Document:

Exhibit 10.1

 

Tapestry
Pharmaceuticals, Inc.

2006 EQUITY INCENTIVE  PLAN

STOCK OPTION AGREEMENT

(NONSTATUTORY STOCK OPTION)

Pursuant
to your Stock Option Grant Notice (“Grant Notice”) and this Stock Option
Agreement, Tapestry Pharmaceuticals, Inc.  (the “Company”)
has granted you an option under its 2006
Equity Incentive Plan (the “Plan”) to purchase the number of shares of
the Company’s Common Stock indicated in your Grant Notice at the exercise price
indicated in your Grant Notice.  Defined
terms not explicitly defined in this Stock Option Agreement but defined in the
Plan shall have the same definitions as in the Plan.

The
details of your option are as follows:

1.             VESTING.  Subject to
Section 10 and to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the
termination of your Continuous Service.

2.             NUMBER OF SHARES AND EXERCISE PRICE. 
The number of shares of Common Stock subject to your option and your
exercise price per share referenced in your Grant Notice may be adjusted from
time to time for Capitalization Adjustments.

3.             EXERCISE PRIOR TO VESTING (“EARLY EXERCISE”). 
If permitted in your Grant Notice (i.e., the “Exercise Schedule”
indicates that “Early Exercise” of your option is permitted) and subject to the
provisions of your option, you may elect at any time that is both (i) during
the period of your Continuous Service and (ii) during the term of your option,
to exercise all or part of your option, including the nonvested portion of your
option; provided, however, that:

(a)           a partial exercise of your option shall
be deemed to cover first vested shares of Common Stock and then the earliest
vesting installment of unvested shares of Common Stock;

(b)           any shares of Common Stock so purchased
from installments that have not vested as of the date of exercise shall be
subject to the purchase option in favor of the Company as described in the
Company’s form of Early Exercise Stock Purchase Agreement; and

(c)           you shall enter into the Company’s form
of Early Exercise Stock Purchase Agreement with a vesting schedule that will
result in the same vesting as if no early exercise had occurred.

4.             METHOD OF PAYMENT. 
Payment of the exercise price is due in full upon exercise of all or any
part of your option.  You may elect to
make payment of the exercise price in cash or by check or in any other manner permitted by your Grant Notice,
which may include one or more of the following:

 

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(a)           In the Company’s sole discretion and
provided that at the time of exercise the Common Stock is publicly traded,
pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company
from the sales proceeds.

(b)           In the Company’s sole discretion and
provided that at the time of exercise the Common Stock is publicly traded, by
delivery of already-owned shares of Common Stock either that you have held for
the period required to avoid a charge to the Company’s reported earnings
(generally six (6) months) or that you did not acquire, directly or indirectly
from the Company, that are owned free and clear of any liens, claims,
encumbrances or security interests, and that are valued at Fair Market Value on
the date of exercise.  “Delivery” for
these purposes, in the sole discretion of the Company at the time you exercise
your option, shall include delivery to the Company of your attestation of
ownership of such shares of Common Stock in a form approved by the
Company.  Notwithstanding the foregoing,
you may not exercise your option by tender to the Company of Common Stock to
the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Company’s stock.

(c)           In the Company’s sole discretion and
provided that at the time of exercise the Common Stock is publicly traded,
through a “net exercise” of your option, pursuant to which the Company will not
require payment of the exercise price of your option but will reduce the number
of shares of Common Stock issued to you upon the exercise by the largest number
of whole shares that has a Fair Market Value that does not exceed the aggregate
exercise price.  With respect to any
remaining balance of the aggregate exercise price, you shall make a cash
payment to the Company.  The shares of
Common Stock so used to pay the exercise price of your option under a “net
exercise” will be considered to have resulted from the exercise of the option,
and accordingly, the option will not again be exercisable with respect to such
shares, the shares actually delivered to you, and any shares withheld for
purposes of tax withholding.

