Exhibit 10.5

 

SENSEONICS, INCORPORATED

1997 STOCK OPTION PLAN, AS AMENDED AND RESTATED

NONQUALIFIED STOCK OPTION AGREEMENT

 

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SENSEONICS, INCORPORATED

1997 STOCK OPTION PLAN, AS AMENDED AND RESTATED

NONQUALIFIED STOCK OPTION AGREEMENT

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

GRANT OF OPTION

1

2.

TERMS OF PLAN

2

3.

PRICE

2

4.

VESTING IN OPTIONS

2

 

(a)

Vesting Schedule

2

 

(b)

Death or Disability; Change of Control

2

5.

EXERCISE OF OPTION

3

 

(a)

Time of Exercise of Option

3

 

(b)

Termination of Option

3

 

(c)

Method of Exercise of Option

4

6.

NON-TRANSFERABILITY OF OPTION

4

7.

RIGHT OF FIRST REFUSAL; REPURCHASE RIGHT; AND RIGHT OF PARTICIPATION IN SALES

5

 

(a)

Right of First Refusal

5

 

(b)

Repurchase Right

7

 

(c)

Right of Participation in Sales

7

 

(d)

Publicly Traded Stock

8

 

(e)

Legend Describing Restrictions and Obligations

8

8.

FORFEITURE OF GAIN

8

9.

EFFECT OF CHANGES IN CAPITALIZATION

9

 

(a)

Changes in Stock

9

 

(b)

Reorganization in Which the Corporation Is the Surviving Corporation

9

 

(c)

Dissolution, Liquidation, Sale of Assets, Reorganization in Which the
Corporation Is Not the Surviving Corporation, Change of Control

10

 

(d)

Adjustments

11

 

(e)

No Limitations on Corporation

11

10.

REQUIREMENTS OF LAW

11

11.

RIGHTS AS STOCKHOLDER

12

12.

WITHHOLDING OF TAXES

12

13.

MARKET STAND-OFF PROVISION; OTHER AGREEMENTS

12

14.

DISCLAIMER OF RIGHTS

13

 

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15.

INTERPRETATION OF THIS OPTION AGREEMENT

13

16.

GOVERNING LAW

13

17.

BINDING EFFECT

13

18.

NOTICE

13

19.

ENTIRE AGREEMENT

14

 

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SENSEONICS, INCORPORATED

1997 STOCK OPTION PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

 

This Stock Option Agreement (the “Option Agreement”) is made as of
             , by and between Senseonics, Incorporated, a Delaware corporation
(the “Corporation”), and                  , an individual who is employed by the
Corporation or its subsidiaries (the “Optionee”).

 

WHEREAS, the Board of Directors of the Corporation (the “Board”) has duly
adopted and approved the Senseonics, Incorporated 1997 Stock Option Plan, as
amended and restated (the “Plan”), which Plan authorizes the Corporation to
grant to eligible individuals options for the purchase of shares of the
Corporation’s common stock, par value $.01 per share (the “Stock”); and

 

WHEREAS, the Corporation has determined that it is desirable and in its best
interests to grant to the Optionee, pursuant to the Plan, an option to purchase
a certain number of shares of Stock, in order to provide the Optionee with an
incentive to advance the interests of the Corporation and any subsidiary thereof
within the meaning of Rule 405 of Regulation C under the Securities Act of 1933,
as amended (with the term “person” as used in such Rule 405 being defined as in
Section 2(2) of such Act) (a “Subsidiary”), all according to the terms and
conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties hereto do hereby agree as follows:

 

1.                                                                                     
GRANT OF OPTION

 

Subject to the terms of the Plan, a copy of which has been provided to the
Optionee, the Corporation hereby grants to the Optionee the right and option
(the “Option”) to purchase from the Corporation, on the terms and subject to the
conditions set forth in the Plan and in this Option Agreement, 750 shares of
Stock.  This Option shall not constitute an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).  The date of grant of this Option is                 , the date on
which the grant of the Option was approved by the Board or an authorized
committee thereof.

