Document:

exv10w3

 

EXHIBIT 10.3

AMENDED AND RESTATED ARTES MEDICAL USA, INC.

2001 STOCK OPTION PLAN

     1. PURPOSE. This Stock Option Plan (the “Plan”) is intended to serve as an incentive
to, and to encourage stock ownership by, certain eligible participants rendering services to Artes
Medical USA, Inc., a Delaware corporation (the “Corporation”), and certain affiliates as set forth
below, so that they may acquire or increase their proprietary interest in the Corporation.

     2. ADMINISTRATION.

            2.1 Committee. The Plan shall be administered by the Board of Directors of the
Corporation (the “Board of Directors”) or a committee of two or more members appointed by the Board
of Directors (the “Committee”). If the Board of Directors does not appoint a Committee, reference
to the Committee hereinbelow, shall mean the Board of Directors. At the time that the Corporation
has a class of equity securities which are registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or is a publicly-held corporation under
Internal Revenue Code Section 162(m), membership in the Committee is limited to Non-Employee
Directors as defined in Rule 16b-3 promulgated under Section 16 of the Exchange Act and outside
directors as defined in Treasury Regulation § 1.162-27(e)(3). The Committee shall select one of
its members as Chairman and shall appoint a Secretary, who need not be a member of the Committee.
The Committee shall hold meetings at such times and places as it may determine and minutes of such
meetings shall be recorded. Acts by a majority of the Committee in a meeting at which a quorum is
present and acts approved in writing by a majority of the members of the Committee shall be valid
acts of the Committee.

            2.2 Term. If the Board of Directors selects a Committee, the members of the Committee
shall serve on the Committee for the period of time determined by the Board of Directors and shall
be subject to removal by the Board of Directors at any time. The Board of Directors may terminate
the function of the Committee at any time and resume all powers and authority previously delegated
to the Committee.

            2.3 Authority. The Committee shall have sole discretion and authority to grant
options under the Plan to eligible participants rendering services to the Corporation or any
“parent” or “subsidiary” of the Corporation, as defined in Section 424 of the Internal Revenue Code
of 1986, as amended (the “Code”) (“Parent or Subsidiary”), at such times, under such terms and in
such amounts as it may decide. For purposes of this Plan and any Stock Option Agreement (as
defined below), the term “Corporation” shall include any Parent or Subsidiary, if applicable.
Subject to the express provisions of the Plan, the Committee shall have complete discretion and
authority to interpret the Plan, to prescribe, amend and rescind the rules and regulations relating
to the Plan, to determine the details and provisions of any Stock Option Agreement, to accelerate
any options granted under the Plan and to make all other determinations necessary or advisable for
the administration of the Plan.

            2.4 Type of Option. The Committee shall have full authority and discretion to
determine, and shall specify, whether the eligible individual will be granted options intended to
qualify as incentive options under Section 422 of the Code (“Incentive Options”) or options

 

 

which are not intended to qualify under Section 422 of the Code (“Non-Qualified Options”);
provided, however, that Incentive Options shall only be granted to employees of the Corporation, or
a Parent or Subsidiary thereof, and shall be subject to the special limitations set forth herein
attributable to Incentive Options.

            2.5 Interpretation. The interpretation and construction by the Committee of any
provisions of the Plan or of any option granted under the Plan shall be final and binding on all
parties having an interest in this Plan or any option granted hereunder. No member of the
Committee shall be liable for any action or determination made in good faith with respect to the
Plan or any option granted under the Plan.

     3. ELIGIBILITY.

            3.1 General. All directors, officers, employees of and certain persons rendering
services to the Corporation, or any Parent or Subsidiary, relative to the Corporation’s, or any
Parent’s or Subsidiaries’, management, operation or development shall be eligible to receive
options under the Plan. The selection of recipients of options shall be within the sole and
absolute discretion of the Committee. No person shall be granted an option under this Plan unless
such person has executed the grant representation letter set forth on Exhibit “A,” as such Exhibit
may be amended by the Committee from time to time and no person shall be granted an Incentive
Option under this Plan unless such person is an employee of the Corporation, or a Parent or
Subsidiary, on the date of grant.

