Exhibit 10.2

DELCATH SYSTEMS, INC.

INDUCEMENT AWARD STOCK OPTION AWARD AGREEMENT

THIS INDUCEMENT AWARD STOCK OPTION AWARD AGREEMENT (this “Agreement”) is made as
of October 1, 2020 (the “Grant Date”), by and between Delcath Systems, Inc., a
Delaware corporation (the “Company”), and Gerard Michel (the “Optionee”).

The parties hereto agree as follows:

1. Inducement Award. The Company hereby grants to the Optionee an Option (the
“Option”) to purchase Four Hundred and Ninety-Eight Thousand (498,000) shares of
Common Stock (“Option Shares”). The Option is granted as an employment
inducement award pursuant to Listing Rule 5635(c) of the corporate governance
rules of the NASDAQ Stock Market. Accordingly, the Option is being granted
outside of the Company’s existing equity compensation plans. However, the Option
will be governed in all respects as if issued under the Company’s 2020 Omnibus
Equity Incentive Plan (the “Plan”), as in effect on the date of its adoption by
the Board and as may be amended thereafter from time to time. Accordingly, the
terms of the Plan are hereby incorporated by reference. Capitalized terms used
in this Agreement and not defined herein shall have the meanings ascribed to
such terms in the Plan or in the Optionee’s Employment Agreement with the
Company dated August 31, 2020 (the “Employment Agreement”). In the event that
any provision of this Agreement conflicts with any term in the Plan, the term in
the Plan shall be deemed controlling. The Option is not intended to be, and
shall not be treated as, an incentive stock option, as defined in Section 422 of
the U.S. Internal Revenue Code of 1986, as amended.

2. Participation. The Optionee shall be deemed a “Participant” for purposes of
applying the terms of the Plan to this Agreement and the Option awarded hereby.

3. Exercise Price. The Exercise Price to be paid by the Optionee to the Company
upon the exercise of the Option shall be:

 

  •  

As to the first Three Hundred and Ninety Six Thousand (396,000) Option Shares to
vest in accordance with the schedule set forth in Section 4 below (or otherwise
hereunder), $11.67 per share;

 

  •  

As to the next Fifty One Thousand (51,000) shares to vest in accordance with the
schedule set forth in Section 4 below (or otherwise hereunder), $17.505 per
share; and

 

  •  

As to the next Fifty One Thousand (51,000) shares to vest in accordance with the
schedule set forth in Section 4 below (or otherwise hereunder), $23.34 per
share.

4. Vesting Provisions. Provided that the Optionee remains in Service as of the
applicable vesting date, the Option shall become vested and exercisable in equal
monthly installments over the 36-month period beginning on the Grant Date (i.e.,
1/36th will vest on the last day of each month during said 36-month period, with
the first vesting date being October 31, 2020, provided that the Optionee
remains in Service as of each such vesting date).

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5. Option Term

(a) Maximum Term. The Option, to the extent vested pursuant to Section 4 hereof
(or otherwise hereunder), may be exercised at any time on or after the
applicable vesting date and prior to the termination of the Option. The Option
shall expire and terminate on October 1, 2030, unless it is earlier terminated
in accordance with the terms of the Plan, as incorporated herein by reference,
or this Agreement (including without limitation, Section 5(b) hereof). Upon any
such termination of the Option, the Option shall be forfeited and shall no
longer be exercisable.

(b) Effect of Termination of Service.

i. Termination by Reason of Disability. In the event of the Optionee’s
termination of Service by reason of “Disability” (as defined in the Employment
Agreement), the Option, to extent vested and exercisable at the time of such
termination of Service, shall terminate and no longer be exercisable upon the
earlier of (A) the expiration date of the Option set forth in Section 5(a)
hereof, and (B) the date that is 12 months following such termination of
Service.

ii. Termination by Reason of Death. In the event of the Optionee’s termination
of Service by reason of death, the Option, to extent vested and exercisable at
the time of such termination of Service, shall terminate and no longer be
exercisable upon the earlier of (A) the expiration date of the Option set forth
in Section 5(a) hereof, and (B) the date that is 12 months following such
termination of Service.

iii. Termination other than for Cause. Except as provided in Section 5(b)(i) or
(ii) (with respect to death or Disability), in the event of the Optionee’s
termination of Service for any reason other than by the Company or an Affiliate
for “Cause” (as defined in the Employment Agreement), the Option, to the extent
vested and exercisable at the time of such termination of Service, shall
terminate and no longer be exercisable upon the earlier of (A) the expiration
date of the Option set forth in Section 5(a) hereof and (B) the 90th day
following such termination of Service.