 

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2.                                                                                     
TERMS OF PLAN

 

The Option evidenced by this Option Agreement is granted subject to the terms
and conditions set forth in the Plan.  All terms and conditions of the Plan, as
it may be amended from time to time, are hereby incorporated into this Option
Agreement by reference and shall be deemed to be part of this Option Agreement,
without regard to whether such terms and conditions are not otherwise set forth
in this Option Agreement.  In the event that there is any inconsistency between
the provisions of this Option Agreement and the provisions of the Plan, the
provisions of the Plan shall govern.

 

3.                                                                                     
PRICE

 

The purchase price for the shares of Stock subject to the Option evidenced by
this Option Agreement is $       per share (the “Option Price”), which price is
not less than 100 percent of the Fair Market Value of the shares of Stock, as
determined by the Board, on the date of grant of this Option.

 

4.                                                                                     
VESTING IN OPTIONS

 

(a)                                 Vesting Schedule

 

 

 

(b)                                 Death or Disability; Change of Control

 

If the Optionee’s service with the Corporation or any Subsidiary should
terminate because of his or her death or Disability, this Option shall become
100% vested upon termination of service.  For purposes of this Option Agreement,
the term “Disability” shall mean “permanent and total disability” as defined in
Section 22(e)(3) of the Code.  In addition, this Option, to the extent it has
not earlier terminated, shall become 100% vested upon the occurrence of a
“change of control” (as defined in section 9(c) below).

 

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5.                                                                                     
EXERCISE OF OPTION

 

Except as otherwise provided herein, and subject to the provisions of the Plan,
the Option granted pursuant to this Option Agreement shall be subject to
exercise as follows:

 

(a)                                 Time of Exercise of Option

 

The Optionee may exercise the Option (subject to the limitations on exercise set
forth in this Option Agreement and in the Plan) to the extent the Option is
vested and has not terminated under Section 5(b).  No single exercise of the
Option shall be for less than 100 shares of Stock, unless the number of shares
purchased is the total number available for purchase under this Option at the
time of exercise.

 

(b)                                 Termination of Option

 

The Option shall terminate upon the earliest of:

 

(i)                                     the expiration of a period of ten years
from the date of grant of the Option, as set forth in Section 1 above;

(ii)                                  the occurrence of a transaction or event
described in Section 9(c) which causes termination of the Option;

(iii)                               the Optionee’s termination of employment or
other relationship with the Corporation or a Subsidiary, to the extent the
Option has not become vested in accordance with Section 4;

(iv)                              the Optionee’s termination of employment or
other relationship with the Corporation or a Subsidiary for Cause;

(v)                                 one year after the Optionee’s termination of
employment or other relationship with the Corporation or a Subsidiary due to
death or Disability (as defined above); or

(vi)                              six months after the Optionee’s termination of
employment or other relationship with the Corporation or a Subsidiary other than
for Cause, death or Disability to the extent the Option has become vested in
accordance with Section 4.

 

For purposes of this Option Agreement, the term “Cause” means, as determined by
the Board, (a) the Optionee’s willful and substantial misconduct with respect to
the business and affairs of the Corporation or any Subsidiary or affiliate
thereof, (b) the Optionee’s neglect of duties or failure to act which can
reasonably be expected to materially adversely affect the business or affairs of
the Corporation or any Subsidiary or affiliate thereof, (c) the commission by
the Optionee of any act involving moral turpitude or fraud or (d) the Optionee’s
conviction of any felony, or of any misdemeanor involving fraud, theft,
embezzlement, forgery or moral turpitude.