            3.2 Termination of Eligibility.

                   3.2.1 If an optionee ceases to be employed by the Corporation, or its Parent or Subsidiary, is
no longer an officer or member of the Board of Directors of the Corporation or no longer performs
services for the Corporation, or its Parent or Subsidiary for any reason (other than for “cause,”
as hereinafter defined, or such optionee’s death), any option granted hereunder to such optionee
shall expire three months after the date the occurrence giving rise to such termination of
eligibility (or 1 year in the event an optionee is “disabled,” as defined in Section 22(e)(3) of
the Code) or upon the date it expires by its terms, whichever is earlier. Any option that has not
vested in the optionee as of the date of such termination shall immediately expire and shall be
null and void. The Committee shall, in its sole and absolute discretion, decide, using the
provisions set forth in Treasury Regulations Section 1.421-7(h), whether an authorized leave of
absence or absence for military or governmental service, or absence for any other reason, shall
constitute termination of eligibility for purposes of this Section.

                   3.2.2 If an optionee ceases to be employed by the Corporation, or its Parent or Subsidiary, is
no longer an officer or member of the Board of Directors of the Corporation, or no longer performs
services for the Corporation, or its Parent or Subsidiary and such termination is as a result of
“cause,” as hereinafter defined, then all options granted hereunder to such optionee shall expire
on the date of the occurrence giving rise to such termination of eligibility or upon the date it
expires by its terms, whichever is earlier, and such optionee shall have no rights with respect to
any unexercised options. For purposes of this Plan, “cause” shall mean an optionee’s personal
dishonesty, misconduct, breach of fiduciary duty,

 

 

incompetence, intentional failure to perform stated obligations, willful violation of any law,
rule, regulation or final cease and desist order, or any material breach of any provision of this
Plan, any Stock Option Agreement or any employment agreement. The Board of Directors shall have
complete discretion and authority to determine whether the termination of the optionee is for
cause.

            3.3 Death of Optionee and Transfer of Option. In the event an optionee shall die, an
option may be exercised (subject to the condition that no option shall be exercisable after its
expiration and only to the extent that the optionee’s right to exercise such option had accrued at
the time of the optionee’s death) at any time within six months after the optionee’s death by the
executors or administrators of the optionee or by any person or persons who shall have acquired the
option directly from the optionee by bequest or inheritance. Any option that has not vested in the
optionee as of the date of death or termination of employment, whichever is earlier, shall
immediately expire and shall be null and void; provided however, that the Committee may include in
any option agreement a provision that the optionee’s shares will vest upon death of the optionee.
No option shall be transferable by the optionee other than by will or the laws of intestate
succession.

            3.4 Limitation on incentive Options. No person shall be granted any Incentive Option
to the extent that the aggregate fair market value of the Stock (as defined below) to which such
options are exercisable for the first time by the optionee during any calendar year (under all
plans of the Corporation as determined under Section 422(d) of the Code) exceeds $100,000.

     4. IDENTIFICATION OF STOCK. The Stock, as defined herein, subject to the options
shall be shares of the Corporation’s authorized but unissued or acquired or reacquired common stock
(the “Stock”). The aggregate number of shares subject to outstanding options shall not exceed
10,000,000 shares of Stock (subject to adjustment as provided in Section 6). If any option granted
hereunder shall expire or terminate for any reason without having been exercised in full, the
unpurchased shares subject thereto shall again be available for purposes of this Plan.
Notwithstanding the above, at no time shall the total number of shares of Stock issuable upon
exercise of all outstanding options and the total number of shares of Stock provided for under any
stock bonus or similar plan of the Corporation exceed 30% as calculated in accordance with the
conditions and exclusions of §260.140.45 of Title 10, California Code of Regulations, based on the
shares of the issuer which are outstanding at the time the calculation is made.