(d)           In the Company’s sole discretion and
subject to compliance with applicable law (including Section 402 of the
Sarbanes Oxley Act of 2002), pursuant to the following deferred payment
alternative:

(i)            Not less than one hundred percent (100%)
of the aggregate exercise price, plus accrued interest, shall be due four (4)
years from date of exercise or, at the Company’s election, upon termination of
your Continuous Service.

(ii)           Interest shall be compounded at least
annually and shall be charged at the minimum rate of interest necessary to
avoid (1) the treatment as interest, under any applicable provisions of the
Code, of any amounts other than amounts stated to be interest under the
deferred payment arrangement and (2) the treatment of the option as a variable
award for financial accounting purposes.

(iii)         At any time that the Company is
incorporated in Delaware, payment of the Common Stock’s “par value,” as defined
in the Delaware General Corporation Law, shall be made in cash and not by
deferred payment.

 

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(iv)          In order to elect the deferred payment
alternative, you must, as a part of your written notice of exercise, give
notice of the election of this payment alternative and, in order to secure the
payment of the deferred exercise price to the Company hereunder, if the Company
so requests, you must tender to the Company a promissory note and a pledge
agreement covering the purchased shares of Common Stock, both in form and
substance satisfactory to the Company, or such other or additional
documentation as the Company may request.

5.             WHOLE SHARES. 
You may exercise your option only for whole shares of Common Stock.

6.             SECURITIES LAW COMPLIANCE. 
Notwithstanding anything to the contrary contained herein, you may not
exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of
Common Stock are not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Securities Act.  The exercise of your
option also must comply with other applicable laws and regulations governing
your option, and you may not exercise your option if the Company determines
that such exercise would not be in material compliance with such laws and
regulations.

7.             TERM.  You may not
exercise your option before the commencement or after the expiration of its
term.  The term of your option commences
on the Date of Grant and expires upon the earliest of the following:

(a)           one hundred eighty (180) days after the
termination of your Continuous Service for any reason other than your
Disability or death, provided that if during any part of such period your
option is not exercisable solely because of the condition set forth in Section
6, your option shall not expire until the earlier of the Expiration Date (as
defined in your Grant Notice) or until it shall have been exercisable for an
aggregate period of three (3) months after the termination of your Continuous
Service;

(b)           twelve (12) months after the termination
of your Continuous Service due to your Disability;

(c)           eighteen (18) months after your death if
you die either during your Continuous Service or within one hundred eighty
(180) days after your Continuous Service terminates;

(d)           the Expiration Date indicated in your
Grant Notice;

(e)           in accordance with the provisions of
Section 12 of the Plan; or

(f)            the day before the tenth (10th)
anniversary of the Date of Grant (as
defined in your Grant Notice).

 

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8.             EXERCISE.

(a)           You may exercise the vested portion of
your option (and the unvested portion of your option if your Grant Notice so
permits) during its term by delivering a Notice of Exercise (in a form
designated by the Company) together with the exercise price to the Secretary of
the Company, or to such other person as the Company may designate, during
regular business hours, together with such additional documents as the Company
may then require.

(b)           By exercising your option you agree that,
as a condition to any exercise of your option, the Company may require you to
enter into an arrangement providing for the payment by you to the Company of
any tax withholding obligation of the Company arising by reason of (1) the
exercise of your option, (2) the lapse of any substantial risk of forfeiture to
which the shares of Common Stock are subject at the time of exercise, or (3)
the disposition of shares of Common Stock acquired upon such exercise.

9.             TRANSFERABILITY. 
Your option is not transferable, except by will or by the laws of
descent and distribution, and is exercisable during your life only by you.  Notwithstanding the foregoing, by delivering
written notice to the Company, in a form satisfactory to the Company, you may
designate a third party who, in the event of your death, shall thereafter be
entitled to exercise your option.

