Document:

EX-4.3 Form of Warrant

 

Exhibit 4.3

Warrant

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Warrant No. ______

MAKO SURGICAL CORP.

WARRANT TO PURCHASE SHARES OF COMMON STOCK

          This Warrant is issued to                                         , a
                                        
(such person or entity, together with transferees permitted
herein, the “Holder”), by MAKO Surgical Corp., a Delaware corporation (the “Company”), as of the
date set forth beside the Company’s signature below.

          1. Purchase of Shares. Subject to the terms and conditions hereinafter set forth,
Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at
such other place as the Company shall notify Holder in writing), to immediately purchase from the
Company up to  shares (the “Shares”) of common stock of the
Company, $0.00001 par value per share (the “Common Stock”), at an exercise price of $0.99 per share
(the “Exercise Price”). The Shares and the Exercise Price shall be subject to adjustment as set
forth in Section 7 hereof.

          2. Exercise Period. This Warrant shall be exercisable immediately and shall remain
exercisable for a period of ten (10) years from the date hereof (the “Exercise Period”) for all or
any part of the number of Shares purchasable hereunder.

          3. Method of Exercise. While this Warrant remains outstanding, Holder may exercise,
in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by:
(i) the surrender of the Warrant, together with a duly executed copy of the form of Exercise Notice
attached hereto as Exhibit A, to the Chief Executive Officer of the Company at its
principal offices and (ii) the payment to the Company by cash, check or wire transfer of an amount
equal to the aggregate Exercise Price for the number of Shares being purchased.

          4. Net Issuance Provision. In lieu of exercising pursuant to Section 3 above, at the
Holder’s option, as long as this Warrant remains outstanding, Holder may exercise this Warrant by
surrender of this Warrant as determined below (“Net Issuance”). If the Holder elects the Net
Issuance method, the Company will issue Common Stock in accordance with the following formula:

	 	 	 
	X =

	 	Y (A-B)
	 

	 	    A
	 
	 	 
	Where:
	 	 
	 
	 	 
	X =

	 	the number of shares of Common Stock to be issued to the Holder.
	 
	 	 
	Y =

	 	the number of shares of Common Stock requested to be exercised under
this Warrant Agreement.
	 
	 	 
	A =

	 	the then current fair market value of one (1) share of Common Stock.
	 
	 	 
	B =

	 	the Exercise Price.

          For purposes of the above calculation, current fair market value of Common Stock shall
mean with respect to each share of Common Stock:

 

 

          (a) if the exercise is in connection with an initial public offering of the Common Stock, and
if the Company’s registration statement relating to such public offering has been declared
effective by the Securities and Exchange Commission (the “SEC”), then the fair market value per
share shall be the initial “Price to Public” specified in the final prospectus with respect to the
offering;

          (b) if this Warrant is exercised after, and not in connection with the Company’s initial
public offering; and

               (i) if the Common Stock is traded on a securities exchange, the fair market value shall be
deemed to be the average of the closing prices over a twenty-one (21) day period ending three (3)
days before the day the current fair market value of the Common Stock is being determined; or

               (ii) if the Common Stock is actively traded over-the-counter, the fair market value shall be
deemed to be the average of the closing bid and asked prices quoted on the Nasdaq system (or
similar system) over the twenty-one (21) day period ending three (3) days before the day the
current fair market value of the Common Stock is being determined.

          (c) if at any time the Common Stock is not listed on any securities exchange or quoted in the
Nasdaq System or the over-the-counter market, the current fair market value of Common Stock shall
be determined in good faith by the Board of Directors of the Company.

          Upon partial exercise by either cash or Net Issuance, the Company shall promptly issue an
amended Warrant representing the remaining number of Shares purchasable thereunder. All other
terms and conditions of such amended Warrant shall be identical to those contained herein.

          5. Certificates for Shares. Upon the exercise of the purchase rights evidenced by
this Warrant, one or more certificates for the number of Shares so purchased shall be issued as
soon as practicable thereafter. Upon any partial exercise of this Warrant, the Company will
forthwith issue and deliver to Holder a new warrant substantially identical to this Warrant for the
remaining portion of the Common Stock for which this Warrant may still be exercised.

          6. Issuance of Shares. The Company covenants that (a) the Shares, when issued
pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect to the issuance thereof
(except for any applicable transfer taxes, which shall be paid by Holder) and (b) during the
Exercise Period, the Company will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of Common Stock upon the exercise of this
Warrant.

          7. Anti-dilution Adjustments. The Exercise Price and the number of Shares to be
received upon exercise of this Warrant shall be subject to adjustment as follows:

               (a) Dividend, Subdivision, Combination or Reclassification of Common Stock. In the
event that the Company shall at any time or from time to time, after the issuance of this Warrant,
but prior to the exercise hereof, (i) make a dividend or distribution on the outstanding shares of
Common Stock payable in shares of the Company’s capital stock, (ii) subdivide the outstanding
shares of Common Stock into a larger number of shares, (iii) combine the outstanding shares of
Common Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a
recapitalization, reorganization or reclassification of the Common Stock (other than any such event
for which an adjustment is made pursuant to another clause of this Section 7), then, and in each
such case, (A) the aggregate number of Shares for which this Warrant is exercisable (the “Warrant
Share Number”) immediately prior to such event shall be adjusted (and any other appropriate actions
shall be taken by the Company) so that the Holder shall be entitled to receive upon exercise of
this Warrant the number of shares of Common Stock or other securities of the Company that it would
have owned or would have been entitled to receive upon or by reason of any of the events described
above, had this Warrant been exercised immediately prior to the occurrence of such event and (B)
the Exercise Price payable upon the exercise of this Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction, the

2

 

numerator of which shall be the number of Shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, and the denominator of which shall be the number of Shares
issuable immediately thereafter. An adjustment made pursuant to this Section 7(a) shall become
effective retroactively (i) in the case of any such dividend or distribution, to a date immediately
following the close of business on the record date for the determination of holders of shares of
Common Stock entitled to receive such dividend or distribution or (ii) in the case of any such
subdivision, combination, reclassification, recapitalization or reorganization, to the close of
business on the day upon which such corporate action becomes effective.

               (b) Issuance of Common Stock or Common
Stock Equivalents Below Exercise Price.

                    (i) If the Company shall at any time or from time to time, after the issuance of this Warrant,
but prior to the exercise hereof, issue or sell (such issuance or sale, a “New Issuance”) any
shares of Common Stock or any security or obligation which is by its terms convertible into or
exercisable into shares of Common Stock, including, without limitation, any option, warrant or
other subscription or purchase right with respect to Common Stock (each a “Common Stock
Equivalent”) at a price per share of Common Stock (the “New Issue Price”) that is less than the
Exercise Price then in effect as of the record date or Issue Date (as defined below), as the case
may be (the “Relevant Date”) (treating the price per share of Common Stock, in the case of the
issuance of any Common Stock Equivalent, as equal to (x) the sum of the price for such Common Stock
Equivalent plus any additional consideration payable (without regard to any anti-dilution
adjustments) upon the conversion, exchange or exercise of such Common Stock Equivalent divided by
(y) the number of shares of Common Stock initially underlying such Common Stock Equivalent), other
than (i) issuances or sales for which an adjustment is made pursuant to another subsection of this
Section 7, (ii) up to _____ shares (as adjusted equitably for stock dividends, stock splits, combinations
and the like) of Common Stock issuable upon exercise of stock options granted to directors,
officers or employees of the Company or its subsidiaries approved by the Board of Directors of the
Company (the “Board”) (including any additional shares of Common Stock as may be issued by virtue
of any antidilution provisions applicable to such options and as such amount may be increased by
the Board from time to time, (iii) shares of Common Stock issued upon conversion of shares of the
Company’s Series A Preferred Stock, (iv) dividends or distributions on the Company’s Series A
Preferred Stock or the Common Stock or upon any subdivision or combination of shares of Common
Stock, (v) shares of Common Stock issued in connection with certain strategic transactions or
acquisitions approved in advance by a majority of the Board, and (vi) shares of Common Stock or
Common Stock Equivalent issued to financial institutions or lenders in connection with lease lines
or loans approved by a majority of the Board (each, an “Excluded Transaction”), then, and
in each such case, (A) the Exercise Price then in effect shall be adjusted to equal the New Issue
Price and (B) the Warrant Share Number shall be increased to equal the product of (i) the aggregate
number of Shares for which this Warrant is exercisable immediately prior to the New Issuance
multiplied by (ii) a fraction, the numerator of which shall be the Exercise Price in effect on the
day immediately prior to the Relevant Date and the denominator of which shall be the Exercise Price
in effect immediately after such adjustment.

