Document:

exv10w4

 

Exhibit 10.4

CONCENTRIC MEDICAL, INC.

2007 EQUITY INCENTIVE PLAN

     1. Purposes of the Plan. The purposes of this Plan are:

	 	•	 	to attract and retain the best available personnel for positions of
substantial responsibility,
	 
	 	•	 	to provide additional incentive to Employees, Directors and Consultants, and
	 
	 	•	 	to promote the success of the Company’s business.

     The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares.

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

          (a) “Administrator” means the Board or any of its Committees as will be administering
the Plan, in accordance with Section 4 of the Plan.

          (b) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.

          (c) “Award” means, individually or collectively, a grant under the Plan of Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units or
Performance Shares.

          (d) “Award Agreement” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan. The Award Agreement is
subject to the terms and conditions of the Plan.

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

          (f) “Change in Control” means the occurrence of any of the following events:

               (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company’s then outstanding voting securities;

 

 

               (ii) The consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets;

               (iii) A change in the composition of the Board occurring within a two (2)-year period, as a
result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent
Directors” means directors who either (A) are Directors as of the effective date of the Plan, or
(B) are elected, or nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination (but will not
include an individual whose election or nomination is in connection with an actual or threatened
proxy contest relating to the election of directors to the Company); or

               (iv) The consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or consolidation.

          (g) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code herein will be a reference to any successor or amended section of the Code.

          (h) “Committee” means a committee of Directors or of other individuals satisfying
Applicable Laws appointed by the Board in accordance with Section 4 hereof.

          (i) “Common Stock” means the common stock of the Company.

          (j) “Company” means Concentric Medical, Inc., a Delaware corporation, or any successor
thereto.

          (k) “Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services to such entity.

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

          (m) “Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code, provided that in the case of Awards other than Incentive Stock Options, the
Administrator in its discretion may determine whether a permanent and total disability exists in
accordance with uniform and non-discriminatory standards adopted by the Administrator from time to
time.

          (n) “Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
director’s fee by the Company will be sufficient to constitute “employment” by the Company.

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

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          (p) “Exchange Program” means a program under which (i) outstanding Awards are
surrendered or cancelled in exchange for Awards of the same type (which may have higher or lower
exercise prices and different terms), Awards of a different type, and/or cash, (ii) Participants
would have the opportunity to transfer any outstanding Awards to a financial institution or other
person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding
Award is reduced. The Administrator will determine the terms and conditions of any Exchange
Program in its sole discretion.

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

               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market or
the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

               (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and
low asked prices for the Common Stock on the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

               (iii) For purposes of any Awards granted on the Registration Date, the Fair Market Value will
be the initial price to the public as set forth in the final prospectus included within the
registration statement in Form S-1 filed with the Securities and Exchange Commission for the
initial public offering of the Company’s Common Stock; or

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

          (r) “Fiscal Year” means the fiscal year of the Company.

          (s) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

          (t) “Inside Director” means a Director who is an Employee.

          (u) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or
is not intended to qualify as an Incentive Stock Option.

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

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

          (x) “Outside Director” means a Director who is not an Employee.

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

          (z) “Participant” means the holder of an outstanding Award.

          (aa) “Performance Share” means an Award denominated in Shares which may be earned in
whole or in part upon attainment of performance goals or other vesting criteria as the
Administrator may determine pursuant to Section 10.

          (bb) “Performance Unit” means an Award which may be earned in whole or in part upon
attainment of performance goals or other vesting criteria as the Administrator may determine and
which may be settled for cash, Shares or other securities or a combination of the foregoing
pursuant to Section 10.

          (cc) “Period of Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of
target levels of performance, or the occurrence of other events as determined by the Administrator.

          (dd) “Plan” means this 2007 Equity Incentive Plan.

          (ee) “Registration Date” means the effective date of the first registration statement
that is filed by the Company and declared effective pursuant to Section 12(g) of the Exchange Act,
with respect to any class of the Company’s securities.

          (ff) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under
Section 7 of the Plan, or issued pursuant to the early exercise of an Option.

          (gg) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to Section 8. Each Restricted Stock Unit
represents an unfunded and unsecured obligation of the Company.

          (hh) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.

          (ii) “Section 16(b)” means Section 16(b) of the Exchange Act.

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

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

          (ll) “Stock Appreciation Right” means an Award, granted alone or in connection with an
Option, that pursuant to Section 9 is designated as a Stock Appreciation Right.

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

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     3. Stock Subject to the Plan.

          (a) Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan,
the maximum aggregate number of Shares that may be issued under the Plan is seven million eight
hundred thousand (7,800,000) (pre-split) Shares. The Shares may be authorized, but unissued, or
reacquired Common Stock.

          (b) Automatic Share Reserve Increase. The number of Shares available for issuance
under the Plan will be increased on the first day of each Fiscal Year beginning with the 2009
Fiscal Year, in an amount equal to the least of (i) ten million (10,000,000) (pre-split) Shares,
(ii) 4% of the outstanding Shares on the last day of the immediately preceding Fiscal Year or (iii)
such number of Shares determined by the Board.

          (c) Lapsed Awards. If an Award expires or becomes unexercisable without having been
exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted
Stock, Restricted Stock Units, Performance Units or Performance Shares, is forfeited to or
repurchased by the Company due to failure to vest, the unpurchased Shares (or for Awards other than
Options or Stock Appreciation Rights the forfeited or repurchased Shares) which were subject
thereto will become available for future grant or sale under the Plan (unless the Plan has
terminated). With respect to Stock Appreciation Rights, only Shares actually issued pursuant to a
Stock Appreciation Right will cease to be available under the Plan; all remaining Shares under
Stock Appreciation Rights will remain available for future grant or sale under the Plan (unless the
Plan has terminated). Shares that have actually been issued under the Plan under any Award will
not be returned to the Plan and will not become available for future distribution under the Plan;
provided, however, that if Shares issued pursuant to Awards of Restricted Stock, Restricted Stock
Units, Performance Shares or Performance Units are repurchased by the Company or are forfeited to
the Company, such Shares will become available for future grant under the Plan. Shares used to pay
the exercise price of an Award or to satisfy the tax withholding obligations related to an Award
will become available for future grant or sale under the Plan. To the extent an Award under the
Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the
number of Shares available for issuance under the Plan. Notwithstanding the foregoing and, subject
to adjustment as provided in Section 13, the maximum number of Shares that may be issued upon the
exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a),
plus, to the extent allowable under Section 422 of the Code and the Treasury Regulations
promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to
Sections 3(b) and 3(c).

          (d) Share Reserve. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as will be sufficient to satisfy the requirements
of the Plan.

     4. Administration of the Plan.

          (a) Procedure.

               (i) Multiple Administrative Bodies. Different Committees with respect to different
groups of Service Providers may administer the Plan.

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               (ii) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two (2) or
more “outside directors” within the meaning of Section 162(m) of the Code.

               (iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt
under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the
requirements for exemption under Rule 16b-3.

               (iv) Other Administration. Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy
Applicable Laws.

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

               (i) to determine the Fair Market Value;

               (ii) to select the Service Providers to whom Awards may be granted hereunder;

               (iii) to determine the number of Shares to be covered by each Award granted hereunder;

               (iv) to approve forms of Award Agreements for use under the Plan;

               (v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise
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, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such factors as the
Administrator will determine;

               (vi) to determine the terms and conditions of any, and to institute any Exchange Program;

               (vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

               (viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of satisfying applicable
foreign laws;

               (ix) to modify or amend each Award (subject to Section 18(c) of the Plan), including but not
limited to the discretionary authority to extend the post-termination exercisability period of
Awards and to extend the maximum term of an Option (subject to Section 7(b) regarding Incentive
Stock Options);

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               (x) to allow Participants to satisfy withholding tax obligations in such manner as prescribed
in Section 15;

               (xi) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Administrator;

               (xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant under an Award; and

               (xiii) to make all other determinations deemed necessary or advisable for administering the
Plan.

          (c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations
and interpretations will be final and binding on all Participants and any other holders of Awards.

     5. Eligibility. Nonstatutory Stock Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Performance Shares and Performance Units may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.

     6. Stock Options.

          (a) Limitations. Each Option will be designated in the Award Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation,
to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by the Participant during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars
($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this
Section 7(a), Incentive Stock Options will be taken into account in the order in which they were
granted. The Fair Market Value of the Shares will be determined as of the time the Option with
respect to such Shares is granted.

          (b) Term of Option. The term of each Option will be stated in the Award Agreement.
In the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or
such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive
Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be
five (5) years from the date of grant or such shorter term as may be provided in the Award
Agreement.

          (c) Option Exercise Price and Consideration.

               (i) Exercise Price. The per share exercise price for the Shares to be issued pursuant
to exercise of an Option will be determined by the Administrator, subject to the following:

                    (1) In the case of an Incentive Stock Option

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                         a) granted to an Employee who, at the time the Incentive Stock Option is granted, 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, the per Share exercise price will be no less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant.

                         b) granted to any Employee other than an Employee described in paragraph (A) immediately
above, the per Share exercise price will be no less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.

                    (2) In the case of a Nonstatutory Stock Option, the per Share exercise price will be no less
than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

                    (3) Notwithstanding the foregoing, Options may be granted with a per Share exercise price of
less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant
pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the
Code.

               (ii) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and will determine any
conditions that must be satisfied before the Option may be exercised.

               (iii) Form of Consideration. The Administrator will determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator will determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory
note, (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which such Option will be exercised and
provided that accepting such Shares, in the sole discretion of the Administrator, will not result
in any adverse accounting consequences to the Company; (5) consideration received by the Company
under a broker-assisted (or other) cashless exercise program implemented by the Company in
connection with the Plan; (6) any combination of the foregoing methods of payment; or (7) such
other consideration and method of payment for the issuance of Shares to the extent permitted by
Applicable Laws.

          (d) Exercise of Option.

               (i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder
will be exercisable according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.

                    An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such
form as the Administrator may specify from time to time) from the person entitled to exercise the
Option, and (ii) full payment for the Shares with respect to which the Option is exercised
(together with applicable withholding taxes). Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Award

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Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name
of the Participant or, if requested by the Participant, in the name of the Participant and his or
her spouse. Until the Shares are issued (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 will exist with respect to the Shares subject to an
Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued)
such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are issued, except as
provided in Section 14 of the Plan.

               Exercising an Option in any manner will decrease the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.

               (ii) Termination of Relationship as a Service Provider. If a Participant ceases to be
a Service Provider, other than upon the Participant’s termination as the result of the
Participant’s death or Disability, the Participant may exercise his or her Option within such
period of time as is specified in the Award Agreement to the extent that the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for three (3) months following the Participant’s termination.
Unless otherwise provided by the Administrator, if on the date of termination the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
will revert to the Plan. If after termination the Participant does not exercise his or her Option
within the time specified by the Administrator, the Option will terminate, and the Shares covered
by such Option will revert to the Plan.

