Exhibit 10.2

 

SUNSHINE HEART, INC.

STOCK OPTION GRANT NOTICE

UNDER THE NEW-HIRE EQUITY INCENTIVE PLAN

 

Sunshine Heart, Inc. (the “Company”), pursuant to its New-Hire Equity Incentive
Plan (the “Plan”), hereby grants to Participant an Option to purchase the number
of shares of the Company’s Common Stock set forth below as an inducement
material to the Participant entering into an employment relationship with the
Company.  This Option is not intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and shall therefore be treated a
non-qualified option.  This Option is subject to all of the terms and conditions
as set forth in this notice, in the Option Agreement, the Plan and the Notice of
Exercise, all of which are attached hereto and incorporated herein in their
entirety. Capitalized terms not explicitly defined herein but defined in the
Plan or the Option Agreement will have the same definitions as in the Plan or
the Option Agreement. If there is any conflict between the terms in this notice
and the Plan, the terms of the Plan will control.

 

Participant:

 

 

 

 

 

Date of Grant:

 

 

 

 

 

Vesting Commencement Date:

 

 

 

 

 

Number of Shares Subject to Option:

 

 

 

 

 

Exercise Price (Per Share):

 

 

 

 

 

Expiration Date:

 

 

 

 

 

Vesting Schedule:

 

1/48th of the shares will vest on the twelfth day of each month commencing the
Vesting Commencement Date.

 

 

 

Payment:

 

By one or a combination of the following items (described in the Option
Agreement):

 

 

 

 

 

o By cash, check, bank draft or money order payable to the Company;

 

 

 

 

 

o By delivery of already-owned shares if the shares are publicly traded;

 

 

 

 

 

o By a “net exercise” arrangement (as described in your Option Agreement); or

 

 

 

 

 

o Pursuant to a broker assisted cashless exercise.

 

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and
understands and agrees to, this Stock Option Grant Notice, the Option Agreement
and the Plan. Participant acknowledges and agrees that this Stock Option Grant
Notice and the Option Agreement may not

 

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be modified, amended or revised except as provided in the Plan. Participant
further acknowledges and agrees that this Option was granted to Participant as
an inducement material the Participant entering into an employment relationship
with the Company.  Participant further acknowledges that as of the Date of
Grant, this Stock Option Grant Notice, the Option Agreement, and the Plan set
forth the entire understanding between Participant and the Company regarding
this Option award and supersede all prior oral and written agreements, promises
and/or representations on that subject with the exception of (i) Options
previously granted and delivered to Participant, (ii) any compensation recovery
policy that is adopted by the Company or is otherwise required by applicable law
and (iii) any written service severance arrangement that would provide for
vesting acceleration of this Option upon the terms and conditions set forth
therein.

 

By accepting this Option, Participant consents to receive such documents by
electronic delivery and to participate in the Plan through an on-line or
electronic system established and maintained by the Company or another third
party designated by the Company.

 

 

SUNSHINE HEART, INC.

 

OPTIONHOLDER:

 

 

 

By:

 

 

 

Signature

 

Signature

 

 

 

Title:

 

 

Date:

 

 

 

 

Date:

 

 

 

 

ATTACHMENTS: Option Agreement, New-Hire Equity Incentive Plan and Notice of
Exercise

 

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ATTACHMENT I

 

OPTION AGREEMENT

 

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ATTACHMENT II

 

NEW-HIRE EQUITY INCENTIVE PLAN

 

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ATTACHMENT III

 

NOTICEOF EXERCISE

 

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SUNSHINE HEART, INC.
NEW-HIRE EQUITY INCENTIVE PLAN

 

OPTION AGREEMENT FOR EMPLOYEES (NEW HIRES ONLY)
(NONSTATUTORY STOCK OPTION)

 

Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Option
Agreement, Sunshine Heart, Inc. (the “Company”) has granted you an Option
(“Option”) under its New-Hire 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 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 provisions contained herein, your Option
will vest as provided in your Grant Notice.  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.

 

(a)           You may exercise the vested portion of your Option during its term
by (i) delivering the Notice of Exercise, attached hereto as Exhibit A and by
completing such other documents and/or procedures designated by the Company for
exercise and (ii) paying the exercise price and any applicable withholding taxes
to the Company’s Secretary, stock plan administrator, or such other person as
the Company may designate.  You may exercise your Option only for whole shares
of Common Stock; the Company shall not be required to issue any fractional
shares of Common Stock under any circumstances.

 

(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 your Option.

 

(c)           The exercise of your Option must comply with all 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.  Notwithstanding anything to the contrary
contained herein, the Committee may suspend your right to exercise the Option
for any period of up to 180 days in any 365-day period for which the Committee
determines, in good faith, that such suspension would be necessary or advisable
in order to comply with the requirements of (i) any applicable federal
securities law or rule or regulation thereunder; (ii) any rule of a national
securities exchange, national securities association, or other self-regulatory
organization; or (iii) any other federal or state law or regulation (each an
“Option Exercise Suspension”).  Notwithstanding the foregoing, no Option

 

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Exercise Suspension shall extend the term of the Option in a manner that would
result in the Option becoming nonqualified deferred compensation subject to
Section 409A of the Code.

