INTUITIVE SURGICAL, INC.
STOCK OPTION AGREEMENT
Pursuant to the Grant Notice and this Stock Option Agreement, which
together shall be defined as the "Option Agreement" under the Plan, the Company
has granted you an option to purchase the number of shares of the Company's
common stock ("Common Stock") indicated in the Grant Notice at the exercise
price indicated in the 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 the limitations contained herein, your option will
vest as provided in the Grant Notice, provided that vesting will cease upon the
termination of your Continuous Service.
Notwithstanding the foregoing, if prior to the consummation of a Change in
Control your Continuous Service has not terminated AND if within twenty-four
(24) months following a Change in Control one of the following events occurs:
(i) your Continuous Service is terminated by the acquiror or successor without
Cause; (ii) the principal place of the performance of your responsibilities (the
"Principal Location") is changed to a location more than twenty-five (25) miles
from your Principal Location immediately prior to the Change in Control and you
voluntarily terminate your Continuous Service with the successor or acquiror; or
(iii) there is a material reduction in your compensation or responsibilities
(not involving a termination of Continuous Service for Cause) and you
voluntarily terminate your Continuous Service with the successor or acquiror;
then the unvested portion of this option shall immediately become fully vested
and exercisable and any Company repurchase option or reacquisition right with
respect to shares acquired by you under this option shall immediately lapse and
such shares shall be fully vested. For purposes of this Section 1, Cause shall
be defined to include (in addition to those items set forth in Section 2(c) of
the Plan) death and severe physical or mental disability.
2. EXERCISE PRIOR TO VESTING. If permitted in the Grant Notice (i.e., the
"Exercise Schedule" indicates that your option is "Immediately exercisable"),
and subject to the provisions of this 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 and then the earliest vesting installment of unvested shares;
(b) any shares so purchased from installments which 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;
(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; and
(d) your option shall not be exercisable with respect to any unvested
installment to the extent such exercise would cause the aggregate fair market
value of any shares subject to incentive stock options granted you by the
Company (valued as of their grant date) which would become exercisable for the
first time during any calendar year to exceed $100,000.
3. 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 any manner that is permitted by the Grant Notice.
4. WHOLE SHARES. Your option may only be exercised for whole shares.
5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, your option may not be exercised unless the shares issuable
upon exercise of your option are then registered under the Securities Act or, if
such shares 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 must also comply with other
applicable laws and regulations governing the option, and the option may not be
exercised if the Company determines that the exercise would not be in material
compliance with such laws and regulations.
6. TERM. The term of your option commences on the Date of Grant and expires
upon the earliest of:
(a) the Expiration Date indicated in the Grant Notice;
(b) the tenth (10th) anniversary of the Date of Grant;
(c) eighteen (18) months after your death, if you die during, or within
three (3) months after, the termination of your Continuous Service; or
(d) twelve (12) months after the termination of your Continuous Service
due to Disability;
(e) the termination of your Continuous Service for Cause; or
(f) three (3) months after the termination of your Continuous Service for
any other reason, provided that if during any part of such three (3) month
period the option is not exercisable solely because of the condition set forth
in paragraph 5, in which event the option shall not expire until the earlier of
the Expiration Date or until it shall have been exercisable for an aggregate
period of three (3) months after the termination of Continuous Service.
To obtain the federal income tax advantages associated with an
"incentive stock option," the Code requires that at all times beginning on the
date of grant of the option and ending on the day three (3) months before the
date of the option's exercise, you must be an employee of the Company or an
Affiliate of the Company, except in the event of your death or Disability. The
Company has provided for extended exercisability of your option under certain
circumstances for your benefit, but cannot guarantee that your option will
necessarily be treated
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as an "incentive stock option" if you provide services to the Company or an
Affiliate of the Company as a Consultant or if you exercise your option more
than three (3) months after the date your employment with the Company
terminates.
7. EXERCISE.
(a) You may exercise the vested portion of your option (and the unvested
portion of your option if the 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:
(i) as a condition to any exercise of your option, the Company may
require you to enter 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 are subject at the time of exercise; or (3) the
disposition of shares acquired upon such exercise;
(ii) you will notify the Company in writing within fifteen (15)
days after the date of any disposition of any of the shares of the Common Stock
issued upon exercise of an incentive stock option that occurs within two (2)
years after the date of your option grant or within one (1) year after such
shares of Common Stock are transferred upon exercise of your option; and
(iii) the Company (or a representative of the underwriters) may, in
connection with the first underwritten registration of the offering of any
securities of the Company under the Securities Act, require that you not sell,
dispose of, transfer, make any short sale of, grant any option for the purchase
of, or enter into any hedging or similar transaction with the same economic
effect as a sale, any shares of Common Stock or other securities of the Company
held by you, for a period of time specified by the underwriter(s) (not to exceed
one hundred eighty (180) days) following the effective date of the registration
statement of the Company filed under the Securities Act. You further agree to
execute and deliver such other agreements as may be reasonably requested by the
Company and/or the underwriter(s) which are consistent with the foregoing or
which are necessary to give further effect thereto. In order to enforce the
foregoing covenant, the Company may impose stop-transfer instructions with
respect to your Common Stock until the end of such period.
8. 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.
9. OPTION NOT A SERVICE CONTRACT. Your option is not an employment contract
and nothing in your option shall be deemed to create in any way whatsoever any
obligation on your
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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 of the Company, or their
respective stockholders, Board of Directors, Officers or Employees to continue
any relationship that you might have as a Director or Consultant for the Company
or an Affiliate.
10. 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 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.
11. 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.
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