 

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(c)                                  Method of Exercise of Option

 

Subject to the terms and conditions of this Option Agreement, an Option that is
exercisable hereunder may be exercised by delivery to the Corporation on any
business day, at its principal office addressed to the attention of the Board,
of written notice of exercise, which notice shall specify the number of shares
for which the Option is being exercised, and shall be accompanied by payment in
full of the Option Price of the shares for which the Option is being exercised. 
Payment of the Option Price for the shares of Stock purchased pursuant to the
exercise of the Option shall be made (a) in cash or by check payable to the
order of the Corporation; (b) through the tender to the Corporation of shares of
Stock, which shares shall be valued, for purposes of determining the extent to
which the Option Price has been paid thereby, at their fair market value
(determined in the manner described in Section 9 of the Plan) on the date of
exercise; or (c) by a combination of the methods described in (a) and
(b) hereof.  Shares of Stock acquired by the Optionee through exercise of an
Option may be surrendered in payment of the exercise price of Options.  On and
after the date shares of Stock are publicly traded on an established securities
market, payment in full of the Option Price need not accompany the written
notice of exercise provided the notice directs that the Stock certificate or
certificates for the shares for which the Option is exercised be delivered to a
licensed broker acceptable to the Corporation as the agent for the individual
exercising the Option and, at the time such Stock certificate or certificates
are delivered, the broker tenders to the Corporation cash (or cash equivalents
acceptable to the Corporation) equal to the Option Price.  An attempt to
exercise any Option granted hereunder other than as set forth above shall be
invalid and of no force and effect.  Promptly after the exercise of an Option
and the payment in full of the Option Price of the shares of Stock covered
thereby, the Optionee shall be entitled to the issuance of a Stock certificate
or certificates evidencing such individual’s ownership of such shares.  The
Optionee shall have none of the rights of a stockholder until the shares of
Stock covered hereby are fully paid and issued to the Optionee and, except as
provided in Section 9 hereof, no adjustment shall be made for dividends or other
rights for which the record date is prior to the date of such issuance.

 

6.                                                                                     
NON-TRANSFERABILITY OF OPTION.

 

During the lifetime of the Optionee, only such Optionee (or, in the event of
legal incapacity or incompetency, the Optionee’s guardian or legal
representative) may exercise the Option.  No Option shall be assignable or
transferable by the Optionee to whom it is granted other than by will or the
laws of descent and distribution.

 

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7.                                                                                     
RIGHT OF FIRST REFUSAL; REPURCHASE RIGHT; AND RIGHT OF PARTICIPATION IN SALES

 

(a)                                 Right of First Refusal

 

(i)                                     If at any time the Optionee desires to
sell any part of the Stock purchased pursuant to this Option (“Option Stock”)
pursuant to a bona fide offer from a third party (the “Proposed Transferee”)
other than in a Permitted Transfer (as defined in section (viii) below), the
Optionee shall submit a written offer (the “Offer”) to sell such shares first to
the Corporation and then to the Purchasers (as defined in section (vii) below)
on terms and conditions, including price, not less favorable to the Corporation
or the Purchasers than those on which the Optionee proposes to sell such shares
to the Proposed Transferee.  Each Offer shall disclose the identity of the
Proposed Transferee, the shares proposed to be sold, the total number of shares
owned by the Optionee, the terms and conditions, including price, of the
proposed sale, and any other material facts relating to the proposed sale.  Each
Offer shall further state that the Corporation and the Purchasers may acquire,
in accordance with the provisions of this Option Agreement, all or any portion
of the offered Option Stock for the price and upon the other terms and
conditions, including deferred payment (if applicable), set forth therein.

 

(ii)                                  The Corporation shall have the first right
to purchase any or all of the Option Stock described in an Offer, and shall
provide notice to the Optionee stating the number of shares it desires to
purchase within 30 days of the Offer.  If the Corporation shall elect to
purchase less than all of the shares contained in an Offer, then the Optionee
shall submit a second Offer as to the remaining shares (the “Offered Shares”) to
the Purchasers.  Each Purchaser shall have the absolute right to purchase that
number of Offered Shares as shall be equal to the number of Offered Shares
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock then owned by such Purchaser and the denominator of which shall
be the aggregate number of shares of Stock then owned by all of the Purchasers. 
For purposes of this Option Agreement, all of the Stock which a Purchaser has
the right to acquire from the Corporation upon the conversion, exercise or
exchange of any of the securities of the Corporation then owned by such
Purchaser shall be deemed to be shares then owned by such Purchaser (the amount
of Offered Shares that each Purchaser is entitled to purchase under this Option
Agreement shall be referred to as its “Pro Rata Fraction”).

