SEC FORM 4 SEC Form 4
FORM 4 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
 
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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
1. Name and Address of Reporting Person*
KNUDSON MARK B

(Last) (First) (Middle)
2800 PATTON ROAD

(Street)
ST. PAUL MN 55113

(City) (State) (Zip)
2. Issuer Name and Ticker or Trading Symbol
EnteroMedics Inc [ ETRM ]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
X Director 10% Owner
X Officer (give title below) Other (specify below)
Chrmn, Pres & CEO
3. Date of Earliest Transaction (Month/Day/Year)
10/29/2010
4. If Amendment, Date of Original Filed (Month/Day/Year)
6. Individual or Joint/Group Filing (Check Applicable Line)
X Form filed by One Reporting Person
Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 1,382(9) I Spouse Revocable Trust
Common Stock 3,215(9) I Family Limited Partnership
Common Stock 32,571(9) I(14) Revocable Trust 2003
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 6. Date Exercisable and Expiration Date (Month/Day/Year) 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Stock Option (right to buy) $2.76(9) 08/16/2004(1) 08/16/2014 Common Stock 11,575(9) 11,575(9) D
Stock Option (right to buy) $2.76(9) (2) 04/27/2015 Common Stock 7,915(9) 7,915(9) D
Stock Option (right to buy) $2.76(9) 04/20/2007(3) 04/20/2016 Common Stock 6,776(9) 6,776(9) D
Stock Option (right to buy) $31.14(9) 10/29/2010 D 42,124(9) 02/06/2008(3) 02/06/2017 Common Stock 42,124(9) (10) 0 D
Stock Option (right to buy) $1.9 10/29/2010 A 33,432 10/29/2010(11) 10/29/2017 Common Stock 33,432 (12) 33,432 D
Warrants (right to buy) $23.68(9) (4) 11/13/2010 Common Stock 337(9) 337(9) I Revocable Trust
Warrants (right to buy) $23.68(9) (4) 11/13/2010 Common Stock 169(9) 169(9) I Spouse Revocable Trust
Stock Option (right to buy) $49.63(9) 10/29/2010 D 70,970(9) 02/06/2008(5) 02/06/2018 Common Stock 70,970(9) (10) 0 D
Stock Option (right to buy) $1.9 10/29/2010 A 25,902(13) 10/29/2010(11) 10/29/2017 Common Stock 25,902 (12) 25,902 D
Stock Option (right to buy) $6.6(9) 10/29/2010 D 45,454(9) 03/04/2009(6) 02/04/2019 Common Stock 45,454(9) (10) 0 D
Stock Option (right to buy) $1.9 10/29/2010 A 44,131 10/29/2010(11) 10/29/2017 Common Stock 44,131 (12) 44,131 D
Warrant (Right to Buy) $8.28(9) 08/24/2009 02/24/2013 Common Stock 5,498(9) 5,498(9) I Revocable Trust 2003
Stock Option (right to buy) $22.2(9) 10/29/2010 D 60,566(9) 06/30/2009(7) 06/22/2019 Common Stock 60,566(9) (10) 0 D
Stock Option (right to buy) $1.9 10/29/2010 A 50,472 10/29/2010(11) 10/29/2017 Common Stock 50,472 (12) 50,472 D
Stock Option (right to buy) $3.78(9) 11/18/2009(8) 11/18/2019 Common Stock 20,833(9) 20,833(9) D
Explanation of Responses:
1. 32,968 shares vest immediately, of the remaining shares 25% vest on the first anniversary of the date of grant and thereafter at 1/36th per month for 36 months, beginning the date shown.
2. Currently 100% vested in accordance with achievement of milestone vesting terms.
3. Vests 25% on the first anniversary of the date of grant and 1/36th per month for 36 months thereafter, beginning the date shown.
4. Immediately exercisable.
5. 50% vests in increments of 1/48th per month beginning the date shown, remaining 50% vests in accordance with achievement of milestone vesting terms.
6. Vests in increments of 1/48th per month beginning the date shown.
7. Vests in increments of 2.0833% per month beginning the date shown.
8. 25% vests immediately and the remaining 75% vests on 11/15/2010; 100% of unvested shares become vested upon change in control.
9. On July 9, 2010, EnteroMedics Inc. effected a 1-for-6 reverse stock split of its issued and outstanding shares of common stock, par value $0.01 per share, resulting in a proportional decrease in the total shares of common stock beneficially owned by the reporting person, all previously reported exercise prices, option grants and similar instruments convertible into common stock were proportionally adjusted to reflect the reverse split.
10. This option was tendered by the reporting person pursuant to EnteroMedics' option exchange offer and was cancelled by the company at the expiration of the offer (see footnote 12).
11. Options vest 33% on date noted and thereafter at 1/24th per month.
12. On October 29, 2010, in exchange for the cancelled option referenced in footnote 10, the company granted the reporting person a replacement option for the number of shares reflected in column 9 of this line item at the exercise price noted in column 2 of this line item.
13. The lesser number of shares underlying the new option issued in exchange for this option reflects the cancellation of the milestone portion of the award in accordance with the terms of the option exchange offer.
14. Starting with a Form 4 filed on 1/20/2010 reporting an option grant in November 2009, the reporting person's filings have erroneously reflected a line item for indirect holdings by a Revocable Trust. This line item was an incorrect duplication and the total shares reported are included in the total reflected for the Revocable Trust 2003. In an amendment filed concurrently herewith, the duplicative line has been removed and this filing and all filings since 1/20/2010 are deemed to be amended to correct the holdings of the reporting person.
Remarks:
THIS FILING REFLECTS THE POST SPLIT NUMBERS OF ALL SHARES, OPTIONS AND SIMILAR INSTRUMENTS HELD BY THE REPORTING PERSON AS PREVIOUSLY REPORTED (SEE FOOTNOTE (9).
/s/ Mark B. Knudson 11/01/2010
** Signature of Reporting Person Date
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