Document:

exv4w3

 

Exhibit 4.3

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT
BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AND REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT THE
PROPOSED TRANSACTION DOES NOT VIOLATE THE SECURITIES ACT OF 1933, AND APPLICABLE STATE SECURITIES
LAWS.

WARRANT TO PURCHASE [NUMBER OF WARRANT SHARES] SHARES OF

COMMON STOCK

December 28, 2007

THIS CERTIFIES THAT, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, [WARRANT HOLDER], or permitted assigns (“Holder”) is entitled to
subscribe for and purchase from Peplin, Inc., a Delaware corporation (the “Company”),
[NUMBER OF WARRANT SHARES] ([NUMBER]) shares (as such number may be adjusted as provided herein) of
fully paid and nonassessable common stock, par value $0.001 per share (the “Common Stock”), of the
Company at the Warrant Price (as hereinafter defined), subject to the provisions and upon the terms
and conditions hereinafter set forth. As used herein, the term “Warrant Shares” shall mean
the shares of Common Stock which Holder may acquire pursuant to this Warrant.

1. Warrant Price. The “Warrant Price” shall initially be Fifteen and 26/100 US Dollars
($15.26) per share, subject to adjustment as provided in Section 7 below.

2. Conditions to Exercise. The purchase right represented by this Warrant may be
exercised, in accordance with the terms hereof, at any time, or from time to time, in whole or in
part during the term commencing on the date hereof and ending at 5:00 P.M. Pacific time on the
fifth anniversary of the date of this Warrant (the “Expiration Date”).

3. Method of Exercise or Conversion; Payment; Issuance of Shares; Issuance of New Warrant.

(a) Cash Exercise. Subject to Section 2 hereof, the purchase right represented by
this Warrant may be exercised by Holder hereof, in whole or in part, by the surrender of
this Warrant (with a duly executed Notice of Exercise in the form attached hereto) during

 

 

normal business hours on any Business Day (as defined below) at the principal office of
Company (as set forth in Section 19 below) and by payment to Company, by cash, certified
check, wire transfer or other immediately available funds, of an amount equal to the then
applicable Warrant Price per share multiplied by the number of Warrant Shares then being
purchased. In the event of any exercise of the rights represented by this Warrant,
book-entry shares of stock so purchased shall be issued in the name of, and registered to,
the account of the Holder hereof, or as such Holder may direct (subject to the terms of
transfer contained herein and upon payment by such Holder hereof of any applicable transfer
taxes), on the records of the Company’s transfer agent for its Common Stock. Such
registration shall be made within 30 days after exercise of this Warrant and at Company’s
expense and, unless this Warrant has been fully exercised or expired, a new Warrant having
terms and conditions substantially identical to this Warrant and representing the portion of
the Warrant Shares, if any, with respect to which this Warrant shall not have been
exercised, shall also be issued to Holder hereof within 30 days after exercise of this
Warrant. For purposes of this Agreement, “Business Day” means any day other than a Saturday,
Sunday or a day on which commercial banking institutions in New York, New York are required
by law to be closed.

(b) Conversion. In lieu of exercising this Warrant as specified in Section 3(a),
Holder may from time to time convert this Warrant, in whole or in part, into Warrant Shares
by surrender of this Warrant (with a duly executed Notice of Exercise in the form attached
hereto) at the principal office of Company, in which event Company shall issue to Holder the
number of Warrant Shares computed using the following formula:

Where:

X = the number of Warrant Shares to be issued to Holder.

Y = the number of Warrant Shares purchasable under this Warrant or, if only a
portion of this Warrant is being exercised, the portion of this Warrant being
canceled (at the date of such calculation).

A = the Fair Market Value of one share of Company’s Common Stock (at the date of
such calculation).

B = Warrant Price (as adjusted to the date of such calculation).

(c) Fair Market Value. For purposes of this Section 3, Fair Market Value of one
share of Company’s Common Stock shall mean:

(i) The average of the closing bid and asked prices of a share of Common Stock
quoted in the Over-The-Counter Market Summary, the last reported sale price quoted
on the NASDAQ Stock Market or on any other exchange on which the Common Stock is
listed, whichever is applicable, as published in the Western Edition of the Wall
Street Journal for the ten (10) trading days immediately before the date of
determination of Fair Market Value; or, if none of the foregoing are

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applicable, the ASX Price. “ASX Price” shall mean twenty (20) multiplied by
Y multiplied by FX, where:

Y= the volume-weighted 10-day trailing average of the closing price (as
displayed on the Australian Securities Exchange’s board) in respect of the
Company’s CHESS Depository Interests (“CDIs”) for the Business Day
immediately before the date of determination; and

FX = the US Dollar/AUD exchange rate published by the Reserve Bank of
Australia on its website (www.rba.gov.au) as at the close of trading (Sydney
time) on the Business Day immediately before the date of determination.

“US Dollars” and “USD” shall mean the currency of the United
States of America and “AUD” shall mean the currency of the
Commonwealth of Australia.

(ii) In the event of an exercise in connection with a merger, acquisition or other
consolidation in which Company is not the surviving entity, the per share Fair
Market Value for the Common Stock shall be the value to be received per share of
Common Stock by all holders of the Common Stock in such transaction as determined by
the Board of Directors; or

(iii) In any other instance, the per share Fair Market Value for the Common Stock
shall be as determined in the reasonable good faith judgment of Company’s Board of
Directors.

In the event of 3(c)(ii) or 3(c)(iii), above, the Company shall prepare a certificate, to be
signed by an authorized officer of Company, setting forth in reasonable detail the basis for
and method of determination of the per share Fair Market Value of the Common Stock. The
officer will also certify to Holder that this per share Fair Market Value will be applicable
to all holders of Company’s Common Stock. Such certification must be made to Holder at
least ten (10) Business Days prior to the proposed effective date of the merger,
consolidation, sale, or other triggering event as defined in 3(c)(ii) or 3(c)(iii).

Notwithstanding anything herein to the contrary, the Company shall not be required to make
any cash payments to the Holder in lieu of issuance of the Warrant Shares.

(d) Automatic Exercise. To the extent this Warrant is not previously exercised, it
shall be deemed to have been automatically converted in accordance with Sections 3(b) and
3(c) hereof (even if not surrendered) immediately before its expiration, involuntary
termination or cancellation if the then-applicable Fair Market Value of a Warrant Share
exceeds the Warrant Price, unless Holder notifies Company in writing to the contrary prior
to such automatic exercise.

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(e) Treatment of Warrant Upon Acquisition of Company.