     5. TERMS AND CONDITIONS OF OPTIONS. Any option granted pursuant to the Plan shall be
evidenced by an agreement (“Stock Option Agreement”) in such form as the Committee shall from time
to time determine, which agreement shall comply with and be subject to the following terms and
conditions:

            5.1 Number of Shares. Each option shall state the number of shares of Stock to which
it pertains.

            5.2 Option Exercise Price. Each option shall state the option exercise price, which
shall be determined by the Committee; provided, however, that (i) the exercise price of any
Incentive Option shall not be less than the fair market value of the Stock, as determined by

 

 

the Committee, on the date of grant of such option, (ii) the exercise price of any Option
granted to any person who owns more than 10% of the total combined voting power of all classes of
the Corporation’s stock, as determined for purposes of Section 422 of the Code, shall not be less
than 110% of the fair market value of the Stock, as determined by the Committee, on the date of
grant of such option, and (iii) the exercise price of any Non-Qualified Option shall not be less
than 85% of the fair market value of the Stock, as determined by the Committee, on the date of
grant of such option.

            5.3 Term of Option. The term of an option granted hereunder shall be determined by
the Committee at the time of grant, but shall not exceed ten years from the date of the grant. The
term of any Incentive Option granted to an employee who owns more than 10% of the total combined
voting power of all classes of the Corporation’s stock, as determined for purposes of Section 422
of the Code, shall in no event exceed five years from the date of grant. All options shall be
subject to early termination as set forth in this Plan. In no event shall any option be
exercisable after the expiration of its term.

            5.4 Method of Exercise. An option shall be exercised by written notice to the
Corporation by the optionee (or successor in the event of death) and execution by the optionee of
an exercise representation letter in the form set forth on Exhibit “B,” as such Exhibit may be
amended by the Committee from time to time. Such written notice shall state the number of shares
with respect to which the option is being exercised and designate a time, during normal business
hours of the Corporation, for the delivery thereof (“Exercise Date”), which time shall be at least
30 days after the giving of such notice unless an earlier date shall have been mutually agreed
upon. At the time specified in the written notice, the Corporation shall deliver to the optionee
at the principal office of the Corporation, or such other appropriate place as may be determined by
the Committee, a certificate or certificates for such shares. Notwithstanding the foregoing, the
Corporation may postpone delivery of any certificate or certificates after notice of exercise for
such reasonable period as may be required to comply with any applicable listing requirements of any
securities exchange. In the event an option shall be exercisable by any person other than the
optionee, the required notice under this Section shall be accompanied by appropriate proof of the
right of such person to exercise the option.

            5.5 Medium and Time of Payment. The option exercise price shall be payable in full on
or before the option Exercise Date by certified or bank cashier’s check.

            5.6 Rights as a Shareholder. An optionee or successor shall have no rights as a
shareholder with respect to any Stock underlying any option until the date of the issuance to such
optionee of a certificate for such Stock. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions or other rights for
which the record date is prior to the date such Stock certificate is issued, except as provided in
Section 6.

            5.7 Modification, Extension and Renewal of Options. Subject to the terms and
conditions of the Plan, the Committee may modify, extend or renew outstanding options granted under
the Plan, or accept the surrender of outstanding options (to the extent not exercised) and
authorize the granting of new options in substitution therefor.

 

 

            5.8 Vesting and Restrictions. The Committee shall have complete authority and
discretion to set the terms, conditions, restrictions, vesting schedules and other provisions of
any option in the applicable Stock Option Agreement and shall have complete authority to require
conditions and restrictions on any Stock issued pursuant to this Plan; provided, however, that,
except with respect to options granted to officers or directors of the Corporation, options granted
pursuant to this Plan shall be exercisable or “vest” at the rate of at least 20% per year over the
5-year period beginning on the date the option is granted. Options granted to officers and
directors shall become exercisable or “vest,” subject to reasonable conditions, at any time during
any period established by the Corporation.

            5.9 Other Provisions. The Stock Option Agreements shall contain such other
provisions, including without limitation, restrictions or conditions upon the exercise of options,
as the Committee shall deem advisable.

