – page 7 of 7

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