(i) Certain Definitions. For the purpose of this Warrant,
“Acquisition” means any sale, license, or other disposition of all or
substantially all of the assets of Company, or any reorganization, consolidation, or
merger of Company, or sale of outstanding Company securities by holders thereof,
where the holders of Company’s securities before the transaction beneficially own
less than 50% of the outstanding voting securities of the successor or surviving
entity after the transaction. For purposes of this Section 3(e), “Affiliate” shall
mean any person or entity that owns or controls, directly or indirectly, 10% percent
or more of the stock of Company, any person or entity that controls or is controlled
by or is under common control with such persons or entities, and each of such
person’s or entity’s officers, directors, joint venturers or partners, as
applicable.

(ii) Cash Acquisition. In the event of an Acquisition in which the sole
consideration is cash, Holder may either (a) exercise its conversion or purchase
right under this Warrant and such exercise will be deemed effective immediately
prior to the consummation of such Acquisition or (b) permit the Warrant to expire
upon the consummation of such Acquisition. Company shall provide Holder with
written notice of any proposed Acquisition together with such reasonable information
as Holder may request in connection with such contemplated Acquisition giving rise
to such notice, which is to be delivered to Holder not less than ten (10) Business
Days prior to the closing of the proposed Acquisition.

(iii) Asset Sale. In the event of an Acquisition (other than an Acquisition
described in 3(e)(ii) above) by a third party that is not an Affiliate of Company (a
“True Asset Sale”), Holder may either (a) exercise its conversion or purchase right
under this Warrant and such exercise will be deemed effective immediately prior to
the consummation of such Acquisition or (b) permit the Warrant to continue until the
Expiration Date if Company continues as a going concern following the closing of any
such True Asset Sale. Company shall provide Holder with written notice of any
proposed asset sale together with such reasonable information as Holder may request
in connection with such asset sale giving rise to such notice, which is to be
delivered to Holder not less than ten (10) Business Days prior to the closing of the
proposed asset sale.

(iv) Assumption of Warrant. Upon the closing of any Acquisition other than
those particularly described in subsections (ii) and (iii) above, the successor
entity shall assume the obligations of this Warrant, and this Warrant shall be
exercisable for the same securities, cash, and property as would be payable for the
Warrant Shares issuable upon exercise of the unexercised portion of this Warrant as
if such Warrant Shares were outstanding on the record date for the Acquisition and
subsequent closing. The Warrant Price and/or number of Warrant Shares shall be
adjusted accordingly so that Holder is neither advantaged or disadvantaged as a
consequence of the Acquisition.

4. Representations and Warranties of Holder and Company.

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(a) Representations and Warranties by Holder. The Holder represents and warrants to
Company with respect to this purchase as follows:

(i) Evaluation. The Holder has substantial experience in evaluating and
investing in private placement transactions of securities of companies similar to
Company so that Holder is capable of evaluating the merits and risks of its
investment in Company and has the capacity to protect its interests.

(ii) Resale. Holder is acquiring this Warrant and the Warrant Shares
issuable upon exercise of this Warrant (collectively the “Securities”) for
investment for its own account and not with a view to, or for resale in connection
with, any distribution thereof. The Holder understands that the Securities have not
been registered under the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the “Act”), by reason of a specific exemption from the
registration provisions of the Act which depends upon, among other things, the bona
fide nature of the investment intent as expressed herein. The Holder agrees and
acknowledges that it will not, directly or indirectly, offer, transfer, or sell the
Securities, or solicit any offers to purchase or acquire the Securities, unless the
transfer or sale is permitted by the terms of the Warrant and such transfer or sale
is (i) pursuant to an effective registration statement under the Act and has been
registered under any applicable state securities or “blue sky” laws, or (ii)
pursuant to an exemption from registration under the Act and applicable state
securities or “blue sky” laws. It being understood that Holder is permitted to
transfer the Securities to an Affiliate in compliance with the provisions of the Act
and applicable state securities or “blue sky” laws.

(iii) Rule 144. The Holder acknowledges that the Securities must be held
indefinitely unless subsequently registered under the Act or an exemption from such
registration is available. The Holder is aware of the provisions of Rule 144
promulgated under the Act.

(iv) Accredited Investor. The Holder is an “accredited investor” as such
term is defined in Rule 501 promulgated under the Act

(v) Opportunity To Discuss. The Holder has had an opportunity to discuss
Company’s business, management and financial affairs with its management and an
opportunity to review Company’s facilities. The Holder understands that such
discussions, as well as the written information issued by Company, were intended to
describe the aspects of Company’s business and prospects which Company believes to
be material but were not necessarily a thorough or exhaustive description.

(vi) CDIs. Upon exercise of the Warrant, in whole or in part, and receipt
by the Holder of Warrant Shares, Holder will not convert any Warrant Shares into the
Company’s CDIs prior to the earlier of (i) such Warrant Shares being registered
under the Act (nothing contained in this paragraph shall be deemed to require the
Company to so register the Warrant Shares) or (ii) such Warrant

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Shares being freely transferable by Holder pursuant to Rule 144 promulgated under
the Act or otherwise pursuant to the Act.

(b) Representations and Warranties by Company. Company hereby represents and warrants to
Holder that the statements in the following paragraphs of this Section 4(b) are true and
correct as of the date hereof

(i) Corporate Power . Company has all requisite legal and corporate power
and authority to execute, issue and deliver this Warrant, to issue the Warrant
Shares issuable upon exercise or conversion of this Warrant, and to carry out and
perform its obligations under this Warrant.

(ii) Authorization; Enforceability. All corporate action on the part of
Company, its officers, directors and shareholders necessary for the authorization,
execution, delivery and performance of its obligations under this Warrant and for
the authorization, issuance and delivery of this Warrant and the Warrant Shares
issuable upon exercise or conversion of this Warrant has been taken and this Warrant
constitutes the legally binding and valid obligation of Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally and
subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law and the time barring of claims and defenses of
set-off or counterclaim.

(iii) Valid Issuance of Warrant and Warrant Shares. This Warrant has been
validly issued and is free of restrictions on transfer other than restrictions on
transfer set forth herein and under applicable state and federal securities laws.
The Warrant Shares issuable upon conversion of this Warrant, when issued, sold and
delivered in accordance with the terms of this Warrant for the consideration
expressed herein, will (a) be duly and validly issued, fully paid and nonassessable,
(b) rank pari passu with the fully paid Common Stock then in issue, (c) be free of
restrictions on transfer other than restrictions on transfer under this Warrant and
under applicable state and federal securities laws and (d) be entitled to receive
any dividend or other distribution which has previously been announced or declared
if the date by which the holder of the Common Stock must be registered to
participate in such dividend or distribution is after the date on which the Exercise
Notice is delivered by the Holder to the Company in accordance with either clause
3(a) or 3(b) as appropriate. Subject to applicable restrictions on transfer, the
issuance and delivery of this Warrant and the Warrant Shares issuable upon exercise
or conversion of this Warrant are not subject to any preemptive or other similar
rights or any liens or encumbrances except as specifically set forth in Company’s
Certificate of Incorporation or this Warrant. The offer, sale and issuance of the
Warrant Shares, as contemplated by this Warrant, are intended to be exempt from the
prospectus and registration requirements of applicable United

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States federal and state security laws, and neither Company nor any authorized agent
acting on its behalf has or will take any action hereafter that would cause the loss
of any such exemption.