     6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

            6.1 Subdivision or Consolidation. Subject to any required action by shareholders of
the Corporation, the number of shares of Stock covered by each outstanding option, and the exercise
price thereof, shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Stock of the Corporation resulting from a subdivision or consolidation of shares,
including, but not limited to, a stock split, reverse stock split, recapitalization, continuation
or reclassification, or the payment of a stock dividend (but only on the Stock) or any other
increase or decrease in the number of such shares effected without receipt of consideration by the
Corporation. Any fraction of a share subject to option that would otherwise result from an
adjustment pursuant to this Section shall be rounded downward to the next full number of shares
without other compensation or consideration to the holder of such option.

            6.2 Capital Transactions. Upon a sale or exchange of all or substantially all of the
assets of the Corporation, a merger or consolidation in which the Corporation is not the surviving
corporation, a merger, reorganization or consolidation in which the Corporation is the surviving
corporation and shareholders of the Corporation exchange their stock for securities or property, a
liquidation of the Corporation or similar transaction, as determined by the Committee (“Capital
Transaction”), this Plan and each option issued under this Plan, whether vested or unvested, shall
terminate, unless such options are assumed by a successor corporation in a merger or consolidation,
immediately prior to such Capital Transaction; provided, however, that unless the outstanding
options are assumed by a successor corporation in a merger or consolidation, subject to terms
approved by the Committee or the options are repurchased pursuant to Section 8, all optionees will
have the right, during the 30 days prior to such Capital Transaction, to exercise all vested
options. Notwithstanding the foregoing, in the event there is a merger or consolidation where the
Corporation is not the surviving corporation, all options granted under this Plan shall vest 30
days prior to such merger or consolidation unless such options are assumed by the successor
corporation in such merger or consolidation. The Committee may (but shall not be obligated to) (i)
accelerate the vesting of any option or (ii) apply the foregoing provisions, including but not
limited to termination of this Plan and any options granted pursuant to the Plan, in the event
there is a sale of 50% or more of the stock of the Corporation in any one-year period or a Capital
Transaction.

 

 

            6.3 Adjustments. To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the Committee, whose determination
in that respect shall be final, binding and conclusive.

            6.4 Ability to Adjust. The grant of an option pursuant to the Plan shall not affect
in any way the right or power of the Corporation to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge, consolidate, dissolve,
liquidate, sell or transfer all or any part of its business or assets.

            6.5 Notice of Adjustment. Whenever the Corporation shall take any action resulting in
any adjustment provided for in this Section, the Corporation shall forthwith deliver notice of such
action to each optionee, which notice shall set forth the number of shares subject to the option
and the exercise price thereof resulting from such adjustment.

            6.6 Limitation on Adjustments. Any adjustment, assumption or substitution of an
Incentive Option shall comply with Section 425 of the Code, if applicable.

     7. NONASSIGNABILITY. Options granted under this Plan may not be sold, pledged,
assigned or transferred in any manner other than by will or by the laws of intestate succession,
and may be exercised during the lifetime of an optionee only by such optionee. Any transfer in
violation of this Section shall void such option and any Stock Option Agreement entered into by the
optionee and the Corporation regarding such transferred option shall be void and have no further
force or effect. No option shall be pledged or hypothecated in any way, nor shall any option be
subject to execution, attachment or similar process.

