Exhibit
10.1


 


 


ANGEION CORPORATION


2002 STOCK OPTION PLAN


as amended through July 21, 2005


 





















 


TABLE OF CONTENTS


 


	
  SECTION 1.

  	
   

  	
  General Purpose of Plan;
  Definitions

  	
   

  
	
  SECTION 2.

  	
   

  	
  Administration

  	
   

  
	
  SECTION 3.

  	
   

  	
  Stock Subject to Plan

  	
   

  
	
  (a)

  	
  Shares Reserved for Issuance

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Adjustments

  	
   

  	
   

  
	
   

  	
   

  
	
  SECTION 4.

  	
   

  	
  Eligibility

  	
   

  
	
  (a)

  	
  Eligible
  Participants

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Annual Limit on Incentive Stock
  Options

  	
   

  	
   

  
	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  Terms and Conditions of
  Stock Options

  	
   

  
	
  (a)

  	
  Exercise
  Price

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Option Term

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
  Exercisability

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
  Method
  of Exercise

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
  Tax
  Withholding

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
  Non-transferability of Options

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (g)

  	
  Termination by Death or Disability

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (h)

  	
  Termination
  by Reason of Retirement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
  Other
  Termination

  	
   

  	
   

  
	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  Restricted Stock

  	
   

  
	
  (a)

  	
  Administration

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Awards
  and Certificates

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
  Restrictions and Conditions

  	
   

  	
   

  
	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  Change in Control

  	
   

  
	
  SECTION 8.

  	
   

  	
  Amendments and Termination

  	
   

  
	
  SECTION 9.

  	
   

  	
  General Provisions

  	
   

  
	
  (a)

  	
  Compliance
  With Laws

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Company
  Authority; No Rights to Employment

  	
   

  	
   

  
									



 


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  (c)

  	
  Repurchase
  Right

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
  Forfeiture
  for Competition

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
  Restrictions
  on Transfer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
  Effect of Transfer/Leave of
  Absence

  	
   

  	
   

  
	
   

  	
   

  
	
  SECTION 10.

  	
   

  	
  Restrictions on Transfer of
  Shares Issued under Plan

  	
   

  
						



 


ii





















 


ANGEION CORPORATION


 


2002 STOCK OPTION


 


SECTION 1.  General Purpose
of Plan; Definitions.


 


The name of this plan is the Angeion
Corporation 2002 Stock Option Plan (the “Plan”).  The purpose of the Plan is to provide a
continuing, long-term incentive to eligible officers, employees and Consultants
of Angeion Corporation (the “Company”) and its Subsidiaries and to members of
the Company’s Board of Directors; to provide a means of rewarding outstanding
performance and to enable the Company to maintain a competitive position to
attract and retain key personnel necessary for continued growth and
profitability.


 


For purposes of the Plan, the following
terms shall be defined as set forth below:


 


(a)           “Agreement” means an agreement by and between the Company
and an optionee or participant under the Plan setting forth the terms and
conditions of the Stock Option grant or other award.


 


(b)           “Board” means the Board of Directors of the Company as it
may be comprised from time to time.


 


(c)           “Cause” means a felony conviction of an optionee or the
failure of an optionee to contest prosecution for a felony, or an optionee’s
willful misconduct or dishonesty, any of which, in the judgment of the Company,
is harmful to the business or reputation of the Company; provided, however,
that if a different definition of Cause is contained in any operative agreement
of employment between the Company and an optionee or participant, such
definition of Cause shall control for purposes of this Agreement.


 


(d)           “Change of Control” means either of the following:


 


(i)            any “person” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934)
becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of the combined voting power of the Company’s then outstanding securities;
or


 


(ii)           a business combination, following
which shareholders of the Company do not continue to beneficially own at least
50% of the voting power of the resulting entity or the members of the Company’s
Board of Directors prior to the transaction do not constitute a majority of the
resulting entity’s Board of Directors; or


 


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(iii)          a
liquidation, dissolution or sale of all or substantially all of the assets of
the Company, and immediately thereafter, there is no substantial continuity of
ownership with respect to the Company and the entity to which such assets have
been transferred.


