EXHIBIT 10.2

Execution Version

 

BIODRAIN MEDICAL, INC. 2012 STOCK INCENTIVE PLAN
RESTRICTED STOCK AWARD GRANT

 

This Restricted Stock Award Agreement (the “Agreement”), dated as of March 14,
2013 (the “Date of Grant”), is delivered by BioDrain Medical, Inc., a Minnesota
corporation (the “Company”), to Josh Kornberg (the “Grantee”).

 

RECITALS

 

WHEREAS, the BioDrain Medical, Inc. 2012 Stock Incentive Plan (the “Plan”)
provides for the grant of restricted stock in accordance with the terms and
conditions of the Plan; and

 

WHEREAS, the Board of Directors of the Company (the “Board”) has decided to make
a restricted stock award grant as an inducement for the Grantee to promote the
best interests of the Company and its stockholders.

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound
hereby, agree as follows:

 

AGREEMENT

 

1.Restricted Stock Grant.

 

(a)Subject to the terms and conditions set forth in this Agreement and the Plan,
the Company hereby grants the Grantee Five Million (5,000,000) shares of Common
Stock of the Company (“Shares”), subject to the restrictions set forth below and
in the Plan (“Restricted Stock”).

 

(b)For purposes of grant of Restricted Stock evidenced by this Agreement, the
following terms shall have the meanings specified below:

 

(i)“Change in Control” shall mean any of the following:

 

(A)there is consummated a merger, consolidation, statutory exchange or
reorganization, unless securities representing more than fifty percent (50%) of
the total combined voting power of the outstanding voting securities of the
successor corporation are immediately thereafter beneficially owned directly or
indirectly and in substantially the same proportion, by the persons who
beneficially owned the Company’s outstanding voting securities immediately prior
to such transaction;

 

 

 

 

(B)

any transaction or series of related transactions pursuant to which any person
or any group of persons comprising a “group” within the meaning of Rule 13d-5(b
)(1) under the Securities Exchange Act of 1934, as amended (other than the
Company or a person that, prior to such transaction or series of related
transactions, directly or indirectly controls, is controlled by or is under
common control with the Company) becomes directly or indirectly the beneficial
owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934,
as amended) of securities possessing (or convertible into or exercisable for
securities possessing) thirty percent (30%) or more of the total combined voting
power of the securities (determined by the power to vote with respect to the
elections of Board members) outstanding immediately after the consummation of
such transaction or series of related transactions, whether such transaction
involves a direct issuance from the Company or the acquisition of outstanding
securities held by one or more of the Company’s shareholders;

 

(C)there is consummated a sale, lease, exclusive license, or other disposition
of all or substantially all of the consolidated assets of the Company and its
subsidiaries, other than a sale, lease, license, or other disposition of all or
substantially all of the consolidated assets of the Company and its subsidiaries
to an entity, more than fifty percent (50%) of the combined voting power of the
voting securities of which are owned by shareholders of the Company in
substantially the same proportions as their ownership of the Company immediately
prior to such sale, lease, license, or other disposition; or

 

(D)individuals who, on the Effective Date, are members of the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
members of the Board; provided, however, that if the appointment or election (or
nomination for election) of any new director was approved or recommended by a
majority vote of the members of the Incumbent Board then still in office, such
new director shall, for purposes of sentence, be considered as a member of the
Incumbent Board.

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have
occurred for purposes of the foregoing paragraph (B) solely as the result of (i)
the acquisition of additional securities by Dr. Samuel Herschkowitz, Joshua
Kornberg or their affiliates; or (ii) a repurchase or other acquisition of
securities by the Company which, by reducing the number of shares of voting
securities outstanding, increases the proportionate number of voting securities
beneficially owned by any person to thirty percent (30%) or more of the combined
voting power of all of the then outstanding voting securities; provided,
however, that if any person referred to in this clause (ii) shall thereafter
become the beneficial owner of any additional shares of voting securities (other
than pursuant to a stock split, stock dividend, or similar transaction or as a
result of an acquisition of securities directly from the Company) and
immediately thereafter beneficially owns thirty percent (30%) or more of the
combined voting power of all of the then outstanding voting securities, then a
“Change in Control” shall be deemed to have occurred for purposes of the
foregoing clause (B).