     8. REPURCHASE OPTION.

            8.1 The Corporation shall have the right to purchase all Stock held by an optionee or any
unexercised option held by an optionee which has been obtained pursuant to the Plan, together with
any rights, securities or additional stock that has been received pursuant to a stock dividend,
stock split, reorganization or other similar transaction that has been received as a result of an
employee option or Stock acquired pursuant thereto in the event (i) an optionee terminates his or
her services with the Corporation, or any Parent or Subsidiary thereof, or (ii) the Corporation so
elects, in the event of a Capital Transaction. The price paid for any unexercised option or Stock
shall be the fair market value of such option or Stock as determined herein. The fair market value
assigned to any option shall be the fair market value of the Stock as to which it is exercisable
reduced by the exercise price. The parties shall first negotiate in good faith to reach an
agreement as to the value of the option or Stock. Absent an agreement within 30 days, the parties
shall select one appraiser to determine the value of the Stock. In the event the parties cannot
agree as to an appraiser, then each party shall appoint one appraiser and the two appraisers shall
jointly determine a third appraiser. In the event the two appraisers cannot determine a third
appraiser, such third appraiser shall be appointed by a Judge of the Superior Court of the County
of San Diego, California. Such appraisers shall make their determination of the fair market value
of the Stock, and the average of the two appraisers whose valuations are closest to each other
shall control. Any appraiser selected by any party shall be an appraiser experienced in the area of
valuing similar stock. The Corporation and the optionee, or successor, shall each pay for one-half
of the cost of any such appraisal. If the Corporation

 

 

desires to purchase the Stock or options held by an employee as set forth in this Section,
then the Corporation shall provide written notice to such optionee at such optionee’s last known
address within 120 days after the termination of such optionee’s employment, or at least 30 days
prior to a Capital Transaction.

            8.2 The Committee may assign the Corporation’s repurchase option under this Section to any
person selected by the Committee including one or more of the shareholders of the Corporation.

            8.3 The repurchase option set forth in this Section shall terminate upon the consummation of
an underwritten public offering of the Corporation’s Stock registered under the Securities Act of
1933, as amended (the “Act”).

9. RIGHT OF FIRST REFUSAL.

            9.1 Stock issued pursuant to this Plan together with any rights, securities or additional
stock that have been received pursuant to a stock dividend, stock split, reorganization or other
transaction that has been received as a result of an employee option or stock acquired pursuant
thereto shall be subject to a right of first refusal by the Corporation in the event the holder of
such shares proposes to sell, pledge or otherwise transfer said shares or any interest in said
shares to any person or entity. Any holder of shares of Stock (or other securities) acquired under
the Plan desiring to transfer such Stock (or other securities) or any interest therein shall give
written notice to the Corporation describing the proposed transfer, including the price of shares
proposed to be transferred, the proposed transfer price and terms, and the name and address of the
proposed transferee. Unless otherwise agreed by the Corporation and the holder of such shares,
repurchases by the Corporation under this Section shall be at the proposed price and terms
specified in the notice to the Corporation. The Corporation’s rights under this Section shall be
freely assignable.

            9.2 If the Corporation fails to exercise its right of first refusal within 30 days from the
date upon which the Corporation received the shareholder’s written notice, the shareholder may,
within the next 90 days, conclude a transfer of the exact number of shares covered by said notice
on terms not more favorable to the transferee than those described in the notice. Any subsequent
proposed transfer by such transferee shall again be subject to the Corporation’s right of first
refusal. If the Corporation exercises its right of first refusal, the shareholder shall endorse
and deliver to the Corporation the stock certificates representing the shares being repurchased,
and the Corporation shall promptly pay the shareholder the total repurchase price as set forth in
the terms of the agreement. The holders of shares being repurchased pursuant to this Section shall
cease to have any rights with respect to such shares immediately upon repurchase.

            9.3 No written notice of a proposed transfer shall be required under this Section and no right
of first refusal shall exist with respect to transfers by will or the laws of intestate succession.

 

 

            9.4 The right of first refusal set forth in this Section shall terminate upon the consummation
of an underwritten public offering of the Corporation’s Stock registered under the Securities Act
of 1933, as amended (the “Act”).

            9.5 Any attempted transfer of any Stock or securities subject to this right of first refusal
which is not made in compliance with this Section shall be null and void.

            9.6 The Committee may assign the Corporation’s repurchase option under this Section to any
person selected by the Committee including one or more or the shareholders of the Corporation.

     10. NO RIGHT OF EMPLOYMENT. Neither the grant nor exercise of any option nor anything
in this Plan shall impose upon the Corporation or any other corporation any obligation to employ or
continue to employ any optionee. The right of the Corporation and any other corporation to
terminate any employee shall not be diminished or affected because an option has been granted to
such employee.