 


(e)           “Code” means the
Internal Revenue Code of 1986, as amended from time to time, or any successor
statute.


 


(f)            “Committee” means the Committee referred to in Section 2
of the Plan.  If at any time no Committee
shall be in office, then the functions of the Committee specified in the Plan
shall be exercised by the Board, unless the Plan specifically states otherwise.


 


(g)           “Company” means Angeion Corporation, a corporation organized
under the laws of the State of Minnesota (or any successor corporation).


 


(h)           “Consultant” means any person, including an advisor, engaged
by the Company or a Parent Corporation or a Subsidiary of the Company to render
services, who is compensated for such services and who is not an employee of
the Company or any Parent Corporation or Subsidiary of the Company.  A Non-Employee Director may serve as a
Consultant.


 


(i)            “Disability” means permanent and total disability as
determined by the Committee.


 


(j)            “Fair Market Value” of Stock on any given date shall be
determined by the Committee as follows:  (i) if
the Stock is listed for trading on one of more national securities exchanges,
or is traded on the Nasdaq Stock Market, the last reported sales price on the
principal exchange or the Nasdaq Stock Market on the date in question, or if
such Stock shall not have been traded on such principal exchange on such date,
the last reported sales price on such principal exchange or the Nasdaq Stock
Market on the first day prior thereto on which such Stock was so traded; or (ii) if
the Stock is not listed for trading on a national securities exchange or the
Nasdaq Stock Market, but is traded in the over-the-counter market, including
the Nasdaq SmallCap Market, the closing bid price for such Stock on the date in
question, or if there is no closing bid price for such Stock on such date, the
closing bid price on the first day prior thereto on which such price existed;
or (iii) if neither (i) nor (ii) is applicable, by any means
determined to be fair and reasonable by the Committee, which determination
shall be final and binding on all parties.


 


(k)           “Incentive Stock Option” means any Stock Option intended to
be and designated as an “Incentive Stock Option” within the meaning of Section 422
of the Code.


 


(l)            “Non-Employee Director” means a “Non-Employee Director”
within the meaning of Rule 16b-3(b)(3) under the Securities Exchange
Act of 1934.


 


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(m)          “Non-Qualified Stock Option” means any Stock Option that is
not an Incentive Stock Option.


 


(n)           “Outside Director” means a Director who: (a) is not a
current employee of the Company or any member of an affiliated group which
includes the Company; (b) is not a former employee of the Company who
receives compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the taxable year; (c) has not been
an officer of the Company; (d) does not receive remuneration from the
Company, either directly or indirectly, in any capacity other than as a
director, except as otherwise permitted under Section 162(m) of the Code
and regulations thereunder.  For this
purpose, remuneration includes any payment in exchange for good or
services.  This definition shall be
further governed by the provisions of Section 162(m) of the Code and
regulations promulgated thereunder.


 


(o)           “Plan of Reorganization” means the plan of reorganization
under Chapter 11 of the Bankruptcy Code as approved by the United States
Bankruptcy Court.


 


(p)           “Parent Corporation” means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if each
of the corporations (other than the Company) owns stock possessing 50% or more
of the total combined voting power of all classes of stock in one of the other
corporations in the chain.


 


(q)           “Restricted Stock” means an award of shares of Stock that
are subject to restrictions under Section 6 below.


 


(r)            “Retirement” means an Optionee’s date of termination which
is designated by the Committee as a “retirement” for purposes of the Plan.  If no designation is made, Retirement means
retirement from active employment with the Company or any Subsidiary or Parent
Corporation of the Company on or after age 65.


 


(s)           “Stock” means the Common Stock, $0.10 par value per share,
of the Company.


 


(t)            “Stock Option” means any option to purchase shares of Stock
granted pursuant to Section 5 below.


 


(u)           “Subsidiary” means Medical Graphics Corporation and any
other corporation (other than the Company), foreign or domestic, in an unbroken
chain of corporations (other than the last corporation in the unbroken chain)
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.


 


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SECTION 2.  Administration.


