**Exhibit10.2**

 

**ENDOCARDIAL SOLUTIONS, INC.**

**AMENDED AND RESTATED1993 LONG-TERM INCENTIVEANDSTOCK OPTION PLAN(AS AMENDED MAY 14, 2002)**

 

 

Section 1.  Purpose of Plan.

 

Purpose.  This Plan shall be known as the “ENDOCARDIALSOLUTIONS, INC. AMENDED AND RESTATED 1993 LONG-TERM INCENTIVE AND STOCK OPTIONPLAN” and is hereinafter referred to as the “Plan.”  The purpose of the Plan is to aid in maintaining and developingpersonnel capable of assuring the future success of Endocardial Solutions,Inc., a Delaware corporation (the “Company”), to offer such personneladditional incentives to put forth maximum efforts for the success of thebusiness, and to afford them an opportunity to acquire a proprietary interestin the Company through stock options and other long-term incentive awards asprovided herein.  Options granted underthis Plan may be either incentive stock options (Incentive Stock Options”)within the meaning of Section 422 of the Internal Revenue Code of 1986(the “Code”), or options that do not qualify as Incentive Stock Options.  Awards granted under this Plan shall beSARs, restricted stock or performance awards as hereinafter described.  With respect to outstanding Incentive StockOptions at the time of amendment of this Plan, such options shall continue tobe governed by the terms of the Plan prior to this amendment.

 

Section 2.  Stock Subject toPlan.

 

Subject to the provisions of Section 15 hereof,the stock to be subject to options or other awards under the Plan shall be theCompany’s authorized but unissued shares of Common Stock, $.01 par value (the“Common Shares”).  Such shares shall beauthorized but unissued shares.  Subjectto adjustment as provided in Section 15 hereof, the maximum number ofshares on which options may be exercised or other awards issued under this Planshall be 3,300,000 shares.  If an optionor award under the Plan expires, or for any reason is terminated or unexercisedwith respect to any shares, such shares shall again be available for options orawards thereafter granted during the term of the Plan.

 

Section 3.  Administration ofPlan.

 

(a)           ThePlan shall be administered by the Board of Directors of the Company or acommittee thereof.  The members of anysuch committee shall be appointed by and serve at the pleasure of the Board ofDirectors.  (The group administering thePlan shall hereinafter be referred to as the “Committee.”)

 

(b)           TheCommittee shall have plenary authority in its discretion, but subject to theexpress provisions of the Plan: (i) to determine the purchase price of theCommon Shares covered by each option or award, (ii) to determine theemployees to whom and the time or times at which such options and awards shallbe granted and the number of shares to be subject to each, (iii) todetermine the form of payment to be made upon the exercise of an SAR or inconnection with performance awards, either cash, Common Shares of the Companyor a combination thereof, (iv) to determine the terms of exercise of eachoption and award, (v) to accelerate the time at which all or any part of anoption or award may be exercised, (vi) to amend or modify the terms of anyoption or award with the consent of the optionee, (vii) to interpret thePlan, (viii) to prescribe, amend and rescind rules and regulations relatingto the Plan, (ix) to determine the terms and provisions of each option andaward agreement under the Plan (which agreements need not be identical),including the designation of those options intended to be Incentive StockOptions, and (x) to make all other determinations necessary or advisablefor the administration of the Plan, subject to the exclusive authority of theBoard of Directors under Section 16 herein to amend or terminate thePlan.  The Committee’s determinations onthe foregoing matters, unless otherwise disapproved by the Board of Directorsof the Company, shall be final and conclusive.

 

(c)           TheCommittee shall select one of its members as its Chair and shall hold itsmeetings at such times and places as it may determine.  A majority of its members shall constitute aquorum.  All

 

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determintations of the Committee shall be made by not less than amajority of its members.  Any decisionor determination reduced to writing and signed by all of the members of theCommittee shall be fully effective as if it had been made by a majority vote ata meeting duly called and held.  Thegrant of an option or award shall be effective only if a written agreementshall have been duly executed and delivered by and on behalf of the Companyfollowing such grant.  The Committee mayappoint a Secretary and may make such rules and regulations for the conduct ofits business as it shall deem advisable.

 

Section 4.  Eligibility andGrant.

 

(a)           Eligibility.  Incentive Stock Options may only be grantedunder this Plan to any full or part-time employee (which term as used hereinincludes, but is not limited to, officers and directors who are also employees)of the Company and of its present and future subsidiary corporations within themeaning of Section 424(f) of the Code (herein called “subsidiaries”).  Full or part-time employees, officers,consultants, directors (including directors who are not employees of theCompany) or independent contractors of the Company or one of its subsidiariesshall be eligible to receive options which do not qualify as Incentive StockOptions and awards.  In determining thepersons to whom options and awards shall be granted and the number of sharessubject to each, the Committee may take into account the nature of servicesrendered by the respective employees or consultants, their present andpotential contributions to the success of the Company and such other factors asthe Committee in its discretion shall deem relevant.