     11. TERM OF PLAN. This Plan is effective on the date the Plan is adopted by the Board
of Directors and options may be granted pursuant to the Plan from time to time within a period of
ten (10) years from such date, or the date of any required shareholder approval required under the
Plan, if earlier. Termination of the Plan shall not affect any option theretofore granted.

     12. AMENDMENT OF THE PLAN. The Board of Directors of the Corporation may, subject to
any required shareholder approval, suspend, discontinue or terminate the Plan, or revise or amend
it in any respect whatsoever with respect to any shares of Stock at that time not subject to
options.

     13. APPLICATION OF FUNDS. The proceeds received by the Corporation from the sale of
Stock pursuant to options may be used for general corporate purposes.

     14. RESERVATION OF SHARES. The Corporation, during the term of this Plan, shall at
all times reserve and keep available such number of shares of Stock as shall be sufficient to
satisfy the requirements of the Plan.

     15. NO OBLIGATION TO EXERCISE OPTION. The granting of an option shall not impose any
obligation upon the optionee to exercise such option.

     16. APPROVAL OF BOARD OF DIRECTORS AND SHAREHOLDERS. The Plan shall not take effect
until approved by the Board of Directors of the Corporation. This Plan shall be approved by a vote
of the shareholders within 12 months from the date of approval by the Board of Directors. In the
event such shareholder vote is not obtained, all options granted hereunder, whether vested or
unvested, shall be null and void. Further, any Stock acquired pursuant to the exercise of any
options under this Agreement may not count for purposes of determining whether shareholder approval
has been obtained.

     17. WITHHOLDING TAXES. Notwithstanding anything else to the contrary in this Plan or
any Stock Option Agreement, the exercise of any option shall be conditioned upon payment by such
optionee in cash, or other provisions satisfactory to the Committee, of all local,

 

 

state, federal or other withholding taxes applicable, in the Committee’s judgment, to the
exercise or to later disposition of shares acquired upon exercise of an option (including any
repurchase of an option or the Stock).

     18. PARACHUTE PAYMENTS. Any outstanding option under the Plan may not be accelerated
to the extent any such acceleration of such option would, when added to the present value of other
payments in the nature of compensation which becomes due and payable to the optionee would result
in the payment to such optionee of an excess parachute payment under Section 280G of the Code. The
existence of any such excess parachute payment shall be determined in the sole and absolute
discretion of the Committee.

     19. SECURITIES LAWS COMPLIANCE. Notwithstanding anything contained herein, the
Corporation shall not be obligated to grant any option under this Plan or to sell, issue or effect
any transfer of any Stock unless such grant, sale, issuance or transfer is at such time effectively
(i) registered or exempt from registration under the Securities Act of 1933, as amended (the “Act”)
and (ii) qualified or exempt from qualification under the California Corporate Securities Law of
1968 and any other applicable state securities laws. As a condition to exercise of any option,
each optionee shall make such representations as may be deemed appropriate by counsel to the
Corporation for the Corporation to use any available exemption from registration under the Act or
qualification under any applicable state securities law.

     20. RESTRICTIVE LEGENDS. The certificates representing the Stock issued upon exercise
of options granted pursuant to this Plan will bear the following legends giving notice of
restrictions on transfer under the Act and this Plan, as follows:

            (a) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED OR TRANSFERRED IN A
TRANSACTION WHICH WAS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON
AN EXEMPTION AFFORDED BY SUCH ACT. NO SALE OR TRANSFER OF THESE SHARES SHALL BE MADE, NO ATTEMPTED
SALE OR TRANSFER SHALL BE VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO ANY
SUCH TRANSACTION UNLESS (A) SUCH TRANSACTION SHALL HAVE BEEN DULY REGISTERED UNDER THE ACT OR (B)
THE ISSUER SHALL HAVE FIRST RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH REGISTRATION
IS NOT REQUIRED.