                    (ii) Such adjustment shall be made whenever such shares of Common Stock or Common Stock
Equivalents are issued, and shall become effective retroactively (x) in the case of an issuance to
the stockholders of the Company, as such, to a date immediately following the close of business on
the record date for the determination of shareholders entitled to receive such shares of Common
Stock or Common Stock Equivalents and (y) in all other cases, on the date (the “Issue Date”) of
such issuance; provided, however, that the determination as to whether an
adjustment is required to be made pursuant to this Section 7(b) shall be made only upon the
issuance of such shares of Common Stock or Common Stock Equivalents, and not upon the issuance of
any security into which the Common Stock Equivalents convert, exchange or may be exercised.

                    (iii) In case at any time any shares of Common Stock or Common Stock Equivalents or any rights
or options to purchase any shares of Common Stock or Common Stock Equivalents shall be issued or
sold for cash, the consideration received therefor shall be deemed to be the amount received by the
Company therefor, without deduction therefrom of any expenses incurred or any underwriting
commissions or concessions or discounts paid or allowed by the Company in connection

3

 

therewith. In case any shares of Common Stock or Common Stock Equivalents or any rights or options
to purchase any Common Stock or Common Stock Equivalents shall be issued or sold for a
consideration other than cash, the amount of the consideration other than cash received by the
Company shall be deemed to be the fair market value of such consideration, without deduction
therefrom of any expenses incurred or any underwriting commissions or concessions or discounts paid
or allowed by the Company in connection therewith. In case any shares of Common Stock or Common
Stock Equivalents or any rights or options to purchase any shares of Common Stock or Common Stock
Equivalents shall be issued in connection with any merger of another entity into the Company, the
amount of consideration therefor shall be deemed to be the fair market value (as determined by the
Board) of the assets of the merged entity after deducting therefrom all cash and other
consideration (if any) paid by the Company in connection with such merger.

               (c) Certain Distributions. In case the Company shall at any time or from time to
time, after the issuance of this Warrant, but prior to the exercise hereof, distribute to all
holders of shares of Common Stock (including any such distribution made in connection with a merger
or consolidation in which the Company is the resulting or surviving entity and shares of Common
Stock are not changed or exchanged) cash, evidences of indebtedness of the Company or another
issuer, securities of the Company or another issuer or other assets (excluding dividends or
distributions payable in shares of Common Stock for which adjustment is made under Section 7(a) and
any distribution in connection with an Excluded Transaction) or rights or warrants to subscribe for
or purchase any of the foregoing, then, and in each such case, (A) the Exercise Price then in
effect shall be adjusted (and any other appropriate actions shall be taken by the Company)
multiplying by the Exercise Price in effect prior to the date of distribution by a fraction (i) the
numerator of which shall be the fair market value of the Common Stock immediately prior to the date
of distribution less the then fair market value of the portion of the cash, evidences of
indebtedness, securities or other assets so distributed or of such rights or warrants applicable to
one share of Common Stock and (ii) the denominator of which shall be the fair market value of the
Common Stock immediately prior to the date of distribution (but such fraction shall not be greater
than one) and (B) the Warrant Share Number shall be increased by being multiplied by a fraction (i)
the numerator of which shall be the fair market value of one share of Common Stock immediately
prior to the record date for the distribution of such cash, evidences of indebtedness, securities,
other assets or rights or warrants and (ii) the denominator of which shall be the fair market value
of one share of Common Stock immediately prior to such record date less the fair market value of
the portion of such cash, evidences of indebtedness, securities, other assets or rights or warrants
so distributed. Such adjustment shall be made whenever any such distribution is made and shall
become effective retroactively to a date immediately following the close of business on the record
date for the determination of stockholders entitled to receive such distribution.

               (d) Other Changes. In case the Company at any time or from time to time, after the
issuance of this Warrant, but prior to the exercise hereof, shall take any action affecting its
Common Stock similar to or having an effect similar to any of the actions described in any of
Sections 7(a), 7(b), 7(c) or 7(h) (but not including any action described in any such Section) and
the Board of Directors in good faith determines that it would be equitable in the circumstances to
adjust the Exercise Price and Warrant Share Number as a result of such action, then, and in each
such case, the Exercise Price and Warrant Share Number shall be adjusted in such manner and at such
time as the Board of Directors in good faith determines would be equitable in the circumstances
(such determination to be evidenced in a resolution, a certified copy of which shall be mailed to
the Holder).

               (e) No Adjustment; Par Value Minimum. Notwithstanding anything herein to the
contrary, no adjustment under this Section 7 need be made to the Exercise Price or Warrant Share
Number if the Company receives written notice from the Holder who or which exercises all or any
part of this Warrant that no such adjustment is required. Notwithstanding any other provision of
this Warrant, the Exercise Price shall not be adjusted below the par value of a share of Common
Stock.

               (f) Abandonment. If the Company shall take a record of the holders of shares of its
Common Stock for the purpose of entitling them to receive a dividend or other distribution, and
shall thereafter and before the distribution to stockholders thereof legally abandon its plan to
pay or deliver such dividend or distribution, then no adjustment in the Exercise Price or Warrant
Share Number shall be required by reason of the taking of such record.

4

 

               (g) Certificate as to Adjustments. Upon any adjustment in the Exercise Price or
Warrant Share Number, the Company shall within a reasonable period (not to exceed ten (10) business
days) following any of the foregoing transactions deliver to the Holder a certificate, signed by
(i) the Chief Executive Officer of the Company and (ii) the Chief Financial Officer of the Company,
setting forth in reasonable detail the event requiring the adjustment and the method by which such
adjustment was calculated and specifying the adjusted Exercise Price and Warrant Share Number then
in effect following such adjustment.

               (h) Spin-off; Reorganization, Reclassification, Merger or Sale Transaction.

                    (i) In case of any spin-off by the Company of another entity (the “Spin-off Entity”) at any
time after the issuance of this Warrant, but prior to the exercise hereof, the Company shall issue
to the Holder a new warrant, in form and substance satisfactory to the Holder, entitling the Holder
to purchase, at an exercise price equal to the excess of the Exercise Price in effect immediately
prior to such spin-off over the adjusted Exercise Price pursuant to Section 7(e), the number of
shares of common stock or other proprietary interest in the Spin-off Entity that the Holder would
have owned had the Holder, immediately prior to such spin-off, exercised this Warrant.

                    (ii) In case of any capital reorganization, reclassification, merger, tender offer, exchange
offer, sale of all or a material portion of the Company’s assets, sale or transfer of a majority of
the Company’s capital stock on an as-converted basis, or consolidation in which the stockholders of
the Company prior to such transaction do not retain a majority of the voting power of the surviving
entity following such a transaction (other than a transaction in which the Company is the surviving
corporation) of the Company or other change of outstanding shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to par value) (each, a
“Transaction”) at any time after the issuance of this Warrant, but prior to the exercise hereof,
the Company shall execute and deliver to the Holder at least twenty (20) business days prior to
effecting such Transaction a certificate stating that the Holder shall have the right thereafter to
exercise this Warrant for the kind and amount of shares of stock or other securities, property or
cash receivable upon such Transaction by a holder of the number of shares of Common Stock into
which this Warrant could have been exercised immediately prior to such Transaction, and provision
shall be made therefor in the agreement, if any, relating to such Transaction. Such certificate
shall provide for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 7. The provisions of this Section 7(h) and any equivalent
thereof in any such certificate similarly shall apply to successive transactions.

               (i) Notices. In case at any time or from time to time:

                    (i) the Company shall declare a divided (or any other distribution) on its shares of Common
Stock;

                    (ii) the Company shall authorize the granting to the holders of shares of its Common Stock
rights or warrants to subscribe for or purchase any shares of the Company’s capital stock or any
other rights or warrants; or

                    (iii) there shall occur a spin-off or Transaction.

then the Company shall mail to the Holder, as promptly as possible, but in any event at least ten
(10) business days prior to the applicable date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend, distribution or granting of
rights or warrants or, if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution or granting of rights or warrants are
to be determined, or (y) the date on which such spin-off or Transaction is expected to become
effective and the date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for shares of stock or other securities or property or cash
deliverable upon such spin-off or Transaction. Notwithstanding the

5

 

foregoing, in the case of any event to which Section 7(h) is applicable, the Company shall also
deliver the certificate described in such Section 7(h) to the Holder at least ten (10) business
days prior to effecting such reorganization or reclassification as aforesaid.

          8. Compliance with Securities Laws. Holder hereby represents and warrants that:

               (a) Purchase Entirely for Own Account. This Warrant and the Common Stock issuable
upon exercise hereof (collectively, the “Securities”) will be acquired for investment for Holder’s
own account, not as a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and Holder has no present intention of selling, granting any participation in or
otherwise distributing the same. Holder does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to any person with respect to
any of the Securities. Holder represents that it has full power and authority to enter into this
Warrant.