 


The Plan shall be administered by the
Board or by a Committee appointed by the Board consisting of at least two
members of the Board of Directors, all of whom shall be Non-Employee Directors
and Outside Directors, who shall serve at the pleasure of the Board.  Any or all of the functions of the Committee
specified in the Plan may be exercised by the Board, except for Stock Options
intended to comply with regulations under Section 162(m) of the Code.


 


The Committee shall have the power and
authority to grant to eligible employees, members of the Board of Directors or
Consultants, pursuant to the terms of the Plan: 
(i) Stock Options or (ii) Restricted Stock.


 


In particular, the Committee shall have
the authority:


 


(i)            to select the officers
and other employees of the Company and other eligible persons to whom Stock
Options and Restricted Stock awards may from time to time be granted hereunder;


 


(ii)           to determine whether and
to what extent Incentive Stock Options, Non-Qualified Stock Options and
Restricted Stock awards, or a combination of the foregoing, are to be granted
hereunder;


 


(iii)          to determine the number of
shares to be covered by each such award granted hereunder;


 


(iv)          to determine the terms and
conditions, not inconsistent with the terms of the Plan, of any award granted
hereunder (including, but not limited to, any restriction on any Stock Option
or other award and/or the shares of Stock relating thereto);


 


(v)           to make any other
determination and take any other action that the Committee deems necessary or desirable
for the administration of the Plan.


 


The Committee shall have the authority to
adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall, from time to time, deem advisable; to interpret
the terms and provisions of the Plan and any award issued under the Plan (and
any Agreements relating thereto); and to otherwise supervise the administration
of the Plan.  Except to the extent
prohibited by applicable law or the applicable rules and regulations of a
stock exchange on which the Stock is traded, or of the Securities and Exchange
Commission, the Committee may delegate to executive officers of the Company the
authority to exercise the powers specified in clauses (i), (ii), (iii), (iv) and
(v) above with respect to persons who are not


 


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either the
chief executive officer of the Company or the four highest paid officers of the
Company other than the chief executive officer.


 


The Committee may amend the terms of any
previously granted Stock Option, prospectively or retroactively, to the extent
such amendment is consistent with the terms of the Plan, but no such amendment
shall impair the rights of any optionee without his or her consent except to
the extent authorized under the Plan. 
The Committee may also substitute new Options for previously granted
Options, including previously granted Options having higher exercise prices.


 


All decisions made by the Committee
pursuant to the provisions of the Plan shall be final and binding on all
persons, including the Company and all optionees.


 


Any granting of Options in excess of
359,463 Shares during the initial two year period following confirmation of the
Plan of Reorganization shall require the approval of the Designee or Designees
(as defined in the Company’s Articles of Incorporation).


 


SECTION 3.  Stock Subject
to Plan.


 


(a)           Shares Reserved for Issuance.  The total number of shares of Stock reserved
and available for distribution under the Plan shall be 800,000 shares(1).  Such shares shall consist of authorized and
unissued shares.


 


If any shares become available as a result
of canceled, unexercised, lapsed or terminated Stock Options, or if any shares
subject to any Restricted Stock award granted hereunder are forfeited or
terminated, such shares shall again be available for distribution in connection
with future awards under the Plan.  Upon
a stock-for-stock exercise of a Option or upon the withholding of stock for
payment of the taxes on an Option, only the net number of shares issued to the
optionee shall be used to calculate the number of shares remaining available
for distribution under the Plan.


 


(b)           Adjustments.  The grant of a Stock Option or other award
pursuant to the Plan shall not limit in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge, exchange or consolidate or to
dissolve, liquidate or transfer all or any part of its business or assets.


 


In the event of an increase or decrease in
the number of shares of Stock resulting from a subdivision or consolidation of
shares or the payment of a stock dividend or any other increase or decrease in
the number of shares of Stock effected without receipt of consideration by the


 










(1) A total of 600,000 shares were originally
authorized under the Plan.  An increase
of 200,000 shares was authorized by the Board on June 6, 2005 and approved by
the shareholders on July 21, 2005.


 


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Company, the
number of shares of Stock reserved under Section 3 of this Plan, the
number of shares of Stock covered by each outstanding Stock Option and the
price per share thereof and the number of shares subject to Restricted Stock
awards shall be adjusted by the Committee to reflect such change.  Additional shares which may be credited
pursuant to such adjustment shall be subject to the same restrictions as are
applicable to the shares with respect to which the adjustment relates.