10.          CHANGE
IN CONTROL.

(a)           If a Change in Control occurs and as of,
or within [25 months, for Named Executive Officers][13 months, for
Controller and other officers Vice President and above] after, the effective
time of such Change in Control your Continuous Service terminates due to an
involuntary termination (not including death or Disability) without Cause or
due to a voluntary termination with Good Reason, then, as of the date of
termination of Continuous Service, the vesting and exercisability of your
option shall be accelerated in full.

(b)           “Cause” means the occurrence of any one
or more of the following: (i) your commission of any crime involving
fraud, dishonesty or moral turpitude; (ii) your attempted commission of or
participation in a fraud or act of dishonesty against the Company that results
in (or might have reasonably resulted in) material harm to the business of the
Company; (iii) your intentional, material violation of any contract or
agreement between you and the Company or any statutory duty you owe to the
Company; or (iv) your conduct that constitutes gross insubordination,
incompetence or habitual neglect of duties and that results in (or might have
reasonably resulted in) material harm to the business of the Company; provided, however, that the action or
conduct described in clauses (iii) and (iv) above will constitute “Cause”
only if such action or conduct continues after the Company has provided you
with written notice thereof and thirty (30) days to cure the same.

(c)           “Good Reason” means that one or more of
the following are undertaken by the Company without your express written
consent: (i) the assignment to you of any duties or responsibilities that
results in a material diminution in your function as in effect immediately
prior to the effective date of the Change in Control; (ii) a reduction by
the Company in your annual base salary, as in effect on the effective date of
the Change in Control or as increased thereafter; (iii) any failure by the
Company to continue in effect any benefit plan or program, including incentive
plans or plans with respect to the receipt of securities of the Company, in

 

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which you were
participating immediately prior to the effective date of the Change in Control
(hereinafter referred to as “Benefit Plans”), or the taking of any action by
the Company that would adversely affect your participation in or reduce your
benefits under the Benefit Plans or deprive you of any fringe benefit that you
enjoyed immediately prior to the effective date of the Change in Control; provided, however, that Good Reason shall
not be deemed to have occurred if the Company provides for your participation
in benefit plans and programs that, taken as a whole, are comparable to the
Benefit Plans; (iv) a relocation of your business office to a location
more than fifty (50) miles from the location at which you performed your
duties as of the effective date of the Change in Control, except for required
travel by you on the Company’s business to an extent substantially consistent
with your business travel obligations prior to the effective date of the Change
in Control; or (v) a material breach by the Company of any provision of
the Plan or the Option Agreement or any other material agreement between you
and the Company concerning the terms and conditions of your employment.

(d)           If any payment or benefit you would
receive pursuant to a Change in Control from the Company or otherwise (“Payment”)
would (i) constitute a “parachute payment” within the meaning of
Section 280G of the Code, and (ii) but for this sentence, be subject
to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”),
then such Payment shall be equal to the Reduced Amount. The “Reduced Amount”
shall be either (x) the largest portion of the Payment that would result
in no portion of the Payment being subject to the Excise Tax or (y) the
largest portion, up to and including the total, of the Payment, whichever
amount, after taking into account all applicable federal, state and local
employment taxes, income taxes, and the Excise Tax (all computed at the highest
applicable marginal rate), results in your receipt, on an after-tax basis, of
the greater amount of the Payment notwithstanding that all or some portion of
the Payment may be subject to the Excise Tax. If a reduction in payments or
benefits constituting “parachute payments” is necessary so that the Payment
equals the Reduced Amount, reduction shall occur in the following order unless
you elect in writing a different order (provided,
however, that such election shall be subject to Company approval if
made on or after the effective date of the event that triggers the Payment):
reduction of cash payments; cancellation of accelerated vesting of Stock
Awards; reduction of employee benefits. In the event that acceleration of
vesting of Stock Award compensation is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of the date of grant of your
Stock Awards (i.e., earliest granted Stock Award cancelled last) unless you
elect in writing a different order for cancellation.