               (b) Investment Experience. Holder acknowledges that it is able to fend for itself,
can bear the economic risk of its investment and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of the investment in this
Warrant. Holder also represents it has not been organized for the purpose of acquiring this
Warrant.

               (c) Accredited Investor. Holder is an “accredited investor” within the meaning of SEC
Rule 501 of Regulation D, as presently in effect.

               (d) Restricted Securities. Holder understands that the Securities are characterized
as “restricted securities” under the federal securities laws inasmuch as they are being acquired
from the Company in a transaction not involving a public offering, and that under such laws and
applicable regulations, such securities may be resold without registration under the Act only in
certain limited circumstances. Holder represents that it is familiar with SEC Rule 144 promulgated
under the Act, as presently in effect, and understands the resale limitations imposed thereby and
by the Act.

          9. Transfer; Assignment.

               (a) Prior to any Transfer (as defined below) or attempted Transfer of all or any part of this
Warrant, Holder shall give ten (10) business days prior written notice (a “Transfer Notice”) to the
Company of Holder’s intention to effect such Transfer, describing the manner and circumstances of
the proposed Transfer, and obtain from counsel to Holder an opinion that such proposed Transfer may
be effected without registration under the Securities Act of 1933, as amended (the “Securities
Act”). After receipt of the Transfer Notice and opinion, the Company shall, within five (5)
business days thereof, so notify Holder and Holder shall thereupon be entitled to Transfer all or
any part of this Warrant, in accordance with the terms of the Transfer Notice. Notwithstanding
anything to the contrary, a Transfer hereunder shall be effective only if (i) such Transfer
complies with Article III of the Stockholders Agreement dated as of the date hereof by and among
the Company and certain stockholders of the Company (the “Stockholders Agreement”) and (ii) each
permitted assignee hereunder enters into an agreement or instrument of accession to the
Stockholders Agreement whereby such assignee shall (x) become an “Additional Stockholder” under the
Stockholders Agreement and (y) agree to become and remain bound by the restrictions and provisions
of the Stockholders Agreement as and to the same extent as the other Stockholders (as defined in
the Stockholders Agreement) party hereto. For purpose of this Section 9, “Transfer” means any
disposition of all or any part of this Warrant, which would constitute a sale thereof within the
meaning of the Securities Act and which is not made pursuant to a registration statement which has
been declared effective under the Securities Act.

               (b) A Transfer and all rights hereunder, in whole or in part, shall be registered on the books
of the Company to be maintained for such purpose, upon surrender of this Warrant at the principal
office of the Company or the office or agency designated by the Company, together with a written
assignment of this Warrant substantially in the form of Exhibit B hereto duly executed by
Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the
making of such Transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a

6

 

new Warrant or Warrants in the name of the assignee or assignees and in the denomination specified
in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the
portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
Notwithstanding anything to the contrary, a Warrant, if properly assigned in compliance herewith,
may be exercised by a new Holder for the purchase of shares of Common Stock without having a new
Warrant issued.

          10. Replacement of Warrant. On receipt of reasonable evidence of the loss, theft,
destruction or mutilation of this Warrant and in the case of mutilation, on surrender and
cancellation of this Warrant, the Company, at its expense and upon receipt of a customary affidavit
of loss without the posting of any bond or monetary amount, shall execute and deliver, in lieu of
this Warrant, a substantially identical warrant of like tenor and amount.

          11. Notices. All notices or other communications hereunder shall be in writing and
shall be deemed given when (i) personally delivered, (ii) three (3) days after being sent by
prepaid certified or registered U.S. mail, or one day after being sent, if sent by nationally
recognized overnight courier, to the address of the party to be noticed as set forth herein or such
other address as such party last provided to the other by written notice, or (iii) upon receipt of
electronic confirmation, if by facsimile. All notices shall be sent to the addresses and facsimile
numbers set forth below or such other address as may be given from time to time under the terms of
this notice provision:

If to the Company:

MAKO Surgical Corp.

2901 Simms Street

Hollywood, Florida 33020

Telephone: 954-927-2044

Facsimile: 954-927-0446

Attention: General Counsel

With a copy (which shall no constitute notice) to:

Hogan & Hartson L.L.P.

555 Thirteenth Street, NW

Washington, DC 20004

Telephone: 202-637-5600

Fax: 202-637-5910

Attention: Christopher J. Hagan, Esq.

If to Holder:

At the address and facsimile number

indicated on the signature page hereof

          12. Successors and Assigns. The terms and provisions of this Warrant shall inure to
the benefit of, and be binding upon, the Company, its successors and assigns and inure to the
benefit of and, be binding upon, the Holder, its successors and permitted assigns. The Company
shall not transfer or assign the Warrant without the express written consent of the Holder prior to
any such proposed transfer or assignment.

          13. Amendments and Waivers. Any term of this Warrant may be amended and the
observance of any term of this Warrant may be waived (either generally or in a particular instance
and either retroactively or prospectively), with the written consent of each of the parties hereto.
Any waiver or amendment effected in accordance with this section shall be binding upon Holder and
the Company.

          14. Governing Law. This Warrant shall be governed by the laws of the State of
Delaware without regard to the conflict of law provisions thereof.

7

 

          15. Entire Agreement. This Warrant and the other documents delivered pursuant hereto
or referred to herein, constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof.

          16. Severability. In case any provision of this Warrant shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

          17. Counterparts. This Warrant may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument.

          18. Survival. Except as expressly set forth herein, the representations, warranties,
covenants and agreements made herein shall survive the closing of the transactions contemplated
hereby.

          19. No Stockholder Rights. This Warrant, in and of itself, shall not entitle the
Holder to any voting rights or other rights as a stockholder of the Company.

          IN
WITNESS WHEREOF, this Warrant is executed as of the ___ day of December, 2004.

	 	 	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	MAKO SURGICAL CORP.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Maurice R. Ferré, M.D.	 	 
	 

	 	 	 	Title:
	 	President & Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HOLDER:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Facsimile:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	Telephone:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

8EX-10.2 2004 Stock Incentive Plan

 

Exhibit 10.2

MAKO SURGICAL CORP.

2004 STOCK INCENTIVE PLAN

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	1. PURPOSE 
	 	 	1	 
	2. DEFINITIONS 
	 	 	1	 
	3. ADMINISTRATION OF THE PLAN 
	 	 	4	 
	3.1 Board
	 	 	4	 
	3.2 Committee
	 	 	5	 
	3.3 Grants
	 	 	5	 
	3.4 Deferral Arrangement
	 	 	6	 
	3.5 No Liability
	 	 	6	 
	4. STOCK SUBJECT TO THE PLAN 
	 	 	6	 
	5. GRANT ELIGIBILITY 
	 	 	7	 
	5.1 Employees and Other Service Providers
	 	 	7	 
	5.2 Limitations on Incentive Stock Options
	 	 	7	 
	6. AWARD AGREEMENT 
	 	 	7	 
	7. TERMS AND CONDITIONS OF OPTIONS 
	 	 	7	 
	7.1 Option Price
	 	 	7	 
	7.2 Vesting
	 	 	8	 
	7.3 Term
	 	 	8	 
	7.4 Exercise of Options on Termination of Service
	 	 	8	 
	7.5 Limitations on Exercise of Option
	 	 	9	 
	7.6 Exercise Procedure
	 	 	9	 
	7.7 right of Holders of Options
	 	 	9	 
	7.8 Delivery of Stock Certificates
	 	 	9	 
	7.9 Transferability of Options
	 	 	9	 
	7.10 Family Transfers
	 	 	10	 
	8. RESTRICTED STOCK 
	 	 	10	 
	8.1 Grant of Restricted Stock
	 	 	10	 
	8.2 Restrictions
	 	 	10	 
	8.3 Restricted Stock Certificates
	 	 	11	 
	8.4 rights of Holders of Restricted Stock
	 	 	11	 
	8.5 Termination of Service
	 	 	11	 
	8.6 Purchase and Delivery of Stock
	 	 	11	 
	9. FORM OF PAYMENT 
	 	 	12	 
	10. WITHHOLDING TAXES 
	 	 	12	 
	11. RESTRICTIONS ON TRANSFER OF SHARES OF STOCK 
	 	 	12	 
	11.1 Right of First Refusal
	 	 	12	 
	11.2 Repurchase and Other Rights
	 	 	13	 
	11.3 Installment Payments
	 	 	13	 
	11.3.1 General Rule
	 	 	13	 
	11.3.2 Exception in the Case of Stock Repurchase Right
	 	 	13	 
	11.4 Publicly Traded Stock
	 	 	13	 
	11.5 Legend
	 	 	13	 
	12. PARACHUTE LIMITATIONS 
	 	 	14	 
	13. REQUIREMENTS OF LAW 
	 	 	14	 
	13.1 General
	 	 	14	 
	13.2 Rule 16b-3
	 	 	15	 