               (iii) Disability of Participant. If a Participant ceases to be a Service Provider as
a result of the Participant’s Disability, the Participant may exercise his or her Option within
such period of time as is specified in the Award Agreement to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for twelve (12) months following the Participant’s termination.
Unless otherwise provided by the Administrator, if on the date of termination the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
will revert to the Plan. If after termination the Participant does not exercise his or her Option
within the time specified herein, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.

               (iv) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised following the Participant’s death within such period of time as is specified in
the Award Agreement to the extent that the Option is vested on the date of death (but in no event
may the option be exercised later than the expiration of the term of such Option as set forth in
the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has
been designated prior to Participant’s death in a form acceptable to the Administrator. If no such
beneficiary has been designated by the Participant, then such Option may be exercised by the
personal representative of the Participant’s estate or by the person(s) to whom the Option is
transferred pursuant to the Participant’s will or in accordance with the laws of descent and

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distribution. In the absence of a specified time in the Award Agreement, the Option will
remain exercisable for twelve (12) months following Participant’s death. Unless otherwise provided
by the Administrator, if at the time of death Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will immediately revert to the
Plan. If the Option is not so exercised within the time specified herein, the Option will
terminate, and the Shares covered by such Option will revert to the Plan.

     7. Restricted Stock.

          (a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, will determine.

          (b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by
an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and
such other terms and conditions as the Administrator, in its sole discretion, will determine.
Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of
Restricted Stock until the restrictions on such Shares have lapsed.

          (c) Transferability. Except as provided in this Section 8, Shares of Restricted Stock
may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.

          (d) Other Restrictions. The Administrator, in its sole discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

          (e) Removal of Restrictions. Except as otherwise provided in this Section 8, Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released
from escrow as soon as practicable after the last day of the Period of Restriction or at such other
time as the Administrator may determine. The Administrator, in its discretion, may accelerate the
time at which any restrictions will lapse or be removed.

          (f) Voting Rights. During the Period of Restriction, Service Providers holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.

          (g) Dividends and Other Distributions. During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares, unless the Administrator provides otherwise. If
any such dividends or distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid.

          (h) Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company
and again will become available for grant under the Plan.

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     8. Restricted Stock Units.

          (a) Grant. Restricted Stock Units may be granted at any time and from time to time as
determined by the Administrator. After the Administrator determines that it will grant Restricted
Stock Units under the Plan, it will advise the Participant in an Award Agreement of the terms,
conditions, and restrictions related to the grant, including the number of Restricted Stock Units.

          (b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in
its discretion, which, depending on the extent to which the criteria are met, will determine the
number of Restricted Stock Units that will be paid out to the Participant. The Administrator may
set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals
(including, but not limited to, continued employment), or any other basis determined by the
Administrator in its discretion.

          (c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the
Participant will be entitled to receive a payout as determined by the Administrator.
Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to
receive a payout.

          (d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made
as soon as practicable after the date(s) determined by the Administrator and set forth in the Award
Agreement. The Administrator, in its sole discretion, may only settle earned Restricted Stock
Units in cash, Shares, or a combination of both.

          (e) Cancellation. On the date set forth in the Award Agreement, all unearned
Restricted Stock Units will be forfeited to the Company.

     9. Stock Appreciation Rights.

          (a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the
Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to
time as will be determined by the Administrator, in its sole discretion.

          (b) Number of Shares. The Administrator will have complete discretion to determine
the number of Stock Appreciation Rights granted to any Service Provider.

          (c) Exercise Price and Other Terms. The per share exercise price for the Shares to be
issued pursuant to exercise of a Stock Appreciation Right will be determined by the Administrator
and will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date
of grant. Otherwise, subject to Section 7(a) of the Plan, the Administrator, subject to the
provisions of the Plan, will have complete discretion to determine the terms and conditions of
Stock Appreciation Rights granted under the Plan.

          (d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be
evidenced by an Award Agreement that will specify the exercise price, the term of the Stock

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Appreciation Right, the conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.

          (e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under
the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set
forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 7(d) also will
apply to Stock Appreciation Rights.

          (f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation
Right, a Participant will be entitled to receive payment from the Company in an amount determined
by multiplying:

               (i) The difference between the Fair Market Value of a Share on the date of exercise over the
exercise price; times

               (ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.

     At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may
be in cash, in Shares of equivalent value, or in some combination thereof.

     10. Performance Units and Performance Shares.

          (a) Grant of Performance Units/Shares. Performance Units and Performance Shares may
be granted to Service Providers at any time and from time to time, as will be determined by the
Administrator, in its sole discretion. The Administrator will have complete discretion in
determining the number of Performance Units and Performance Shares granted to each Participant.

          (b) Value of Performance Units/Shares. Each Performance Unit will have an initial
value that is established by the Administrator on or before the date of grant. Each Performance
Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

          (c) Performance Objectives and Other Terms. The Administrator will set performance
objectives or other vesting provisions (including, without limitation, continued status as a
Service Provider) in its discretion which, depending on the extent to which they are met, will
determine the number or value of Performance Units/Shares that will be paid out to the Service
Providers. The time period during which the performance objectives or other vesting provisions
must be met will be called the “Performance Period.” Each Award of Performance Units/Shares will
be evidenced by an Award Agreement that will specify the Performance Period, and such other terms
and conditions as the Administrator, in its sole discretion, will determine. The Administrator may
set performance objectives based upon the achievement of Company-wide, divisional, or individual
goals, applicable federal or state securities laws, or any other basis determined by the
Administrator in its discretion.

          (d) Earning of Performance Units/Shares. After the applicable Performance Period has
ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of
Performance Units/Shares earned by the Participant over the Performance Period, to be

-12-

 

determined as a function of the extent to which the corresponding performance objectives or
other vesting provisions have been achieved. After the grant of a Performance Unit/Share, the
Administrator, in its sole discretion, may reduce or waive any performance objectives or other
vesting provisions for such Performance Unit/Share.

          (e) Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares will be made as soon as practicable after the expiration of the applicable
Performance Period. The Administrator, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable Performance Period) or
in a combination thereof.

          (f) Cancellation of Performance Units/Shares. On the date set forth in the Award
Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and
again will be available for grant under the Plan.

     11. Leaves of Absence/Transfer Between Locations. Unless the Administrator provides
otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of
absence. A Service Provider will not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the Company or between the
Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may
exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute
or contract. If reemployment upon expiration of a leave of absence approved by the Company is not
so guaranteed, then three (3) months following the ninety-first (91st) day of such leave
any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock
Option and will be treated for tax purposes as a Nonstatutory Stock Option.

     12. Transferability of Awards. Unless determined otherwise by the Administrator, an
Award 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 and may be exercised, during the
lifetime of the Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as the Administrator
deems appropriate.

     13. Adjustments; Dissolution or Liquidation; Merger or Change in Control.

          (a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Shares or other securities of the Company, or other change in the corporate structure
of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or
enlargement of the benefits or potential benefits intended to be made available under the Plan,
will adjust the number and class of Shares that may be delivered under the Plan and/or the number,
class, and price of Shares covered by each outstanding Award, and the numerical Share limits in
Section 3 of the Plan.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as soon as practicable

-13-

 

prior to the effective date of such proposed transaction. To the extent it has not been
previously exercised, an Award will terminate immediately prior to the consummation of such
proposed action.

          (c) Change in Control. In the event of a merger or Change in Control, each
outstanding Award will be treated as the Administrator determines, including, without limitation,
that each Award be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. The Administrator will not be
required to treat all Awards similarly in the transaction.

          In the event that the successor corporation does not assume or substitute for the Award, the
Participant will fully vest in and have the right to exercise all of his or her outstanding Options
and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be
vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse,
and, with respect to Awards with performance-based vesting, all performance goals or other vesting
criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms
and conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or
substituted in the event of a Change in Control, the Administrator will notify the Participant in
writing or electronically that the Option or Stock Appreciation Right will be exercisable for a
period of time determined by the Administrator in its sole discretion, and the Option or Stock
Appreciation Right will terminate upon the expiration of such period.

          For the purposes of this subsection (c), an Award will be considered assumed if, following the
Change in Control, the Award confers the right to purchase or receive, for each Share subject to
the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or
other securities or property) received in the Change in Control by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the Change in Control is not
solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received upon the
exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit,
Performance Unit or Performance Share, for each Share subject to such Award, to be solely common
stock of the successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Change in Control.

          Notwithstanding anything in this Section 13(c) to the contrary, an Award that vests, is earned
or paid-out upon the satisfaction of one or more performance goals will not be considered assumed
if the Company or its successor modifies any of such performance goals without the Participant’s
consent; provided, however, a modification to such performance goals only to reflect the successor
corporation’s post-Change in Control corporate structure will not be deemed to invalidate an
otherwise valid Award assumption.

          (d) Outside Director Awards. With respect to Awards granted to an Outside Director
that are assumed or substituted for, if on the date of or following such assumption or substitution
the Participant’s status as a Director or a director of the successor corporation, as applicable,
is terminated other than upon a voluntary resignation by the Participant (unless such resignation
is at the request of the acquirer), then the Participant will fully vest in and have the right

-14-

 

to exercise Options and/or Stock Appreciation Rights as to all of the Shares underlying such
Award, including those Shares which would not otherwise be vested or exercisable, all restrictions
on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Performance Units
and Performance Shares, all performance goals or other vesting criteria will be deemed achieved at
one hundred percent (100%) of target levels and all other terms and conditions met.

     14. Tax Withholding.

          (a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to
an Award (or exercise thereof), the Company will have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local, foreign or other taxes (including the Participant’s FICA obligation)
required to be withheld with respect to such Award (or exercise thereof).

          (b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may permit a Participant to satisfy such
tax withholding obligation, in whole or in part by (without limitation) (a) paying cash, (b)
electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market
Value equal to the minimum statutory amount required to be withheld, or (c) delivering to the
Company already-owned Shares having a Fair Market Value equal to the minimum statutory amount
required to be withheld. The Fair Market Value of the Shares to be withheld or delivered will be
determined as of the date that the taxes are required to be withheld.

     15. No Effect on Employment or Service. Neither the Plan nor any Award will confer
upon a Participant any right with respect to continuing the Participant’s relationship as a Service
Provider with the Company, nor will they interfere in any way with the Participant’s right or the
Company’s right to terminate such relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.

     16. Date of Grant. The date of grant of an Award will be, for all purposes, the date
on which the Administrator makes the determination granting such Award, or such other later date as
is determined by the Administrator. Notice of the determination will be provided to each
Participant within a reasonable time after the date of such grant.