(iv) No Conflict. The execution, delivery, and performance of this Warrant
will not result in (a) any violation of, be in conflict with, or constitute a
default under, with or without the passage of time or the giving of notice (1) any
provision of Company’s Certificate of Incorporation or by-laws; (2) any material
provision of any judgment, decree, or order to which Company is a party, by which it
is bound, or to which any of its material assets are subject or (3) any material
provision of a statute, rule, governmental regulation or stock exchange listing rule
applicable to Company or its issued securities (including the CDIs related thereto).

(v) Capitalization. The capitalization of Company as set forth in Annex A
is complete and accurate as of the date hereof (after giving effect to the issuance
of this Warrant) and reflects (a) all outstanding capital stock of Company and (b)
all outstanding warrants, options, conversion privileges, preemptive rights or other
rights or agreements to purchase or otherwise acquire or issue any equity securities
or convertible securities of Company. Company has reserved in its books and records
[NUMBER OF WARRANT SHARES] shares of Common Stock for issuance under this Warrant.

5. Legends.

(a) Legend. Book-entry shares representing the Warrant Shares shall bear the
following legend:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OR STATE SECURITIES LAWS OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.”

The Company need not enter into its stock records a transfer of Warrant Shares unless the
conditions specified in the foregoing legend are satisfied. The Company may also instruct
its transfer agent not to allow the transfer of any of the Warrant Shares unless the
conditions specified in the foregoing legend are satisfied.

(b) Removal of Legend and Transfer Restrictions. The legend relating to the Act
described in paragraph 5(a) of this Warrant shall be removed and Company shall cause

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the issuance of book-entry shares without such legend to Holder if (i) the Securities are
registered under the Act and a prospectus meeting the requirements of Section 10 of the Act
is available, nothing herein contained shall be deemed to require the Company to so register
this Warrant or the Warrant Shares or (ii) Holder provides to Company an opinion of counsel
for Holder knowledgeable in securities laws and reasonably satisfactory to Company, or other
evidence reasonably satisfactory to Company, to the effect that public sale, transfer or
assignment of the Securities may be made without registration.

6. Condition of Transfer or Exercise of Warrant. It shall be a condition to any transfer
or exercise of this Warrant that at the time of such transfer or exercise, Holder shall provide
Company with a representation in writing that Holder or transferee is acquiring this Warrant and
the shares of Common Stock to be issued upon exercise for investment purposes only and not with a
view to any sale or distribution, or will provide Company with a statement of pertinent facts
covering any proposed distribution. As a further condition to any transfer of this Warrant or any
or all of the shares of Common Stock issuable upon exercise of this Warrant, other than a transfer
registered under the Act, Company may request a legal opinion, in form and substance satisfactory
to Company and its counsel, reciting the pertinent circumstances surrounding the proposed transfer
and stating that such transfer is exempt from the registration and prospectus delivery requirements
of the Act. The Company shall not require Holder to provide an opinion of counsel if the transfer
is to an affiliate of Holder. Each book-entry share evidencing the Warrant Shares issued upon
exercise of this Warrant or upon any transfer of the Warrant Shares (other than a transfer
registered under the Act or any subsequent transfer of shares so registered) shall, at Company’s
option, if the Warrant Shares are not freely saleable under Rule 144(k) under the Act, contain a
legend in form and substance satisfactory to Company and its counsel, restricting the transfer of
the Warrant Shares to sales or other dispositions exempt from the requirements of the Act. As
further condition to each transfer, at the request of Company, Holder shall surrender this Warrant
to Company and the transferee shall receive and accept a Warrant, of like tenor and date, executed
by Company.

7. Adjustment for Certain Events. The number and kind of securities purchasable upon the
exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time
upon the occurrence of certain events, as follows:

(a) Reclassification or Merger. In case of (i) any reclassification or change of
securities of the class issuable upon exercise of this Warrant (other than a change in par
value, or from par value to no par value, or from no par value to par value, or as a result
of a subdivision or combination), (ii) any merger of Company with or into another
corporation (other than a merger with another corporation in which Company is the acquiring
and the surviving corporation and which does not result in any reclassification or change of
outstanding securities issuable upon exercise of this Warrant), or (iii) any sale of all or
substantially all of the assets of Company, Company, or such successor or purchasing
corporation, as the case may be, shall duly execute and deliver to Holder a new Warrant (in
form and substance satisfactory to Holder of this Warrant), or Company shall make
appropriate provision without the issuance of a new Warrant, so that Holder shall have the
right to receive, at a total purchase price not to exceed that payable upon

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the exercise of the unexercised portion of this Warrant, and in lieu of the Warrant Shares
theretofore issuable upon exercise or conversion of this Warrant, the kind and amount of
shares of stock, other securities, money and property receivable upon such reclassification,
change, merger or sale by a holder of the number of shares of Common Stock then purchasable
under this Warrant, or in the case of such a merger or sale in which the consideration paid
consists all or in part of assets other than securities of the successor or purchasing
corporation, at the option of Holder, the securities of the successor or purchasing
corporation having a value at the time of the transaction equivalent to the value of the
Warrant Shares purchasable upon exercise of this Warrant at the time of the transaction. Any
new Warrant shall provide for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 7. The provisions of this
subparagraph (a) shall similarly apply to successive reclassifications, changes, mergers and
transfers.

(b) Subdivision or Combination of Shares. If Company at any time while this Warrant
remains outstanding and unexpired shall subdivide or combine its outstanding shares of
Common Stock, the Warrant Price shall be proportionately decreased and the number of Warrant
Shares issuable hereunder shall be proportionately increased in the case of a subdivision
and the Warrant Price shall be proportionately increased and the number of Warrant Shares
issuable hereunder shall be proportionately decreased in the case of a combination.