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	 	 	Page	 
	13.3 Financial Reports
	 	 	15	 
	14. EFFECT OF CHANGES IN CAPITALIZATION 
	 	 	16	 
	14.1 Changes in Stock
	 	 	16	 
	14.2 Change of Control
	 	 	16	 
	14.3 Adjustments
	 	 	17	 
	14.4 No Limitations on Company
	 	 	17	 
	15. DURATION AND AMENDMENTS 
	 	 	17	 
	15.1 Term of the Plan
	 	 	17	 
	15.2 Amendment and Termination of the Plan
	 	 	18	 
	16. GENERAL PROVISIONS 
	 	 	18	 
	16.1 Disclaimer of Rights 
	 	 	18	 
	16.2 Nonexclusivity of the Plan 
	 	 	18	 
	16.3 Captions 
	 	 	18	 
	16.4 Other Award Agreement Provisions 
	 	 	19	 
	16.5 Number and Gender 
	 	 	19	 
	16.6 Severability 
	 	 	19	 
	16.7 Governing Law 
	 	 	19	 
	17. EXECUTION 
	 	 	20	 

MAKO 2004 Option Plan — Dec. 2004

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MAKO SURGICAL CORP.

2004 STOCK INCENTIVE PLAN

     MAKO Surgical Corp., a Delaware corporation (the “Company”), sets forth herein the terms of
its 2004 Stock Incentive Plan (the “Plan”) as follows:

1. PURPOSE

     The Plan is intended to enhance the Company’s and its Affiliates’ (as defined herein) ability
to attract and retain highly qualified officers, directors, key employees, and other persons, and
to motivate such officers, directors, key employees, and other persons to serve the Company and its
Affiliates and to expend maximum effort to improve the business results and earnings of the
Company, by providing to such officers, directors, key employees and other persons an opportunity
to acquire or increase a direct proprietary interest in the operations and future success of the
Company. To this end, the Plan provides for the grant of stock options and restricted stock in
accordance with the terms hereof. Stock options granted under the Plan may be nonqualified stock
options or incentive stock options, as provided herein.

2. DEFINITIONS

     For purposes of interpreting the Plan and related documents (including Award Agreements), the
following definitions shall apply:

     2.1 “Affiliate” means, with respect to the Company, any company or other trade or business
that controls, is controlled by or is under common control with the Company within the meaning of
Rule 405 of Regulation C under the Securities Act, including, without limitation, any Subsidiary.

     2.2 “Award Agreement” means the stock option and restricted stock or other written agreement
between the Company and a Grantee that evidences and sets out the terms and conditions of a Grant.

     2.3 “Benefit Arrangement” shall have the meaning set forth in Section 12 hereof.

     2.4 “Board” means the Board of Directors of the Company.

     2.5 “Cause” means, as determined by the Board and unless otherwise provided in an applicable
employment agreement with the Company or an Affiliate, (i) gross negligence or willful misconduct
in connection with the performance of duties; (ii) conviction of a criminal offense (other than
minor traffic offenses); or (iii) material breach of any term of any employment, consulting or
other services, confidentiality, intellectual property or non-competition agreements, if any,
between the Service Provider and the Company or an Affiliate.

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     2.6 “Change of Control” means (i) the dissolution or liquidation of the Company or a merger,
consolidation, or reorganization of the Company with one or more other entities in which the
Company is not the surviving entity, (ii) a sale of substantially all of the assets of the Company
to another person or entity, or (iii) any transaction (including without limitation a merger or
reorganization in which the Company is the surviving entity) which results in any person or entity
(other than persons who are shareholders or Affiliates immediately prior to the transaction) owning
50% or more of the combined voting power of all classes of stock of the Company.

     2.7 “Code” means the Internal Revenue Code of 1986, as now in effect or as hereafter amended.

     2.8 “Committee” means a committee of, and designated from time to time by resolution of, the
Board, which shall consist of one or more members of the Board.

     2.9 “Company” means MAKO Surgical Corp.

     2.10 “Disability” means the Grantee is unable to perform each of the essential duties of such
Grantee’s position by reason of a medically determinable physical or mental impairment which is
potentially permanent in character or which can be expected to last for a continuous period of not
less than 12 months; provided, however, that, with respect to rules regarding expiration of an
Incentive Stock Option following termination of the Grantee’s Service, Disability shall mean the
Grantee is unable to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than 12 months.

     2.11 “Effective Date” means December 9, 2004, the date the Plan is approved by the Board.

     2.12 “Exchange Act” means the Securities Exchange Act of 1934, as now in effect or as
hereafter amended.

     2.13 “Fair Market Value” means the value of a share of Stock, determined as follows: if on
the Grant Date or other determination date the Stock is listed on an established national or
regional stock exchange, is admitted to quotation on The Nasdaq Stock Market, Inc., or is publicly
traded on an established securities market, the Fair Market Value of a share of Stock shall be the
closing price of the Stock on such exchange or in such market (if there is more than one such
exchange or market the Board shall determine the appropriate exchange or market) on the Grant Date
or such other determination date (or if there is no such reported closing price, the Fair Market
Value shall be the mean between the highest bid and lowest asked prices or between the high and low
sale prices on such trading day) or, if no sale of Stock is reported for such trading day, on the
next preceding day on which any sale shall have been reported. If the Stock is not listed on such
an exchange, quoted on such system or traded on such a market, Fair Market Value shall be the value
of the Stock as determined by the Board in good faith.

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     2.14 “Family Member” means a person who is a spouse, former spouse, child, stepchild,
grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive
relationships, of the Grantee, any person sharing the Grantee’s household (other than a tenant or
employee), a trust in which any one or more these persons have more than fifty percent of the
beneficial interest, a foundation in which any one or more of these persons (or the Grantee)
control the management of assets, and any other entity in which one or more these persons (or the
Grantee) own more than fifty percent of the voting interests; provided, however, that to the extent
required by applicable law, the term Family Member shall be limited to a person who is a spouse,
former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law,
including adoptive relationships, of the Grantee or a trust or foundation for the exclusive benefit
of any one or more of these persons.

     2.15 “Grant” means an award of an Option or Restricted Stock under the Plan.

     2.16 “Grant Date” means, as determined by the Board, the latest to occur of (i) the date as of
which the Board approves a Grant, (ii) the date on which the recipient of a Grant first becomes
eligible to receive a Grant under Section 5 hereof, or (iii) such other date as may be specified by
the Board.

     2.17 “Grantee” means a person who receives or holds a Grant under the Plan.

     2.18 “Incentive Stock Option” means an “incentive stock option” within the meaning of Section
422 of the Code, or the corresponding provision of any subsequently enacted tax statute, as amended
from time to time.

     2.19 “Nonqualified Stock Option” means a stock option that is not an Incentive Stock Option.

     2.20 “Option” means an option to purchase one or more shares of Stock pursuant to the Plan.

     2.21 “Option Price” means the purchase price for each share of Stock subject to an Option.

     2.22 “Other Agreement” shall have the meaning set forth in Section 12 hereof.

     2.23 “Plan” means this MAKO Surgical Corp. 2004 Stock Incentive Plan.

     2.24 “Purchase Price” means the purchase price for each share of Stock pursuant to a Grant of
Restricted Stock.

     2.25 “Reporting Person” means a person who is required to file reports under Section 16(a) of
the Exchange Act.

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     2.26 “Restricted Stock” means shares of Stock, awarded to a Grantee pursuant to Section 8
hereof, that are subject to restrictions and to a risk of forfeiture.

     2.27 “Securities Act” means the Securities Act of 1933, as now in effect or as hereafter
amended.

     2.28 “Service” means service as an employee, officer, director or other Service Provider of
the Company or an Affiliate. Unless otherwise stated in the applicable Award Agreement, a
Grantee’s change in position or duties shall not result in interrupted or terminated Service, so
long as such Grantee continues to be an employee, officer, director or other Service Provider of
the Company or an Affiliate.

     2.29 “Service Provider” means an employee, officer or director of the Company or an Affiliate,
or a consultant or adviser currently providing services to the Company or an Affiliate.

     2.30 “Stock” means the common stock, $.001 par value per share, of the Company.

     2.31 “Subsidiary” means any “subsidiary corporation” of the Company within the meaning of
Section 424(f) of the Code.

     2.32 “Ten-Percent Stockholder” means an individual who owns more than ten percent (10%) of the
total combined voting power of all classes of outstanding stock of the Company, its parent or any
of its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of
the Code shall be applied.