     17. Term of Plan. Subject to Section 21 of the Plan, the Plan will become effective
upon its adoption by the Board. It will continue in effect for a term of ten (10) years from the
date adopted by the Board, unless terminated earlier under Section 18 of the Plan.

     18. Amendment and Termination of the Plan.

          (a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

          (b) Stockholder Approval. The Company will obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws.

          (c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise

-15-

 

between the Participant and the Administrator, which agreement must be in writing and signed
by the Participant and the Company. Termination of the Plan will not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect to Awards granted under the
Plan prior to the date of such termination.

     19. Conditions Upon Issuance of Shares.

          (a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares will comply with
Applicable Laws and will be further subject to the approval of counsel for the Company with respect
to such compliance.

          (b) Investment Representations. As a condition to the exercise of an Award, the
Company may require the person exercising such 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.

     20. Inability to Obtain Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority will not have been obtained.

     21. Stockholder Approval. The Plan will be subject to approval by the stockholders of
the Company within twelve (12) months after the date the Plan is adopted by the Board. Such
stockholder approval will be obtained in the manner and to the degree required under Applicable
Laws.

-16-

 

CONCENTRIC MEDICAL, INC.

2007 EQUITY INCENTIVE PLAN

NOTICE OF GRANT OF STOCK OPTION

     Unless otherwise defined herein, the terms defined in the Concentric Medical, Inc. 2007 Equity
Incentive Plan (the “Plan”) will have the same defined meanings in this Notice of Grant of Stock
Option (the “Notice of Grant”) and Terms and Conditions of Stock Option Grant, attached hereto as
Exhibit A (together, the “Agreement”).

	 	 	 	 	 	 	 
	 

	 	Participant:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

     Participant has been granted an Option to purchase Common Stock of the Company, subject to the
terms and conditions of the Plan and this Agreement, as follows:

	 	 	 	 	 	 	 
	 

	 	Grant Number
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Date of Grant
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Vesting Commencement Date
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Number of Shares Granted
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Exercise Price per Share
	 	$
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Total Exercise Price
	 	$
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Type of Option
	 	___  Incentive Stock Option	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	___  Nonstatutory Stock Option	 	 
	 
	 	 	 	 	 	 
	 

	 	Term/Expiration Date	 	 	 	 
	 

	 	 	 	 

	 	 

     Vesting Schedule:

     Subject to accelerated vesting as set forth below or in the Plan, this Option will be
exercisable, in whole or in part, in accordance with the following schedule:

     [Twenty-five percent (25%) of the Shares subject to the Option will vest twelve (12) months
after the Vesting Commencement Date, and one forty-eighth (1/48th) of the Shares subject
to the Option will vest each month thereafter on the same day of the month as the Vesting
Commencement Date (and if there is no corresponding day, on the last day of the month), subject to
Participant continuing to be a Service Provider through each such date.]

 

 

     Termination Period:

     This Option will be exercisable for [three (3) months] after Participant ceases to be a
Service Provider, unless such termination is due to Participant’s death or Disability, in which
case this Option will be exercisable for [twelve (12) months] after Participant ceases to be a
Service Provider. Notwithstanding the foregoing, in no event may this Option be exercised after
the Term/Expiration Date as provided above and may be subject to earlier termination as provided in
Section 13(c) of the Plan.

     By Participant’s signature and the signature of the Company’s representative below,
Participant and the Company agree that this Option is granted under and governed by the terms and
conditions of the Plan and this Agreement. Participant has reviewed the Plan and this Agreement in
their entirety, has had an opportunity to obtain the advice of counsel prior to executing this
Agreement and fully understands all provisions of the Plan and Agreement. Participant hereby
agrees to accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to the Plan and Agreement. Participant further agrees to
notify the Company upon any change in the residence address indicated below.

	 	 	 	 	 
	PARTICIPANT

	 	 	 	CONCENTRIC MEDICAL, INC.
	 
	 	 	 	 
	 

	 	 	 	 
	Signature

	 	 	 	By
	 
	 	 	 	 
	 

	 	 	 	 
	Print Name

	 	 	 	Title
	 
	 	 	 	 
	Address:
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

- 2 -

 

EXHIBIT A

TERMS AND CONDITIONS OF STOCK OPTION GRANT

     1. Grant. The Company hereby grants to the Participant named in the Notice of Grant
(the “Participant”) an option (the “Option”) to purchase the number of Shares, as set forth in the
Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise
Price”), subject to all of the terms and conditions in this Agreement and the Plan, which is
incorporated herein by reference. Subject to Section 18(c) of the Plan, in the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of this Agreement, the
terms and conditions of the Plan will prevail.

          If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is
intended to qualify as an ISO under Section 422 of the Code. However, if this Option is intended
to be an ISO, to the extent that it exceeds the $100,000 rule of Code Section 422(d) it will be
treated as a Nonstatutory Stock Option (“NSO”).

     2. Vesting Schedule. Except as provided in Section 3, the Option awarded by this
Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant.
Shares scheduled to vest on a certain date or upon the occurrence of a certain condition will not
vest in Participant in accordance with any of the provisions of this Agreement, unless Participant
will have been continuously a Service Provider from the Date of Grant until the date such vesting
occurs.

     3. Administrator Discretion. The Administrator, in its discretion, may accelerate the
vesting of the balance, or some lesser portion of the balance, of the unvested Option at any time,
subject to the terms of the Plan. If so accelerated, such Option will be considered as having
vested as of the date specified by the Administrator.

     4. Exercise of Option. This Option may be exercised only within the term set out in
the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the
terms of this Agreement.

          This Option is exercisable by delivery of an exercise notice, in the form attached as
Exhibit B (the “Exercise Notice”) or in a manner and pursuant to such procedures as the
Administrator may determine, which will state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company pursuant to the provisions of the
Plan. The Exercise Notice will be completed by Participant and delivered to the Company. The
Exercise Notice will be accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares together with any applicable tax withholding. This Option will be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate
Exercise Price.

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

          (a) cash;

- 3 -

 

          (b) check; or

          (c) consideration received by the Company under a formal cashless exercise program adopted by
the Company in connection with the Plan.

     6. Tax Obligations.

          (a) Withholding of Taxes. Notwithstanding any contrary provision of this Agreement,
no certificate representing the Shares will be issued to Participant, unless and until satisfactory
arrangements (as determined by the Administrator) will have been made by Participant with respect
to the payment of income, employment and other taxes which the Company determines must be withheld
with respect to such Shares. To the extent determined appropriate by the Company in its
discretion, it will have the right (but not the obligation) to satisfy any tax withholding
obligations by reducing the number of Shares otherwise deliverable to Participant. If Participant
fails to make satisfactory arrangements for the payment of any required tax withholding obligations
hereunder at the time of the Option exercise, Participant acknowledges and agrees that the Company
may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

          (b) Notice of Disqualifying Disposition of ISO Shares. If the Option granted to
Participant herein is an ISO, and if Participant sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Grant
Date, or (ii) the date one (1) year after the date of exercise, Participant will immediately notify
the Company in writing of such disposition. Participant agrees that Participant may be subject to
income tax withholding by the Company on the compensation income recognized by Participant.

          (c) Code Section 409A. Under Code Section 409A, an option that vests after December
31, 2004 that was granted with a per Share exercise price that is determined by the Internal
Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on the date of grant
(a “Discount Option”) may be considered “deferred compensation.” A Discount Option may result in
(i) income recognition by Participant prior to the exercise of the option, (ii) an additional
twenty percent (20%) federal income tax, and (iii) potential penalty and interest charges. The
Discount Option may also result in additional state income, penalty and interest charges to the
Participant. Participant acknowledges that the Company cannot and has not guaranteed that the IRS
will agree that the per Share exercise price of this Option equals or exceeds the Fair Market Value
of a Share on the Date of Grant in a later examination. Participant agrees that if the IRS
determines that the Option was granted with a per Share exercise price that was less than the Fair
Market Value of a Share on the date of grant, Participant will be solely responsible for
Participant’s costs related to such a determination.

     7. Rights as Stockholder. Neither Participant nor any person claiming under or
through Participant will have any of the rights or privileges of a stockholder of the Company in
respect of any Shares deliverable hereunder unless and until certificates representing such Shares
will have been issued, recorded on the records of the Company or its transfer agents or registrars,
and delivered to Participant. After such issuance, recordation and delivery, Participant will have
all the

- 4 -

 

rights of a stockholder of the Company with respect to voting such Shares and receipt of
dividends and distributions on such Shares.

     8. No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE
PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING
PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR
IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE
COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S
RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

     9. Address for Notices. Any notice to be given to the Company under the terms of this
Agreement will be addressed to the Company at Concentric Medical, Inc., 1380 Shorebird Way,
Mountain View, CA 94043, or at such other address as the Company may hereafter designate in
writing.

     10. Grant is Not Transferable. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during the
lifetime of Participant only by Participant.

     11. Binding Agreement. Subject to the limitation on the transferability of this grant
contained herein, this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.

     12. Additional Conditions to Issuance of Stock. If at any time the Company will
determine, in its discretion, that the listing, registration or qualification of the Shares upon
any securities exchange or under any state or federal law, or the consent or approval of any
governmental regulatory authority is necessary or desirable as a condition to the issuance of
Shares to Participant (or his or her estate), such issuance will not occur unless and until such
listing, registration, qualification, consent or approval will have been effected or obtained free
of any conditions not acceptable to the Company. The Company will make all reasonable efforts to
meet the requirements of any such state or federal law or securities exchange and to obtain any
such consent or approval of any such governmental authority. Assuming such compliance, for income
tax purposes the Exercised Shares will be considered transferred to Participant on the date the
Option is exercised with respect to such Exercised Shares.

     13. Plan Governs. This Agreement is subject to all terms and provisions of the Plan.
In the event of a conflict between one or more provisions of this Agreement and one or more
provisions

- 5 -

 

of the Plan, the provisions of the Plan will govern. Capitalized terms used and not defined
in this Agreement will have the meaning set forth in the Plan.

     14. Administrator Authority. The Administrator will have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke any such rules
(including, but not limited to, the determination of whether or not any Shares subject to the
Option have vested). All actions taken and all interpretations and determinations made by the
Administrator in good faith will be final and binding upon Participant, the Company and all other
interested persons. No member of the Administrator will be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or this Agreement.

     15. Electronic Delivery. The Company may, in its sole discretion, decide to deliver
any documents related to Options awarded under the Plan or future Options that may be awarded under
the Plan by electronic means or request Participant’s consent to participate in the Plan by
electronic means. Participant hereby consents to receive such documents by electronic delivery and
agrees to participate in the Plan through any on-line or electronic system established and
maintained by the Company or another third party designated by the Company.

     16. Captions. Captions provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

     17. Agreement Severable. In the event that any provision in this Agreement will be
held invalid or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.

