Exhibit 10.3

 

NMT MEDICAL, INC.

 

INCENTIVE STOCK OPTION LETTER AGREEMENT

 

1996 PLAN

 

TO: [First Name] [Last Name]

 

We are pleased to inform you that you have been selected by the Plan
Administrator of the NMT Medical, Inc. (the “Company”) 1996 Stock Option Plan
(the “Plan”) to receive an incentive option as defined in Section 422 of the
Internal Revenue Code of 1986, as amended, for the purchase of <<Number>> shares
of the Company’s common stock, $.001 par value, at an exercise price of
<<Price>> per share (the “exercise price”). The date of grant of the option is
<<Grant Date>>. A copy of the Plan is available and the provisions thereof,
including, without limitation, those relating to withholding taxes, are
incorporated into this Agreement by reference.

 

The terms of the option are as set forth in the Plan and in this Agreement. The
most important of the terms set forth in the Plan are summarized as follows:

 

Term. The term of the option is ten years from date of grant, unless sooner
terminated.

 

Exercise. During your lifetime only you can exercise the option. The Plan also
provides for exercise of the option by the personal representative of your
estate or the beneficiary thereof following your death. You may use the Notice
of Exercise in the form attached to this Agreement when you exercise the option.

 

Payment for Shares. The option may be exercised by the delivery of:

 

(a) Cash, personal check (unless at the time of exercise the Plan Administrator
determines otherwise), or bank certified or cashier’s checks; or

 

(b) Unless the Plan Administrator in its sole discretion determines otherwise, a
properly executed Notice of Exercise, together with irrevocable instructions to
a broker to promptly deliver to the Company the amount of sale or loan proceeds
to pay the exercise price.

 

Termination. The option will terminate immediately upon termination for cause,
as defined in the Plan, or three months after cessation of your relationship
with the Company or an Affiliate thereof, unless cessation is due to death or
total disability, in which case the option shall terminate 12 months after
cessation of such relationship.

 

Transfer of Option. The option is not transferable except by will or by the
applicable laws of descent and distribution or pursuant to a qualified domestic
relations order.

 

Vesting. During the period of Optionee’s continuous relationship with the
Company or any subsidiary thereof, the option shall become exercisable <<Vesting
Schedule>>.

 

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<<In the event of an Acquisition Event (as defined in the Plan), and as long as
the Participant is an employee, officer, director, consultant or advisor of the
Company at such time, this option shall become immediately exercisable in full.
An “Acquisition Event” is defined in the Plan to mean (a) any merger or
consolidation of the Company with or into another entity as a result of which
the Common Stock is converted into or exchanged for the right to receive cash,
securities or other property or (b) any exchange of shares of the Company for
cash, securities or other property pursuant to a statutory share exchange
transaction.>> <<Optional provision depending on grant>>

 

YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 8 OF THE PLAN WHICH DESCRIBES
CERTAIN IMPORTANT CONDITIONS RELATING TO FEDERAL AND STATE SECURITIES LAWS THAT
MUST BE SATISFIED BEFORE THE OPTION CAN BE EXERCISED AND BEFORE THE COMPANY CAN
ISSUE ANY SHARES TO YOU. THE COMPANY HAS NO OBLIGATION TO REGISTER THE SHARES
THAT WOULD BE ISSUED UPON THE EXERCISE OF YOUR OPTION, AND IF IT NEVER REGISTERS
THE SHARES, YOU WILL NOT BE ABLE TO EXERCISE THE OPTION UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE. AT THE PRESENT TIME, EXEMPTIONS FROM REGISTRATION
UNDER FEDERAL AND STATE SECURITIES LAWS ARE VERY LIMITED AND MIGHT BE
UNAVAILABLE TO YOU PRIOR TO THE EXPIRATION OF THE OPTION. CONSEQUENTLY, YOU
MIGHT HAVE NO OPPORTUNITY TO EXERCISE THE OPTION AND TO RECEIVE SHARES UPON SUCH
EXERCISE. IN ADDITION, YOU SHOULD CONSULT WITH YOUR TAX ADVISOR CONCERNING THE
RAMIFICATIONS TO YOU OF HOLDING OR EXERCISING YOUR OPTIONS OR HOLDING OR SELLING
THE SHARES UNDERLYING SUCH OPTIONS.

 

You understand that, during any period in which the shares which may be acquired
pursuant to your option are subject to the provisions of Section 16 of the
Securities Exchange Act of 1934, as amended (and you yourself are also so
subject), in order for your transactions under the Plan to qualify for the
exemption from Section 16(b) provided by Rule 16b-3, a total of six months must
elapse between the grant of the option and the sale of shares underlying the
option.

 

Please execute the Acceptance and Acknowledgement set forth below on the
enclosed copy of this Agreement and return it to the undersigned.

 

Very truly yours,

NMT MEDICAL, INC.

By:

   

Name:

   

Title:

   

 

ACCEPTANCE AND ACKNOWLEDGEMENT

 

I, a resident of the State of                     , accept the stock option
described above granted (<<Grant Date>>) under the NMT Medical, Inc. 1996 Stock
Option Plan, and acknowledge that a copy of this plan will be provided to me
upon request. I understand I am responsible for the terms set forth in the Plan,
including the provisions of Section 8 thereof.

 

Dated: 

   

Taxpayer I.D. Number(S.S. #): 

   

Signature: 

   

 

Grant dated, <<Grant Date>>, for [First Name] [Last Name]