 

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 one or more of the following
manners unless otherwise provided in your Grant Notice:

 

(a)           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)           Provided that at the time of exercise the Common Stock is publicly
traded, by delivery to the Company (either by actual delivery or attestation) of
already-owned shares of Common Stock 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, will 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 delivery to the Company of Common Stock if
doing so would violate the provisions of the Listing Rules, any law, regulation
or agreement restricting the redemption of the Company’s stock.

 

(c)           Subject to the consent of the Company at the time of exercise, by
a “net exercise” arrangement pursuant to which the Company will reduce the
number of shares of Common Stock issued upon exercise of your Option by the
largest whole number of shares with a Fair Market Value that does not exceed the
aggregate exercise price.  You must pay any remaining balance of the aggregate
exercise price not satisfied by the “net exercise” in cash or other permitted
form of payment.  Shares of Common Stock will no longer be outstanding under
your Option and will not be exercisable thereafter if those shares are (i) used
to pay the exercise price pursuant to the “net exercise,” (ii) delivered to you
as a result of such exercise, and (iii) withheld to satisfy tax withholding
obligations.

 

5.             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 one or more of the following
manners unless otherwise provided in your Grant Notice:

 

(a)           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)

 

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by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds.

 

(b)           Provided that at the time of exercise the Common Stock is publicly
traded, by delivery to the Company (either by actual delivery or attestation) of
already-owned shares of Common Stock 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, will 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 delivery to the Company of Common Stock if
doing so would violate the provisions of the Listing Rules, any law, regulation
or agreement restricting the redemption of the Company’s stock.

 

(c)           Subject to the consent of the Company at the time of exercise, by
a “net exercise” arrangement pursuant to which the Company will reduce the
number of shares of Common Stock issued upon exercise of your Option by the
largest whole number of shares with a Fair Market Value that does not exceed the
aggregate exercise price.  You must pay any remaining balance of the aggregate
exercise price not satisfied by the “net exercise” in cash or other permitted
form of payment.  Shares of Common Stock will no longer be outstanding under
your Option and will not be exercisable thereafter if those shares are (i) used
to pay the exercise price pursuant to the “net exercise,” (ii) delivered to you
as a result of such exercise, and (iii) withheld to satisfy tax withholding
obligations.

 

6.             TERM.  You may not exercise your Option before the Date of Grant
or after its Expiration Date. Subject to Section 6, below, the term of your
Option commences on the Date of Grant and expires upon the earliest of the
following:

 

(a)           three (3) months after the termination of your Continuous Service
for any reason other than your death or Disability;

 

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

 

(c)           the Expiration Date indicated in your Grant Notice; or

 

(d)           the day before the tenth (10th) anniversary of the Date of Grant.

 

7.             CORPORATE TRANSACTION; CHANGE IN CONTROL.  In the event of a
Corporate Transaction or Change in Control, your Option shall be subject to the
provisions of Sections 9(c) and (d) of the Plan, including any forfeiture
provisions described therein.

 

8.             TRANSFERABILITY.  Your Option is not transferable, except (i) by
will or by the laws of descent and distribution, (ii) pursuant to a domestic
relations order and (iii) with the prior written approval of the Company, by
instrument to an inter vivos or testamentary trust, in a form

 

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accepted by the Company, in which the Option is to be passed to beneficiaries
upon the death of the trust or (settlor).

 

9.             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, 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 your Option.

 

(b)           Upon your request and subject to approval by the Company, in its
sole discretion, and in compliance with any applicable conditions or
restrictions of law, 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 classification of your Option as a liability for financial accounting
purposes). 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 unless such obligations are satisfied.

 

10.          TAX CONSEQUENCES. You hereby agree that the Company does not have a
duty to design or administer the Plan or its other compensation programs in a
manner that minimizes your tax liabilities. You will not make any claim against
the Company, or any of its Officers, Directors, Employees or Affiliates related
to tax liabilities arising from your Option or your other compensation. In
particular, you acknowledge that this Option is exempt from Section 409A of the
Code only if the exercise price per share specified in the Grant Notice is at
least equal to the “fair market value” per share of the Common Stock on the Date
of Grant and there is no other impermissible deferral of compensation associated
with the Option.

 

11.          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.  The Company may, in its sole discretion,
decide to deliver any documents related to participation in the Plan and this
Option by electronic means or to request your consent to participate in the Plan
by electronic means. By accepting this Option, you consent to receive such
documents by electronic delivery and to participate in the Plan through an
on-line or electronic system established and maintained by the Company or
another third party designated by the Company.