     18. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. Participant expressly warrants that he or
she is not accepting this Agreement in reliance on any promises, representations, or inducements
other than those contained herein. Modifications to this Agreement or the Plan can be made only in
an express written contract executed by a duly authorized officer of the Company. Notwithstanding
anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise
this Agreement as it deems necessary or advisable, in its sole discretion and without the consent
of Participant, to comply with Code Section 409A or to otherwise avoid imposition of any additional
tax or income recognition under Code Section 409A in connection to this Option.

     19. Amendment, Suspension or Termination of the Plan. By accepting this Award,
Participant expressly warrants that he or she has received an Option under the Plan, and has
received, read and understood a description of the Plan. Participant understands that the Plan is
discretionary in nature and may be amended, suspended or terminated by the Company at any time.

     20. Governing Law. This Agreement will be governed by the laws of the State of
California, without giving effect to the conflict of law principles thereof. For purposes of
litigating

- 6 -

 

any dispute that arises under this Option or this Agreement, the parties hereby submit to and
consent to the jurisdiction of the State of California, and agree that such litigation will be
conducted in the courts of Santa Clara County, California, or the federal courts for the United
States for the Northern District of California, and no other courts, where this Option is made
and/or to be performed.

- 7 -

 

EXHIBIT B

CONCENTRIC MEDICAL, INC.

2007 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

Concentric Medical, Inc.

1380 Shorebird Way

Mountain View, CA 94043

Attention:                     

     1. Exercise of Option. Effective as of today,                                         , ___, the
undersigned (“Purchaser”) hereby elects to purchase                                                     shares (the “Shares”) of the
Common Stock of Concentric Medical, Inc. (the “Company”) under and pursuant to the 2007 Equity
Incentive Plan (the “Plan”) and the Stock Option Agreement dated                      (the “Agreement”). The
purchase price for the Shares will be $                                         , as required by the Agreement.

     2. Delivery of Payment. Purchaser herewith delivers to the Company the full purchase
price of the Shares and any required tax withholding to be paid in connection with the exercise of
the Option.

     3. Representations of Purchaser. Purchaser acknowledges that Purchaser has received,
read and understood the Plan and the Agreement and agrees to abide by and be bound by their terms
and conditions.

     4. Rights as Stockholder. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares,
no right to vote or receive dividends or any other rights as a stockholder will exist with respect
to the Shares subject to the Option, notwithstanding the exercise of the Option. The Shares so
acquired will be issued to Participant as soon as practicable after 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 of issuance, except as provided in Section 13 of the Plan.

     5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser
represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in
connection with the purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.

     6. Entire Agreement; Governing Law. The Plan and Agreement are incorporated herein by
reference. This Exercise Notice, the Plan and the Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their entirety all prior

- 8 -

 

undertakings and agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser’s interest except by means of a writing
signed by the Company and Purchaser. This agreement is governed by the internal substantive laws,
but not the choice of law rules, of the State of California.

	 	 	 	 	 
	Submitted by:

	 	 	 	Accepted by:
	 
	 	 	 	 
	PURCHASER

	 	 	 	CONCENTRIC MEDICAL, INC.
	 
	 	 	 	 
	 

	 	 	 	 
	Signature

	 	 	 	By
	 
	 	 	 	 
	 

	 	 	 	 
	Print Name

	 	 	 	Its
	 
	 	 	 	 
	Address:
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Date Received

- 9 -

 

CONCENTRIC MEDICAL, INC.

2007 EQUITY INCENTIVE PLAN

NOTICE OF GRANT OF RESTRICTED STOCK

     Unless otherwise defined herein, the terms defined in the Concentric Medical, Inc. 2007 Equity
Incentive Plan (the “Plan”) will have the same defined meanings in this Notice of Grant of
Restricted Stock (the “Notice of Grant”) and Terms and Conditions of Restricted Stock Grant,
attached hereto as Exhibit A (together, the “Agreement”).

	 	 	 	 	 	 	 
	 

	 	Participant:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

     Participant has been granted the right to receive an Award of Restricted Stock, subject to the
terms and conditions of the Plan and this Agreement, as follows:

	 	 	 	 	 	 	 
	 

	 	Grant Number
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Date of Grant
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Vesting Commencement Date
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Number of Shares Granted
	 	 

	 	 

     Vesting Schedule:

     Subject to any acceleration provisions contained in the Plan or set forth below, the
Restricted Stock will vest and the Company’s right to reacquire the Restricted Stock will lapse in
accordance with the following schedule:

     [VESTING SCHEDULE]

 - 1 -

 

     By Participant’s signature and the signature of the Company’s representative below,
Participant and the Company agree that this Award of Restricted Stock is granted under and governed
by the terms and conditions of the Plan and this Agreement. Participant has reviewed the Plan and
this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of the Plan and Agreement.
Participant hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions relating to the Plan and Agreement.
Participant further agrees to notify the Company upon any change in the residence address indicated
below.

	 	 	 	 	 
	PARTICIPANT

	 	 	 	CONCENTRIC MEDICAL, INC.
	 
	 	 	 	 
	 

	 	 	 	 
	Signature
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Print Name
	 	 	 	 
	 
	 	 	 	 
	Address:
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

- 2 -

 

EXHIBIT A

TERMS AND CONDITIONS OF RESTRICTED STOCK GRANT

     1. Grant of Restricted Stock. The Company hereby grants to the Participant named in
the Notice of Grant (the “Participant”) under the Plan for past services and as a separate
incentive in connection with his or her services and not in lieu of any salary or other
compensation for his or her services, an Award of Shares of Restricted Stock, subject to all of the
terms and conditions in this Agreement and the Plan, which is incorporated herein by reference.
Subject to Section 18(c) of the Plan, in the event of a conflict between the terms and conditions
of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan
will prevail.

     2. Escrow of Shares.

          (a) All Shares of Restricted Stock will, upon execution of this Agreement, be delivered and
deposited with an escrow holder designated by the Company (the “Escrow Holder”). The Shares of
Restricted Stock will be held by the Escrow Holder until such time as the Shares of Restricted
Stock vest or the date Participant ceases to be a Service Provider.

          (b) The Escrow Holder will not be liable for any act it may do or omit to do with respect to
holding the Shares of Restricted Stock in escrow while acting in good faith and in the exercise of
its judgment.

          (c) Upon Participant’s termination as a Service Provider for any reason, the Escrow Holder,
upon receipt of written notice of such termination, will take all steps necessary to accomplish the
transfer of the unvested Shares of Restricted Stock to the Company. Participant hereby appoints
the Escrow Holder with full power of substitution, as Participant’s true and lawful
attorney-in-fact with irrevocable power and authority in the name and on behalf of Participant to
take any action and execute all documents and instruments, including, without limitation, stock
powers which may be necessary to transfer the certificate or certificates evidencing such unvested
Shares of Restricted Stock to the Company upon such termination.

          (d) The Escrow Holder will take all steps necessary to accomplish the transfer of Shares of
Restricted Stock to Participant after they vest following Participant’s request that the Escrow
Holder do so.

          (e) Subject to the terms hereof, Participant will have all the rights of a stockholder with
respect to the Shares while they are held in escrow, including without limitation, the right to
vote the Shares and to receive any cash dividends declared thereon.

          (f) In the event of any dividend or other distribution (whether in the form of cash, Shares,
other securities, or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate structure of the
Company affecting the Shares, the Shares of Restricted Stock will be increased, reduced or
otherwise changed, and by virtue of any such change Participant will in his or her capacity as
owner of unvested Shares of Restricted Stock be entitled to new or additional or different shares

- 3 -

 

of stock, cash or securities (other than rights or warrants to purchase securities); such new
or additional or different shares, cash or securities will thereupon be considered to be unvested
Shares of Restricted Stock and will be subject to all of the conditions and restrictions which were
applicable to the unvested Shares of Restricted Stock pursuant to this Agreement. If Participant
receives rights or warrants with respect to any unvested Shares of Restricted Stock, such rights or
warrants may be held or exercised by Participant, provided that until such exercise any such rights
or warrants and after such exercise any shares or other securities acquired by the exercise of such
rights or warrants will be considered to be unvested Shares of Restricted Stock and will be subject
to all of the conditions and restrictions which were applicable to the unvested Shares of
Restricted Stock pursuant to this Agreement. The Administrator in its absolute discretion at any
time may accelerate the vesting of all or any portion of such new or additional shares of stock,
cash or securities, rights or warrants to purchase securities or shares or other securities
acquired by the exercise of such rights or warrants.

          (g) The Company may instruct the transfer agent for its Common Stock to place a legend on the
certificates representing the Restricted Stock or otherwise note its records as to the restrictions
on transfer set forth in this Agreement.

     3. Vesting Schedule. Except as provided in Section 4, and subject to Section 5, the
Shares of Restricted Stock awarded by this Agreement will vest in accordance with the vesting
provisions set forth in the Notice of Grant. Shares of Restricted Stock scheduled to vest on a
certain date or upon the occurrence of a certain condition will not vest in Participant in
accordance with any of the provisions of this Agreement, unless Participant will have been
continuously a Service Provider from the Date of Grant until the date such vesting occurs.

     4. Administrator Discretion. The Administrator, in its discretion, may accelerate the
vesting of the balance, or some lesser portion of the balance, of the unvested Restricted Stock at
any time, subject to the terms of the Plan. If so accelerated, such Restricted Stock will be
considered as having vested as of the date specified by the Administrator.

     5. Forfeiture upon Termination of Status as a Service Provider. Notwithstanding any
contrary provision of this Agreement, the balance of the Shares of Restricted Stock that have not
vested at the time of Participant’s termination as a Service Provider for any reason will be
forfeited and automatically transferred to and reacquired by the Company at no cost to the Company
upon the date of such termination and Participant will have no further rights thereunder.
Participant will not be entitled to a refund of the price paid for the Shares of Restricted Stock,
if any, returned to the Company pursuant to this Section 5. Participant hereby appoints the Escrow
Agent with full power of substitution, as Participant’s true and lawful attorney-in-fact with
irrevocable power and authority in the name and on behalf of Participant to take any action and
execute all documents and instruments, including, without limitation, stock powers which may be
necessary to transfer the certificate or certificates evidencing such unvested Shares to the
Company upon such termination of service.