 

(b)           Grantof Additional Options.  A person whohas been granted an option or award under this Plan may be granted additionaloptions or awards under the Plan if the Committee shall so determine; provided,however, that for Incentive Stock Options to the extent the aggregate fairmarket value (determined at the time the Incentive Stock Option is granted) ofthe Common Shares with respect to which all Incentive Stock Options areexercisable for the first time by an employee during any calendar year (underall plans described in subsection (d) of Section 422 of the Code of his orher employer corporation and its parent and subsidiary corporations) exceeds$100,000, such options shall be treated as options that do not qualify asIncentive Stock Options.  Nothing in thePlan or in any agreement thereunder shall confer on any employee any right tocontinue in the employ of the Company or any of its subsidiaries or affect, inany way, the right of the Company or any of its subsidiaries to terminate hisor her employment at any time.

 

Section 5.  Price.

 

The option price for all Incentive Stock Optionsgranted under the Plan shall be determined by the Committee but shall not beless than 100% of the fair market value of the Common Shares at the date ofgrant of such option.  The option pricefor options granted under the Plan that do not qualify as Incentive StockOptions and, if applicable, the price for all awards shall also be determinedby the Committee.  For purposes of thepreceding sentence and for all other valuation purposes under the Plan, the fairmarket value of the Common Shares shall be as reasonably determined by theCommittee.  If on the date of grant ofany option or award hereunder the Common Shares are not traded on anestablished securities market, the Committee shall make a good faith attempt tosatisfy the requirements of this Section 5 and in connection therewithshall take such action as it deems necessary or advisable.

 

Section 6.  Term.

 

Each option and award and all rights and obligationsthereunder shall expire on the date determined by the Committee and specifiedin the option or award agreement.  TheCommittee shall be under no duty to provide terms of like duration for optionsor awards granted under the Plan, but the term of an Incentive Stock Option maynot extend more than ten (10) years form the date of grant of such option andthe term of options granted under the Plan which do not qualify as IncentiveStock Options may not extend more than fifteen (15) years from the date ofgranting of such option.

 

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Section 7.  Exercise ofOption or Award.

 

(a)           Exercisability.  The Committee shall have full and completeauthority to determine whether an option or award will be exercisable in fullat any time or from time to time during the term thereof, or to provide for theexercise thereof in such installments, upon the occurrence of such events (suchas termination of employment for any reason) and at such times during the termof the option as the Committee may determine and specify in the option or awardagreement.

 

(b)           NoViolation of State or Federal Laws. The exercise of any option or award granted hereunder shall only beeffective at such time that the sale of Common Shares pursuant to such exercisewill not violate any state or federal securities or other laws.

 

(c)           Methodof Exercise.  An optionee or granteeelecting to exercise an option or award shall give written notice to theCompany of such election and of the number of shares subject to suchexercise.  The full purchase price ofsuch shares shall be tendered with such notice of exercise.  Payment shall be made to the Company in cash(including bank check, certified check, personal check, or money order), or, atthe discretion of the Committee and as specified by the Committee, (i) bydelivering certificates for the Company’s Common Shares already owned by theoptionee or grantee having a fair market value as of the date of grant equal tothe full purchase price of the shares, or (ii) by delivering theoptionee’s or grantee’s promissory note, which shall provide for interest at arate not less than the minimum rate required to avoid the imputation of income,original issue discount or a below-market-rate loan pursuant toSections 483, 1274 or 7872 of the Code or any successor provisionsthereof, or (iii) a combination of cash, the optionee’s or granteepromissory note and such shares.  Thefair market value of such tendered shares shall be determined as provided inSection 5 herein.  The optionee’sor grantee’s promissory note shall be a full recourse liability of the optioneeand may, at the discretion of the Committee, be secured by a pledge of theshares being purchased.  Until suchperson has been issued the shares subject to such exercise, he or she shallpossess no rights as a shareholder with respect to such shares.

 

Section 8.  StockAppreciation Rights.

 

(a)           Grant.  At the time of grant of an option or awardunder the Plan (or at any other time), the Committee, in its discretion, maygrant a Stock Appreciation Right (“SAR”) evidenced by an agreement in such formas the Committee shall from time to time approve.  Any such SAR may be subject to restrictions on the exercisethereof as may be set forth in the agreement representing such SAR, whichagreement shall comply with and be subject to the following terms andconditions and any additional terms and conditions established by the Committeethat are consistent with the terms of the Plan.