3. ADMINISTRATION OF THE PLAN

     3.1 Board.

     The Board shall have such powers and authorities related to the administration of the Plan as
are consistent with the Company’s certificate of incorporation and by-laws and applicable law. The
Board shall have full power and authority to take all actions and to make all determinations
required or provided for under the Plan, any Grant or any Award Agreement, and shall have full
power and authority to take all such other actions and make all such other determinations not
inconsistent with the specific terms and provisions of the Plan that the Board deems to be
necessary or appropriate to the administration of the Plan, any Grant or any Award Agreement. All
such actions and determinations shall be by the affirmative vote of a majority of the members of
the Board present at a meeting or by unanimous consent of the Board executed in writing in
accordance with the Company’s certificate of incorporation and by-laws and applicable law. The
interpretation and construction by the Board of any provision of the Plan, any Grant or any Award
Agreement shall be final, binding and conclusive. To the extent permitted by law, the Board may
delegate its authority under the Plan to a member of the Board or an executive officer of the
Company who is a member of the Board.

- 4 -

 

     3.2 Committee.

     The Board from time to time may delegate to one or more Committees such powers and authorities
related to the administration and implementation of the Plan, as set forth in Section 3.1 above and
in other applicable provisions, as the Board shall determine, consistent with the certificate of
incorporation and by-laws of the Company and applicable law. In the event that the Plan, any Grant
or any Award Agreement entered into hereunder provides for any action to be taken by or
determination to be made by the Board, such action may be taken by or such determination may be
made by the applicable Committee if the power and authority to do so has been delegated to the
Committee by the Board as provided for in Section 3.1. Unless otherwise expressly determined by
the Board, any such action or determination by the Committee shall be final, binding and
conclusive. To the extent permitted by law, the Committee may delegate its authority under the
Plan to a member of the Board or an executive officer of the Company who is a member of the Board.

     3.3 Grants.

     Subject to the other terms and conditions of the Plan, the Board shall have full and final
authority to:

	 	(i)	 	designate Grantees,
	 
	 	(ii)	 	determine the type or types of Grants to be made to a Grantee,
	 
	 	(iii)	 	determine the number of shares of Stock to be subject to a Grant,
	 
	 	(iv)	 	establish the terms and conditions of each Grant (including, but not limited
to, the Option Price of any Option, the nature and duration of any restriction or
condition (or provision for lapse thereof) relating to the vesting, exercise, transfer,
or forfeiture of a Grant or the shares of Stock subject thereto, and any terms or
conditions that may be necessary to qualify Options as Incentive Stock Options),
	 
	 	(v)	 	prescribe the form of each Award Agreement evidencing a Grant, and
	 
	 	(vi)	 	amend, modify, or supplement the terms of any outstanding Grant.
Notwithstanding the foregoing, no amendment, modification or supplement of any Grant
shall, without the consent of the Grantee, impair the Grantee’s rights under such
Grant.

     Such authority specifically includes the authority, in order to effectuate the purposes of the
Plan but without amending the Plan, to modify Grants to eligible individuals who are foreign
nationals or are individuals who are employed outside the United States to recognize differences in
local law, tax policy, or custom. As a condition to any Grant, the Board shall have the right, at
its discretion, to require Grantees to return to the Company Grants previously awarded under the
Plan. Subject to the terms and conditions of the Plan, any such subsequent Grant shall be upon
such terms and conditions as are specified by the Board at the time the new Grant is made. The

- 5 -

 

Board shall have the right, in its discretion, to make Grants in substitution or exchange for
any other grant under another plan of the Company, any Affiliate, or any business entity to be
acquired by the Company or an Affiliate. The Company may retain the right in an Award Agreement to
cause a forfeiture of the gain realized by a Grantee on account of actions taken by the Grantee in
violation or breach of or in conflict with any non-competition agreement, any agreement prohibiting
solicitation of employees or clients of the Company or any Affiliate thereof or any confidentiality
obligation with respect to the Company or any Affiliate thereof or otherwise in competition with
the Company or any Affiliate thereof, to the extent specified in such Award Agreement applicable to
the Grantee. Furthermore, the Company may annul a Grant if the Grantee is an employee of the
Company or an Affiliate thereof and is terminated for Cause as defined in the applicable Award
Agreement or the Plan, as applicable.

     3.4 Deferral Arrangement.

     The Board may permit or require the deferral of any award payment into a deferred compensation
arrangement, subject to such rules and procedures as it may establish, which may include provisions
for the payment or crediting of interest or dividend equivalents, including converting such credits
into deferred Stock equivalents and restricting deferrals to comply with hardship distribution
rules affecting 401(k) plans.

     3.5 No Liability.

     No member of the Board or of the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Grant or Award Agreement.

4. STOCK SUBJECT TO THE PLAN

     Subject to adjustment as provided in Section 14 hereof and the limitation of the next
paragraph relating to Restricted Stock, the number of shares of Stock available for issuance under
the Plan shall be One Million Eight Hundred Twenty Five Thousand shares (1,825,000). All shares of
Stock issuable under the Plan may be issued as Incentive Stock Options. Stock issued or to be
issued under the Plan shall be authorized but unissued shares or, to the extent permitted by
applicable law, issued shares that have been reacquired by the Company. If any shares covered by a
Grant are not purchased or are forfeited, or if a Grant otherwise terminates without delivery of
any Stock subject thereto, then the number of shares of Stock counted against the aggregate number
of shares available under the Plan with respect to such Grant shall, to the extent of any such
forfeiture or termination, again be available for making Grants under the Plan.

     If the exercise price of any Option granted under the Plan is satisfied by tendering shares of
Stock to the Company (by either actual delivery or by attestation), only the number of shares of
Stock issued net of the shares of Stock tendered shall be deemed delivered for purposes of
determining the maximum number of shares of Stock available for delivery under the Plan.

- 6 -

 

5. GRANT ELIGIBILITY

     5.1 Employees and Other Service Providers.

     Grants (including Grants of Incentive Stock Options, subject to Section 5.2) may be made under
the Plan to any employee, officer or director of, or other Service Provider providing services to,
the Company or any Affiliate. To the extent required by applicable state law, Grants within
certain states may be limited to employees and officers or employees, officers and directors. An
eligible person may receive more than one Grant, subject to such restrictions as are provided
herein.

     5.2 Limitations on Incentive Stock Options.

     An Option shall constitute an Incentive Stock Option only (i) if the Grantee of such Option is
an employee of the Company or any Subsidiary of the Company or any parent of the Company; (ii) to
the extent specifically provided in the related Award Agreement; and (iii) to the extent that the
aggregate Fair Market Value (determined at the time the Option is granted) of the shares of Stock
with respect to which all Incentive Stock Options held by such Grantee become exercisable for the
first time during any calendar year (under the Plan and all other plans of the Grantee’s employer
and its affiliates) does not exceed $100,000. This limitation shall be applied by taking Options
into account in the order in which they were granted.

6. AWARD AGREEMENT

     Each Grant pursuant to the Plan shall be evidenced by an Award Agreement, in such form or
forms as the Board shall from time to time determine, which specifies the number of shares subject
to the Grant and provides for adjustment in accordance with Section 14. Award Agreements granted
from time to time or at the same time need not contain similar provisions but shall be consistent
with the terms of the Plan. Each Award Agreement evidencing a Grant of Options shall specify
whether such Options are intended to be Nonqualified Stock Options or Incentive Stock Options, and
in the absence of such specification such options shall be deemed Nonqualified Stock Options.

7. TERMS AND CONDITIONS OF OPTIONS

     7.1 Option Price.

     The Option Price of each Option shall be fixed by the Board and stated in the Award Agreement
evidencing such Option. In the case of an Incentive Stock Option the Option Price shall not be
less than the Fair Market Value on the Grant Date of a share of Stock; provided, however, that in
the event that a Grantee is a Ten-Percent Stockholder, the Option Price of an Incentive Stock
Option granted to such Grantee shall be not less than 110 percent of the Fair Market Value of a
share of Stock on the Grant Date. To the extent required by applicable law, in the case of a
Nonqualified Stock Option, the Option Price shall be not less than 85 percent of the

- 7 -

 

Fair Market Value on the Grant Date of a share of Stock; provided, however, that in the event that
a Grantee is a Ten-Percent Stockholder, the Option Price shall be not less than 110 percent of the
Fair Market Value of a share of Stock on the Grant Date. In no case shall the Option Price of any
Option be less than the par value of a share of Stock.