(c) Stock Dividends and Other Distributions. If Company at any time while this
Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Common Stock
payable in Common Stock, then the Warrant Price shall be adjusted, from and after the date
of determination of shareholders entitled to receive such dividend or distribution, to that
price determined by multiplying the Warrant Price in effect immediately prior to such date
of determination by a fraction (A) the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to such dividend or distribution, and
(B) the denominator of which shall be the total number of shares of Common Stock outstanding
immediately after such dividend or distribution; or (ii) make any other distribution with
respect to Common Stock (except any distribution specifically provided for in Sections 7(a)
and 7(b)), then, in each such case, provision shall be made by Company such that Holder
shall receive upon exercise of this Warrant a proportionate share of any such dividend or
distribution as though it were Holder of the Warrant Shares as of the record date fixed for
the determination of the shareholders of Company entitled to receive such dividend or
distribution.

(d) Adjustment of Number of Shares. Upon each adjustment in the Warrant Price, the
number of Warrant Shares purchasable hereunder shall be adjusted, to the nearest whole
share, to the product obtained by multiplying the number of Warrant Shares purchasable
immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately prior to such adjustment and the denominator of
which shall be the Warrant Price immediately thereafter.

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8. Notice of Adjustments. Whenever any Warrant Price or the kind or number of securities
issuable under this Warrant shall be adjusted pursuant to Section 7 hereof, Company shall prepare
a certificate signed by an officer of Company setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such adjustment was
calculated, and the Warrant Price and number or kind of shares issuable upon exercise of this
Warrant after giving effect to such adjustment, and shall cause copies of such certificate to be
mailed (by certified or registered mail, return receipt required, postage prepaid) within thirty
(30) days of such adjustment to Holder as set forth in Section 19 hereof.

9. Transferability of Warrant. This Warrant is transferable on the books of Company at
its principal office by the registered Holder hereof upon surrender of this Warrant properly
endorsed, subject to compliance with Section 6 and applicable federal and state securities laws.
The Company shall issue and deliver to the transferee a new Warrant representing the Warrant so
transferred. Upon any partial transfer, Company will issue and deliver to Holder a new Warrant
with respect to the Warrant not so transferred. Holder shall not have any right to transfer any
portion of this Warrant to any direct competitor of Company.

10. Registration Rights. If, prior to the sale of the Warrant Shares by Holder, the Company
agrees to grant registration rights, and other associated rights contained in the applicable
registration rights agreement including, if any, without limitation, with respect to amendments to
such rights and with respect to the granting of other registration rights (collectively, the
“Registration Rights”), to any purchaser or holder of its Common Stock or other class of equity
security, other than a registration relating solely to employee benefit plans, a registration
relating to a corporate reorganization or other Rule 145 transaction, or a registration on any
registration form that does not permit secondary sales, the Company will provide Holder with the
option to receive no less favorable Registration Rights than those granted to such other purchaser
or holder. In such an event, the Company will provide Holder with a substantially final version of
the registration rights agreement evidencing the Registration Rights (the “Registration Rights
Agreement”), along with a blank signature page in the name of Holder. Upon receipt of such
documents, Holder, at its option, will be entitled to become a party to the Registration Rights
Agreement by executing and returning to Company the signature page provided within ten (10)
Business Days of its receipt from the Company in accordance with Section 19. If Holder declines the
Company’s first offer of Registration Rights, the Company will be required to offer Holder, in the
manner described above, the option to receive no less favorable Registration Rights than those
granted to any purchaser or holder of its Common Stock or other class of equity security upon the
Company’s next grant of Registration Rights. It being understood that the Company will not be
required to offer Holder Registration Rights more than two (2) times (and that any amendments
and/or restatements of registration rights agreements to which, pursuant to this Section 10, Holder
has become a party, shall not constitute a new “offer” of new Registration Rights for purposes of
this sentence). The Holder’s rights under this Section will terminate upon its delivery of its
executed signature page to the Company (but, for the avoidance of doubt, Holder’s Registration
Rights pursuant to the agreement to which such signature page relates shall become effective (and
not terminate) on delivery of such signature page by Holder) and its acceptance of the Company’s
offer of Registration Rights; provided that, if the Company should take any action to terminate
Holder’s Registration Rights after Holder’s acceptance, the Company’s obligations under this
Section will be revived.

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11. Rule 144 Reporting.  With a view to making available the benefits of certain rules and
regulations of the Commission that may permit the sale of the restricted securities to the public
without registration, the Company agrees to use its reasonable best efforts to:

(a) Make and keep public information regarding the Company available as those terms are
understood and defined in Rule 144 under the Act, at all times from and after the effective
date of the first registration statement under the Act filed by the Company for an offering
of its securities to the general public;

(b) File with the Commission in a timely manner all reports and other documents required of
the Company under the Act and the Exchange Act of 1934, as amended (“Exchange Act”) at any
time after it has become subject to such reporting requirements; and

(c) So long as Holder owns any restricted securities, furnish to the Holder forthwith upon
written request a written statement by the Company as to its compliance with the reporting
requirements of Rule 144 (at any time from and after ninety (90) days following the
effective date of the first registration statement filed by the Company for an offering of
its securities to the general public), and of the Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents so filed as
Holder may reasonably request in availing itself of any rule or regulation of the Commission
allowing Holder to sell any such securities without registration.

12. No Fractional Shares. No fractional share of Common Stock will be issued in connection
with any exercise or conversion hereunder, and the number of Warrant Shares to be issued upon
conversion shall be rounded up to the nearest whole share.

13. Charges, Taxes and Expenses. Issuance of shares of Common Stock upon the exercise or
conversion of this Warrant shall be made without charge to Holder for any United States or state
of the United States documentary stamp tax or other incidental expense with respect to the
issuance of such shares, all of which taxes and expenses shall be paid by Company, and such shares
shall be issued in the name of Holder.

14. No Shareholder Rights Until Exercise. Except as expressly provided herein, this
Warrant does not entitle Holder to any voting rights or other rights as a shareholder of Company
prior to the exercise hereof.

15. Registry of Warrant. Company shall maintain a registry showing the name and address
of the registered Holder of this Warrant. This Warrant may be surrendered for exchange or
exercise, in accordance with its terms, at such office or agency of Company, and Company and
Holder shall be entitled to rely in all respects, prior to written notice to the contrary, upon
such registry.

16. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and, in the case of loss, theft, or destruction, of indemnity reasonably satisfactory to
it, and, if

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mutilated, upon surrender and cancellation of this Warrant, Company will execute and deliver a new
Warrant, having terms and conditions substantially identical to this Warrant, in lieu hereof.

17. Miscellaneous.

(a) Issue Date. The provisions of this Warrant shall be construed and shall be
given effect in all respect as if it had been issued and delivered by Company on the date
hereof.

(b) Successors. This Warrant shall be binding upon any successors or assigns of
Company.

(c) Headings. The headings used in this Warrant are used for convenience only and
are not to be considered in construing or interpreting this Warrant.