iv. Termination for Cause. In the event of the Optionee’s termination of Service
by the Company or an Affiliate for Cause, the Option (both the vested and
unvested portion) shall terminate and no longer be exercisable upon the date of
such termination of Service. If the Optionee’s Service is suspended pending an
investigation of whether the Optionee’s Service will be terminated for Cause,
all of the Optionee’s rights under the Option, including the right to exercise
the Option, shall be suspended during the investigation period.

v. Unvested Option. The Option, to the extent unvested as of the date of the
Optionee’s termination of Service for any reason, shall terminate upon the date
of such termination of Service (except to the extent necessary to give effect to
any acceleration of vesting upon certain terminations of Service within a
specific period prior to or following a Change in Control pursuant to
Section 4.5(d) of the Employment Agreement, in which case such accelerated
portion shall terminate and no longer be exercisable upon the earlier of (A) the
expiration date of the Option set forth in Section 5(a) hereof and (B) the 90th
day following such termination of Service)).

 

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(c) No Notice of Option Expiration. The Optionee is responsible for keeping
track of the expiration date of the Option and the post-termination exercise
periods following the Optionee’s termination of Service for any reason. The
Company is not obligated to provide further notice of such periods.

6. Procedure for Exercise.

(a) Notice of Exercise. The Option, to the extent vested and outstanding, may be
exercised by delivering written notice of exercise to the Company, in the form
required by the Committee. The notice must state the number of Option Shares to
be purchased and must be accompanied by payment in full of the Exercise Price.

(b) Payment of Exercise Price. The Exercise Price may be paid by cash or a
certified or bank cashier’s check or wire transfer. The Committee may also allow
any other method of payment permitted by Section 6(f) of the Plan in its
discretion at the time of exercise, subject to any restrictions deemed necessary
or appropriate by the Committee to facilitate compliance with Applicable Law.
The Option may be exercised to purchase less than the total number of Option
Shares subject to the Option.

(c) Delivery of Stock Certificates Upon Exercise. Subject to Section 8 hereof,
upon the exercise of the Option, the Company shall mail or deliver to the
Optionee (or beneficiary in the case of exercise by a beneficiary), as promptly
as practicable, a stock certificate or certificates representing the Option
Shares then purchased (or take such other action its deems advisable to evidence
the issuance of the Option Shares then purchased).

7. Restrictions on Transfer. The Optionee acknowledges and agrees that the
Option, and any right or interest therein, may not be sold, transferred, gifted,
donated, pledged, hypothecated, disposed of or assigned by the Optionee, and may
be exercised during the lifetime of the Optionee only by the Optionee (or during
the period the Optionee is under a legal disability, by the Optionee’s guardian
or legal representative). However, in the event of the death of the Optionee,
the Option may be transferred by will or the laws of descent or distribution.

8. Registration, Listing and Qualification of Shares. Upon the exercise of the
Option at a time when there is not in effect a registration statement under the
Securities Act relating to the Option Shares, by virtue of such exercise, the
Optionee shall be deemed to represent and warrant to the Company that the Option
Shares shall be acquired for investment and not with a view to the distribution
thereof, and not with any present intention of distributing the same. The
Optionee shall provide the Company with such additional or other representations
and warranties as the Company may require in order to ensure compliance with
applicable Federal and state securities, blue sky and all other Applicable Laws.
No Option Shares shall be issued unless and until the Company and/or the
Optionee shall have complied with all applicable Federal or state registration,
listing and/or qualification requirements and all other requirements of
Applicable Law.

 

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9. Certain Plan Provisions. Without limiting any other provision of this
Agreement, the Option shall be subject to the same terms as provided in Plan
Sections 4(d) (Adjustments for Change in Common Stock, Etc.), Section 12
(Forfeiture Events) and Section 13 (Change in Control).

10. Optionee’s Representations. The Optionee hereby represents and warrants to
the Company that (i) the execution, delivery and performance of this Agreement
by the Optionee does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which the Optionee is a party or by which the Optionee is bound and (ii) upon
the execution and delivery of this Agreement by the Company, this Agreement
shall be the valid and binding obligation of the Optionee, enforceable against
the Optionee in accordance with its terms. The Optionee hereby acknowledges and
represents that the Optionee has consulted with (or has had an opportunity to
consult with) independent legal counsel regarding the Optionee’s rights and
obligations under this Agreement and that the Optionee fully understands the
terms and conditions contained herein and therein.

11. Rights of Optionee. Nothing in this Agreement shall interfere or limit in
any way the right of the Company or any Affiliate to terminate the Optionee’s
Service at any time for any reason (with or without Cause). Nothing in this
Agreement shall confer upon the Optionee any right to future equity-based or
other incentive awards and nothing in this Agreement shall provide for any
adjustment to the number of Option Shares issued or issuable pursuant to the
exercise the Option upon the occurrence of subsequent events except as provided
in the Plan.