 

(iii)                               The Purchasers shall have a right of
oversubscription such that if any Purchaser fails to buy the Offered Shares up
to its Pro Rata Fraction, the other Purchasers shall, among them, have the right
to purchase up to the balance of the Offered Shares not so purchased.  Such
right of oversubscription may

 

5

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be exercised by a Purchaser by agreeing to purchase the Offered Shares as to
more than its Pro Rata Fraction.  If, as a result thereof, such
oversubscriptions exceed the total number of Offered Shares available in respect
of such oversubscription privilege, the oversubscribing Purchasers shall be cut
back with respect to their oversubscriptions on a pro rata basis in accordance
with their respective Pro Rata Fractions or as they may otherwise agree among
themselves.

 

(iv)                              If a Purchaser desires to purchase all or any
part of the Offered Shares, said Purchaser shall communicate in writing to the
Optionee its election to purchase, which communication shall state the number of
Offered Shares said Purchaser desires to purchase and shall be given to the
Optionee within thirty days of the date the Offer was made to the Purchaser. 
Such communication shall, when taken in conjunction with the Offer, be deemed to
constitute a valid, legally binding and enforceable agreement for the sale and
purchase of such Offered Shares (subject to the aforesaid limitations as to a
Purchaser’s right to purchase more than its Pro Rata Fraction).  Sales of the
Offered Shares to be sold to purchasing Purchasers pursuant to this Option
Agreement shall be made at the offices of the Corporation on the 60th day
following the date the Offer was made to the Purchasers (or if such 60th day is
not a business day, then on the next succeeding business day).  Such sales shall
be effected by the Optionee’s delivery to each purchasing Purchaser of a
certificate or certificates evidencing the Offered Shares to be purchased by it,
duly endorsed for transfer to such purchasing Purchaser, against payment to the
Optionee of the purchase price therefor by such purchasing Purchaser.

 

(v)                                 If the Purchasers do not purchase all of the
Offered Shares, the Offered Shares not so purchased may be sold by the Optionee
at any time within 90 days after the date the Offer was made to the Purchasers. 
Any such sale shall be to the Proposed Transferee, at not less than the price
and upon other terms and conditions, if any, not more favorable to the Proposed
Transferee than those specified in the Offer.  Any Offered Shares not sold
within such 90-day period shall continue to be subject to the requirements of a
prior offer pursuant to this Option Agreement.  If Offered Shares are sold
pursuant to this Option Agreement to any party who is not a Purchaser, the
Offered Shares so sold shall continue to be subject to this right of first
refusal.

 

(vi)                              The Purchasers’ right of first refusal
provided in this Option Agreement shall not apply with respect to sales of Stock
to the Corporation.

 

(vii)                           For purposes of this Option Agreement,
“Purchasers” means those certain purchasers of the Corporation’s preferred stock
and any other owner of equity securities of the Corporation whom the Corporation
declares in writing to be a Purchaser for purposes of this Option Agreement.

 

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(viii)                        For purposes of this Option Agreement, a
“Permitted Transfer” means a transfer of all or any of the Option Stock (a) by
way of gift to any member of the Optionee’s family or to any trust for the
benefit of any such family member or the Optionee, provided that any such
transferee shall agree in writing with the Corporation, as a condition to such
transfer, to be bound by all of the provisions of the Option Agreement to the
same extent as if such transferee were the Optionee, or (b) by will or the laws
of descent and distribution, in which event each such transferee shall be bound
by all of the provisions of this Option Agreement to the same extent as if such
transferee were the Optionee.  As used herein, the word “family” shall include
any spouse, lineal ancestor or descendant, brother or sister.