(d) Saturdays, Sundays, Holidays. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a Saturday or
a Sunday or shall be a legal holiday in the State of New York, then such action may be taken
or such right may be exercised on the next succeeding day not a legal holiday.

(e) Attorney’s Fees. In the event of any dispute between the parties concerning
the terms and provisions of this Warrant, the party prevailing in such dispute shall be
entitled to collect from the other party all costs incurred in such dispute, including
reasonable attorney’s fees.

(f) Acceptance. Receipt of this Warrant by the Holder shall constitute acceptance
of and agreement to all of the terms and conditions contained herein.

18. No Impairment. Company will not, by amendment of its Certificate of Incorporation or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or appropriate in order to protect
the rights of Holder hereof against impairment.

19. Addresses. Any notice required or permitted hereunder shall be in writing and shall
be mailed by overnight courier, registered or certified mail, return receipt requested, and
postage prepaid, or otherwise delivered by hand or by messenger, addressed as set forth below, or
at such other address as Company or Holder hereof shall have furnished to the other party in
accordance with the delivery instructions set forth in this Section 19.

	 	 	 	 	 	 	 
	 

	 	If to Company:
	 	Peplin, Inc.
	 	 
	 

	 	 	 	6475 Christie Avenue	 	 
	 

	 	 	 	Emeryville, CA 94608	 	 

12

 

	 	 	 	 	 	 	 
	 

	 	 	 	Attn: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	With a copy to:
	 	Latham &Watkins LLP	 	 
	 

	 	 	 	650 Town Center Drive, 20th Floor	 	 
	 

	 	 	 	Costa Mesa, CA 92626-1925	 	 
	 

	 	 	 	Attn: B. Shayne Kennedy	 	 
	 
	 	 	 	 	 	 
	 

	 	If to Holder:
	 	[HOLDER]	 	 
	 

	 	 	 	[ADDRESS]	 	 

If mailed by registered or certified mail, return receipt requested, and postage prepaid,
notice shall be deemed to be given five (5) days after being sent, and if sent by overnight
courier, by hand or by messenger, notice shall be deemed to be given when delivered (if on a
Business Day, and if not, on the next Business Day).

20. Amendments. This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by each of Company and Holder.

21. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS WARRANT OR THE WARRANT
SHARES.

22. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. THE
PARTIES HEREBY UNCONDITIONALLY AND IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION AND VENUE OF
THE COURTS OF THE STATE OF CALIFORNIA AND THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF
CALIFORNIA FOR ANY ACTIONS, SUITS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

13

 

     IN WITNESS WHEREOF, Company has caused this Warrant to be executed by its officer thereunto
duly authorized.

	 	 	 	 	 	 	 
	PEPLIN, INC.	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Dated as of                       , 200                    .	 	 

 

 

NOTICE OF EXERCISE

	 	 	 
	To:
	 	 
	PEPLIN, INC.
	 	 
	 
	 	 
	 

	 	 
	 

	 	 
	 

	 	 

	1.	 	The undersigned Warrant holder (“Holder”) elects to acquire shares of the common
stock, par value $0.001 per share (the “Common Stock”), of Peplin, Inc. (the
“Company”), pursuant to the terms of the Stock Purchase Warrant dated December 28,
2007 (the “Warrant”).
	 
	2.	 	The Holder exercises its rights under the Warrant as set forth below:

	 	(  )	 	Holder elects to purchase                     shares of
Common Stock as provided in Section 3(a) and tenders payment herewith in cash,
certified check, wire transfer or other immediately available funds in the
amount of US$                     as payment of the purchase price.
	 
	 	(  )	 	Holder elects to convert the purchase rights into
shares of Common Stock as provided in Section 3(b) of the Warrant.

	3.	 	Holder surrenders the Warrant with this Notice of Exercise.

Holder represents that it is acquiring the aforesaid shares of Common Stock for investment and not
with a view to or for resale in connection with distribution and that Holder has no present
intention of distributing or reselling the shares.

Please issue the shares of the Common Stock in the name of Holder or in such other name as is
specified below:

	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Taxpayer I.D.:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

If the Exercise Amount is less than all of the shares of Common Stock purchasable hereunder, please
issue a new Warrant representing the remaining balance of such shares, as follows:

	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Taxpayer I.D.:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	[HOLDER]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Date:                       , 200                    	 	 

 

 

ANNEX A

COMPANY CAPITALIZATION

10,341,484 shares of Common Stock

17,118,960 listed CDI warrants convertible into 855,948 shares of Common Stock

935,519 employee stock options convertible into 935,519 shares of Common Stock

A warrant to purchase [NUMBER OF WARRANT SHARES] shares of Common Stock issued pursuant to this Agreement

A warrant to purchase [NUMBER OF WARRANT SHARES] shares of Common Stock issued pursuant to the Warrant, dated as of the date hereof, in favor of [WARRANT HOLDER]exv10w3

 

Exhibit 10.3

PEPLIN, INC.

2007 INCENTIVE AWARD PLAN

STOCK OPTION GRANT NOTICE

     Peplin, Inc., a Delaware corporation (the “Company”), pursuant to its 2007 Incentive Award
Plan (the “Plan”), hereby grants to the holder listed below (“Participant”), an option to purchase
the number of shares of the Company’s common stock, par value USD 0.001 per share (“Stock”), set
forth below (the “Shares”) at the price set forth below (the “Option”). This Option is subject to
all of the terms and conditions set forth herein and in the Stock Option Agreement attached hereto
as Exhibit A (the “Stock Option Agreement”) and the Plan, each of which are incorporated
herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Stock Option Grant Notice (the “Grant Notice”).

	 	 	 	 	 
	Participant:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Grant Date:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Exercise Price per Share:

	 	[AUSD][USD]	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Total Exercise Price:

	 	[AUSD][USD]	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Total Number of Shares
Subject to the Option:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Expiration Date:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 

	 	 	 	 
	Type of Option:

	 	o      Incentive Stock Option                      o      Non-Qualified Stock Option	 
	 
	 	 	 
	Vesting Schedule:

	 	 	 
	 
	 	 	 
	 

	 	 	 
	 
	 	 	 
	 

	 	 	 
	 
	 	 	 
	 

	 	 	 
	 
	 	 	 

     By his or her signature below, Participant agrees to be bound by the terms and conditions of
the Plan, the Stock Option Agreement and this Grant Notice. Participant has reviewed the Stock
Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Grant Notice and fully understands all
provisions of this Grant Notice, the Stock Option Agreement and the Plan. Participant hereby
agrees to accept as binding, conclusive and

 

 