The accounting firm
engaged by the Company for general audit purposes as of the day prior to the
effective date of the Change in Control shall perform the foregoing
calculations. If the accounting firm so engaged by the Company is serving as
accountant or auditor for the individual, entity or group effecting the Change
in Control, the Company shall appoint a nationally recognized accounting firm
to make the determinations required hereunder. The Company shall bear all
expenses with respect to the determinations by such accounting firm required to
be made hereunder.

The accounting firm
engaged to make the determinations hereunder shall provide its calculations,
together with detailed supporting documentation, to you and the Company within
fifteen (15) calendar days after the date on which your right to a
Payment is triggered (if requested at that time by you or the Company) or such
other time as requested by you or the

 

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Company. If the
accounting firm determines that no Excise Tax is payable with respect to a
Payment, either before or after the application of the Reduced Amount, it shall
furnish you and the Company with an opinion reasonably acceptable to you that
no Excise Tax will be imposed with respect to such Payment. Any good faith
determinations of the accounting firm made hereunder shall be final, binding
and conclusive upon you and the Company.

11.          OPTION NOT A SERVICE CONTRACT. 
Your option is not an employment or service contract, and nothing in
your option shall be deemed to create in any way whatsoever any obligation on
your part to continue in the employ of the Company or an Affiliate, or of the
Company or an Affiliate to continue your employment.  In addition, nothing in your option shall
obligate the Company or an Affiliate, their respective stockholders, Boards of
Directors, Officers or Employees to continue any relationship that you might
have as a Director or Consultant for the Company or an Affiliate.

12.          WITHHOLDING OBLIGATIONS.

(a)           At the time you exercise your option, in
whole or in part, or at any time thereafter as requested by the Company, you
hereby authorize withholding from payroll and any other amounts payable to you,
and otherwise agree to make adequate provision for (including by means of a “cashless
exercise” pursuant to a program developed under Regulation T as promulgated by
the Federal Reserve Board to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection
with the exercise of your option.

(b)           Upon your request and subject to approval
by the Company, in its sole discretion, and compliance with any applicable
legal conditions or restrictions, the Company may withhold from fully vested
shares of Common Stock otherwise issuable to you upon the exercise of your
option a number of whole shares of Common Stock having a Fair Market Value,
determined by the Company as of the date of exercise, not in excess of the
minimum amount of tax required to be withheld by law (or such lower amount as
may be necessary to avoid variable award accounting).  If the date of determination of any tax withholding
obligation is deferred to a date later than the date of exercise of your
option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of
the Code, covering the aggregate number of shares of Common Stock acquired upon
such exercise with respect to which such determination is otherwise deferred,
to accelerate the determination of such tax withholding obligation to the date
of exercise of your option.  Notwithstanding
the filing of such election, shares of Common Stock shall be withheld solely
from fully vested shares of Common Stock determined as of the date of exercise
of your option that are otherwise issuable to you upon such exercise.  Any adverse consequences to you arising in
connection with such share withholding procedure shall be your sole
responsibility.

(c)           You may not exercise your option unless
the tax withholding obligations of the Company and/or any Affiliate are
satisfied.  Accordingly, you may not be
able to exercise your option when desired even though your option is vested,
and the Company shall have no obligation to issue a certificate for such shares
of Common Stock or release such shares of Common Stock from any escrow provided
for herein unless such obligations are satisfied.

 

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13.          NOTICES.  Any notices
provided for in your option or the Plan shall be given in writing and shall be
deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States
mail, postage prepaid, addressed to you at the last address you provided to the
Company.

14.          GOVERNING PLAN DOCUMENT. 
Your option is subject to all the provisions of the Plan, the provisions
of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time
be promulgated and adopted pursuant to the Plan.  In the event of any conflict between the
provisions of your option and those of the Plan, the provisions of the Plan
shall control.

 

 

 

7Exhibit 10.1

CONCEPTUS,
INC.

SPENCER
ROECK STOCK APPRECIATION RIGHT AGREEMENT

                This SPENCER ROECK STOCK APPRECIATION RIGHT AGREEMENT
(the “Agreement”) is entered into effective as of October 10, 2007 (the “Effective
Date”) between Conceptus, Inc. (the “Company”) and Spencer Roeck
(the “Participant”).