 

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(ii)“Employment Agreement” means that certain Employment Agreement, dated August
13, 2012 and effective as of April24, 2012 (as amended from time to time), by
and between the Company and the Grantee.

 

(iii)“Fair Market Value” shall have the meaning set forth in the Plan.

 

(iv)“Liquidity Event” means the date of a Change in Control.

 

2.Vesting and Nonassignability of Restricted Stock.

 

(a)Vesting Restricted Stock. In the event of a Liquidity Event, one hundred
percent (100%) of the Shares of Restricted Stock shall become vested, and the
restrictions described in Sections 2(c) and 2(d) shall lapse, if the Grantee
continues to be employed by, or provide service to, the Company from the Date of
Grant until the date of the Liquidity Event.

 

(b)For purposes of this Agreement, the term “vest” shall mean with respect to
any share of Restricted Stock subject to the restrictions on transfer set forth
in this Agreement or the Plan and that such share is no longer subject to the
risk of forfeiture.

 

(c)Except as otherwise provided in the Employment Agreement or any employment or
other agreement between the Company and the Grantee, if the Grantee’s employment
or service with the Company terminates for any reason before the Restricted
Stock is fully vested, the shares of Restricted Stock that are not then vested
shall be forfeited and must be immediately returned to the Company.

 

(d)During the period before the shares of Restricted Stock vest (the
“Restriction Period”), the non-vested Restricted Stock may not be assigned,
transferred, pledged or otherwise disposed of by the Grantee. Any attempt to
assign, transfer, pledge or otherwise dispose of the shares contrary to the
provisions hereof, and the levy of any execution, attachment or similar process
upon the shares, shall be null, void and without effect.

 

3.Issuance of Certificates.

 

(a)Stock certificates representing the Restricted Stock will be issued by the
Company and held in escrow by the Company or its designee until the Restricted
Stock vests, or the Company may hold non-certificated shares until the
Restricted Stock vests. To facilitate any transfer or forfeiture contemplated by
this Agreement, upon signing the Agreement the Grantee shall deliver an
Assignment Separate from Certificate in the form attached hereto as Exhibit A,
executed in blank by the Grantee with respect to each such stock certificate, to
the Company, or its designee, to hold in the escrow for so long as such shares
of Restricted Stock have not vested pursuant this Agreement, with the authority
to take all such actions and to effectuate all such transfers and/or forfeitures
as may be necessary or appropriate to accomplish the objectives of this
Agreement in accordance with the terms hereof. During the Restriction Period,
the Grantee shall receive any cash dividends with respect to the non-vested
shares of Restricted Stock and may participate in any distribution pursuant to a
plan of dissolution or complete liquidation of the Company. In the event of a
dividend or distribution payable in stock or other property or a
reclassification, split-up or similar event during the Restriction Period, the
shares or other property issued or declared with respect to the non-vested
shares of Restricted Stock shall be subject to the same terms and conditions
relating to vesting as the shares to which they relate.

 

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(b)When the Grantee obtains a vested right to shares of Restricted Stock, a
certificate representing the vested shares shall be issued to the Grantee, free
of the restrictions under Section 2 of this Agreement.

 

(c)The obligation of the Company to deliver shares upon the vesting of the
Restricted Stock shall be subject to all applicable laws, rules, and regulations
and such approvals by governmental agencies as may be deemed appropriate by the
Company in its discretion to comply with relevant securities laws and
regulations.

 

4.Grant Subject to Plan Provisions. Except as otherwise provided herein, this
grant is made pursuant to the Plan, the terms of which are incorporated herein
by reference, and in all respects shall be interpreted in accordance with the
Plan. The grant is subject to interpretations, regulations and determinations
concerning the Plan established from time to time by the Board in accordance
with the provisions of the Plan, including, but not limited to, provisions
pertaining to (a) rights and obligations with respect to withholding taxes; (b)
the registration, qualification or listing of the shares; (c) changes in
capitalization of the Company; and (d) other requirements of applicable law. The
Board shall have the authority to interpret and construe the grant pursuant to
the terms of the Plan, and its decisions shall be conclusive and binding upon
all parties as to any questions arising hereunder. In the event of any
inconsistency or conflict between the Plan and this Agreement, the terms,
conditions and provisions of this Agreement shall govern and control.