 

(b)                                 Repurchase Right

 

(i)                                     Except as hereinafter provided, if the
Optionee shall cease to provide services in any capacity to the Corporation or
any of its Subsidiaries, the Corporation may within twelve months (or such
shorter period as may be required by applicable law) from the date upon which
the Optionee ceases to serve, exercise its option under this Option Agreement to
purchase from the Optionee any or all of his Option Stock.

 

(ii)                                  The purchase price of any shares of Option
Stock for which the Corporation exercises its option under this Option Agreement
(the “Repurchase Price”) shall be the current fair market value (determined in
the manner described in Section 9 of the Plan) of the Stock.

 

(iii)                               If the Corporation desires to exercise its
option to purchase, it shall do so by communicating in writing its election to
purchase to the Optionee, which communication shall state the number of shares
the Corporation is electing to purchase and the Purchase Price and shall be
given to the Optionee within the twelve-month period (or such shorter period)
provided for in section (i) above.

 

(c)                                  Right of Participation in Sales

 

(i)                                     If at any time the Optionee desires to
sell for cash any part of the Option Stock owned by him to any person or entity
other than one or more of the Purchasers (a “Buyer”), each of the Purchasers
shall have the right to sell to the Buyer, as a condition to such sale by the
Optionee, at the same price per share and on the same terms and conditions as
involved in such sale by the Optionee, the same percentage of the Stock owned by
such Purchaser as the Option Stock to be sold by the Optionee to the Buyer
represents with respect to the Stock owned by the Optionee immediately prior to
the sale of any of his Option Stock to the Buyer.

 

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(ii)                                  Each Purchaser wishing to so participate
in any sale under this Section 7 shall notify the Optionee in writing of such
intention as soon as practicable after such Purchaser’s receipt of the Offer and
in any event within twenty days after the date the Offer was made.

 

(iii)                               The Optionee and each participating
Purchaser shall sell to the Buyer all, or at the option of the Buyer, any part
of the shares proposed to be sold by them at not less than the price and upon
other terms and conditions, if any, not more favorable to the Buyer than those
in the Offer provided by the Optionee; provided, however, that any purchase of
less than all of such shares by the Buyer shall be made from the Optionee and
each participating Purchaser pro rata based upon the relative amount of the
shares that the Optionee and each participating Purchaser is otherwise entitled
to sell.

 

(iv)                              Any shares sold by the Optionee or a
participating Purchaser pursuant to this Section 7 shall no longer be subject to
this Section 7(c).

 

(v)                                 The Purchasers’ right to participate in
sales pursuant to this Section 7 shall not apply with respect to sales of Option
Stock to the Corporation.

 

(d)                                 Publicly Traded Stock

 

If the Stock is listed on an established national or regional stock exchange or
is admitted to quotation on the National Association of Securities Dealers
Automated Quotation System, or is publicly traded in an established securities
market, the foregoing restrictions of Sections 7(a), (b), and (c) shall
terminate as of the first date that the Stock is so listed, quoted or publicly
traded.

 

(e)                                  Legend Describing Restrictions and
Obligations

 

The Board may cause a legend to be placed prominently on certificates
representing Stock issued pursuant to the Plan in order to give notice of the
transferability restrictions and other obligations imposed by Sections 7 and 8. 
The Corporation does not intend to exercise its repurchase rights during the
first six months after exercise of the Option to the extent that such action
would result in an accounting charge to the Corporation.