                This stock appreciation right (“SAR”) has been
granted without stockholder approval as a stand-alone inducement grant pursuant
to NASDAQ Marketplace Rule 4350(i)(1)(A)(iv). Certain capitalized terms used
herein shall have the meanings given such terms in paragraph 18 of this
Agreement.

                1.             Grant.  In consideration of the Participant’s
agreement to commence and remain in the employ of the Company or its
Subsidiaries and for other good and valuable consideration, effective as of the
Effective Date, the Company irrevocably grants to the Participant a stock
appreciation right (a “SAR”) for 100,000 shares of common stock (the “Common
Stock”), par value $0.003 per share (the “Shares”), at an exercise
price of $19.99 per share (the “Exercise 
Price per Share”).

 

                2.             Company’s Obligation to Pay.
 Each SAR has a value equal to the
difference between the Fair Market Value of a Share and the Exercise Price per
Share on the date the SAR is exercised. Unless and until the SAR will have
vested in the manner set forth in paragraph 3, the Participant will have no
right to payment of the SAR. Prior to actual payment of any vested SAR, such
SAR will represent an unsecured obligation of the Company, payable (if at all)
only from the general assets of the Company.

 

                3.             Vesting Schedule.  Subject to paragraph 4, the SAR awarded by
this Agreement will vest in the Participant with respect to one-eighth (1/8th)
of the Shares on the six-month anniversary of September 19, 2007 (the “Vesting
Commencement Date”), with the remainder of the Shares subject thereto
vesting in equal monthly installments over the following forty-two (42) months,
such that the SAR shall be fully vested on the four-year anniversary of the
Vesting Commencement Date, in any event, subject to Participant continuing to
be a Service Provider through each such vesting date.

 

                4.             Exercise
and Term.

                                (a)           The SAR may be exercised by the
Participant (or in the event of the Participant’s death by the Participant’s
estate) during its term only to the extent vested. Any portion of the SAR in
which the Participant is vested shall be exercisable until the earliest of the
following (the “Expiration Date”):

                                                (i) Twelve (12)
months following the date the Participant ceases to be a Service Provider by
reason of death or as a result of total and permanent disability as defined in
Section 22(e)(3) of the Code;

 

 

                                                (ii) Ninety (90) days
following the date the Participant ceases to be a Service Provider for any
reason other than death or as a result of total and permanent disability as
defined in Section 22(e)(3) of the Code; or

 

                                                (iii)
the tenth anniversary of the Effective Date.

 

                                (b)           Any
exercisable portion of the SAR may be exercised in whole or in part at any time
prior to the time when the SAR becomes unexercisable under paragraph 4(a).

 

                                (c)           Any
vested SAR or portion of a SAR not exercised prior to its Expiration Date will
be forfeited and will terminate.

 

                                (d)           A
vested SAR or portion of a SAR may be exercised by completing a Stock
Appreciation Right Exercise Notice in the form attached hereto as Exhibit A
and returning it to the Company at 331 East Evelyn Avenue, Mountain View,
California 94041, Attn: Chief Financial Officer, or at such other address as
the Company may hereafter designate in writing, prior to its Expiration Date.
The SAR may not be exercised more than once with respect to any Share related
thereto.

 

                5.             Payment.

 

                                (a)           The Company shall settle the exercise
of all or any portion of the SAR in whole Shares within ten (10) days following
such exercise.

 

                                (b)           No Shares shall be issued pursuant to
Section 5(a) until Participant has paid any and all federal, state and local
withholding taxes with respect to such exercise; provided, however,
that to the extent determined appropriate by the Company, any federal, state
and local withholding taxes with respect to such exercise will be paid by
reducing the number of Shares actually paid to the Participant by that number
of Shares having a Fair Market Value equal to the statutory minimum amount
required to be so withheld.