12. No Rights as a Stockholder. The Optionee shall not have any of the rights of
a stockholder with respect to the Option Shares until the Option Shares have
been issued to the Optionee upon the due exercise of the Option. No adjustment
will be made for dividends or distributions or other rights for which the record
date is prior to the date such Option Shares are issued.

13. Withholding of Taxes. The Option (including the issuance of Option Shares
pursuant to the exercise of the Option) shall be subject to applicable tax
withholding. The Company shall be entitled, as it deems necessary or desirable,
to withhold from any amounts due and payable by the Company or any Affiliate to
the Optionee (or secure payment from the Optionee in lieu of withholding) the
amount of any withholding or other tax due with respect to the exercise of the
Option, and, subject to Applicable Law, the Company may defer the issuance of
any Option Shares in connection with the exercise of the Option unless
indemnified by the Optionee (including by way of payment to the Company of an
amount required to be withheld as a condition of Option exercise), to the
Company’s satisfaction, with respect to liabilities relating to tax
withholdings. In this regard, the Optionee authorizes the Company or any
Affiliate, or their respective agents, at their discretion, to satisfy the
obligations with regard to all applicable tax withholdings by one or a
combination of the following:

(a) withholding from the Optionee’s wages or other cash compensation paid to the
Optionee by the Company and/or any Affiliate;

 

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(b) withholding from proceeds of the sale of Option Shares acquired at exercise
of this Option either through a voluntary sale or through a mandatory sale
arranged by the Company (on the Optionee’s behalf pursuant to this authorization
and without further consent);

(c) withholding Option Shares to be issued upon exercise of the Option, provided
the Company only withholds a number of Option Shares necessary to satisfy no
more than the withholding amounts determined based on the maximum permitted
statutory rate applicable in the Optionee’s jurisdiction;

(d) the Optionee’s payment of a cash amount (including by check representing
readily available funds or a wire transfer); or

(e) any other arrangement approved by the Committee and permitted under
Applicable Law.

14. Personal Data. For the purpose of implementing, administering and managing
the Plan, this Agreement and Option granted hereunder, the Optionee, by
execution hereof, consents to the collection, receipt, use, retention and
transfer, in electronic or other form, of the Optionee’s personal data by and
among the Company and its third party vendors or any potential party to any
Change in Control transaction or capital raising transaction involving the
Company. The Optionee understands that personal data (including but not limited
to, name, home address, telephone number, employee number, employment status,
social security number, tax identification number, date of birth, nationality,
job and payroll location, data for tax withholding purposes and shares awarded,
cancelled, exercised, vested and unvested) may be transferred to third parties
assisting in the implementation, administration and management of this Agreement
and Option and the Plan and the Optionee expressly authorizes such transfer as
well as the retention, use, and the subsequent transfer of the data by the
recipient(s). The Optionee understands that these recipients may be located in
the Optionee’s country or elsewhere, and that the recipient’s country may have
different data privacy laws and protections than the Optionee’s country. The
Optionee understands that data will be held only as long as is necessary to
implement, administer and manage this Option. The Optionee understands that he
may, at any time, request a list with the names and addresses of any potential
recipients of the personal data, view data, request additional information about
the storage and processing of data, require any necessary amendments to data or
refuse or withdraw the consents herein, in any case without cost, by contacting
in writing the Company’s Secretary. The Optionee understands, however, that
refusing or withdrawing the Optionee’s consent may affect the Optionee’s ability
to accept or exercise this Option.

15. Consent to Electronic Delivery and Participation. By accepting this Option,
the Optionee agrees to participate hereunder through an on-line or electronic
system established and maintained by the Company or a third party designated by
the Company, and consents to the electronic delivery of the Agreement, the Plan,
account statements, prospectuses, and all other documents, communications, or
information related to the Option. Electronic delivery may include the delivery
of a link to the Company intranet or the internet site of a third party involved
in administering the Agreement, the delivery of the document via e-mail, or such
other delivery determined at the Company’s discretion. The Optionee may receive
from the Company a paper copy of any documents delivered electronically at no
cost if the Optionee contacts the Company by telephone, through a postal
service, or electronic mail to the appropriate Person designated by the
Committee.