 

(b)           Exercise.  An SAR shall be exercised by the delivery tothe Company of a written notice which shall state that the holder thereofelects to exercise his or her SAR as to the number of shares specified in thenotice and which shall further state what portion, if any, of the SAR exerciseamount (hereinafter defined) the holder thereof requests is to be paid in cashand what portion, if any, is to be paid in Common Shares of the Company.  The Committee promptly shall cause to bepaid to such holder the SAR exercise amount either in cash, in Common Shares ofthe Company, or any combination of cash and shares as the Committee maydetermine.  Such determination may beeither in accordance with the request made by the holder of the SAR or in thesole and absolute discretion of the Committee. The SAR exercise amount is the excess of the fair market value of oneshare of the Company’s Common Shares on the date of exercise over the per shareexercise price in respect of which the SAR was granted, multiplied by thenumber of shares as to which the SAR is exercised.  For the purposes hereof, the fair market value of the Company’sshares shall be determined as provided in Section 5 herein.

 

Section 9.  Restricted StockAwards.

 

Awards of Common Shares subject to forfeiture andtransfer restrictions may be granted by the Committee.  Any restricted stock award shall beevidenced by an agreement in such form as the Committee shall from time to timeapprove, which agreement shall comply with and be subject to the followingterms and conditions and any additional terms and conditions established by theCommittee that are consistent with the terms of the Plan:

 

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(a)           Grant of Restricted Stock Awards.  Each restricted stock award made under thePlan shall be for such number of Common Shares as shall be determined by theCommittee and set forth in the agreement containing the terms of suchrestricted stock award.  Such agreementshall set forth a period of time during which the grantee must remain in thecontinuous employment of the Company in order for the forfeiture and transferrestrictions to lapse.  If the Committeeso determines, the restrictions may lapse during such restricted period ininstallments with respect to specified portions of the shares covered by therestricted stock award.  The agreementmay also, in the discretion of the Committee, set forth performance or otherconditions that will subject the Common Shares to forfeiture and transferrestrictions.  The Committee may, at itsdiscretion, waive all or any part of the restrictions applicable to any or alloutstanding restricted stock awards.

 

(b)           Delivery of Common Shares andRestrictions.  At the time of arestricted stock award, a certificate representing the number of Common Sharesawarded thereunder shall be registered in the name of the grantee.  Such certificate shall be held by theCompany or any custodian appointed by the Company for the account of thegrantee subject to the terms and conditions of the Plan, and shall bear such alegend setting forth the restrictions imposed thereon as the Committee, in itsdiscretion, may determine.  The granteeshall have all rights of a shareholder with respect to the Common Shares,including the right to receive dividends and the right to vote such shares,subject to the following restrictions: (i) the grantee shall not beentitled to delivery of the stock certificate until the expiration of therestricted period and the fulfillment of any other restrictive conditions setforth in the restricted stock agreement with respect to such Common Shares;(ii) none of the Common Shares may be sold, assigned, transferred,pledged, hypothecated or otherwise encumbered or disposed of during suchrestricted period or until after the fulfillment of any such other restrictiveconditions; and (iii) except as otherwise determined by the Committee, allof the Common Shares shall be forfeited and all rights of the grantee to suchCommon Shares shall terminate, without further obligation on the part of theCompany, unless the grantee remains in the continuous employment of the Companyfor the entire restricted period in relation to which such Common Shares weregranted and unless any other restrictive conditions relating to the restrictedstock award are met.  Any Common Shares,any other securities of the Company and any other property (except for cashdividends) distributed with respect to the Common Shares subject to restrictedstock awards shall be subject to the same restrictions, terms and conditions assuch restricted Common Shares.

 

(c)           Termination of Restrictions.  At the end of the restricted period andprovided that any other restrictive conditions of the restricted stock awardare met, or at such earlier time as otherwise determined by the Committee, allrestrictions set forth in the agreement relating to the restricted stock awardor in the Plan shall lapse as to the restricted Common Shares subject thereto,and a stock certificate for the appropriate number of Common Shares, free ofthe restrictions and the restricted stock legend, shall be delivered to thegrantee or his or her beneficiary or estate, as the case may be.

 

Section 10.  PerformanceAwards.

 

The Committee is further authorized to grantperformance awards.  Subject to theterms of this Plan and any applicable award agreement, a performance awardgranted under the Plan (i) may be denominated or payable in cash, CommonShares (including, without limitation, restricted stock), other securities,other awards, or other property and (ii) shall confer on the holderthereof rights valued as determined by the Committee, in its discretion, andpayable to, or exercisable by, the holder of the performance awards, in wholeor in part, upon the achievement of such performance goals during suchperformance periods as the Committee, in its discretion, shall establish.  Subject to the terms of this Plan and anyapplicable award agreement, the performance goals to be achieved during anyperformance period, the length of any performance period, the amount of anyperformance award granted, and the amount of any payment or transfer to be madeby the grantee and by the Company under any performance award shall bedetermined by the Committee.

 

Section 11.  Income TaxWithholding and Tax Bonuses.