 

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

 

                7.             Address for Notices.  Any notice to be given to the Company under
the terms of this Agreement will be addressed to the Company at 331 East Evelyn
Avenue, Mountain View, California 94041, Attn: Chief Financial Officer, or at
such other address as the Company may hereafter designate in writing. Any
notices provided for in this Agreement shall be given in writing and shall be
deemed effectively given upon receipt or, in the case of notices delivered by
the Company to the Participant, five (5) days after deposit in the United States
mail, postage prepaid, addressed to the Participant at the address specified on
the first page of this Agreement or at such other address as the Participant
may hereafter designate by written notice to the Company.

 

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                8.             Grant is Not Transferable.  Except to the limited extent provided in
paragraph 4, this grant and the rights and privileges conferred hereby,
including without limitation the Shares issuable upon exercise of the SAR, will
not be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and will not be subject to sale under execution,
attachment or similar process until, with respect to whole Shares issuable
following the exercise of the SAR, such Shares are issued pursuant to paragraph
5 above. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of this grant, or any right or privilege conferred hereby, or upon any
attempted sale under any execution, attachment or similar process, this grant
and the rights and privileges conferred hereby immediately will become null and
void.

 

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

 

                10.           No Effect on Employment or Service.
 This Agreement is not an employment or
service contract, and nothing herein shall be deemed to create in any way
whatsoever any obligation on the Participant’s part to continue in the employ
or service of the Company, or of the Company to continue the Participant’s
employment or service with the Company. Nothing in this Agreement shall affect
in any manner whatsoever the right or power of the Company to terminate the
Participant’s employment or service relationship, for any reason whatsoever,
with or without good cause.

 

                11.           Committee Authority.  The Company’s Board of Directors, the
Compensation Committee of the Company’s Board of Directors or such other
committee of the Board of Directors as shall be duly authorized (collectively,
the “Administrator”) will have the power to interpret this Agreement and to
adopt such rules for the administration, interpretation and application of the
provisions of this Agreement as are consistent therewith and to interpret or
revoke any such rules (including, but not limited to, the determination of
whether or not the SAR or any portion thereof has vested). All actions taken
and all interpretations and determinations made by the Administrator in good
faith will be final and binding upon Participant, the Company and all other
interested persons. No member of the Administrator will be personally liable
for any action, determination or interpretation made in good faith with respect
to this Agreement.

 

                12.           Additional Conditions to Issuance
of Stock.  If at any time the Company
will determine, in its discretion, that the listing, registration or
qualification of the Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory
authority is necessary or desirable as a condition to the issuance of Shares to
the Participant (or Participant’s estate), such issuance will not occur unless
and until such listing, registration, qualification, consent or approval will
have been effected or obtained free of any conditions not acceptable to the
Company. The Company will make all reasonable efforts to meet the requirements
of any such state or federal law or securities exchange and to obtain any such
consent or approval of any such governmental authority. As a condition to the
exercise of this Stock Appreciation Right, the Company may require the person
exercising this Stock Appreciation Right to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment
and without any present intention to sell or

 

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distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any of the aforementioned relevant
provisions of law.

 

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

 

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

 

                15.           Material Inducement.  The Participant agrees that the Participant
has not been previously employed in any capacity by the Company or a
Subsidiary, or if previously employed, has had a bona-fide period of
non-employment, and that the grant of this SAR is an inducement material to the
Participant’s agreement to enter into employment with the Company or
Subsidiary.

 

                16.           Adjustments
upon Changes in Capitalization, Merger or Asset Sale.

                                (a)           In
the event that the Company determines that other than an Equity Restructuring
any dividend or other distribution (whether in the form of cash, Common Stock,
other securities, or other property), reclassification, reorganization, merger,
consolidation, spin off, combination, repurchase, liquidation, dissolution, or
sale, transfer, exchange or other disposition of all or substantially all of
the assets of the Company, or exchange of Common Stock or other securities of
the Company, issuance of warrants or other rights to purchase Common Stock or
other securities of the Company, or other similar corporate transaction or
event, in the Company’s sole discretion, affects the Common Stock such that an
adjustment is determined by the Company to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended by the
Company to be made available under this Agreement or with respect to the SAR,
then the Company shall, in such manner as it may deem equitable, adjust the
number and kind of shares of Common Stock (or other securities or property)
subject to this Agreement.

