Exhibit 10.5


 


AGA
MEDICAL HOLDINGS, INC.


2006
EQUITY INCENTIVE PLAN


 


Non-Statutory
Stock Option


 


Section 1.              Grant of Option.


 


(a)           This certificate evidences a
non-statutory stock option (this “Stock Option”) granted by AGA Medical
Holdings, Inc.,  a Delaware
corporation (the “Company”), on [·], to [·]
(the “Participant”), an employee of the Company, pursuant to the Company’s
2006 Equity Incentive Plan (as from time to time in effect, the “Plan”).  Under this Stock Option, the Participant may
purchase, in whole or in part, on the terms herein provided, a total of [·]
shares of Class B Common Stock of the Company (the “Shares”) at
$2.75 per Share, which is not less than the fair market value of the Shares on
the date of grant of this Stock Option. 
The latest date on which this Stock Option, or any part thereof, may be
exercised is [·] (the “Final Exercise Date”).  The Stock Option evidenced by this
certificate is intended to be, and is hereby designated, a non-statutory
option, that is, an option that does not qualify
as an incentive stock option as defined in Section 422.


 


(b)           This Stock Option shall be
exercisable, if at all, in the following cumulative installments prior to the
Final Exercise Date:


 


as to
[·] Shares on and after [·];


as to an additional [·] Shares
on and after [·]; and


as to an additional [·]
Shares on and after [·]; and


as to an additional [·]
Shares on and after [·]; and


as to an additional [·]
Shares on and after [·].


 


This Stock Option may
become exercisable earlier if so determined by the Administrator in its sole
discretion or in the circumstances described in Section 7(a)(3) of
the Plan, where applicable.  For the
avoidance of doubt, however, the occurrence of a public offering of the common
stock of the Company (whether or not a Qualified Public Offering) shall not
result in an acceleration of the exercisability of this Stock Option except as
the Administrator may otherwise determine in its sole discretion.


 


Notwithstanding the
foregoing, upon termination of the Participant’s Employment, any portion of
this Stock Option that is not then exercisable shall immediately expire and the
remainder of this Stock Option, if any, will remain exercisable for three
months (unless termination of the Participant’s Employment resulted from
reasons that in the determination of the Administrator cast such discredit on
the Participant as to justify immediate forfeiture of this Stock Option (“Cause”),
in which case this entire Stock Option shall immediately expire and no portion
thereof shall remain exercisable); provided,
that  any portion of this Stock Option
held by the Participant immediately prior to the Participant’s death, to the
extent then exercisable, will remain exercisable for one year following the
Participant’s death; further provided,
that in no event shall any portion of this Stock Option be exercisable after
the Final Exercise Date.


 


Section 2.              Exercise of Stock Option.


 


Each election to exercise
this Stock Option shall be in writing, signed by the Participant or the
Participant’s executor or administrator or the person or persons to whom this
Stock Option is transferred by will or the applicable laws of descent and
distribution (collectively, the “Option Holder”), and received by the
Company at its principal office, accompanied by this certificate and payment in
full as provided in the Plan.  Subject to
the further terms and conditions provided in the Plan, the purchase price may
be paid as follows:  (i) by delivery
of cash or check acceptable to the Administrator; (ii) upon and following
an initial public offering of the Company, through a broker-assisted exercise
program acceptable to the Administrator; or (iii) through any combination
of the foregoing.  In the event that this
Stock Option is exercised by an Option Holder other than the Participant, the
Company will be under no obligation to deliver Shares hereunder unless and
until it is satisfied as to the authority of the Option Holder to exercise this
Stock Option.


 


Section 3.              Notice of Disposition.


 


The person exercising
this Stock Option shall notify the Company when making any disposition of the
Shares acquired upon exercise of this Stock Option, whether by sale, gift or
otherwise.  No disposition of the Shares
that does not comply with Section 6(a)(9) and Exhibit B of the
Plan shall be permitted.


 


Section 4.              Restrictions on Transfer of
Shares; Repurchase Rights.


 


(a)           Transfer Restrictions.  If at the time this Stock Option is exercised
the Company or any of its stockholders is a party to any agreement restricting
the transfer of any outstanding shares of the Company’s common stock, the
Administrator may provide that this Stock


 


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Option may be exercised
only if the Shares so acquired are made subject to the transfer restrictions
set forth in that agreement (or if more than one such agreement is then in
effect, the agreement or agreements specified by the Administrator).  Without limiting the generality of the
foregoing or of Section 7 below, the Participant expressly acknowledges
that any Shares acquired upon exercise of this Stock Option are subject to the
provisions of Section 6(a)(9) and Exhibit B of the Plan.