     6. Death of Participant. Any distribution or delivery to be made to Participant under
this Agreement will, if Participant is then deceased, be made to Participant’s designated
beneficiary, or if no beneficiary survives Participant, the administrator or executor of
Participant’s estate. Any such transferee must furnish the Company with (a) written notice of his

- 4 -

 

or her status as transferee, and (b) evidence satisfactory to the Company to establish the
validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

     7. Withholding of Taxes. Notwithstanding any contrary provision of this Agreement, no
certificate representing the Shares of Restricted Stock may be released from the escrow established
pursuant to Section 5, unless and until satisfactory arrangements (as determined by the
Administrator) will have been made by Participant with respect to the payment of income, employment
and other taxes which the Company determines must be withheld with respect to such Shares. To the
extent determined appropriate by the Company in its discretion, it will have the right (but not the
obligation) to satisfy any tax withholding obligations by reducing the number of Shares otherwise
deliverable to Participant. If Participant fails to make satisfactory arrangements for
the payment of any required tax withholding obligations hereunder at the time any applicable Shares
otherwise are scheduled to vest pursuant to Sections 3 or 4, Participant will permanently forfeit
such Shares and the Shares will be returned to the Company at no cost to the Company.

     8. Rights as Stockholder. Neither Participant nor any person claiming under or
through Participant will have any of the rights or privileges of a stockholder of the Company in
respect of any Shares deliverable hereunder unless and until certificates representing such Shares
will have been issued, recorded on the records of the Company or its transfer agents or registrars,
and delivered to Participant or the Escrow Agent. Except as provided in Section 2(f), after such
issuance, recordation and delivery, Participant will have all the rights of a stockholder of the
Company with respect to voting such Shares and receipt of dividends and distributions on such
Shares.

     9. No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE
VESTING OF THE SHARES OF RESTRICTED STOCK PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING
OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS RESTRICTED
STOCK OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S
RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT)
TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

     10. Address for Notices. Any notice to be given to the Company under the terms of
this Agreement will be addressed to the Company at Concentric Medical, Inc., 1380 Shorebird Way,
Mountain View, CA 94043, or at such other address as the Company may hereafter designate in
writing.

- 5 -

 

     11. Grant is Not Transferable. Except to the limited extent provided in Section 6,
the unvested Shares subject to this grant and the rights and privileges conferred hereby will not
be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and will not be subject to sale under execution, attachment or similar process. Upon
any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any unvested Shares of
Restricted Stock subject to this grant, or any right or privilege conferred hereby, or upon any
attempted sale under any execution, attachment or similar process, this grant and the rights and
privileges conferred hereby immediately will become null and void.

     12. Binding Agreement. Subject to the limitation on the transferability of this grant
contained herein, this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.

     13. Additional Conditions to Release from Escrow. The Company will not be required to
issue any certificate or certificates for Shares hereunder or release such Shares from the escrow
established pursuant to Section 2 prior to fulfillment of all the following conditions: (a) the
admission of such Shares to listing on all stock exchanges on which such class of stock is then
listed; (b) the completion of any registration or other qualification of such Shares under any
state or federal law or under the rulings or regulations of the Securities and Exchange Commission
or any other governmental regulatory body, which the Administrator will, in its absolute
discretion, deem necessary or advisable; (c) the obtaining of any approval or other clearance from
any state or federal governmental agency, which the Administrator will, in its absolute discretion,
determine to be necessary or advisable; and (d) the lapse of such reasonable period of time
following the date of grant of the Restricted Stock as the Administrator may establish from time to
time for reasons of administrative convenience.

     14. Plan Governs. This Agreement is subject to all terms and provisions of the Plan.
In the event of a conflict between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan will govern. Capitalized terms used and not
defined in this Agreement will have the meaning set forth in the Plan.

     15. Administrator Authority. The Administrator will have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke any such rules
(including, but not limited to, the determination of whether or not any Shares of Restricted Stock
have vested). All actions taken and all interpretations and determinations made by the
Administrator in good faith will be final and binding upon Participant, the Company and all other
interested persons. No member of the Administrator will be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or this Agreement.

     16. Electronic Delivery. The Company may, in its sole discretion, decide to deliver
any documents related to the Shares of Restricted Stock awarded under the Plan or future Restricted
Stock that may be awarded under the Plan by electronic means or request Participant’s consent to
participate in the Plan by electronic means. Participant hereby consents to receive such documents
by electronic delivery and agrees to participate in the Plan through any on-line or electronic
system established and maintained by the Company or another third party designated by the Company.

- 6 -

 

     17. Captions. Captions provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

     18. Agreement Severable. In the event that any provision in this Agreement will be
held invalid or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.

     19. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. Participant expressly warrants that he or
she is not accepting this Agreement in reliance on any promises, representations, or inducements
other than those contained herein. Modifications to this Agreement or the Plan can be made only in
an express written contract executed by a duly authorized officer of the Company. Notwithstanding
anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise
this Agreement as it deems necessary or advisable, in its sole discretion and without the consent
of Participant, to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) or to otherwise avoid imposition of any additional tax or income recognition under Section
409A of the Code in connection to this Award of Restricted Stock.

     20. Amendment, Suspension or Termination of the Plan. By accepting this Award,
Participant expressly warrants that he or she has received an Award of Restricted Stock under the
Plan, and has received, read and understood a description of the Plan. Participant understands
that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company
at any time.

     21. Governing Law. This Agreement will be governed by the laws of the State of
California, without giving effect to the conflict of law principles thereof. For purposes of
litigating any dispute that arises under this Award of Restricted Stock or this Agreement, the
parties hereby submit to and consent to the jurisdiction of the State of California, and agree that
such litigation will be conducted in the courts of Santa Clara County, California, or the federal
courts for the United States for the Northern District of California, and no other courts, where
this Award of Restricted Stock is made and/or to be performed.

- 7 -

 

CONCENTRIC MEDICAL, INC.

2007 EQUITY INCENTIVE PLAN

NOTICE OF GRANT OF RESTRICTED STOCK UNITS

     Unless otherwise defined herein, the terms defined in the Concentric Medical, Inc. 2007 Equity
Incentive Plan (the “Plan”) will have the same defined meanings in this Notice of Grant of
Restricted Stock Units (the “Notice of Grant”) and Terms and Conditions of Restricted Stock Unit
Grant, attached hereto as Exhibit A (together, the “Agreement”).

	 	 	 	 	 	 	 
	 

	 	Participant:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

     Participant has been granted the right to receive an Award of Restricted Stock Units, subject
to the terms and conditions of the Plan and this Agreement, as follows:

	 	 	 	 	 	 	 
	 

	 	Grant Number
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Date of Grant
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Vesting Commencement Date
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Number of Restricted Stock Units
	 	 

	 	 

     Vesting Schedule:

     Subject to any acceleration provisions contained in the Plan or set forth below, the
Restricted Stock Unit will vest in accordance with the following schedule:

     [VESTING SCHEDULE.]

     In the event Participant ceases to be a Service Provider for any or no reason before
Participant vests in the Restricted Stock Unit, the Restricted Stock Unit and Participant’s right
to acquire any Shares hereunder will immediately terminate.

     By Participant’s signature and the signature of the Company’s representative below,
Participant and the Company agree that this Award of Restricted Stock Units is granted under and
governed by the terms and conditions of the Plan and this Agreement. Participant has reviewed the
Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Agreement and fully understands all provisions of the Plan and Agreement.
Participant hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions relating to the Plan and Agreement.
Participant further agrees to notify the Company upon any change in the residence address indicated
below.

- 1 -

 

	 	 	 	 	 
	PARTICIPANT

	 	 	 	CONCENTRIC MEDICAL, INC.
	 
	 	 	 	 
	 

	 	 	 	 
	Signature

	 	 	 	By
	 
	 	 	 	 
	 

	 	 	 	 
	Print Name

	 	 	 	Title
	 
	 	 	 	 
	Address:
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

- 2 -

 

EXHIBIT A

TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT GRANT

     1. Grant. The Company hereby grants to the Participant named in the Notice of
Grant (the “Participant”) under the Plan an Award of Restricted Stock Units, subject to
all of the terms and conditions in this Agreement and the Plan, which is incorporated herein by
reference. Subject to Section 18(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of
the Plan will prevail.

     2. Company’s Obligation to Pay. Each Restricted Stock Unit represents the right to
receive a Share on the date it vests. Unless and until the Restricted Stock Units will have vested
in the manner set forth in Section 3, Participant will have no right to payment of any such
Restricted Stock Units. Prior to actual payment of any vested Restricted Stock Units, such
Restricted Stock Unit will represent an unsecured obligation of the Company, payable (if at all)
only from the general assets of the Company. Any Restricted Stock Units that vest in accordance
with Sections 3 or 4 will be paid to Participant (or in the event of Participant’s death, to his or
her estate) in whole Shares, subject to Participant satisfying any applicable tax withholding
obligations as set forth in Section 6.

     3. Vesting Schedule. Except as provided in Section 4, and subject to Section 5, the
Restricted Stock Units awarded by this Agreement will vest in accordance with the vesting
provisions set forth in the Notice of Grant. Restricted Stock Units            scheduled to vest on
a certain date or upon the occurrence of a certain condition will not vest in Participant in
accordance with any of the provisions of this Agreement, unless Participant will have been
continuously a Service Provider from the Date of Grant until the date such vesting occurs.

     4. Administrator Discretion. The Administrator, in its discretion, may accelerate the
vesting of the balance, or some lesser portion of the balance, of the unvested Restricted Stock
Units at any time, subject to the terms of the Plan. If so accelerated, such Restricted Stock
Units will be considered as having vested as of the date specified by the Administrator.

     5. Forfeiture upon Termination of Status as a Service Provider. Notwithstanding any
contrary provision of this Agreement, the balance of the Restricted Stock Units that have not
vested as of the time of Participant’s termination as a Service Provider for any or no reason and
Participant’s right to acquire any Shares hereunder will immediately terminate.

     6. Death of Participant. Any distribution or delivery to be made to Participant under
this Agreement will, if Participant is then deceased, be made to Participant’s designated
beneficiary, or if no beneficiary survives Participant, the administrator or executor of
Participant’s estate. Any such transferee must furnish the Company with (a) written notice of his
or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity
of the transfer and compliance with any laws or regulations pertaining to said transfer.

     7. Withholding of Taxes. Notwithstanding any contrary provision of this Agreement, no
certificate representing the Shares will be issued to Participant, unless and until satisfactory
arrangements (as determined by the Administrator) will have been made by

- 3 -

 

Participant with respect to the payment of income, employment and other taxes which the
Company determines must be withheld with respect to such Shares. To the extent determined
appropriate by the Company in its discretion, it will have the right (but not the obligation) to
satisfy any tax withholding obligations by reducing the number of Shares otherwise deliverable to
Participant. If Participant fails to make satisfactory arrangements for the payment of any
required tax withholding obligations hereunder at the time any applicable Restricted Stock Units
otherwise are scheduled to vest pursuant to Sections 3 or 4, Participant will permanently forfeit
such Restricted Stock Units and any right to receive Shares thereunder and the Restricted Stock
Units will be returned to the Company at no cost to the Company.