 

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16. No Future Entitlement. By execution of this Agreement, the Optionee
acknowledges and agrees that: (i) the grant of this Option is a one-time benefit
which does not create any contractual or other right to receive future grants of
stock options, or compensation in lieu of stock options, even if stock options
have been granted repeatedly in the past; (ii) all determinations with respect
to any such future grants, including, but not limited to, the times when stock
options shall be granted or shall become exercisable, the maximum number of
shares subject to each stock option, and the purchase price, will be at the sole
discretion of the Committee; (iii) the value of this Option is not part of
normal or expected compensation or salary for any purpose, including, but not
limited to, calculating any termination, severance, resignation, redundancy, end
of service payments or similar payments, or bonuses, long-service awards,
pension or retirement benefits; (v) the vesting of this Option ceases upon
termination of employment with the Company or transfer of employment from the
Company, or other cessation of eligibility for any reason, except as may
otherwise be explicitly provided in this Agreement or the Plan; (vi) if the
underlying Common Stock does not increase in value, this Option will have no
value, nor does the Company guarantee any future value; and (vii) no claim or
entitlement to compensation or damages arises if the Common Stock does not
increase in value, and the Optionee irrevocably releases the Company from any
such claim that does arise.

17. General Provisions.

(a) Transfers in Violation of Agreement. Any transfer or attempted transfer of
the Option in violation of any provision of this Agreement or the Plan shall be
null and void and of no force and effect and the purported transferee shall have
no rights or privileges in or with respect to the Option or the Option Shares.

(b) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under Applicable Law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any Applicable Law in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or the enforceability of this Agreement in any other jurisdiction, but this
Agreement shall be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained
herein.

(c) Complete Agreement. This Agreement (including the terms of the Plan as
incorporated herein by reference), the Employment Agreement and the other
documents expressly referred to herein and therein, embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements and representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
For the avoidance of doubt, the Optionee acknowledges and agrees that this
Agreement shall be in full, final and complete satisfaction of any obligation of
the Company to grant to the Optionee the stock option contemplated by
Section 2.3 of the Employment Agreement.

 

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(d) Counterparts. This Agreement may be executed in separate counterparts, each
of which is deemed to be an original and all of which taken together constitute
one and the same agreement.

(e) Successors and Assigns. Except as otherwise provided herein, this Agreement
shall bind and inure to the benefit of, and be enforceable by, the Optionee and
the Company and their respective successors and assigns; provided, that the
rights and obligations of the Optionee under this Agreement shall not be
assignable except as may otherwise be expressly permitted in this Agreement or
in the Plan.

(f) Choice of Law. This Agreement shall be construed, interpreted and the rights
of the parties determined in accordance with the laws of the State of Delaware
(without reference to any choice of law rules that would require the application
of the laws of any other jurisdiction). Each of the Company and the Optionee
waives the necessity for personal service of any and all process upon such party
and consents that all such service of process may be made by registered or
certified mail (return receipt requested), in each case directed to such party
at the address set forth in the Company’s records, and service so made will be
deemed to be completed on the date of actual receipt. Each of the Company and
the Optionee consents to service of process as aforesaid. Nothing in this
Agreement will prohibit personal service in lieu of the service by mail
contemplated herein.

(g) Amendment. The provisions of this Agreement may be amended by the Committee
at any time; provided, however, that the Committee may not change any term of
this Agreement in a manner which would have a materially adverse effect on the
Optionee without the Optionee’s approval, unless such an amendment is required
by Applicable Law or otherwise expressly permitted by the terms of the Plan.

(h) Interpretation. All questions of interpretation concerning this Agreement
shall be determined by the Committee. All determinations by the Committee shall
be final and binding upon all persons having an interest in the Option as
provided by the Plan. Any officer (other than the Optionee) shall have the
authority to act on behalf of the Company with respect to any matter, right,
obligation, or election which is the responsibility of or which is allocated to
the Company herein or in the Plan, provided that the officer has apparent
authority with respect to such matter, right, obligation, or election.

(i) Further Instruments. The Committee may require that the Optionee execute any
agreements (or the Committee may otherwise impose other requirements) with such
terms as the Committee deems appropriate, with respect to the Option or the
Option Shares. The Optionee shall execute any additional documents the Committee
deems necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on the Optionee pursuant to the terms of
this Agreement.

(j) Section 409A. The Option is intended to be exempt from Section 409A of the
Code, and this Agreement (including the Plan, as incorporated by reference
herein) shall be administered and interpreted consistent with such intent.
Notwithstanding the foregoing, the Company makes no representations that the
Option or the vesting and payments provided by this Agreement are exempt from or
comply with Section 409A of the Code, and in no event shall the Company or any
Affiliate be liable for all or any portion of any taxes, penalties, interest or
other expenses that may be incurred by the Optionee on account of non-compliance
with Section 409A of the Code.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.

 

DELCATH SYSTEMS, INC. By:  

/s/ Roger G. Stoll

  Name:   Roger G. Stoll   Title:   Chairman of the Board

 

OPTIONEE Signature:  

/s/ Gerard Michel

Name:   Gerard Michel

(Signature Page to October 1, 2020 Inducement Award Stock Option Award
Agreement)