 


(b)           Repurchase Rights.  Each Share acquired upon exercise of this
Stock Option shall be subject to the provisions of this Section 4(b), and
the Participant, by exercising this Stock Option, agrees to take such actions
then or thereafter as the Administrator may from time to time require to
effectuate or facilitate the administration of this Section 4(b).


 


(i)            Upon termination of the Participant’s
Employment for any reason (including, without limitation, as a result of death,
disability, incapacity, retirement, resignation, or dismissal with or without
Cause) at any time prior to a Qualified Public Offering, the Company shall have
the right and option, but not the obligation, (the “Repurchase Right”)
to purchase from the Participant or such other person as then holds Shares
acquired upon exercise of this Stock Option, or any of them, any or all of the
Shares acquired upon exercise of this Stock Option.  If the Company exercises the Repurchase Right
it shall pay the holder as the purchase price for any Share so purchased an
amount (the “Purchase Price”) equal to the fair market value of such
Share (determined as hereinafter provided) as of the date of such repurchase; provided, that if termination of Employment was for Cause,
the Purchase Price shall equal the lower of such fair market value or the
exercise price paid upon exercise of this Stock Option for such Shares pursuant
to Section 2 above.  For the
purposes of this Section 4(b), the “fair market value” of a Share on any
date shall equal its fair market value determined in good faith by the
Administrator on a basis consistent with the manner of determining the fair
market value of the common stock of the Company for purposes of offering such
common stock to equity investors.


 


(ii)           The Company may exercise the
Repurchase Right described in Section 4(b)(i) above as to any Share
by giving the holder of the Share a written notice of election to purchase at
any time after the later of (A) the date of the termination of the
Participant’s Employment, or (B) the date on which such Share is acquired
upon exercise of this Stock Option, but not later than the date which falls
seven months after the later of (A) and (B).  Any such notice of election shall specify the
number of Shares to be purchased and the Purchase Price for such Shares.  The closing for the purchase by the Company
of such Shares pursuant to the provisions of this Section 4(b) will take
place at the offices of the Company on the date specified in such written
notice, which date shall be a business day not later than sixty (60) days after
the date such notice is given.  At such
closing, the holder of the Share or Shares to be repurchased shall deliver such
Shares, duly endorsed for transfer, against payment in full (in cash or by
certified or official bank check) of the Purchase Price therefor.


 


(v)             In the event that
the Company chooses not to exercise its Repurchase Right under this Section 4(b),
the Shares subject to the Repurchase Right shall thereafter cease to be subject
thereto.


 


(vi)          In order to
facilitate the repurchase by the Company of Shares acquired upon exercise of
this Stock Option, the stock certificates representing the Shares shall, for so
long as such Shares are subject to repurchase pursuant to this Section 4(b),
remain in the custody of the Company.


 


Section 5.              Withholding; Agreement to Provide
Security.


 


If at the time this Stock
Option is exercised the Administrator determines that under applicable law and
regulations it could be liable for the withholding of any federal or state tax
upon exercise or with respect to a disposition of any Shares acquired upon
exercise of this Stock Option, this Stock Option may not be exercised unless
the person exercising this Stock Option remits to the Company any amounts
determined by the Company to be required to be withheld upon exercise (or makes
other arrangements satisfactory to the Company for the payment of such taxes)
and gives such security as the Company deems adequate to meet its potential
liability for the withholding of tax upon a disposition of the Shares and
agrees to augment such security from time to time in any amount reasonably
determined by the Company to be necessary to preserve the adequacy of such
security.


 


Section 6.              Nontransferability of Stock
Option.


 


This Stock Option is not transferable by the Participant otherwise than
by will or the laws of descent and distribution and is exercisable during the
Participant’s lifetime only by the Participant.


 


Section 7.              Provisions of the Plan.


 


This Stock Option is
subject to the provisions of the Plan, which are incorporated herein by
reference.  A copy of the Plan as in
effect on the date of the grant of this Stock Option has been furnished to the
Participant.  By exercising all or any
part of this Stock Option, the 


 


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Participant agrees to be
bound by the terms of the Plan and this certificate.  All initially capitalized terms used herein
will have the meaning specified in the Plan (including without limitation Exhibit B
thereof), unless another meaning is specified herein.


 


IN WITNESS WHEREOF, the
Company has caused this instrument to be executed by its duly authorized officer.


 


 


	
   

  	
   

  	
  AGA MEDICAL HOLDINGS,
  INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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