     7.2 Vesting.

     Subject to Sections 7.3 and 14.2 hereof, each Option granted under the Plan shall become
exercisable at such times and under such conditions as shall be determined by the Board and stated
in the Award Agreement. For purposes of this Section 7.2, fractional numbers of shares of Stock
subject to an Option shall be rounded down to the next nearest whole number. To the extent
required by applicable law, each Option shall become exercisable no less rapidly than the rate of
twenty percent (20%) per year for each of the first five (5) years from the Grant Date based on
continued Service. Subject to the preceding sentence, the Board may provide, for example, in the
Award Agreement for (i) accelerated exercisability of the Option in the event the Grantee’s Service
terminates on account of death, Disability or another event, (ii) expiration of the Option prior to
its term in the event of the termination of the Grantee’s Service, (iii) immediate forfeiture of
the Option in the event the Grantee’s Service is terminated for Cause or (iv) unvested Options to
be exercised subject to the Company’s right of repurchase with respect to unvested shares of Stock.

     7.3 Term.

     Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stock
thereunder shall cease, upon the expiration of ten years from the Grant Date, or under such
circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the
Board and stated in the Award Agreement relating to such Option; provided, however, that in the
event that the Grantee is a Ten-Percent Stockholder, an Option granted to such Grantee that is
intended to be an Incentive Stock Option shall not be exercisable after the expiration of five
years from its Grant Date.

     7.4 Exercise of Options on Termination of Service.

     Each Award Agreement shall set forth the extent to which the Grantee shall have the right to
exercise the Option following termination of the Grantee’s Service. Such provisions shall be
determined in the sole discretion of the Board, need not be uniform among all Options issued
pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.
Notwithstanding the foregoing, to the extent required by applicable law, each Option shall provide
that the Grantee shall have the right to exercise the vested portion of any Option held at
termination for at least thirty (30) days following termination of Service with the Company for any
reason (other than for Cause), and that the Grantee shall have the right to exercise the Option for
at least six (6) months if the Grantee’s Service terminates due to death or Disability.

- 8 -

 

     7.5 Limitations on Exercise of Option.

     Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in
whole or in part, prior to the date the Plan is approved by the shareholders of the Company, or
after ten years following the Grant Date, or after the occurrence of an event referred to in
Section 14 hereof which results in termination of the Option.

     7.6 Exercise Procedure.

     An Option that is exercisable may be exercised by the Grantee’s delivery to the Company of
written notice of exercise on any business day, at the Company’s principal office, on the form
specified by the Company. Such notice shall specify the number of shares of Stock with respect to
which the Option is being exercised and shall be accompanied by payment in full of the Option Price
of the shares for which the Option is being exercised. The minimum number of shares of Stock with
respect to which an Option may be exercised, in whole or in part, at any time shall be the lesser
of (i) 100 shares or such lesser number set forth in the applicable Award Agreement and (ii) the
maximum number of shares available for purchase under the Option at the time of exercise. The
Option Price shall be payable in a form described in Section 9.

     7.7 Right of Holders of Options.

     Unless otherwise stated in the applicable Award Agreement, an individual holding or exercising
an Option shall have none of the rights of a shareholder (for example, the right to cash or
dividend payments or distributions attributable to the subject shares of Stock or to direct the
voting of shares of Stock) until the shares of Stock covered thereby are fully paid and issued to
such individual.

     7.8 Delivery of Stock Certificates.

     Promptly after the exercise of an Option by a Grantee and the payment in full of the Option
Price, such Grantee shall be entitled to the issuance of a stock certificate or certificates
evidencing such Grantee’s ownership of the shares of Stock purchased upon such exercise of the
Option. Notwithstanding any other provision of this Plan to the contrary, the Company may elect to
satisfy any requirement under this Plan for the delivery of stock certificates through the use of
book-entry.

     7.9 Transferability of Options.

     Except as provided in Section 7.10, during the lifetime of a Grantee, only the Grantee (or, in
the event of legal incapacity or incompetency, the Grantee’s guardian or legal representative) may
exercise an Option. Except as provided in Section 7.10, no Option shall be assignable or
transferable by the Grantee to whom it is granted, other than by will or the laws of descent and
distribution.

- 9 -

 

     7.10 Family Transfers.

     If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or
part of an Option that is not an Incentive Stock Option to any Family Member. For the purpose of
this Section 7.10, a “not for value” transfer is a transfer which is (i) a gift, (ii) a transfer
under a domestic relations order in settlement of marital property rights; or (iii) unless
applicable law does not permit such transfers, a transfer to an entity in which more than fifty
percent of the voting interests are owned by Family Members (or the Grantee) in exchange for an
interest in that entity. Following a transfer under this Section 7.10, any such Option shall
continue to be subject to the same terms and conditions as were applicable immediately prior to
transfer, and shares of Stock acquired pursuant to the Option shall be subject to the same
restrictions on transfer of shares as would have applied to the Grantee. Subsequent transfers of
transferred Options are prohibited except to Family Members of the original Grantee in accordance
with this Section 7.10 or by will or the laws of descent and distribution. The events of
termination of Service under an Option shall continue to be applied with respect to the original
Grantee, following which the Option shall be exercisable by the transferee only to the extent, and
for the periods specified in the applicable Award Agreement, and the shares may be subject to
repurchase by the Company or its assignee.

8. RESTRICTED STOCK

     8.1 Grant of Restricted Stock.

     The Board may from time to time grant Restricted Stock to persons eligible to receive Grants
under Section 5 hereof, subject to such restrictions, conditions and other terms as the Board may
determine.

     8.2 Restrictions.

     At the time a Grant of Restricted Stock is made, the Board shall establish a restriction
period applicable to such Restricted Stock. Each Grant of Restricted Stock may be subject to a
different restriction period. The Board may, in its sole discretion, at the time a Grant of
Restricted Stock is made, prescribe conditions that must be satisfied prior to the expiration of
the restriction period, including the satisfaction of corporate or individual performance
objectives or continued Service, in order that all or any portion of the Restricted Stock shall
vest. To the extent required by applicable law, the vesting restrictions applicable to a Grant of
Restricted Stock shall lapse no less rapidly than the rate of twenty percent (20%) per year for
each of the first five (5) years from the Grant Date, based on continued Service.

     The Board also may, in its sole discretion, shorten or terminate the restriction period or
waive any of the conditions applicable to all or a portion of the Restricted Stock. The Restricted
Stock may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during
the restriction period or prior to the satisfaction of any other conditions prescribed by the Board
with respect to such Restricted Stock.

- 10 -

 

     8.3 Restricted Stock Certificates.

     The Company shall issue, in the name of each Grantee to whom Restricted Stock has been
granted, stock certificates representing the total number of shares of Restricted Stock granted to
the Grantee, as soon as reasonably practicable after the Grant Date. The Board may provide in an
Award Agreement that either (i) the Secretary of the Company shall hold such certificates for the
Grantee’s benefit until such time as the Restricted Stock is forfeited to the Company, or the
restrictions lapse, or (ii) such certificates shall be delivered to the Grantee, provided, however,
that such certificates shall bear a legend or legends that complies with the applicable securities
laws and regulations and makes appropriate reference to the restrictions imposed under the Plan and
the Award Agreement.

     8.4 Rights of Holders of Restricted Stock.

     Unless the Board otherwise provides in an Award Agreement, holders of Restricted Stock shall
have the right to vote such Stock and the right to receive any dividends declared or paid with
respect to such Stock. The Board may provide that any dividends paid on Restricted Stock must be
reinvested in shares of Stock, which may or may not be subject to the same vesting conditions and
restrictions applicable to such Restricted Stock. All distributions, if any, received by a Grantee
with respect to Restricted Stock as a result of any stock split, stock dividend, combination of
shares, or other similar transaction shall be subject to the restrictions applicable to the
original Grant.

     8.5 Termination of Service.

     Unless otherwise provided by the Board in the applicable Award Agreement, upon the termination
of a Grantee’s Service with the Company or an Affiliate, any shares of Restricted Stock held by
such Grantee that have not vested, or with respect to which all applicable restrictions and
conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of Restricted
Stock, the Grantee shall have no further rights with respect to such Grant, including but not
limited to any right to vote Restricted Stock or any right to receive dividends with respect to
shares of Restricted Stock.

     8.6 Purchase and Delivery of Stock.

     The Grantee shall be required to purchase the Restricted Stock from the Company at a Purchase
Price equal to the greater of (i) the aggregate par value of the shares of Stock represented by
such Restricted Stock or (ii) the Purchase Price, if any, specified in the Award Agreement relating
to such Restricted Stock. The Purchase Price shall be payable in a form described in Section 9 or,
in the discretion of the Board, in consideration for past Services rendered to the Company or an
Affiliate. To the extent required by applicable law, the Purchase Price of a share of Restricted
Stock shall be not less than 85 percent of the Fair Market Value on the Grant Date of a share of
Stock; provided, however, that in the event that the Grantee is a Ten-Percent Stockholder, the
Purchase Price shall be not less than 100 percent of the Fair Market Value on the Grant Date of a
share of Stock.