 

5.Adjustments. If there is any change in the number or kind of Shares
outstanding (a) by reason of a spinoff, split of Shares, reclassification,
combination or exchange of Shares or similar event; (b) by reason of a merger,
reorganization or consolidation; (c) by reason of any other extraordinary or
unusual event affecting the outstanding Shares as a class without the Company’s
receipt of consideration; or (d) by reason of a change in the structure of the
Company, or if the value of the outstanding Shares are substantially reduced as
a result of a spinoff or the Company’s payment of an extraordinary distribution,
the shares of Restricted Stock, the kind of Shares issued under this Agreement,
and the price per share of Shares covered by the shares of Restricted Stock may
be appropriately adjusted by the Board to reflect any increase or decrease in
the number of, or change in the kind or value of, issued Shares to preclude, to
the extent practicable, the enlargement of dilution of rights and benefits under
such shares of Restricted Stock; provided, however, that any fractional Shares
resulting from such adjustment shall be eliminated. Any adjustments determined
by the Board shall be final, binding and conclusive.

 

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6.Shareholder Approval. If the Restricted Stock covered by this Agreement
exceed, as of the Date of Grant, the number of shares of common stock which may
be issued under the Plan as last approved by the shareholders of the Company,
then this Agreement shall be void with respect to such excess shares, unless
shareholder approval of an amendment sufficiently increasing the number of
shares of common stock issuable under the Plan is obtained in accordance with
the provisions of the Plan on or before July 30, 2013. For purposes of
determining the number of excess shares in accordance with this Section, the
Restricted Stock shall be deemed to have been granted to Grantee after any stock
options granted to Grantee under the Plan on the Date of Grant.

 

7.Withholding. The Grantee shall be required to pay to the Company, or make
other arrangements satisfactory to the Company to provide for the payment of,
any Federal, state, local or other taxes that the Company is required to
withhold with respect to the grant or vesting of the Restricted Stock.

 

8.Section 83(b) Election. The Grantee hereby acknowledges that the Grantee has
been informed that, with respect to the Restricted Stock, the Grantee may file
an election with the Internal Revenue Service, within 30 days of the execution
of this Agreement, electing pursuant to Section 83(b) of the Internal Revenue
Code of 1986, as amended, (the “Code”) to be taxed currently on any difference
between the purchase price of the Restricted Stock and their fair market value
on the date of grant. Absent such an election, taxable income will be measured
and recognized by the Grantee at the time or times at which the forfeiture
restrictions on the Restricted Stock lapse. The Grantee is strongly encouraged
to seek the advice of his own tax consultants in connection with the issuance of
the Restricted Stock and the advisability of filing of the election under
Section 83(b) of the Code. A form of Election under Section 83(b) is attached
hereto as Exhibit B for reference.

 

THE GRANTEE ACKNOWLEDGES THAT IT IS NOT THE COMPANY’S, BUT RATHER THE GRANTEE’S
SOLE RESPONSIBILITY TO FILE THE ELECTION UNDER SECTION 83(b) TIMELY.

 

9.No Employment or Other Rights. This grant shall not confer upon the Grantee
any right to be retained by or in the employ or service of the Company and shall
not interfere in any way with the right of the Company to terminate the
Grantee’s employment or service at any time. The right of the Company to
terminate at will the Grantee’s employment or service at any time for any reason
is specifically reserved.

 

10.Assignment by the Company. The rights and protections of the Company
hereunder shall extend to any successors or assigns of the Company and to the
Company’s parents, subsidiaries, and affiliates. This Agreement may be assigned
by the Company without the Grantee’s consent.

 

11.Applicable Law. The validity, construction, interpretation and effect of this
instrument shall be governed by and construed in accordance with the laws of the
State of Minnesota, without giving effect to the conflicts of laws provisions
thereof.

 

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12.Notice. Any notice to the Company provided for in this instrument shall be
addressed to the Company in care of the Chief Financial Officer at the corporate
headquarters of the Company, and any notice to the Grantee shall be addressed to
such Grantee at the current address shown on the payroll of the Company, or to
such other address as the Grantee may designate to the Company in writing. Any
notice shall be delivered by hand, sent by telecopy or enclosed in a properly
sealed envelope addressed as stated above, registered and deposited, postage
prepaid, in a post office regularly maintained by the United States Postal
Service.