     8. Rights as Stockholder. Neither Participant nor any person claiming under or
through Participant will have any of the rights or privileges of a stockholder of the Company in
respect of any Shares deliverable hereunder unless and until certificates representing such Shares
will have been issued, recorded on the records of the Company or its transfer agents or registrars,
and delivered to Participant. After such issuance, recordation and delivery, Participant will have
all the rights of a stockholder of the Company with respect to voting such Shares and receipt of
dividends and distributions on such Shares.

     9. No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE
VESTING OF THE RESTRICTED STOCK UNITS PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING
OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OF
RESTRICTED STOCK UNITS OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES
THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH
HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH
PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING
PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

     10. Address for Notices. Any notice to be given to the Company under the
terms of this Agreement will be addressed to the Company at Concentric Medical, Inc., 1380
Shorebird Way, Mountain View, CA 94043, or at such other address as the Company may hereafter
designate in writing.

     11. Grant is Not Transferable. Except to the limited extent provided in Section 6,
this grant and the rights and privileges conferred hereby will not be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be
subject to sale under execution, attachment or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred
hereby, or upon any attempted sale under any execution, attachment or similar process, this grant
and the rights and privileges conferred hereby immediately will become null and void.

- 4 -

 

     12. Binding Agreement. Subject to the limitation on the transferability of this grant
contained herein, this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.

     13. Additional Conditions to Issuance of Stock. If at any time the Company will
determine, in its discretion, that the listing, registration or qualification of the Shares upon
any securities exchange or under any state or federal law, or the consent or approval of any
governmental regulatory authority is necessary or desirable as a condition to the issuance of
Shares to Participant (or his or her estate), such issuance will not occur unless and until such
listing, registration, qualification, consent or approval will have been effected or obtained free
of any conditions not acceptable to the Company. Where the Company determines that the delivery of
the payment of any Shares will violate federal securities laws or other applicable laws, the
Company will defer delivery until the earliest date at which the Company reasonably anticipates
that the delivery of Shares will no longer cause such violation. The Company will make all
reasonable efforts to meet the requirements of any such state or federal law or securities exchange
and to obtain any such consent or approval of any such governmental authority.

     14. Plan Governs. This Agreement is subject to all terms and provisions of the Plan.
In the event of a conflict between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan will govern. Capitalized terms used and not
defined in this Agreement will have the meaning set forth in the Plan.

     15. Administrator Authority. The Administrator will have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke any such rules
(including, but not limited to, the determination of whether or not any Restricted Stock Units have
vested). All actions taken and all interpretations and determinations made by the Administrator in
good faith will be final and binding upon Participant, the Company and all other interested
persons. No member of the Administrator will be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or this Agreement.

     16. Electronic Delivery. The Company may, in its sole discretion, decide to deliver
any documents related to Restricted Stock Units awarded under the Plan or future Restricted Stock
Units that may be awarded under the Plan by electronic means or request Participant’s consent to
participate in the Plan by electronic means. Participant hereby consents to receive such documents
by electronic delivery and agrees to participate in the Plan through any on-line or electronic
system established and maintained by the Company or another third party designated by the Company.

     17. Captions. Captions provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

     18. Agreement Severable. In the event that any provision in this Agreement will be
held invalid or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.

- 5 -

 

     19. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. Participant expressly warrants that he or
she is not accepting this Agreement in reliance on any promises, representations, or inducements
other than those contained herein. Modifications to this Agreement or the Plan can be made only in
an express written contract executed by a duly authorized officer of the Company. Notwithstanding
anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise
this Agreement as it deems necessary or advisable, in its sole discretion and without the consent
of Participant, to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) or to otherwise avoid imposition of any additional tax or income recognition under Section
409A of the Code in connection to this Award of Restricted Stock Units.

     20. Amendment, Suspension or Termination of the Plan. By accepting this Award,
Participant expressly warrants that he or she has received an Award of Restricted Stock Units under
the Plan, and has received, read and understood a description of the Plan. Participant understands
that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company
at any time.

     21. Governing Law. This Agreement will be governed by the laws of the State of
California, without giving effect to the conflict of law principles thereof. For purposes of
litigating any dispute that arises under this Award of Restricted Stock Units or this Agreement,
the parties hereby submit to and consent to the jurisdiction of the State of California, and agree
that such litigation will be conducted in the courts of Santa Clara County, California, or the
federal courts for the United States for the Northern District of California, and no other courts,
where this Award of Restricted Stock Units is made and/or to be performed.

- 6 -exv10w5

 

Exhibit 10.5

CONCENTRIC MEDICAL, INC.

2007 EMPLOYEE STOCK PURCHASE PLAN

     1. Purpose. The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Common Stock through accumulated payroll
deductions. The Company’s intention is to have the Plan qualify as an “employee stock purchase
plan” under Section 423 of the Code. The provisions of the Plan, accordingly, will be construed so
as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with
the requirements of Section 423 of the Code.

     2. Definitions.

          (a) “Administrator” means the Board or any Committee designated by the Board to
administer the Plan pursuant to Section 14.

          (b) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.

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

          (d) “Change in Control” means the occurrence of any of the following events:

               (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company’s then outstanding voting securities; or

               (ii) The consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets; or

               (iii) The consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or consolidation; or

               (iv) A change in the composition of the Board occurring within a two (2) year period, as a
result of which less than a majority of the Directors are Incumbent Directors. “Incumbent
Directors” means Directors who either (A) are Directors as of the effective date of the Plan, or
(B) are elected, or nominated for election, to the Board with the affirmative votes of at least a
majority of the Directors at the time of such election or nomination (but will not include an

 

 

individual whose election or nomination is in connection with an actual or threatened proxy
contest relating to the election of Directors to the Company).

          (e) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code herein will be a reference to any successor or amended section of the Code.

          (f) “Committee” means a committee of the Board appointed in accordance with Section 14
hereof.

          (g) “Common Stock” means the common stock of the Company.

          (h) “Company” means Concentric Medical, Inc., a Delaware corporation.

          (i) “Compensation” means an Employee’s base straight time gross earnings, commissions
(to the extent such commissions are an integral, recurring part of compensation), overtime and
shift premium, but exclusive of payments for incentive compensation, bonuses and other
compensation.

          (j) “Designated Subsidiary” means any Subsidiary that has been designated by the
Administrator from time to time in its sole discretion as eligible to participate in the Plan.

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

          (l) “Eligible Employee” means any individual who is a common law employee of an
Employer and is customarily employed for at least twenty (20) hours per week and more than five (5)
months in any calendar year by the Employer. For purposes of the Plan, the employment relationship
will be treated as continuing intact while the individual is on sick leave or other leave of
absence that the Employer approves. Where the period of leave exceeds ninety (90) days and the
individual’s right to reemployment is not guaranteed either by statute or by contract, the
employment relationship will be deemed to have terminated on the ninety-first (91st) day of such
leave. The Administrator, in its discretion, from time to time may, prior to an Offering Date for
all options to be granted on such Offering Date, determine (on a uniform and nondiscriminatory
basis) that the definition of Eligible Employee will or will not include an individual if he or
she: (i) has not completed at least two (2) years of service since his or her last hire date (or
such lesser period of time as may be determined by the Administrator in its discretion), (ii)
customarily works not more than twenty (20) hours per week (or such lesser period of time as may be
determined by the Administrator in its discretion), (iii) customarily works not more than five (5)
months per calendar year (or such lesser period of time as may be determined by the Administrator
in its discretion), (iv) is an executive, officer or other manager, or (v) is a highly compensated
employee under Section 414(q) of the Code.

          (m) “Employer” means any one or all of the Company and its Designated Subsidiaries.

          (n) “Exchange Act” means the Securities Exchange Act of 1934, as amended, including
the rules and regulations promulgated thereunder.

-2-

 

          (o) “Exercise Date” means the first Trading Day on or after May 15 and November 15 of
each year. The first Exercise Date under the Plan will be May 15, 2008.

          (p) “Fair Market Value” means, as of any date and unless the Administrator determines
otherwise, the value of Common Stock determined as follows:

          (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market or
the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the date of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

          (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value will be the mean of the closing bid and asked prices
for the Common Stock on the date of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

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

          (iv) For purposes of the Offering Date of the first Offering Period under the Plan, the Fair
Market Value will be the initial price to the public as set forth in the final prospectus included
within the registration statement on Form S-1 filed with the Securities and Exchange Commission for
the initial public offering of the Common Stock (the “Registration Statement”).

          (q) “Fiscal Year” means the fiscal year of the Company.

          (r) “New Exercise Date” means a new Exercise Date say by shortening any Offering
Period then in progress.

          (s) “Offering Date” means the first Trading Day of each Offering Period.

          (t) “Offering Periods” means the periods of approximately six (6) months during which
an option granted pursuant to the Plan may be exercised, (i) commencing on the first Trading Day on
or after May 15 of each year and terminating on the first Trading Day on or following November 15,
approximately six (6) months later, and (ii) commencing on the first Trading Day on or after
November 15 of each year and terminating on the first Trading Day on or following May 15,
approximately six (6) months later. The duration and timing of Offering Periods may be changed
pursuant to Sections 4 and 20.

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

          (v) “Plan” means this Concentric Medical, Inc. 2007 Employee Stock Purchase Plan.

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          (w) “Purchase Period” means the period during an Offering Period which shares of
Common Stock may be purchased on a participant’s behalf in accordance with the terms of the Plan.
Unless the Administrator provides otherwise, the Purchase Period will have the same duration and
coincide with the length of the Offering Period.

          (x) “Purchase Price” means an amount equal to eighty-five percent (85%) of the Fair
Market Value of a share of Common Stock on the Offering Date or on the Exercise Date, whichever is
lower; provided however, that the Purchase Price may be determined for subsequent Offering Periods
by the Administrator subject to compliance with Section 423 of the Code (or any successor rule or
provision or any other applicable law, regulation or stock exchange rule) or pursuant to Section
20.

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

          (z) “Trading Day” means a day on which the national stock exchange upon which the
Common Stock is listed is open for trading.

     3. Eligibility.

          (a) Offering Periods. Any Eligible Employee on a given Offering Date will be eligible
to participate in the Plan, subject to the requirements of Section 5.

          (b) Limitations. Any provisions of the Plan to the contrary notwithstanding, no
Eligible Employee will be granted an option under the Plan (i) to the extent that, immediately
after the grant, such Eligible Employee (or any other person whose stock would be attributed to
such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the
Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such
stock possessing five percent (5%) or more of the total combined voting power or value of all
classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii)
to the extent that his or her rights to purchase stock under all employee stock purchase plans (as
defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company
accrues at a rate which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined
at the Fair Market Value of the stock at the time such option is granted) for each calendar year in
which such option is outstanding at any time.