 


SECTION 4.  Eligibility.


 


(a)           Eligible Participants.  Officers, other employees of the Company and
its Subsidiaries, members of the Board, and Consultants who are responsible for
or contribute to the management, growth and/or profitability of the business of
the Company and its Subsidiaries are eligible to be granted Stock Options,
Restricted Stock awards under the Plan. 
The optionees and participants to receive awards under the Plan shall be
selected from time to time by the Committee, in its sole discretion, from among
those eligible, and the Committee shall determine, in its sole discretion, the
number of shares of Stock covered by each award.


 


(b)           Annual Limit on
Incentive Stock Options.  The aggregate Fair Market Value (determined
as of the time the Stock Option is granted) of the Stock with respect to which
an Incentive Stock Option under this Plan or any other plan of the Company and
any Subsidiary or Parent Corporation is exercisable for the first time by an
optionee during any calendar year shall not exceed $100,000.


 


(c)           162(m) Annual Limitation.  Notwithstanding the foregoing, no person
shall receive grants of Options under this Plan that exceed 250,000(2) shares
during any fiscal year of the Company.


 


SECTION 5.  Terms and
Conditions of Stock Options.


 


Each Stock Option shall be evidenced by a
written Agreement, in such form as the Committee may approve from time to time,
which shall be subject to the provisions of this Plan and to such other terms
and conditions as the Committee may deem appropriate including, without
limitation, a provision that any Stock that may be acquired by an optionee in
connection with a Stock Option granted hereunder be subject to a separate
buy-sell, voting, shareholders’ or other similar agreement.  The Stock Options granted under the Plan may
be of two types:  (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options.  No Incentive Stock Options shall be granted
under the Plan after that date which is ten (10) years after adoption of
this Plan by the Board.


 










(2) The Plan originally provided that no person shall
receive grants of stock that exceed 100,000 shares in any fiscal year.  This amount was increased to 250,000 on April
8, 2003 by the Board of Directors.  The
change was approved by the shareholders on May 14, 2003.


 


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The Committee shall have the authority to
grant any eligible optionees Incentive Stock Options (if the optionee is an
employee), Non-Qualified Stock Options, or both types of options.  To the extent that any option or portion of
an option does not qualify as an Incentive Stock Option, it shall constitute a
separate Non-Qualified Stock Option.


 


Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify either the Plan or
any Incentive Stock Option under Section 422 of the Code.  The preceding sentence shall not preclude any
modification or amendment to an outstanding Incentive Stock Option, whether or
not such modification or amendment results in disqualification of such Stock
Option as an Incentive Stock Option, provided the optionee consents in writing
to the modification or amendment.


 


Stock Options granted under the Plan shall
be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan,
as the Committee shall deem desirable:


 


(a)           Exercise Price.  The exercise price per share of Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant, except that the exercise price of an Incentive Stock Option
shall not be less than 100% of the Fair Market Value of the Stock on the date
the option is granted.  If an employee
owns or is deemed to own (by reason of the attribution rules applicable
under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of capital stock of the Company or any Parent
Corporation or Subsidiary and an Incentive Stock Option is granted to such
employee, the option price shall be no less than 110% of the Fair Market Value
of the Stock on the date the Stock Option is granted.


 


(b)           Option Term.  The term of each Stock Option shall be fixed
by the Committee, but no Incentive Stock Option shall be exercisable more than
ten years after the date the Stock Option is granted.  In the event that the Committee does not fix
the term of a Stock Option, the term shall be ten years from the date the Stock
Option is granted, subject to earlier termination as otherwise provided
herein.  Notwithstanding the foregoing,
if an employee owns or is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of capital stock of the Company or any Parent Corporation
or Subsidiary and an Incentive Stock Option is granted to such employee, the
term of such Stock Option shall be no more than five years from the date of
grant.