- 11 -

 

     Upon the expiration or termination of the restriction period and the satisfaction of any other
conditions prescribed by the Board, having properly paid the Purchase Price, the restrictions
applicable to shares of Restricted Stock shall lapse, and, unless otherwise provided in the Award
Agreement, a stock certificate for such shares shall be delivered, free of all such restrictions,
to the Grantee or the Grantee’s beneficiary or estate, as the case may be.

9. FORM OF PAYMENT

     Payment of the Option Price for the shares purchased pursuant to the exercise of an Option or
the Purchase Price for Restricted Stock shall be made in cash or in cash equivalents acceptable to
the Company. In addition, to the extent the Award Agreement so provides, payment of the Option
Price for shares purchased pursuant to exercise of an Option or the Purchase Price for Restricted
Stock may be made in any other form that is consistent with applicable laws, regulations and rules.

10. WITHHOLDING TAXES

     The Company or any Affiliate, as the case may be, shall have the right to deduct from payments
of any kind otherwise due to a Grantee any Federal, state, or local taxes of any kind required by
law to be withheld with respect to the vesting of or other lapse of restrictions applicable to
Restricted Stock or upon the issuance of any shares of Stock or payment of any kind upon the
exercise of any Grant. At the time of such vesting, lapse, or exercise, the Grantee shall pay to
the Company or Affiliate, as the case may be, any amount that the Company or Affiliate may
reasonably determine to be necessary to satisfy such withholding obligation. Subject to the prior
approval of the Company or the Affiliate, which may be withheld by the Company or the Affiliate, as
the case may be, in its sole discretion, the Grantee may elect to satisfy such obligations, in
whole or in part, (i) by causing the Company or the Affiliate to withhold shares of Stock otherwise
issuable to the Grantee or (ii) by delivering to the Company or the Affiliate shares of Stock
already owned by the Grantee. The shares of Stock so delivered or withheld shall have an aggregate
Fair Market Value equal to such withholding obligations. The Fair Market Value of the shares of
Stock used to satisfy such withholding obligation shall be determined by the Company or the
Affiliate as of the date that the amount of tax to be withheld is to be determined. A Grantee who
has made an election pursuant to this Section 10 may satisfy his or her withholding obligation only
with shares of Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or
other similar requirements.

11. RESTRICTIONS ON TRANSFER OF SHARES OF STOCK

     11.1 Right of First Refusal.

     Subject to Section 11.4 below, a Grantee (or such other individual who is entitled to exercise
an Option or otherwise acquire shares pursuant to a Grant under the terms of this Plan) shall not
sell, pledge, assign, gift, transfer, or otherwise dispose of any shares of Stock acquired

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     pursuant to a Grant to any person or entity in contravention of any of the provisions, terms
or conditions contained in the Company’s Stockholders Agreement (as in effect from time to time),
and Grantee acknowledges and agrees that Grantee and any shares of Stock acquired pursuant to a
Grant shall be subject and bound by all such provisions, terms and conditions contained in such
Stockholders Agreement, including, without limitation, the Company’s right of first refusal to
purchase such Stock prior to proposed transfer to a third party.

     11.2 Repurchase and Other Rights.

     Stock issued upon exercise of a Grant or pursuant to the Grant of Restricted Stock may be
subject to such right of repurchase or other transfer restrictions as the Board may determine,
consistent with applicable law. Any such additional restriction shall be set forth in the Award
Agreement.

     11.3 Installment Payments.

          11.3.1 General Rule.

     In the case of any purchase of Stock or an Option under this Section 11, the Company or its
permitted assignee may pay the Grantee, transferee of the Option or other registered owner of the
Stock the purchase price in three or fewer annual installments. Interest shall be credited on the
installments at the applicable federal rate (as determined for purposes of Section 1274 of the
Code) in effect on the date on which the purchase is made. The Company or its permitted assignee
shall pay at least one-third of the total purchase price each year, plus interest on the unpaid
balance, with the first payment being made on or before the 60th day after the purchase.

          11.3.2 Exception in the Case of Stock Repurchase Right.

     If an Award Agreement authorizes, upon the Grantee’s termination of Service, the repurchase of
shares of Stock acquired by the Grantee pursuant to the exercise of an Option or under a Grant of
Restricted Stock, to the extent required by applicable law, payment shall be made in cash or by
cancellation of indebtedness within the later of 90 days from the date of termination of Service or
90 days from the date of exercise or purchase, as the case may be.

     11.4 Publicly Traded Stock.

     If the Stock is listed on an established national or regional stock exchange or is admitted to
quotation on The Nasdaq Stock Market, Inc., or is publicly traded in an established securities
market, the foregoing transfer restrictions of Sections 11.1 and 11.2 shall terminate as of the
first date that the Stock is so listed, quoted or publicly traded.

     11.5 Legend.

     In order to enforce the restrictions imposed upon shares of Stock under this Plan or as
provided in an Award Agreement, the Board may cause a legend or legends to be placed on any

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certificate representing shares issued pursuant to this Plan that complies with the applicable
securities laws and regulations and makes appropriate reference to the restrictions imposed under
it.

12. PARACHUTE LIMITATIONS

     Notwithstanding any other provision of this Plan or of any other agreement, contract, or
understanding heretofore or hereafter entered into by a Grantee with the Company or any Affiliate,
except an agreement, contract, or understanding hereafter entered into that expressly modifies or
excludes application of this paragraph (an “Other Agreement”), and notwithstanding any formal or
informal plan or other arrangement for the direct or indirect provision of compensation to the
Grantee (including groups or classes of participants or beneficiaries of which the Grantee is a
member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit
to or for the Grantee (a “Benefit Arrangement”), if the Grantee is a “disqualified individual,” as
defined in Section 280G(c) of the Code, any Grants held by that Grantee and any right to receive
any payment or other benefit under this Plan shall not become exercisable or vested (i) to the
extent that such right to exercise, vesting, payment, or benefit, taking into account all other
rights, payments, or benefits to or for the Grantee under this Plan, all Other Agreements, and all
Benefit Arrangements, would cause any payment or benefit to the Grantee under this Plan to be
considered a “parachute payment” within the meaning of Section 280G(b)(2) of the Code as then in
effect (a “Parachute Payment”) and (ii) if, as a result of receiving a Parachute Payment, the
aggregate after-tax amounts received by the Grantee from the Company under this Plan, all Other
Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could
be received by the Grantee without causing any such payment or benefit to be considered a Parachute
Payment. In the event that the receipt of any such right to exercise, vesting, payment, or benefit
under this Plan, in conjunction with all other rights, payments, or benefits to or for the Grantee
under any Other Agreement or any Benefit Arrangement would cause the Grantee to be considered to
have received a Parachute Payment under this Plan that would have the effect of decreasing the
after-tax amount received by the Grantee as described in clause (ii) of the preceding sentence,
then the Grantee shall have the right, in the Grantee’s sole discretion, to designate those rights,
payments, or benefits under this Plan, any Other Agreements, and any Benefit Arrangements that
should be reduced or eliminated so as to avoid having the payment or benefit to the Grantee under
this Plan be deemed to be a Parachute Payment.

13. REQUIREMENTS OF LAW

     13.1 General.

     The Company shall not be required to sell or issue any shares of Stock under any Grant if the
sale or issuance of such shares would constitute a violation by the Grantee, any other individual
exercising a right emanating from such Grant, or the Company of any provision of any law or
regulation of any governmental authority, including without limitation any federal or state
securities laws or regulations. If at any time the Company shall determine, in its discretion,
that

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the listing, registration or qualification of any shares subject to a Grant upon any
securities exchange or under any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the issuance or purchase of shares hereunder, no shares of
Stock may be issued or sold to the Grantee or any other individual exercising an Option pursuant to
such Grant unless such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company, and any delay caused
thereby shall in no way affect the date of termination of the Grant. Specifically, in connection
with the Securities Act, upon the exercise of any right emanating from such Grant or the delivery
of any shares of Restricted Stock, unless a registration statement under the Securities Act is in
effect with respect to the shares of Stock covered by such Grant, the Company shall not be required
to sell or issue such shares unless the Board has received evidence satisfactory to it that the
Grantee or any other individual exercising an Option may acquire such shares pursuant to an
exemption from registration under the Securities Act. Any determination in this connection by the
Board shall be final, binding, and conclusive. The Company may, but shall in no event be obligated
to, register any securities covered hereby pursuant to the Securities Act. The Company shall not
be obligated to take any affirmative action in order to cause the exercise of an Option or the
issuance of shares of Stock pursuant to the Plan to comply with any law or regulation of any
governmental authority. As to any jurisdiction that expressly imposes the requirement that an
Option shall not be exercisable until the shares of Stock covered by such Option are registered or
are exempt from registration, the exercise of such Option (under circumstances in which the laws of
such jurisdiction apply) shall be deemed conditioned upon the effectiveness of such registration or
the availability of such an exemption.