 

(a)           Withholdingof Taxes.  In order to comply withall applicable federal or state income tax laws or regulations, the Company maytake such action as it deems appropriate to ensure that all applicable federalor state payroll, withholding, income or other taxes, which are the sole andabsolute responsibility of an optionee or grantee under the Plan, are withheldor collected from such optionee or

 

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grantee.  In order to assist anoptionee or grantee in paying all federal and state taxes to be withheld orcollected upon exercise of an option or award which does not qualify as anIncentive Stock Option hereunder, the Committee, in its absolute discretion andsubject to such additional terms and conditions as it may adopt, shall permitthe optionee or grantee to satisfy such tax obligation by (i) electing tohave the Company withhold a portion of the shares otherwise to be deliveredupon exercise of such option or award with a fair market value, determined inaccordance with Section 5 herein, equal to such taxes or(ii) delivering to the Company Common Shares other than the sharesissuable upon exercise of such option or award with a fair market value,determined in accordance with Section 5, equal to such taxes.

 

(b)           TaxBonus.  The Committee shall have theauthority, at the time of grant of an option under the Plan or at any timethereafter, to approve tax bonuses to designated optionees or grantees to bepaid upon their exercise of options or awards granted hereunder.  The amount of any such payments shall bedetermined by the Committee.  TheCommittee shall have full authority in its absolute discretion to determine theamount of any such tax bonus and the terms and conditions affecting the vestingand payment thereafter.

 

Section 12.  AdditionalRestrictions.

 

The Committee shall have full and complete authorityto determine whether all or any part of the Common Shares of the Companyacquired upon exercise of any of the options or awards granted under the Planshall be subject to restrictions on the transferability thereof or any otherrestrictions affecting in any manner the optionee’s or grantee’s rights withrespect thereto, but any such restriction shall be contained in the agreementrelating to such options or awards.

 

Section 13.  Ten PercentShareholder Rule.

 

Notwithstanding any other provision in the Plan, if atthe time an option is otherwise to be granted pursuant to the Plan the optioneeowns directly or indirectly (within the meaning of Section 424(d) of theCode) Common Shares of the Company possessing more than ten percent (10%) ofthe total combined voting power of all classes of stock of the Company or itsparent or subsidiary corporations, if any (within the meaning ofSection 422(b)(6) of the Code), then any Incentive Stock Option to begranted to such optionee pursuant to the Plan shall satisfy the requirements ofSection 422(c)(5) of the Code, and the option price shall be not less than110% of the fair market value of the Common Shares of the Company determined asdescribed herein, and such option by its terms shall not be exercisable afterthe expiration of five (5) years from the date such option is granted.

 

Section 14.  Non-Transferability.

 

No option or award granted under the Plan shall betransferable by an optionee or grantee, otherwise than by will or the laws ofdescent or distribution.  Except as otherwiseprovided in an option or award agreement, during the lifetime of an optionee orgrantee, the option shall be exercisable only by such optionee or grantee.

 

Section 15.  Dilution orOther Adjustments.

 

If there shall be any change in the Common Sharesthrough merger, consolidation, reorganization, recapitalization, dividend inthe form of stock (of whatever amount), stock split or other change in thecorporate structure, appropriate adjustments in the Plan and outstandingoptions and awards shall be made by the Committee.  In the event of any such changes, adjustments shall include,where appropriate, changes in the aggregate number of shares subject to thePlan, the number of shares and the price per share subject to outstandingoptions and awards and the amount payable upon exercise of outstanding awards,in order to prevent dilution or enlargement of option or award rights.

 

Section 16.  Amendment orDiscontinuance of Plan.

 

The Board of Directors may amend or discontinue thePlan at any time.  Subject to theprovisions of Section 15 no amendment of the Plan, however, shall withoutshareholder approval: (i) increase the maximum

 

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number of shares under the Plan as provided in Section 2 herein,(ii) decrease the minimum price provided in Section 5 herein,(ii) extend the maximum term under Section 6, or (iv) modify theeligibility requirements for participation in the Plan.  The Board of Directors shall not alter orimpair any option or award theretofore granted under the Plan without theconsent of the holder of the option.

 

Section 17.  Time ofGranting.

 

Nothing contained in the Plan or in any resolutionadopted or to be adopted by the Board of Directors or by the shareholders ofthe Company, and no action taken by the Committee or the Board of Directors(other than the execution and delivery of an option or award agreement), shallconstitute the granting of an option or award hereunder.

 

Section 18.  Termination ofPlan.

 

Unless the Plan shall have been discontinued asprovided in Section 15 hereof, the Plan shall terminate May 4,2003.  No option or award may be grantedafter such termination, but termination of the Plan shall not, without theconsent of the optionee or grantee, alter or impair any rights or obligationsunder any option or award theretofore granted.

 

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