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INCENTIVE STOCK OPTION
AGREEMENT
ATS Medical, Inc.
(the “Company”) has adopted the ATS Medical, Inc. 2000
Stock Incentive Plan (the “Plan”) which permits the
issuance of stock options for the purchase of shares of common
stock, $.01 par value, of the Company (the “Common
Stock”), and the Company has taken all necessary actions to
grant this Option to you (the “Optionee”) pursuant and
subject to the terms of the Plan, as follows:
1. Grant
of Option . The Company grants as of the date of this agreement
the right and option (hereinafter called the “Option”)
to purchase all or any part of an aggregate number of shares of
Common Stock (the “Shares”) at the price per share
provided pursuant to the Notice of Grant of Stock Options and
Option Agreement (the “Notice”), which constitutes the
first page of this agreement, and on the terms and conditions set
forth herein and in the Plan. It is understood and agreed that the
Option price is not less than the per share fair market value of
such Shares on the date this Option was granted. The Company
intends that this Option shall be an incentive stock option
governed by the provisions of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”). The
terms of the Plan and the Option shall be interpreted and
administered so as to satisfy the requirements of Section 422
of the Code. A copy of the Plan will be furnished upon request of
the Optionee.
2.
Termination of Option and Vesting of Option Rights
.
(a) This
Option shall in all events terminate at the close of business on
the date of expiration contained in the Notice (the
“Termination Date”) or such shorter period as is
prescribed herein. The Option may be exercised during the Option
period only as described in the vesting schedule contained in the
Notice.
(b) During
the lifetime of the Optionee, this Option shall be exercisable only
by Optionee and shall not be assignable or transferable by
Optionee, other than by will or the laws of descent and
distribution.
(c) The
Optionee understands that, to the extent that the aggregate fair
market value (determined at the time the Option was granted) of the
shares of Common Stock of the Company with respect to which all
options that are incentive stock options within the meaning of
Section 422 of the Code are exercisable for the first time by
the Optionee during any calendar year exceeds $100,000, in
accordance with Section 422(d) of the Code, such options shall be
treated as options that do not qualify as incentive stock
options.
3.
Acceleration of Exercisability Upon Change in Control .
Notwithstanding the said vesting schedule, the entire Option shall
become immediately exercisable upon a Change in Control (as defined
below) of the Company and shall terminate if not exercised
30 days
following the
date of a Change in Control of the Company. The Company shall
notify the Optionee in writing of the acceleration within
10 days of the Change in Control.
A “Change in
Control” of the Company shall be deemed to have occurred if
(a) a change in control occurs of a nature that would be
required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended, whether or not the
Company is then subject to such reporting requirement;
(b) more than 25 percent of the then outstanding common
shares of the Company is acquired by any person or group; or (c)
individuals who at the date hereof constitute the Board of
Directors of the Company cease for any reason to constitute at
least a majority thereof (unless the election or the nomination for
election of each new director was approved by a vote of at least
two-thirds of directors then still in office who were directors at
the beginning of the period and/or their successor directors who
were recommended or elected to succeed a beginning director by at
least two-thirds of the directors who were directors at the
beginning of the period).
4.
Exercise of Option after Death or Termination of Employment
. This Option shall terminate and may no longer be exercised if the
Optionee ceases to be employed by the Company or its subsidiaries,
if any, except that:
(a) In the event
that the Optionee shall cease to be employed by the Company or its
subsidiaries, if any, for the reason other than the
Optionee’s gross and willful misconduct or death or
disability, the Optionee shall have the right to exercise this
Option at any time within three months after such termination of
employment to the extent of the full number of Shares the Optionee
was entitled to purchase under this Option on the date of
termination.
(b) In the event
that the Optionee shall cease to be employed by the Company or its
subsidiaries, if any, by reason of the Opti
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