 

final all decisions or interpretations of the Administrator upon any questions arising under
or relating to the Plan, this Grant Notice or the Stock Option Agreement.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	PEPLIN, INC.:	 	 	 	PARTICIPANT:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	Print Name:	 	 	 	 	 	Print Name:	 	 
	 

	 	 
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	Address:

	 	 	 	 	 	 	 	Address:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

			
	Attachments:	 	Stock Option Agreement (Exhibit A)

Form of Exercise Notice (Exhibit B)

Peplin, Inc. 2007 Incentive Award Plan (Exhibit C)

Peplin, Inc. 2007 Incentive Award Plan Prospectus (Exhibit D)

A-

 

EXHIBIT A

TO STOCK OPTION GRANT NOTICE

STOCK OPTION AGREEMENT

     Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option
Agreement (this “Agreement”) is attached, Peplin, Inc., a Delaware corporation (the “Company”), has
granted to Participant an option to purchase the number of shares of the Company’s common stock,
par value USD 0.001 per share (“Stock”), specified in the Grant Notice, upon the terms and
conditions set forth in the Peplin, Inc. 2007 Incentive Award Plan (the “Plan”), the Grant Notice
and this Agreement.

ARTICLE I

GENERAL

     1.1 Defined Terms. Wherever the following terms are used in this Agreement they shall
have the meanings specified below, unless the context clearly indicates otherwise. Capitalized
terms not specifically defined herein shall have the meanings specified in the Grant Notice or, if
not defined therein, the Plan.

          “Misconduct” shall mean (i) the commission of any act of fraud, embezzlement or dishonesty by
Participant that adversely affects the Company or any Subsidiary, (ii) any unauthorized use or
disclosure by Participant of confidential information or trade secrets of the Company or any
Subsidiary that adversely affects the Company or any Subsidiary, (iii) any willful and continued
failure by Participant to substantially perform his or her duties with the Company or any
Subsidiary (other than any such failure resulting from Participant’s incapacity due to physical or
mental illness), after a written demand for substantial performance is delivered to Participant by
the Board, which demand specifically identifies the manner in which the Board believes that
Participant has not substantially performed such duties, or (iv) any willful and continued failure
by Participant to substantially follow and comply with the specific and lawful directives of the
Board, as reasonably determined by the Board (other than any such failure resulting from
Participant’s incapacity due to physical or mental illness), after a written demand for substantial
performance is delivered to Participant by the Board, which demand specifically identifies the
manner in which the Board believes that Participant has not substantially performed such
directives. The foregoing definition shall not in any way preclude or restrict the right of the
Company (or any Subsidiary) to discharge or dismiss Participant or any other person in the service
of the Company (or any Subsidiary) for any other acts or omissions, but such other acts or
omissions shall not be deemed, for purposes of this Agreement, to constitute grounds for
termination for Misconduct.

     1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions
of the Plan which are incorporated herein by reference.

A-1

 

ARTICLE II

GRANT OF OPTION

     2.1 Grant of Option. In consideration of Participant’s agreement to remain in the
service or employ of the Company or a Subsidiary and for other good and valuable consideration,
effective as of the “Grant Date” set forth in the Grant Notice (the “Grant Date”), the Company
irrevocably grants to Participant an option to purchase any part or all of an aggregate of the
number of shares of Stock set forth in the Grant Notice, upon the terms and conditions set forth in
the Plan, the Grant Notice and this Agreement. Unless designated as an Incentive Stock Option in
the Grant Notice, the Option shall be a Non-Qualified Stock Option.

     2.2 Exercise Price. The exercise price of the shares of Stock subject to the Option
shall be as set forth in the Grant Notice, without commission or other charge; provided, however,
that the exercise price per share of Stock subject to the Option shall not be less than 100% of the
Fair Market Value of a share of Stock on the Grant Date. Notwithstanding the foregoing, if this
Option is designated as an Incentive Stock Option and Participant owns (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any Subsidiary Corporation or “parent corporation” of the Company (as
defined in Section 424(e) of the Code), the exercise price per share of Stock subject to the Option
shall not be less than 110% of the Fair Market Value of a share of Stock on the Grant Date (or the
date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).

     2.3 Consideration to the Company; No Employment Rights. In consideration of the grant
of the Option by the Company, Participant agrees to render faithful and efficient services to the
Company or any Subsidiary. Nothing in the Plan or this Agreement shall confer upon Participant any
right to continue in the employ or service of the Company or any Subsidiary or shall interfere with
or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby
expressly reserved, to discharge or terminate the services of Participant at any time for any
reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a
written agreement between the Company or a Subsidiary and Participant.

ARTICLE III

PERIOD OF EXERCISABILITY

     3.1 Commencement of Exercisability.

          (a) Subject to Sections 3.2 and 3.3, the Option shall become vested and exercisable in such
amounts and at such times as are set forth in the Grant Notice.

          (b) No portion of the Option which has not become vested and exercisable at the date of
Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy,
as applicable, shall thereafter become vested and exercisable, except as may be otherwise provided
by the Administrator or as set forth in a written agreement between the Company and Participant.

     3.2 Duration of Exercisability. The installments provided for in the vesting schedule
set forth in the Grant Notice are cumulative. Each such installment which becomes vested and
exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and
exercisable until it becomes unexercisable under Section 3.3.

A-2

 

     3.3 Expiration of Option. The Option may not be exercised to any extent by anyone
after the first to occur of the following events:

          (a) The “Expiration Date” set forth in the Grant Notice or, if earlier, the expiration of ten
years from the Grant Date;

          (b) If this Option is designated as an Incentive Stock Option and Participant owned (within
the meaning of Section 424(d) of the Code), at the time the Option was granted, more than 10% of
the total combined voting power of all classes of stock of the Company or any “subsidiary
corporation” of the Company or any “parent corporation” of the Company (each within the meaning of
Section 424 of the Code), the expiration of five years from the Grant Date;

          (c) The expiration of [three months] from the date of Participant’s Termination of Employment,
Termination of Directorship or Termination of Consultancy, unless such termination occurs by reason
of Participant’s death, Participant’s “permanent and total disability” (within the meaning of
Section 22(e)(3) of the Code) or Participant’s discharge for Misconduct;

          (d) The expiration of [twelve months] from the date of Participant’s Termination of
Employment, Termination of Directorship or Termination of Consultancy by reason of Participant’s
death or Participant’s “permanent and total disability” (within the meaning of Section 22(e)(3) of
the Code);

          (e) The date of Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy by reason of Participant’s discharge for Misconduct.

     Participant acknowledges that an Incentive Stock Option exercised more than three months after
Participant’s Termination of Employment, other than by reason of death or Participant’s “permanent
and total disability” (within the meaning of Section 22(e)(3) of the Code), will be taxed as a
Non-Qualified Stock Option.