 

8.                                                                                     
FORFEITURE OF GAIN

 

The Corporation shall have the right to repurchase any or all of the shares of
Stock acquired pursuant to such Option, at a price equal to the Option Price
paid for such shares, (i) if the holder violates any agreement covering
(a) non-competition with the Corporation or a Subsidiary or (b) non-disclosure
of confidential information of the Corporation or a Subsidiary, (ii) if the
holder is

 

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terminated for Cause as defined in Section 5(b) or (iii) if, during the period
ending one year subsequent to termination of the Optionee’s service with the
Corporation or a Subsidiary, the Board determines that the Optionee committed
acts or omissions which would have been the basis for a termination of the
Optionee’s service for Cause had such acts or omissions been discovered prior to
termination of the Optionee’s service.  A notice of repurchase given pursuant to
this Subsection shall specify the price and date of closing of such repurchase,
which shall be no later than 30 days from the date the Corporation exercises
such right.  In the event any such repurchase right is exercised in accordance
with this Subsection, the holder of the Stock being repurchased shall be
obligated to sell such Stock pursuant to the exercise of such right.  The
provisions of this Section 8 may be modified and/or superseded with respect to
the Optionee in the event the Corporation and such Optionee enter into separate
agreements governing the subject matter of this Section 8.

 

9.                                                                                     
EFFECT OF CHANGES IN CAPITALIZATION

 

(a)                                 Changes in Stock

 

If the number of outstanding shares of Stock is increased or decreased or the
shares of Stock are changed into or exchanged for a different number or kind of
shares or other securities of the Corporation on account of any
recapitalization, reclassification, stock split-up, combination of shares,
exchange of shares, stock dividend or other distribution payable in capital
stock, or other increase or decrease in such shares effected without receipt of
consideration by the Corporation, occurring after the date of grant of the
Option, the number and kind of shares of Stock for which the Option was granted
shall be adjusted proportionately and accordingly so that the proportionate
interest of the Optionee immediately following such event shall, to the extent
practicable, be the same as immediately before such event.  Any such adjustment
in the Option shall not change the aggregate Option Price payable with respect
to shares that are subject to the unexercised portion of the Option but shall
include a corresponding proportionate adjustment in the Option Price per share.

 

(b)                                 Reorganization in Which the Corporation Is
the Surviving Corporation

 

Subject to Subsection 9(c)(iii) hereof, if the Corporation shall be the
surviving corporation in any reorganization, merger, or consolidation of the
Corporation with one or more other corporations, the Option shall pertain to and
apply to the securities to which a holder of the number of shares of Stock
subject to the Option would have been entitled immediately following such
reorganization, merger, or consolidation, with a corresponding proportionate
adjustment of the

 

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Option Price per share so that the aggregate Option Price thereafter shall be
the same as the aggregate Option Price of the shares remaining subject to the
Option immediately prior to such reorganization, merger, or consolidation.

 

(c)                                  Dissolution, Liquidation, Sale of Assets,
Reorganization in Which the Corporation Is Not the Surviving Corporation, Change
of Control

 

The Option shall terminate (i) upon the dissolution or liquidation of the
Corporation, (ii) upon a merger, consolidation, or reorganization of the
Corporation with one or more other corporations in which the Corporation is not
the surviving corporation or (iii) any transaction (including without limitation
a merger or reorganization in which the Corporation is the surviving
corporation) that results in a “change of control” of the Corporation (as
defined below) except to the extent that provision is made in writing in
connection with any such transaction covered by clauses (i) through (iii) for
the assumption of the Option or for the substitution for the Option of a new
option(s) covering the stock of a successor corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and exercise prices, in which event the Option theretofore granted shall
continue in the manner and under the terms so provided.  In the event of any
such termination of the Option, the Optionee shall have the right (subject to
the general limitations on exercise set forth in Section 5), during such period
occurring before such termination as the Board in its sole discretion shall
determine and designate, and in any event immediately before the occurrence of
such termination, to exercise such Option in whole or in part, whether or not
such Option was otherwise exercisable at the time such termination occurs.  The
Corporation shall send written notice of a transaction or event that will result
in such a termination to Optionee not later than the time at which the
Corporation gives notice thereof to its stockholders.