 

[Remainder of this page intentionally left blank. Signature page(s) immediately
follow.]

  

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IN WITNESS WHEREOF, the Company has caused its duly authorized officers to
execute and attest this instrument and the Grantee has placed his signature
hereon, effective as of the Date of Grant.

 

. BIODRAIN MEDICAL, INC               By: /s/ Bob Myers               Its: Chief
Financial Officer            

 

 

 

 

 

I hereby accept the grant or Restricted Stock described in this Agreement and I
agree to be bound by the terms of the Plan and this Agreement. I hereby further
agree that all of the decisions and determinations of the Board with respect to
the Plan or the foregoing grant or Restricted Stock shall be final and binding
on me, my beneficiaries and any other person having or claiming an interest in
the Restricted Stock described in this Agreement.

 

 

 

  /s/ Josh Kornberg   Josh Kornberg

 

 

 

 

EXHIBIT A

 

STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE

 

FOR VALUE RECEIVED, Josh Kornberg hereby sells, assigns and transfers unto
_________________, ______________ (_____________________________) shares of
Common Stock of BioDrain Medical, Inc., a Minnesota corporation (the “Company”),
standing in his name on the books of, the Company represented by Certificate No.
LJ herewith, and does hereby irrevocably constitute and appoint the Secretary of
the Company attorney to transfer the said stock in the books of the Company with
full power of substitution.

Dated:             Josh Kornberg        

 

 

 

 

 

 

[Please sign this document but do not date it. The date and information of the
transferee will be completed if and when the shares are assigned.]

 

 

 

 

EXHIBIT B

 

ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED

 

The undersigned taxpayer hereby makes an election pursuant to Section 83(b) of
the Internal Revenue Code of 1986, as amended, and the Treasury Regulations
thereunder (the “Regulations”), and in connection with this election supplies
the following information:

 

(1)Name of taxpayer making election: ________________________
Address: _____________________________________________
Social Security Number: ________________________________
Tax Year for which election is being made: _________________

 

(2)The property with respect to which the election is being made consists of [ ]
shares of Common Stock (the “Shares”) of BioDrain Medical, Inc. (the “Company”),
of which all of the Shares are subject to vesting restrictions.

 

(3)Date the property was transferred: March 14, 2013 (the “Date of Grant”).

 

(4)The Shares are subject to forfeiture to the Company if the taxpayer ceases to
be employed by, or provide service to, the Company during the restriction
period. The restriction period lapses if the taxpayer is employed by, or
providing service to, the Company from the Date of Grant until the date of the
Liquidity Event (i.e., the date of a change in control).

 

(5)The fair market value at the time of the transfer of the stock (determined
without regard to any restriction other than a restriction which by its terms
will never lapse) is $[_] per share.

 

(6)The amount paid for the stock is [$0] per share ([$OJ aggregate
consideration).

 

(7)A copy of this statement has been furnished to the Company (and to the
transferee of the Shares, if different from the taxpayer) as required by §
1.83-2(d) of the Regulations.

 

(8)This statement is executed as of [Insert Date].

 

 

                                               

Josh Kornberg

 

 

 

 

INSTRUCTIONS FOR FILING SECTION 83(B) ELECTION

 

Attached is a form of election under section 83(b) of the Internal Revenue Code.
If you wish to make such an election, you should complete, sign and date the
election and then proceed as follows:

 

1.Execute three counterparts of your completed election (plus one extra
counterpart for each person other than you, if any who receives property that is
the subject of your election), retaining at least one photocopy for your
records.

 

2.Send one counterpart to the Internal Revenue Service Center with which you
will file your Federal income tax return for the current year via certified
mail, return receipt requested. THE ELECTION SHOULD BE SENT IMMEDIATELY, AS YOU
ONLY HAVE 30 DAYS FROM THE ISSUANCE/PURCHASE/GRANT DATE WITIDN WHICH TO MAKE THE
ELECTION - NO WAIVERS, LATE FILINGS OR EXTENSIONS ARE PERMITTED.

 

3.Deliver one counterpart of the completed election to the Company for its
files.

 

4.If anyone other than you (e.g, one of your family members) will receive
property that is the subject of your election, deliver one counterpart of the
completed election to each such person.

 

5.Attach one counterpart of the completed election to your Federal income tax
return for this year when you file that return next year.