     3.4 Special Tax Consequences. Participant acknowledges that, to the extent that the
aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of
Stock with respect to which Incentive Stock Options, including the Option, are exercisable for the
first time by Participant in any calendar year exceeds USD 100,000, the Option and such other
options shall be Non-Qualified Stock Options to the extent necessary to comply with the limitations
imposed by Section 422(d) of the Code. Participant further acknowledges that the rule set forth in
the preceding sentence shall be applied by taking the Option and other “incentive stock options”
into account in the order in which they were granted, as determined under Section 422(d) of the
Code and the Treasury Regulations thereunder.

ARTICLE IV

EXERCISE OF OPTION

     4.1 Person Eligible to Exercise. Except as provided in Sections 5.2(b) and 5.2(c),
during the lifetime of Participant, only Participant may exercise the Option or any portion
thereof. After the death of Participant, any exercisable portion of the Option may, prior to the
time when the Option becomes unexercisable under Section 3.3, be exercised by Participant’s
personal representative or by any person empowered to do so under the deceased Participant’s will
or under the then applicable laws of descent and distribution.

     4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior to the time when
the Option or

A-3

 

portion thereof becomes unexercisable under Section 3.3; provided, however, that each partial
exercise shall be for not less than 100 shares (or, if less, the maximum number of shares for which
the Option is vested and exercisable at such time) and shall be for whole shares only.

     4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary of the Company or the Secretary’s office of all of
the following prior to the time when the Option or such portion thereof becomes unexercisable under
Section 3.3:

          (a) An Exercise Notice in writing signed by Participant or any other person then entitled to
exercise the Option or portion thereof, stating that the Option or portion thereof is thereby
exercised, such notice complying with all applicable rules established by the Administrator. Such
notice shall be substantially in the form attached as Exhibit B to the Grant Notice (or
such other form as is prescribed by the Administrator);

          (b) The receipt by the Company of full payment for the shares with respect to which the Option
or portion thereof is exercised, including payment of any applicable withholding tax, which may be
in one or more of the forms of consideration permitted under Section 4.4;

          (c) Such representations and documents as the Administrator, in its discretion, deems
necessary or advisable to effect compliance with all applicable provisions of the Securities Act
and any other federal, state or foreign securities laws or regulations. The Administrator may, in
its discretion, also take whatever additional actions it deems appropriate to effect such
compliance including, without limitation, placing legends on share certificates and issuing
stop-transfer orders to transfer agents and registrars; and

          (d) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by
any person or persons other than Participant, appropriate proof of the right of such person or
persons to exercise the Option.

     4.4 Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of Participant:

          (a) cash;

          (b) check;

          (c) to the extent permitted under applicable laws, delivery of a notice that Participant has
placed a market sell order with a broker with respect to shares of Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the aggregate exercise price; provided,
that payment of such proceeds is then made to the Company upon settlement of such sale;

          (d) with the consent of the Administrator, through the delivery of shares of Stock which have
been owned by Participant for at least six months, duly endorsed for transfer to the Company with a
Fair Market Value on the date of exercise equal to the aggregate exercise price of the Option or
exercised portion thereof; or

          (e) any combination of the foregoing.

     4.5 Conditions to Issuance of Shares. The shares of Stock deliverable upon the
exercise of the Option, or any portion thereof, may be either previously authorized but unissued
shares or issued

A-4

 

shares which have then been reacquired by the Company. Such shares shall be fully paid and
nonassessable. The Company shall not be required to issue or deliver any shares of Stock purchased
upon the exercise of the Option or portion thereof prior to fulfillment of all of the following
conditions:

          (a) The admission of such shares to listing on all stock exchanges on which such Stock is then
listed;

          (b) The completion of any registration or other qualification of such shares under any
federal, state or foreign law or under rulings or regulations promulgated by the Securities and
Exchange Commission or any other governmental regulatory body, which the Administrator shall, in
its discretion, deem necessary or advisable;

          (c) The obtaining of any approval or other clearance from any federal, state or foreign
governmental agency which the Administrator shall, in its discretion, determine to be necessary or
advisable;

          (d) The receipt by the Company of full payment for such shares, including payment of any
applicable withholding tax, which may be in one or more of the forms of consideration permitted
under Section 4.4;

          (e) Unless a Registration Statement under the Securities Act is in effect with respect to the
shares of Stock to be issued, the receipt of a written representation of Participant that the
shares of Stock are being acquired by Participant for investment and with no present intention of
selling or transferring them and that Participant will not sell or otherwise transfer the shares
except in compliance with all applicable securities laws; and

          (f) The lapse of such reasonable period of time following the exercise of the Option and the
satisfaction of all other conditions to issuance as the Administrator may from time to time
establish for reasons of administrative convenience.

     4.6 Rights as Stockholder. The holder of the Option shall not be, nor have any of the
rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the
exercise of any part of the Option unless and until such shares shall have been issued by the
Company to such holder (as evidenced by the appropriate entry on the books of the Company or of a
duly authorized transfer agent of the Company). No adjustment will be made for a dividend or other
right for which the record date is prior to the date the shares are issued, except as provided in
Section 11.3 of the Plan.

ARTICLE V

OTHER PROVISIONS

     5.1 Administration. The Administrator shall have the power to (a) interpret the Plan
and this Agreement, (b) adopt such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret, amend or revoke any such rules and (c) amend
this Agreement, subject to Section 5.9. All actions taken and all interpretations and
determinations made by the Administrator in good faith shall be binding, conclusive and final upon
Participant, the Company and all other interested persons. No member of the Administrator shall be
personally liable for any action, determination or interpretation made in good faith with respect
to the Plan, this Agreement or the Option. In its discretion, the Board may at any time and from
time to time exercise any and all rights and duties of the Administrator under the Plan except with
respect to matters which under Rule 16b-3 or Section

A-5

 

162(m) of the Code, or any regulations or
rules issued thereunder, are required to be determined in the discretion of the Administrator.

     5.2 Option Not Transferable.

          (a) Subject to Section 5.2(b), the Option may not be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution. Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts, contracts or engagements
of Participant or Participant’s successors in interest or shall be subject to sale or other
disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other
means whether such sale or other disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including
bankruptcy), and any attempted sale or other disposition thereof shall be null and void and of no
effect, except to the extent that such sale or other disposition is permitted by the preceding
sentence.

          (b) Notwithstanding any other provision in this Agreement, with the consent of the
Administrator and to the extent the Option is not intended to qualify as an Incentive Stock Option,
the Option may be transferred to one or more Permitted Transferees, subject to the terms and
conditions set forth in Section 11.1(b) of the Plan.