 

For purposes of this Section 9(c), a “change of control” shall mean: (i) a sale
of substantially all of the assets of the Corporation to another person or
entity, or (ii) any transaction (including without limitation a merger or
reorganization in which the Corporation is the surviving corporation) that
results in any person or entity (other than a person or entity who was a holder
of securities of the Corporation on June 30, 1998) owning 50% or more of the
combined voting power of all classes of stock of the Corporation, unless (A) the
acquisition of securities resulting in such person’s or entity’s first owning
50% or more of the combined voting power of all classes of stock of the
Corporation arises from the Corporation’s issuance to such person or entity of
new securities (other than an issuance pursuant to an underwritten public
offering in which such acquisition is not expressly approved by the Board of
Directors) or (B) at least two-thirds of the directors comprising the full Board
of Directors of the Corporation determine that any such

 

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transaction specified in this subsection 9(c) does not constitute a change of
control for purposes hereof.

 

(d)                                 Adjustments

 

Adjustments under this Section 9 related to stock or other securities of the
Corporation shall be made by the Board, whose determination in that respect
shall be final, binding, and conclusive.  No fractional shares of Stock or units
of other securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in each case by
rounding downward to the nearest whole share or unit.

 

(e)                                  No Limitations on Corporation

 

The grant of the Option shall not affect or limit in any way the right or power
of the Corporation to make adjustments, reclassifications, reorganizations, or
changes of its capital or business structure or to merge, consolidate, dissolve,
or liquidate, or to sell or transfer all or any part of its business or assets.

 

10.                                                                              
REQUIREMENTS OF LAW

 

The Corporation shall not be required to sell or issue any shares of Stock under
the Option if the sale or issuance of such shares would constitute a violation
by the Optionee, the individual exercising the Option, or the Corporation of any
provisions of any law or regulation of any governmental authority, including
without limitation any federal or state securities laws or regulations.  If at
any time the Corporation shall determine, in its discretion, that the listing,
registration, or qualification of any shares subject to the Option upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory or self-regulatory body is necessary or
desirable as a condition of, or in connection with the issuance or purchase of
shares, the Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent, or approval shall have been effected or
obtained free of any conditions not acceptable to the Corporation, and any delay
caused thereby shall in no way affect the date of termination of the Option. 
Specifically in connection with the Securities Act of 1933 (as now in effect or
as hereafter amended), upon the exercise of any Option, unless a registration
statement under such Act is in effect with respect to the shares of Stock
covered thereby, the Corporation shall not be required to sell or issue such
shares unless the Board has received evidence satisfactory to it that the holder
of such Option may acquire such shares pursuant to an exemption from
registration under such Act.  Any determination in this connection by the Board
shall be final, binding, and conclusive.  The Corporation may, but shall in no
event be obligated to, register any securities covered hereby pursuant to the
Securities Act of 1933 (as now in effect or as hereafter amended) or to register
its common stock pursuant to the Securities Exchange Act of 1934 (as now in
effect or as hereafter amended).  The

 

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Corporation shall not be obligated to take any affirmative action in order to
cause the exercisability or vesting of an Option or to cause the exercise of an
Option or the issuance of shares pursuant thereto to comply with any law or
regulation of any governmental authority.  As to any jurisdiction that expressly
imposes the requirement that an Option shall not be exercisable unless and until
the shares of Stock covered by such Option are registered or are subject to an
available exemption from registration, the exercise of such Option (under
circumstances in which the laws of such jurisdiction apply) shall be deemed
conditioned upon the effectiveness of such registration or the availability of
such an exemption.

 

11.                                                                              
RIGHTS AS STOCKHOLDER

 

Neither the Optionee nor any executor, administrator, distributee or legatee of
the Optionee’s estate shall be, or have any of the rights or privileges of, a
stockholder of the Corporation in respect of any shares of Stock issuable
hereunder unless and until such shares have been fully paid and certificates
representing such shares have been endorsed, transferred and delivered, and the
name of the Optionee (or of such personal representative, administrator,
distributee or legatee of the Optionee’s estate) has been entered as the
stockholder of record on the books of the Corporation.