 

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12.          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. If there is any conflict between the provisions of your Option and
those of the Plan, the provisions of the Plan will control. In addition, your
Option (and any compensation paid, shares issued under your Option, or proceeds
received upon the sale of such shares) is subject to recoupment in accordance
with The Dodd—Frank Wall Street Reform and Consumer Protection Act and any
implementing regulations thereunder, any clawback or compensation recovery
policy adopted by the Company and any compensation recovery policy otherwise
required by applicable law.

 

13.          EFFECT ON OTHER EMPLOYEE BENEFIT PLANS.  The value of this Option
will not be included as compensation, earnings, salaries, or other similar terms
used when calculating your benefits under any employee benefit plan sponsored by
the Company or any Affiliate, except as such plan otherwise expressly provides.
The Company expressly reserves its rights to amend, modify, or terminate any of
the Company’s or any Affiliate’s employee benefit plans.

 

14.          VOTING RIGHTS.  You will not have voting or any other rights as a
stockholder of the Company with respect to the shares to be issued pursuant to
this Option until such shares are issued to you. Upon such issuance, you will
obtain full voting and other rights as a stockholder of the Company. Nothing
contained in this Option, and no action taken pursuant to its provisions, will
create or be construed to create a trust of any kind or a fiduciary relationship
between you and the Company or any other person.

 

15.          SEVERABILITY.  If all or any part of this Option Agreement or the
Plan is declared by any court or governmental authority to be unlawful or
invalid, such unlawfulness or invalidity will not invalidate any portion of this
Option Agreement or the Plan not declared to be unlawful or invalid. Any
Section of this Option Agreement (or part of such a Section) so declared to be
unlawful or invalid shall, if possible, be construed in a manner which will give
effect to the terms of such Section or part of a Section to the fullest extent
possible while remaining lawful and valid.

 

16.          CONSENT TO TRANSFER OF PERSONAL DATA.  In administering the Plan,
or to comply with applicable legal, regulatory, tax, or accounting requirements,
it may be necessary for the Company to transfer certain Participant data to an
affiliate or to its outside service providers or governmental agencies. By
accepting the Option, you consent, to the fullest extent permitted by law, to
the use and transfer, electronically or otherwise, of your personal data to such
entities for such purposes.

 

17.          MISCELLANEOUS.

 

(a)           The rights and obligations of the Company under your Option will
be transferable to any one or more persons or entities, and all covenants and
agreements hereunder will inure to the benefit of, and be enforceable by the
Company’s successors and assigns.

 

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(b)           You agree upon request to execute any further documents or
instruments necessary or desirable in the sole determination of the Company to
carry out the purposes or intent of your Option.

 

(c)           You acknowledge and agree that you have reviewed your Option in
its entirety, have had an opportunity to obtain the advice of counsel prior to
executing and accepting your Option, and fully understand all provisions of your
Option.

 

(d)           This Option Agreement will be subject to all applicable laws,
rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.

 

(e)           All obligations of the Company under the Plan and this Option
Agreement will be binding on any successor to the Company, whether the existence
of such successor is the result of a direct or indirect purchase, merger,
consolidation, or otherwise, of all or substantially all of the business and/or
assets of the Company.

 

*     *     *

 

This Option Agreement will be deemed to be signed by you upon the signing by you
of the Stock Option Grant Notice to which it is attached.

 

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NOTICE OF EXERCISE

 

SUNSHINE HEART, INC.

 

12988 Valley View Road

 

Eden Prairie, MN 55344

Date of Exercise:

 

 

This constitutes notice to Sunshine Heart, Inc. (the “Company”) under my Option
that I elect to purchase the below number of shares of Common Stock of the
Company (the “Shares”) for the price set forth below.

 

Type of Option (check one):

 

Nonstatutory

 

 

 

Stock Option dated:

 

 

 

 

 

Number of Shares as to which Option is exercised:

 

 

 

 

 

Certificates to be issued in name of:

 

 

 

 

 

Total exercise price:

 

$                  

 

 

 

Cash payment delivered herewith:

 

$                  

 

 

 

[Value of                    Shares delivered herewith(1):

 

$]                 

 

 

 

[Value of                    Shares pursuant to net exercise(2):

 

$]                 

 

 

 

[[Regulation T Program (cashless exercise(3)):

 

$]                 

 

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(1)                                 Shares must meet the public trading
requirements set forth in the Option. Shares must be valued in accordance with
the terms of the Option being exercised, and must be owned free and clear of any
liens, claims, encumbrances or security interests. Certificates must be endorsed
or accompanied by an executed assignment separate from certificate.

(2)                                 Sunshine Heart, Inc. must have established
net exercise procedures at the time of exercise, in order to utilize this
payment method.

(3)                                 Shares must meet the public trading
requirements set forth in the option.

 

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By this exercise, I agree (i) to provide such additional documents as you may
require pursuant to the terms of the Sunshine Heart, Inc. New-Hire Equity
Incentive Plan, and (ii) to provide for the payment by me to you (in the manner
designated by you) of your withholding obligation, if any, relating to the
exercise of this Option.

 

Very truly yours,

 

 

 

 

 

 

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