          (c) Unless transferred to a Permitted Transferee in accordance with Section 5.2(b), during the
lifetime of Participant, only Participant may exercise the Option or any portion thereof. Subject
to such conditions and procedures as the Administrator may require, a Permitted Transferee may
exercise the Option or any portion thereof during Participant’s lifetime. After the death of
Participant, any exercisable portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by Participant’s personal representative or by any
person empowered to do so under the deceased Participant’s will or under the then applicable laws
of descent and distribution.

     5.3 Restrictive Legends and Stop-Transfer Orders.

          (a) The share certificate or certificates evidencing the shares of Stock purchased hereunder
shall be endorsed with any legends that may be required by any applicable federal, state or foreign
securities laws.

          (b) Participant agrees that, in order to ensure compliance with the restrictions referred to
herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.

          (c) The Company shall not be required: (i) to transfer on its books any shares of Stock that
have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or
(ii) to treat as owner of such shares of Stock or to accord the right to vote or pay dividends to
any purchaser or other transferee to whom such shares shall have been so transferred.

     5.4 Shares to Be Reserved. The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Stock as will be sufficient to satisfy
the requirements of this Agreement.

     5.5 Notices. Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of the Secretary of the Company at the address given
beneath the signature of the Company’s authorized officer on the Grant Notice, and any notice to be
given to

A-6

 

Participant shall be addressed to Participant at the address given beneath Participant’s signature
on the Grant Notice or at the last known address for Participant contained in the Company’s
records. By a notice given pursuant to this Section 5.5, either party may thereafter designate a
different address for notices to be given to that party. Any notice which is required to be given
to Participant shall, if Participant is then deceased, be given to the person entitled to exercise
Participant’s Option pursuant to Section 4.1 by written notice under this Section 5.5. Any notice
shall be deemed duly given when sent via email or enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.

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

     5.7 Governing Law; Severability. This Agreement shall be administered, interpreted
and enforced under the laws of the State of Delaware, without regard to the conflicts of laws
principles thereof. Should any provision of this Agreement be determined by a court of law to be
illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain
enforceable.

     5.8 Conformity to Securities Laws. Participant acknowledges that the Plan is intended
to conform to the extent necessary with all applicable federal, state and foreign securities laws
(including the Securities Act and the Exchange Act) and any and all regulations and rules
promulgated thereunder by the Securities and Exchange Commission or any other governmental
regulatory body. Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the Option is granted and may be exercised, only in such a manner as to conform to such laws,
rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement
shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

     5.9 Amendments. This Agreement may not be modified, amended or terminated, except by
an instrument in writing, signed by a duly authorized representative of the Company and, to the
extent any such modification, amendment or termination may adversely affect the rights of
Participant or such other person as may be permitted to exercise the Option pursuant to Section
4.1, by Participant or such other person, except as otherwise provided under the terms of the Plan.

     5.10 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer herein set forth in
Section 5.2, this Agreement shall be binding upon Participant and Participant’s heirs, executors,
administrators, successors and assigns.

     5.11 Notification of Disposition. If this Option is designated as an Incentive Stock
Option, Participant shall give prompt notice to the Company of any disposition or other transfer of
any shares of Stock acquired under this Agreement if such disposition or transfer is made (a)
within two years from the Grant Date or (b) within one year after the transfer of such shares to
Participant. Such notice shall specify the date of such disposition or other transfer and the
amount realized, in cash, other property, assumption of indebtedness or other consideration, by
Participant in such disposition or other transfer.

     5.12 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange
Act, the Plan, the Option and this Agreement shall be subject to any additional limitations set
forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any
amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such
exemptive rule. To the extent permitted

A-7

 

by applicable law, this Agreement shall be deemed amended to the extent necessary to conform
to such applicable exemptive rule.

     5.13 Entire Agreement. The Plan, the Grant Notice (including all Exhibits thereto)
and this Agreement constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Participant with respect to the subject
matter hereof, except to the extent expressly provided otherwise in a written agreement between the
Company or a Subsidiary and Participant.

A-8

 

EXHIBIT B

TO STOCK OPTION GRANT NOTICE

FORM OF EXERCISE NOTICE

     Effective as of today,                           , 20     , the undersigned (“Participant”) hereby
elects to exercise Participant’s option to purchase the number of shares of common stock specified
below (the “Shares”) of Peplin, Inc., a Delaware corporation (the “Company”), under and pursuant to
the Peplin, Inc. 2007 Incentive Award Plan (the “Plan”), the Stock Option Grant Notice dated as of
                    , 20      and the Stock Option Agreement attached thereto (the “Option Agreement”).
Capitalized terms used herein without definition shall have the meanings given in the Plan and, if
not defined in the Plan, the Option Agreement.

	 	 	 	 	 
	Grant Date:
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	Number of Shares as to which Option
is Exercised:
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	Exercise Price per Share:	 	[AUSD][USD]
	 	 	 
	 
	 	 	 	 
	Total Exercise Price:	 	[AUSD][USD]
	 	 	 
	 
	 	 	 	 
	Certificate to be issued in name of:
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	Payment delivered herewith:	 	[AUSD][USD]
	 	 	 
	 	 	(Representing the full exercise price for the Shares, as well as any applicable withholding tax)
	 
	 	 	 	 
	 

	 	Form of Payment:	 	 
	 

	 	 	 	 
	 

	 	 	 	(Please specify)

Type of Option:           o       Incentive Stock Option            o      Non-Qualified Stock Option

     Participant acknowledges that Participant has received, read and understood the Plan and the
Option Agreement. Participant agrees to abide by and be bound by their terms and conditions.
Participant understands that Participant may suffer adverse tax consequences as a result of
Participant’s purchase or disposition of the Shares. Participant represents that Participant has
consulted with any tax consultants Participant deems advisable in connection with the purchase or
disposition of the Shares and that Participant is not relying on the Company for any tax advice.
The Plan and Option Agreement are incorporated herein by reference. This Exercise Notice, the Plan
and the Option Agreement constitute the entire agreement of the parties and supersede in their
entirety all prior undertakings and agreements of the Company and Participant with respect to the
subject matter hereof.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	ACCEPTED BY:	 	 	 	SUBMITTED BY:
	PEPLIN, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	Print Name:	 	 	 	 	 	Print Name:	 	 
	 

	 	 	 
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Address:	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT C

TO STOCK OPTION GRANT NOTICE

PEPLIN, INC. 2007 INCENTIVE AWARD PLAN

 

 

EXHIBIT D

TO STOCK OPTION GRANT NOTICE

PEPLIN, INC. 2007 INCENTIVE AWARD PLAN PROSPECTUS

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