 

12.                                                                              
WITHHOLDING OF TAXES

 

The parties hereto recognize that the Corporation or a Subsidiary may be
obligated to withhold federal, state and local income taxes and Social Security
taxes to the extent that the Optionee realizes ordinary income in connection
with the exercise of the Option or in connection with a disposition of any
shares of Stock acquired by exercise of the Option.  The Optionee agrees that
the Corporation or a Subsidiary may withhold amounts needed to cover such taxes
from payments otherwise due and owing to the Optionee, and also agrees that upon
demand the Optionee will promptly pay to the Corporation or a Subsidiary having
such obligation any additional amounts as may be necessary to satisfy such
withholding tax obligation.

 

13.                                                                              
MARKET STAND-OFF PROVISION; OTHER AGREEMENTS

 

In connection with any underwritten public offering by the Corporation of its
equity securities pursuant to an effective registration statement filed under
the Securities Act of 1933 (as now in effect or as hereafter amended), including
the Corporation’s initial public offering, the Optionee agrees not to sell, make
any short sale of, loan, hypothecate, pledge, grant any option for the purchase
of, or otherwise dispose or transfer for value or agree to engage in any of the
foregoing transactions with respect to any shares of Stock without the prior
written consent of the Corporation or its underwriters, for such period of time
after the effective date of such registration statement as may be requested by
the Corporation or the underwriters (not to exceed 180 days in length).

 

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14.                                                                              
DISCLAIMER OF RIGHTS

 

No provision in this Option Agreement shall be construed to confer upon the
Optionee the right to remain in the employ or service of or to maintain a
relationship with the Corporation or any Subsidiary, or to interfere in any way
with any contractual or other right or authority of the Corporation or any
Subsidiary either to increase or decrease the compensation of the Optionee at
any time, or to terminate any employment or other relationship between the
Optionee and the Corporation or any Subsidiary.

 

15.                                                                              
INTERPRETATION OF THIS OPTION AGREEMENT

 

All decisions and interpretations made by the Board or the Committee thereof
with regard to any question arising under the Plan or this Option Agreement
shall be final, binding and conclusive on the Corporation and the Optionee and
any other person entitled to exercise the Option as provided for herein.

 

16.                                                                              
GOVERNING LAW

 

This Option Agreement shall be governed by the laws of the State of Delaware
(excluding its choice of law rules).

 

17.                                                                              
BINDING EFFECT

 

Subject to all restrictions provided for in this Option Agreement, the Plan and
by applicable law limiting assignment and transfer of this Option Agreement and
the Option provided for herein, this Option Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors, and assigns.

 

18.                                                                              
NOTICE

 

Any notice hereunder by the Optionee to the Corporation shall be in writing and
shall be deemed duly given if mailed or delivered to the Corporation at its
principal office, addressed to the attention of the President, or if so mailed
or delivered to such other address as the Corporation may hereafter designate by
notice to the Optionee.  Any notice hereunder by the Corporation to the Optionee
shall be in writing and shall be deemed duly given if mailed or delivered to the
Optionee at the address specified below by the Optionee for such purpose, or if
so mailed or delivered to such other address as the Optionee may hereafter
designate by written notice given to the Corporation.

 

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19.                                                                              
ENTIRE AGREEMENT

 

This Option Agreement and the Plan together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof.  Neither this Option
Agreement nor any term hereof may be amended, waived, discharged or terminated
except by a written instrument signed by the Corporation and the Optionee;
provided, however, that the Corporation unilaterally may waive any provision
hereof in writing to the extent that such waiver does not adversely affect the
interests of the Optionee hereunder, but no such waiver shall operate as or be
construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Option Agreement, or caused this Option Agreement to be duly executed and
delivered in their name and on their behalf, as of the day and year first above
written.

 

 

 

SENSEONICS, INCORPORATED

 

 

 

By:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

OPTIONEE:

 

 

 

 

 

 

 

ADDRESS FOR NOTICE TO OPTIONEE:

 

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