     13.2 Rule 16b-3.

     During any time when the Company has a class of equity security registered under Section 12 of
the Exchange Act, it is the intent of the Company that Grants pursuant to the Plan and the exercise
of Options granted hereunder will qualify for the exemption provided by Rule 16b-3 under the
Exchange Act. To the extent that any provision of the Plan or action by the Board does not comply
with the requirements of Rule 16b-3, it shall be deemed inoperative to the extent permitted by law
and deemed advisable by the Board, and shall not affect the validity of the Plan. In the event
that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify this Plan
in any respect necessary to satisfy the requirements of, or to take advantage of any features of,
the revised exemption or its replacement.

     13.3 Financial Reports.

     To the extent required by applicable law, not less often than annually, the Company shall
furnish to Grantees summary financial information including a balance sheet regarding the Company’s
financial condition and results of operations, unless such Grantees have duties with the Company
that assure them access to equivalent information. Such financial statements need not be audited.

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14. EFFECT OF CHANGES IN CAPITALIZATION

     14.1 Changes in Stock.

     The number of shares for which Grants may be made under the Plan shall be proportionately
increased or decreased for any increase or decrease in the number of shares of Stock on account of
any recapitalization, reclassification, stock split, reverse split, combination of shares, exchange
of shares, stock dividend or other distribution payable in capital stock, or for any other increase
or decrease in such shares effected without receipt of consideration by the Company occurring after
the Effective Date ( any such event hereafter referred to as a “Corporate Event”). In addition,
subject to the exception set forth in the last sentence of Section 14.3, the number of shares for
which Grants are outstanding shall be proportionately increased or decreased for any increase or
decrease in the number of shares of Stock on account of any Corporate Event. Any such adjustment
in outstanding Options shall not change the aggregate Option Price payable with respect to shares
that are subject to the unexercised portion of an Option outstanding but shall include a
corresponding proportionate adjustment in the Option Price per share. The conversion of any
convertible securities of the Company shall not be treated as an increase in shares effected
without receipt of consideration. In the event of any distribution to the Company’s stockholders of
securities of any other entity or other assets (other than dividends payable in cash or stock of
the Company) without receipt of consideration by the Company, the Company may, in such manner as
the Company deems appropriate, adjust (i) the number and kind of shares subject to outstanding
Grants and/or (ii) the exercise price of outstanding Options to reflect such distribution.

     14.2 Change of Control.

     Subject to the exceptions set forth in the last sentence of this Section 14.2 and the last
sentence of Section 14.3 upon the occurrence of a Change of Control:

     (i) all outstanding shares of Restricted Stock shall be deemed to have vested, and, with the
exception of such restrictions imposed under Section 11, all restrictions and conditions applicable
to such shares of Restricted Stock shall be deemed to have lapsed, immediately prior to the
occurrence of such Change of Control, and

     (ii) either of the following two actions shall be taken:

          (A) prior to the scheduled consummation of a Change of Control, all Options outstanding
hereunder shall become immediately exercisable and shall remain exercisable for a reasonable period
of time determined by the Board in its sole discretion, or

          (B) the Board may elect, in its sole discretion, to cancel any outstanding Grants and pay or
deliver, or cause to be paid or delivered, to the holder thereof an amount in cash or securities
having a value (as determined by the Board acting in good faith), in the case of Restricted Stock,
equal to the formula or fixed price per share paid to holders of shares of Stock and, in the case
of Options, equal to the product of the number of shares of Stock subject to the Grant (the “Grant
Shares”) multiplied by the amount, if any, by which (I) the formula or fixed

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price per share paid to holders of shares of Stock pursuant to such transaction exceeds (II)
the Option Price applicable to such Grant Shares.

     With respect to the Company’s establishment of an exercise window, (i) any exercise of an
Option during such period shall be conditioned upon the consummation of the event and shall be
effective only immediately before the consummation of the event, and (ii) upon consummation of any
Change of Control the Plan, and all outstanding but unexercised Options shall terminate. The Board
shall send written notice of an event that will result in such a termination to all individuals who
hold Options not later than the time at which the Company gives notice thereof to its shareholders.

     This Section 14.2 shall not apply to any Change of Control to the extent that provision is
made in writing in connection with such Change of Control for the assumption or continuation of the
Options and Restricted Stock theretofore granted, or for the substitution for such Grants for new
common stock options and new common stock restricted stock relating to the stock of a successor
entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number of shares
(disregarding any consideration that is not common stock) and option prices, in which event the
Grants theretofore granted shall continue in the manner and under the terms so provided.

     14.3 Adjustments.

     Adjustments under Section 14 related to shares of Stock or securities of the Company shall be
made by the Board, whose determination in that respect shall be final, binding and conclusive. No
fractional shares or other securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in each case by rounding downward
to the nearest whole share. The Board may provide in the Award Agreements at the time of Grant, or
any time thereafter with the consent of the Grantee, for different provisions to apply to a Grant
in place of those described in Sections 14.1, Error! Reference source not found. and 14.2.

     14.4 No Limitations on Company.

     The making of Grants pursuant to the Plan shall not affect or limit in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations, or changes of its
capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or
transfer all or any part of its business or assets.

15. DURATION AND AMENDMENTS

     15.1 Term of the Plan.

     The Effective Date of this Plan is the date of its adoption by the Board, subject to the
approval of the Plan by the Company’s stockholders. In the event that the stockholders fail to
approve the Plan within twelve (12) months after its adoption by the Board, any Grants already

- 17 -

 

made that require such stockholder approval shall be null and void, and no such additional
Grants shall be made after such date. The Plan shall terminate automatically ten (10) years after
its adoption by the Board and may be terminated on any earlier date as next provided.

     15.2 Amendment and Termination of the Plan.

     The Board may, at any time and from time to time, amend, suspend, or terminate the Plan as to
any shares of Stock as to which Grants have not been made. An amendment to the Plan shall be
contingent on approval of the Company’s stockholders only to the extent required by applicable law,
regulations or rules. No Grants shall be made after the termination of the Plan. No amendment,
suspension, or termination of the Plan shall, without the consent of the Grantee, alter or impair
rights or obligations under any Grant theretofore awarded under the Plan.

16. GENERAL PROVISIONS

     16.1 Disclaimer of Rights

     No provision in the Plan or in any Grant or Award Agreement shall be construed to confer upon
any individual the right to remain in the employ or service of the Company or any Affiliate, or to
interfere in any way with any contractual or other right or authority of the Company either to
increase or decrease the compensation or other payments to any individual at any time, or to
terminate any employment or other relationship between any individual and the Company or any
Affiliate. The obligation of the Company to pay any benefits pursuant to this Plan shall be
interpreted as a contractual obligation to pay only those amounts described herein, in the manner
and under the conditions prescribed herein. The Plan shall in no way be interpreted to require the
Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or
escrow for payment to any participant or beneficiary under the terms of the Plan.

     16.2 Nonexclusivity of the Plan

     Neither the adoption of the Plan nor the submission of the Plan to the shareholders of the
Company for approval shall be construed as creating any limitations upon the right and authority of
the Board to adopt such other incentive compensation arrangements (which arrangements may be
applicable either generally to a class or classes of individuals or specifically to a particular
individual or particular individuals) as the Board in its discretion determines desirable,
including, without limitation, the granting of stock options otherwise than under the Plan.

     16.3 Captions

     The use of captions in this Plan or any Award Agreement is for the convenience of reference
only and shall not affect the meaning of any provision of the Plan or such Award Agreement.

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     16.4 Other Award Agreement Provisions

     Each Grant awarded under the Plan may contain such other terms and conditions not inconsistent
with the Plan as may be determined by the Board, in its sole discretion.

     16.5 Number and Gender

     With respect to words used in this Plan, the singular form shall include the plural form, the
masculine gender shall include the feminine gender, etc., as the context requires.

     16.6 Severability

     If any provision of the Plan or any Award Agreement shall be determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof
shall be severable and enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.

     16.7 Governing Law

     The validity and construction of this Plan and the instruments evidencing the Grants awarded
hereunder shall be governed by the laws of the State of Delaware other than any conflicts or choice
of law rule or principle that might otherwise refer construction or interpretation of this Plan and
the instruments evidencing the Grants awarded hereunder to the substantive laws of any other
jurisdiction.

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17. EXECUTION

     To
record adoption of the Plan by the Board as of December 16, 2004, and approval of the
Plan by the stockholders on December 17, 2004, the Company has caused its authorized officer to
execute the Plan.

	 	 	 	 	 	 	 
	 	 	MAKO SURGICAL CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

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