     4. Offering Periods. The Plan will be implemented by consecutive Offering Periods
with a new Offering Period commencing on the first Trading Day on or after May 15 and November 15
each year, or on such other date as the Administrator will determine. The Administrator will have
the power to change the duration of Offering Periods (including the commencement dates thereof)
with respect to future offerings without stockholder approval if such change is announced prior to
the scheduled beginning of the first Offering Period to be affected thereafter.

     5. Participation. An Eligible Employee may participate in the Plan pursuant to
Section 3(a) by (i) submitting to the Company’s payroll office (or its designee), on or before a
date prescribed by the Administrator prior to an applicable Offering Date, a properly completed
subscription agreement authorizing payroll deductions in the form provided by the Administrator for

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such purpose, or (ii) following an electronic or other enrollment procedure prescribed by the
Administrator.

     6. Payroll Deductions.

          (a) At the time a participant enrolls in the Plan pursuant to Section 5, he or she will elect
to have payroll deductions made on each pay day during the Offering Period in an amount not
exceeding fifteen percent (15%) of the Compensation, which he or she receives on each pay day
during the Offering Period; provided, however, that should a pay day occur on an Exercise Date, a
participant will have the payroll deductions made on such day applied to his or her account under
the subsequent Purchase or Offering Period. A participant’s subscription agreement will remain in
effect for successive Offering Periods unless terminated as provided in Section 10 hereof.

          (b) Payroll deductions for a participant will commence on the first pay day following the
Offering Date and will end on the last pay day prior to the Exercise Date of such Offering Period
to which such authorization is applicable, unless sooner terminated by the participant as provided
in Section 10 hereof.

          (c) All payroll deductions made for a participant will be credited to his or her account under
the Plan and will be withheld in whole percentages only. A participant may not make any additional
payments into such account.

          (d) A participant may discontinue his or her participation in the Plan as provided in Section
10, or may decrease (but not increase) the rate of his or her payroll deductions to zero percent
(0%) of Compensation (and the participant will not be permitted to reduce his or her payroll
contributions to an amount other than zero percent (0%) of Compensation) during the Offering Period
by (i) properly completing and submitting to the Company’s payroll office (or its designee), on or
before a date prescribed by the Administrator prior to an applicable Exercise Date, a new
subscription agreement authorizing the change in payroll deduction rate in the form provided by the
Administrator for such purpose, or (ii) following an electronic or other procedure prescribed by
the Administrator. If a participant has not followed such procedures to change the rate of payroll
deductions, the rate of his or her payroll deductions will continue at the originally elected rate
throughout the Offering Period and future Offering Periods (unless terminated as provided in
Section 10). The Administrator may, in its sole discretion, change the nature and/or number of
payroll deduction rate changes that may be made by participants during any Offering Period. Any
change in payroll deduction rate made pursuant to this Section 6(d) will be effective as of the
first full payroll period following five (5) business days after the date on which the change is
made by the participant (unless the Administrator, in its sole discretion, elects to process a
given change in payroll deduction rate more quickly).

          (e) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(c), a participant’s payroll deductions may be decreased to zero percent (0%)
at any time during an Offering Period. Subject to
Section 423(b)(8) of the Code and Section 3(c)
hereof, payroll deductions will recommence at the rate originally elected by the participant
effective as of the beginning of the first Offering Period which is scheduled to end in the
following calendar year, unless terminated by the participant as provided in Section 10.

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          (f) At the time the option is exercised, in whole or in part, or at the time some or all of
the Common Stock issued under the Plan is disposed of, the participant must make adequate provision
for the Company’s or Employer’s federal, state, or any other tax liability payable to any
authority, national insurance, social security or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock. At any time, the
Company or the Employer may, but will not be obligated to, withhold from the participant’s
compensation the amount necessary for the Company or the Employer to meet applicable withholding
obligations, including any withholding required to make available to the Company or the Employer
any tax deductions or benefits attributable to sale or early disposition of Common Stock by the
Eligible Employee.

     7. Grant of Option. On the Offering Date of each Offering Period, each Eligible
Employee participating in such Offering Period will be granted an option to purchase on each
Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of
shares of Common Stock determined by dividing such Eligible Employee’s payroll deductions
accumulated prior to such Exercise Date and retained in the Eligible Employee’s account as of the
Exercise Date by the applicable Purchase Price; provided that in no event will an Eligible Employee
be permitted to purchase during each Offering Period more than 3,000 shares of the Common Stock
(subject to any adjustment pursuant to Section 19), and provided further that such purchase will be
subject to the limitations set forth in Sections 3(b) and 13. The Eligible Employee may accept the
grant of such option with respect to the first Offering Period by submitting a properly completed
subscription agreement in accordance with the requirements of Section 5. The Administrator may,
for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number
of shares of Common Stock that an Eligible Employee may purchase during each Offering Period.
Exercise of the option will occur as provided in Section 8, unless the participant has withdrawn
pursuant to Section 10. The option will expire on the last day of the Offering Period.

     8. Exercise of Option.

          (a) Unless a participant withdraws from the Plan as provided in Section 10, his or her option
for the purchase of shares of Common Stock will be exercised automatically on the Exercise Date,
and the maximum number of full shares subject to option will be purchased for such participant at
the applicable Purchase Price with the accumulated payroll deductions in his or her account. No
fractional shares of Common Stock will be purchased; any payroll deductions accumulated in a
participant’s account which are not sufficient to purchase a full share will be retained in the
participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10. Any other funds left over in a participant’s account after
the Exercise Date will be returned to the participant. During a participant’s lifetime, a
participant’s option to purchase shares hereunder is exercisable only by him or her.

          (b) If the Administrator determines that, on a given Exercise Date, the number of shares of
Common Stock with respect to which options are to be exercised may exceed (i) the number of shares
of Common Stock that were available for sale under the Plan on the Offering Date of the applicable
Offering Period, or (ii) the number of shares of Common Stock available for sale under the Plan on
such Exercise Date, the Administrator may in its sole discretion provide that the Company will make
a pro rata allocation of the shares of Common Stock available for purchase on such Offering Date or
Exercise Date, as applicable, in as uniform a manner as will be practicable and

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as it will determine in its sole discretion to be equitable among all participants exercising
options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in
effect or terminate all Offering Periods then in effect pursuant to Section 20. The Company may
make a pro rata allocation of the shares available on the Offering Date of any applicable Offering
Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares
for issuance under the Plan by the Company’s stockholders subsequent to such Offering Date.

     9. Delivery. As soon as reasonably practicable after each Exercise Date on which a
purchase of shares of Common Stock occurs, the Company will arrange the delivery to each
participant the shares purchased upon exercise of his or her option in a form determined by the
Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The
Company may permit or require that shares be deposited directly with a broker designated by the
Company or to a designated agent of the Company, and the Company may utilize electronic or
automated methods of share transfer. The Company may require that shares be retained with such
broker or agent for a designated period of time and/or may establish other procedures to permit
tracking of disqualifying dispositions of such shares. No participant will have any voting,
dividend, or other stockholder rights with respect to shares of Common Stock subject to any option
granted under the Plan until such shares have been purchased and delivered to the participant as
provided in this Section 9.

     10. Withdrawal.

          (a) A participant may withdraw all but not less than all the payroll deductions credited to
his or her account and not yet used to exercise his or her option under the Plan at any time by (i)
submitting to the Company’s payroll office (or its designee) a written notice of withdrawal in the
form prescribed by the Administrator for such purpose (which may be similar to the form attached
hereto as Exhibit B), or (ii) following an electronic or other withdrawal procedure
prescribed by the Administrator. All of the participant’s payroll deductions credited to his or
her account will be paid to such participant promptly after receipt of notice of withdrawal and
such participant’s option for the Offering Period will be automatically terminated, and no further
payroll deductions for the purchase of shares will be made for such Offering Period. If a
participant withdraws from an Offering Period, payroll deductions will not resume at the beginning
of the succeeding Offering Period, unless the participant re-enrolls in the Plan in accordance with
the provisions of Section 5.

          (b) A participant’s withdrawal from an Offering Period will not have any effect upon his or
her eligibility to participate in any similar plan which may hereafter be adopted by the Company or
in succeeding Offering Periods which commence after the termination of the Offering Period from
which the participant withdraws.

     11. Termination of Employment. Upon a participant’s ceasing to be an Eligible
Employee, for any reason, he or she will be deemed to have elected to withdraw from the Plan and
the payroll deductions credited to such participant’s account during the Offering Period but not
yet used to purchase shares of Common Stock under the Plan will be returned to such participant or,
in the case of his or her death, to the person or persons entitled thereto under Section 15, and
such participant’s option will be automatically terminated.

-7-

 

     12. Interest. No interest will accrue on the payroll deductions of a participant in
the Plan.

     13. Stock.

          (a) Subject to adjustment upon changes in capitalization of the Company as provided in Section
19 hereof, the maximum number of shares of Common Stock which will be made available for sale under
the Plan will be 3,000,000 shares, plus an annual increase to be added on the first day of each
Fiscal Year beginning with the 2009 Fiscal Year, equal to the least of (i) 3,000,000 shares of
Common Stock, (ii) 2% of the outstanding shares of Common Stock on such date, or (iii) an amount
determined by the Administrator.

          (b) Until the shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), a participant will only have the
rights of an unsecured creditor with respect to such shares, and no right to vote or receive
dividends or any other rights as a stockholder will exist with respect to such shares.

          (c) Shares of Common Stock to be delivered to a participant under the Plan will be registered
in the name of the participant or in the name of the participant and his or her spouse.

     14. Administration. The Plan will be administered by the Board or a Committee
appointed by the Board, which Committee will be constituted to comply with Applicable Laws. The
Administrator will have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under
the Plan. Every finding, decision and determination made by the Administrator will, to the full
extent permitted by law, be final and binding upon all parties. Notwithstanding any provision to
the contrary in this Plan, the Administrator may adopt rules or procedures relating to the
operation and administration of the Plan to accommodate the specific requirements of local laws and
procedures for jurisdictions outside of the United States. Without limiting the generality of the
foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding
eligibility to participate, the definition of Compensation, handling of payroll deductions, making
of contributions to the Plan (including, without limitation, in forms other than payroll
deductions), establishment of bank or trust accounts to hold payroll deductions, payment of
interest, conversion of local currency, obligations to pay payroll tax, determination of
beneficiary designation requirements, withholding procedures and handling of stock certificates
which vary with local requirements.

     15. Designation of Beneficiary.

          (a) A participant may file a designation of a beneficiary who is to receive any shares of
Common Stock and cash, if any, from the participant’s account under the Plan in the event of such
participant’s death subsequent to an Exercise Date on which the option is exercised but prior to
delivery to such participant of such shares and cash. In addition, a participant may file a
designation of a beneficiary who is to receive any cash from the participant’s account under the
Plan in the event of such participant’s death prior to exercise of the option. If a participant is
married and the designated beneficiary is not the spouse, spousal consent will be required for such
designation to be effective.