 

                                (b)           In
the event of any transaction or event described in paragraph 16(a), the
Company, in its sole discretion, and on such terms and conditions as it deems
appropriate, either by the terms of the Agreement or by action taken prior to
the occurrence of such transaction or event and either automatically or upon
the Participant’s request, is hereby authorized to take any one or more of the
following actions whenever the Company determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended by the Company to be made available under this
Agreement or to facilitate such transaction or event:

 

                                                (i)            To provide for either the purchase
of the SAR for an amount of cash equal to the amount that could have been
obtained upon the exercise of the SAR or realization of the Participant’s
rights had the SAR been currently exercisable or payable or fully vested or the
replacement of the SAR with other rights or property selected by the Company in
its sole discretion;

 

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                                                (ii)           To provide that the SAR shall be
exercisable as to all shares covered thereby, notwithstanding anything to the
contrary in this Agreement;

 

                                                (iii)          To provide that the SAR be assumed by
the successor or survivor corporation, or a parent or subsidiary thereof, or
shall be substituted for by similar options, rights or awards covering the
stock of the successor or survivor corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares and
prices;

 

                                                (iv)          To make adjustments in the number and
type of shares of Common Stock (or other securities or property) subject to
outstanding SAR, and/or in the terms and conditions of (including the grant or
exercise price), and the criteria included in, outstanding SAR; or

 

                                                (v)           To provide that immediately upon the
consummation of such event, the SAR shall not be exercisable and shall
terminate; provided, that for a specified period of time prior to such event,
the SAR shall be exercisable as to all Shares covered thereby, and the
restrictions imposed under this Agreement upon some or all Shares may be terminated,
notwithstanding anything to the contrary in this Agreement.

 

                                (c)           In
connection with the occurrence of any Equity Restructuring, and notwithstanding
anything to the contrary in paragraphs 16(a) and 16(b), the number and type of
securities subject to the outstanding SAR and the exercise price or grant price
thereof, if applicable, will be proportionately adjusted. The adjustments
provided under this paragraph 16(c) shall be nondiscretionary and shall be
final and binding on the affected the Participant and the Company.

 

                                (d)           If
the Company undergoes an Acquisition, then any surviving corporation or entity
or acquiring corporation or entity, or affiliate of such corporation or entity,
may assume the SAR or may substitute similar stock awards (including an award
to acquire the same consideration paid to the stockholders in the transaction
described in this paragraph 16(d)) for those outstanding under this Agreement.
In the event any surviving corporation or entity or acquiring corporation or
entity in an Acquisition, or affiliate of such corporation or entity, does not
assume the SAR or does not substitute similar stock awards for the SAR, then if
the Participant’s status as a Service Provider has not terminated prior to such
event, the vesting of the SAR (and the time during which the SAR may be
exercised) shall be accelerated and made fully exercisable and all restrictions
thereon shall lapse at least ten (10) days prior to the closing of the
Acquisition (and the SAR terminated if not exercised prior to the closing of
such Acquisition).

 

                                (f)            The
existence of this Agreement shall not affect or restrict in any way the right
or power of the Company or the stockholders of the Company to make or authorize
any adjustment, recapitalization, reorganization or other change in the Company’s
capital structure or its business, any merger or consolidation of the Company,
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks whose rights are superior
to or affect the Common Stock or the rights thereof or which are convertible
into or exchangeable for Common Stock, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.

 

5

 

                17.           Amendment.  The provisions of this Agreement may be
amended or waived only by written agreement between the Company and the
Participant, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement will affect the validity, binding effect or
enforceability of this Agreement. Notwithstanding the foregoing, the Company
may amend, terminate or revoke this Agreement in any respect to the extent
determined necessary or desirable by the Company in its discretion to comply
with the requirements of Section 409A of the Code and the Department of
Treasury regulations and other guidance promulgated thereunder. Participant
expressly understands and agrees that no additional consent of Participant
shall be required in connection with such amendment, termination or revocation.