            (b) THE SALE, TRANSFER, HYPOTHECATION, OR ENCUMBRANCE OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED BY THE PROVISIONS OF A STOCK OPTION
AGREEMENT DATED __________ AND
A STOCK OPTION PLAN DATED APRIL 30, 2001 A COPY OF WHICH MAY BE INSPECTED AT THE CORPORATION’S
PRINCIPAL OFFICE.

            (c) Any other legends required by applicable securities laws as determined by the Committee.

     21. NOTICES. Any notice to be given under the terms of the Plan shall be addressed to
the Corporation in care of its Secretary at its principal office, and any notice to be given to an

 

 

optionee shall be addressed to such optionee at the address maintained by the Corporation for
such person or at such other address as the optionee may specify in writing to the Corporation.

     22. INFORMATION TO PARTICIPANTS. The Corporation shall make available to all holders
of options the information required pursuant to § 260.140.46 of the California Code of Regulations.

     As adopted by the Board of Directors as of April 30, 2001; and amended by the Board of
Directors on November 22, 2004 and the shareholders on December 3, 2004; and further amended by the
Board of Directors on August 30, 2005 and the shareholders on August 31, 2005.

	 	 	 	 	 
	 	 	ARTES MEDICAL USA, INC., a Delaware corporation
	 
	 	 	 	 
	 

	 	Signature:
	 	/s/ Stefan M. Lemperle
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Printed Name: Stefan M. Lemperle
	 
	 	 	 	 
	 	 	Title: President and Chief Executive Officer

 

 

EXHIBIT A

Date: __________________, 200_

 

Artes Medical USA, Inc.

4660 La Jolla Village Drive, Suite 825

San Diego, CA 92122

			
	Re:	 	2001 Stock Option Plan

To Whom It May Concern:

     This letter is delivered to Artes Medical USA, Inc., a Delaware corporation (the
“Corporation”), in connection with the grant to
__________ (the “Optionee”) of an
option (the “Option”) to purchase __________ shares of common stock of the Corporation (the
“Stock”) pursuant to the Artes Medical USA, Inc., 2001 Stock Option Plan dated April 30, 2001 (the
“Plan”). The Optionee understands that the Corporation’s receipt of this letter executed by the
Optionee is a condition to the Corporation’s willingness to grant the Option to the Optionee.

     In addition, the Optionee makes the following representations and warranties with the
understanding that the Corporation will rely upon them.

     1. The Optionee acknowledges receipt of a copy of the Plan and Agreement. The Optionee has
carefully reviewed the Plan and Agreement.

     2. The Optionee understands and acknowledges that the Option and the Stock are subject to the
terms and conditions of the Plan.

     3. The Optionee understands and agrees that, at the time of exercise of any part of the Option
for Stock, the Optionee may be required to provide the Corporation with additional representations,
warranties and/or covenants similar to those contained in this letter.

     4. The Optionee is a resident of the State of __________. (Optionee must complete this
blank.)

     5. The Optionee will notify the Corporation immediately of any change in the above information
which occurs before the Option is exercised in full by the Optionee.

Exhibit A – Page 1

 

     The
foregoing representations and warranties are given on _______________, 200__ at __________________________.

                   
                   
                   
                   
                   
                   
                   
                   
   (city, state)

	 	 	 	 	 
	 	 	OPTIONEE:
	 
	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	Printed Name:	 
	 

	 	 	 	 

Exhibit A – Page 2

 

EXHIBIT B

	 	 	 	 	 
	 

	 	Address of Optionee:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

Date: _____________, 200_

 

Artes Medical USA, Inc.

4660 La Jolla Village Drive, Suite 825

San Diego, CA 92122

     Re: 2001 Stock Option Plan

To Whom It May Concern:

     I
(the “Optionee”) hereby exercise my right to purchase
__________ shares of common
stock (the “Stock”) of Artes Medical USA, Inc., a Delaware corporation (the “Corporation”),
pursuant to, and in accordance with, the Artes Medical USA, Inc. 2001 Stock Option Plan dated April
30, 2001 (the “Plan”) and Stock Option Agreement (the “Agreement”) dated __________, 200_. As
provided in such Plan, I deliver herewith payment as set forth in Section 5.5 of the Plan in the
amount equal to the number of shares being purchased multiplied by the price per share, as
indicated in Section 1 of the Agreement. Please deliver to me at my address as set forth above
stock certificates representing the subject shares registered in the following name(s):
_________________. I further request that the certificates be registered in the following form
of ownership (for example, as individual property, community property, separate property, etc.):
___________.