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

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the absence of a beneficiary validly designated under the Plan who is living at the time of
such participant’s death, the Company will deliver such shares and/or cash to the executor or
administrator of the estate of the participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such
shares and/or cash to the spouse or to any one or more dependents or relatives of the participant,
or if no spouse, dependent or relative is known to the Company, then to such other person as the
Company may designate.

          (c) All beneficiary designations will be in such form and manner as the Administrator may
designate from time to time.

     16. Transferability. Neither payroll deductions credited to a participant’s account
nor any rights with regard to the exercise of an option or to receive shares of Common Stock under
the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by
will, the laws of descent and distribution or as provided in Section 15 hereof) by the participant.
Any such attempt at assignment, transfer, pledge or other disposition will be without effect,
except that the Company may treat such act as an election to withdraw funds from an Offering Period
in accordance with Section 10 hereof.

     17. Use of Funds. The Company may use all payroll deductions received or held by it
under the Plan for any corporate purpose, and the Company will not be obligated to segregate such
payroll deductions. Until shares of Common Stock are issued, participants will only have the
rights of an unsecured creditor with respect to such shares.

     18. Reports. Individual accounts will be maintained for each participant in the Plan.
Statements of account will be given to participating Eligible Employees at least annually, which
statements will set forth the amounts of payroll deductions, the Purchase Price, the number of
shares of Common Stock purchased and the remaining cash balance, if any.

     19. Adjustments, Dissolution, Liquidation, Merger or Change in Control.

          (a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company, or other change in the
corporate structure of the Company affecting the Common Stock occurs, the Administrator, in order
to prevent dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan, will, in such manner as it may deem equitable, adjust the number and
class of Common Stock which may be delivered under the Plan, the Purchase Price per share and the
number of shares of Common Stock covered by each option under the Plan which has not yet been
exercised, and the numerical limits of Sections 7 and 13.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, any Offering Period then in progress will be shortened by setting a New
Exercise Date, and will terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise Date
will be before the date of the Company’s proposed dissolution or liquidation. The Administrator

-9-

 

will notify each participant in writing, at least ten (10) business days prior to the New
Exercise Date, that the Exercise Date for the participant’s option has been changed to the New
Exercise Date and that the participant’s option will be exercised automatically on the New Exercise
Date, unless prior to such date the participant has withdrawn from the Offering Period as provided
in Section 10 hereof.

          (c) Merger or Change in Control. In the event of a merger or Change in Control, each
outstanding option will be assumed or an equivalent option substituted by the successor corporation
or a Parent or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, the Offering Period with respect to
which such option relates will be shortened by setting a New Exercise Date and will end on the New
Exercise Date. The New Exercise Date will occur before the date of the Company’s proposed merger
or Change in Control. The Administrator will notify each participant in writing prior to the New
Exercise Date, that the Exercise Date for the participant’s option has been changed to the New
Exercise Date and that the participant’s option will be exercised automatically on the New Exercise
Date, unless prior to such date the participant has withdrawn from the Offering Period as provided
in Section 10 hereof.

     20. Amendment or Termination.

          (a) The Administrator, in its sole discretion, may amend, suspend, or terminate the Plan, or
any part thereof, at any time and for any reason. If the Plan is terminated, the Administrator, in
its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon
completion of the purchase of shares of Common Stock on the next Exercise Date (which may be sooner
than originally scheduled, if determined by the Administrator in its discretion), or may elect to
permit Offering Periods to expire in accordance with their terms (and subject to any adjustment
pursuant to Section 19). If the Offering Periods are terminated prior to expiration, all amounts
then credited to participants’ accounts which have not been used to purchase shares of Common Stock
will be returned to the participants (without interest thereon, except as otherwise required under
local laws) as soon as administratively practicable.

          (b) Without stockholder consent and without limiting Section 20(a), the Administrator will be
entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount
withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in
a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated
by a participant in order to adjust for delays or mistakes in the Company’s processing of properly
completed withholding elections, establish reasonable waiting and adjustment periods and/or
accounting and crediting procedures to ensure that amounts applied toward the purchase of Common
Stock for each participant properly correspond with amounts withheld from the participant’s
Compensation, and establish such other limitations or procedures as the Administrator determines in
its sole discretion advisable which are consistent with the Plan.

          (c) In the event the Administrator determines that the ongoing operation of the Plan may
result in unfavorable financial accounting consequences, the Administrator may, in its discretion
and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or
eliminate such accounting consequence including, but not limited to:

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               (i) amending the Plan to conform with the safe harbor definition under Statement of Financial
Accounting Standards 123(R), including with respect to an Offering Period underway at the time;

               (ii) altering the Purchase Price for any Offering Period including an Offering Period underway
at the time of the change in Purchase Price;

               (iii) shortening any Offering Period by setting a New Exercise Date, including an Offering
Period underway at the time of the Administrator action;

               (iv) reducing the maximum percentage of Compensation a participant may elect to set aside as
payroll deductions; and

               (v) reducing the maximum number of Shares a participant may purchase during any Offering
Period or Purchase Period.

     Such modifications or amendments will not require stockholder approval or the consent of any
Plan participants.

     21. Notices. All notices or other communications by a participant to the Company
under or in connection with the Plan will be deemed to have been duly given when received in the
form and manner specified by the Company at the location, or by the person, designated by the
Company for the receipt thereof.

     22. Conditions Upon Issuance of Shares. Shares of Common Stock will not be issued
with respect to an option unless the exercise of such option and the issuance and delivery of such
shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock exchange upon which the
shares may then be listed, and will be further subject to the approval of counsel for the Company
with respect to such compliance.

     As a condition to the exercise of an option, the Company may require the person exercising
such option to represent and warrant at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

     23. Term of Plan. The Plan will become effective upon the earlier to occur of its
adoption by the Board or its approval by the stockholders of the Company. It will continue in
effect for a term of twenty (20) years, unless sooner terminated under Section 20.

     24. Stockholder Approval. The Plan will be subject to approval by the stockholders of
the Company within twelve (12) months after the date the Plan is adopted by the Board. Such
stockholder approval will be obtained in the manner and to the degree required under Applicable
Laws.

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EXHIBIT A

CONCENTRIC MEDICAL, INC.

2007 EMPLOYEE STOCK PURCHASE PLAN

SUBSCRIPTION AGREEMENT

			
	 	 	 
	___ Original Application
	 	Offering Date:                                         
	___ Change in Payroll Deduction Rate	 	 
	___ Change of Beneficiary(ies)	 	 

     1.                                          hereby elects to participate in the Concentric Medical, Inc. 2007
Employee Stock Purchase Plan (the “Plan”) and subscribes to purchase shares of the Company’s Common
Stock in accordance with this Subscription Agreement and the Plan.

     2. I hereby authorize payroll deductions from each paycheck in the amount of ___% of my
Compensation on each payday (from 0 to 15%) during the Offering Period in accordance with the Plan.
(Please note that no fractional percentages are permitted.)

     3. I understand that said payroll deductions will be accumulated for the purchase of shares of
Common Stock at the applicable Purchase Price determined in accordance with the Plan. I understand
that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used
to automatically exercise my option and purchase Common Stock under the Plan.

     4. I have received a copy of the complete Plan and its accompanying prospectus. I understand
that my participation in the Plan is in all respects subject to the terms of the Plan.

     5. Shares of Common Stock purchased for me under the Plan should be issued in the name(s) of
(Eligible Employee or Eligible Employee and Spouse only).

     6. I understand that if I dispose of any shares received by me pursuant to the Employee Stock
Purchase Plan within two (2) years after the Offering Date (the first day of the Offering Period
during which I purchased such shares) or one (1) year after the Exercise Date, I will be treated
for federal income tax purposes as having received ordinary income at the time of such disposition
in an amount equal to the excess of the fair market value of the shares at the time such shares
were purchased by me over the price which I paid for the shares. I hereby agree to notify the
Company in writing within thirty (30) days after the date of any disposition of my shares and I
will make adequate provision for Federal, state or other tax withholding obligations, if any, which
arise upon the disposition of the Common Stock. The Company may, but will not be obligated to,
withhold from my compensation the amount necessary to meet any applicable withholding obligation
including any withholding necessary to make available to the Company any tax deductions or benefits
attributable to sale or early disposition of Common Stock by me. If I dispose of such shares at
any time after the expiration of the two (2)-year and one (1)-year holding periods, I understand
that I will be treated for federal income tax purposes as having received income only at the time
of such disposition, and that such income will be taxed as ordinary income only to the extent of an

 

 

amount equal to the lesser of (a) the excess of the fair market value of the shares at the
time of such disposition over the purchase price which I paid for the shares, or (b) 15% of the
fair market value of the shares on the first day of the Offering Period. The remainder of the
gain, if any, recognized on such disposition will be taxed as capital gain.

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

     8. In the event of my death, I hereby designate the following as my beneficiary(ies) to
receive all payments and shares due me under the Employee Stock Purchase Plan:

	 	 	 	 	 	 	 
	NAME: (please print)
	 	 	 	 	 	 
	 	 	     
	 

	 	First
	 	Middle
	 	Last

	 	 	 
	 

	 	 
	Relationship
	 	 
	 
	 	 
	 

	 	 
	Percentage Benefit
	 	 
	 

	 	 
	 

	 	Address

	 	 	 	 	 	 	 
	NAME: (please print)
	 	 	 	 	 	 
	 	 	     
	 

	 	First
	 	Middle
	 	Last

	 	 	 
	 

	 	 
	Relationship
	 	 
	 
	 	 
	 

	 	 
	Percentage Benefit
	 	 
	 

	 	 
	 

	 	Address

-2-

 

	 	 	 
	Employee’s Social
	 	 
	Security Number:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	Employee’s Address:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

     I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT WILL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE
OFFERING PERIODS UNLESS TERMINATED BY ME.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Signature of Employee
	 
	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Spouse’s Signature (If beneficiary other than
spouse)

 

 

EXHIBIT B

CONCENTRIC MEDICAL, INC.

2007 EMPLOYEE STOCK PURCHASE PLAN

NOTICE OF WITHDRAWAL

     The undersigned participant in the Offering Period of the Concentric Medical, Inc. 2007
Employee Stock Purchase Plan that began on                     , ___(the “Offering Date”) hereby
notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby
directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period. The undersigned understands
and agrees that his or her option for such Offering Period will be automatically terminated. The
undersigned understands further that no further payroll deductions will be made for the purchase of
shares in the current Offering Period and the undersigned will be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription Agreement.

	 	 	 	 	 	 	 
	 	 	Name and Address of Participant:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	Signature:	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:

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