 

                18.           Successors and Assigns.  Subject to the provisions of paragraph 16
above, the Company may assign any of its rights under this Agreement to single
or multiple assignees, and the Stock Appreciation Right shall inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Participant and Participant’s heirs, executors, administrators, successors and
assigns.

 

                19.           Certain Definitions.  As used herein, the following definitions
shall apply:

 

                                (a)           “Acquisition”
means (i) any consolidation or merger of the Company with or into any other
corporation or other entity or person in which the stockholders of the Company
prior to such consolidation or merger own less than fifty percent (50%) of the
Company’s voting power immediately after such consolidation or merger, or (ii)
a sale of all or substantially all of the assets of the Company.

 

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

 

                                (c)           “Code”
means the Internal Revenue Code of 1986, as amended, or any successor statute
or statutes thereto. Reference to any particular Code section shall include any
successor section.

 

                                (d)           “Consultant”
means any consultant or adviser if: (i) the consultant or adviser renders bona
fide services to the Company or any Parent or Subsidiary of the Company; (ii)
the services rendered by the consultant or adviser are not in connection with
the offer or sale of securities in a capital-raising transaction and do not
directly or indirectly promote or maintain a market for the Company’s
securities; and (iii) the consultant or adviser is a natural person who has
contracted directly with the Company or any Parent or Subsidiary of the Company
to render such services.

 

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

 

                                (f)            “Employee”
means any person, including an officer or Director, who is an employee (as
defined in accordance with Section 3401(c) of the Code) of the Company or any
Parent or Subsidiary of the Company. A Service Provider shall not cease to be
an Employee in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. Neither service as a Director nor
payment of a director’s

 

6

 

 

                fee by the Company
shall be sufficient, by itself, to constitute “employment” by the Company.

 

                                (g)           “Equity
Restructuring” shall mean a non-reciprocal transaction between the Company
and its stockholders, such as a stock dividend, stock split, spin-off, rights offering
or recapitalization through a large, nonrecurring cash dividend, that affects
shares of Common Stock (or other securities of the Company) or the share price
of Common Stock (or of other securities) and causes a change in the per share
value of the Common Stock underlying the SAR.

 

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

 

                                                (i)            If the Common Stock is listed on any
established stock exchange or national market system, including, without
limitation, the Nasdaq Global Select Market, the Nasdaq Global Market or the
Nasdaq Capital Market, its Fair Market Value shall be the closing sales price
for a share of such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system on the day of determination (or the most
recent day on which sales were reported if none were reported on such date), as
reported in The Wall Street Journal or such other source as the Company deems
reliable;

 

                                                (ii)           If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for a share of the
Common Stock on the day of determination (or the most recent day on which bid
and asked prices were reported if none were reported on such date); or

 

                                                (iii)          In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Company.

 

                                (i)            “Parent” means any corporation, whether now or
hereafter existing (other than the Company), in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
last corporation in the unbroken chain owns stock possessing more than fifty
percent of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

 

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

 

                                (k)           “Subsidiary” means any corporation, whether now or
hereafter existing (other than the Company), in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing more than
fifty percent of the total combined voting power of all classes of stock in one
of the other corporations in such chain.

 

(Signature Page Follows)

 

7

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

 

 

	
  CONCEPTUS, INC.

  	
  PARTICIPANT

  
	
   

  	
   

  
	
  /s/ Gregory E. Lichtwardt

  	
   

  	
  /s/ Spencer Roeck

  	
   

  
	
  By: Gregory E. Lichtwardt

  	
  By: Spencer Roeck

  
	
  Its: Executive Vice President, Treasurer and

  	
   

  
	
  Chief Financial Officer

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  [Address]

  
				

 

 

8

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