     The Optionee hereby represents and agrees as follows:

     1. The Optionee acknowledges receipt of a copy of the Plan and Agreement. The Optionee has
carefully reviewed the Plan and Agreement.

     2. The Optionee is a resident of the State of __________. (Optionee must complete this
blank.)

     3. The Optionee represents and agrees that if the Optionee is an “affiliate” (as defined in
Rule 144 under the Securities Act of 1933) of the Corporation at the time the Optionee desires to
sell any of the Stock, the Optionee will be subject to certain restrictions under, and will comply
with all of the requirements of, applicable federal and state securities laws.

Exhibit B – Page 1

 

     The
foregoing representations and warranties are given on
__________, 200_ at ____________________.

                            
                            
                            
                            
                            (city, state)

	 	 	 	 	 
	 	 	OPTIONEE:
	 
	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	Printed Name:	 
	 

	 	 	 	 

Exhibit B – Page 2exv10w4

 

EXHIBIT
10.4

ARTES MEDICAL, INC.

NOTICE OF GRANT OF STOCK OPTION

(Immediately Exercisable)

                          (the “Optionee ”) has been granted an option (the “Option ”) to
purchase certain shares of Common Stock of Artes Medical, Inc. (the “Company”) pursuant to the
Company’s 2001 Stock Option Plan (the "Plan”), as follows:

	 	 	 	 	 
	 

	 	Date of Option Grant:
	 	                    
	 
	 	 	 	 
	 

	 	Number of Option Shares:
	 	                    
	 
	 	 	 	 
	 

	 	Exercise Price:
	 	$                 per share
	 
	 	 	 	 
	 

	 	Initial Exercise Date:
	 	Later of Date of Option Grant or Service commencement date.
	 
	 	 	 	 
	 

	 	Initial Vesting Date:
	 	                                    
	 
	 	 	 	 
	 

	 	Option Expiration Date:
	 	The date ten (10) years after the Date of Option Grant.
	 
	 	 	 	 
	 

	 	Tax Status of Option:
	 	Incentive Stock Option. (Enter “Incentive” or “Nonstatutory.” If
blank, this Option will be a Nonstatutory Stock Option.)

Vested Shares: Except as provided in the Stock Option Agreement, the number of Vested Shares
(disregarding any resulting fractional share) as of any date is determined by multiplying
the number of option shares by the “Vested Ratio” determined as of such date as follows:

	 	 	 	 	 
	 	 	Vested Ratio
	Prior to Initial Vesting Date
	 	 	0	 
	On Initial Vesting Date, provided the Optionee’s
Service has not terminated prior to such date
	 	 	1/8	 
	Plus:
	 	 	 	 
	For each full month of the Optionee’s continuous
Service from the Initial Vesting Date until the
Vested Ratio equals 1/1, an additional
	 	 	1/48	 

     By their signatures below, the Company and the Optionee agree that the Option is governed by
this Notice and by the provisions of the Plan and the Stock Option Agreement, both, of which are
attached to and made a part of this document. The Optionee acknowledges receipt of copies of the
Plan and the Stock Option Agreement, represents that the Optionee has read and is familiar with
their provisions, and hereby accepts the Option subject to all of their terms and conditions.

	 	 	 	 	 	 	 	 	 
	ARTES MEDICAL, INC.	 	 	 	OPTIONEE	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Signature	 	 
	Its:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 
	Address:

	 	5870 Pacific Center Boulevard
	 	Date:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	San Diego, CA 92121	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 	 
	ATTACHMENTS:

	 	2001 Stock Option Plan, as amended to the Date of Option Grant; Stock Option
Agreement and Exhibits

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