 


(c)           Exercisability.  Stock Options shall be exercisable in
accordance with such terms and conditions and during such periods as determined
by the Committee at or after grant, subject to the restrictions stated in Section 5(b) above.  In the event that the Committee does not
determine the time at which a Stock Option shall be exercisable, such Stock
Option shall be exercisable one year after the date of grant, subject to
earlier termination as otherwise provided


 


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herein.  If the Committee provides, in its discretion,
that any Stock Option is exercisable only in installments, the Committee may
waive such installment exercise provisions at any time.


 


(d)           Method of Exercise.  Stock Options may be exercised in whole or in
part at any time during the option period by giving written notice of exercise
to the Company, specifying the number of shares to be purchased.  Such notice shall be accompanied by payment
in full of the purchase price, either by certified or bank check, or by any
other form of legal consideration deemed sufficient by the Committee and
consistent with the Plan’s purpose and applicable law, including promissory
notes or delivery of irrevocable instructions to a broker acceptable to the
Company to promptly deliver to the Company the amount of sale or loan proceeds
to pay the entire exercise price and any tax withholding resulting from such
exercise.  As determined by the Committee
at the time of grant or exercise, in its sole discretion, payment in full or in
part may also be made by tendering, by either actual delivery of shares or
attestation, shares of Stock already owned by the optionee and valued at Fair
Market Value (which, in the case of Stock acquired upon exercise of an Option,
have been owned for more than six months on the date of surrender); provided,
however, that, in the case of an Incentive Option, the right to make a
payment in the form of already owned shares may be authorized only at the time
the Option is granted.  No shares of
Stock shall be issued until full payment therefor has been made.


 


(e)           Tax Withholding.  Each optionee shall, no later than the date
as of which any part of the value of an award first becomes includable as
compensation in the gross income of the optionee for federal income tax
purposes, pay to the Company, or make arrangements satisfactory to the
Committee regarding payment of, any federal, state, or local taxes of any kind
required by law to be withheld with respect to the award.  The obligations of the Company under the Plan
shall be conditional on such payment or arrangements and the Company, any
Parent Corporation, and any Subsidiary shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the optionee.  If the terms of a Option so permit,
an optionee may elect by written notice to the Company to satisfy part or all
of the withholding tax requirements associated with the award by (i) authorizing
the Company to retain from the number of shares of Stock that would otherwise
be deliverable to the optionee, or (ii) delivering to the Company from
shares of Stock already owned by the optionee, that number of shares having an
aggregate Fair Market Value equal to part or all of the tax payable by the
optionee under this Section, and in the event shares are withheld, the amount
withheld shall not exceed the minimum required federal, state and FICA
withholding amount.  Any such election shall be in
accordance with, and subject to, applicable tax and securities laws,
regulations and rulings.


 


(f)            Non-transferability of
Options.


 


(i)            No Incentive Stock Option
shall be transferable by the optionee otherwise than by will or by the laws of
descent and distribution, and all Incentive Stock Options shall be exercisable,
during the optionee’s lifetime, only by the optionee.


 


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(ii)           The Committee may, in its
discretion, authorize all or a portion of any Nonqualified Stock Options to be
granted to an optionee to be on terms which permit transfer by such optionee to
(A) the spouse, children or grandchildren of the optionee (“Immediate
Family Members”), (B) a trust or trusts for the exclusive benefit of such
Immediate Family Members, or (C) a partnership or partnerships in which
such Immediate Family Members are the only partners, provided that (1) there
may be no consideration for any such transfer, (2) the Agreement pursuant
to which such options are granted must be approved by the Committee, and must
expressly provide for transferability in a manner consistent with this Section 5(f)(ii),
and (3) subsequent transfers of transferred options shall be prohibited
except those in accordance with Section 5(f)(i).  Following transfer, any such options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that the term “optionee” herein shall
in such event be deemed to refer to the transferee, except that the events of
termination of employment of Sections 5(g), 5(h) and 5(i) hereof
shall continue to be applied with respect to the original optionee, following
which the options shall be exercisable by the transferee only to the extent,
and for the periods specified in such Sections.


 


(g)           Termination by Death or
Disability. 
Unless the Agreement provides otherwise or the Committee determines
otherwise, if an optionee’s employment by or relationship with the Company or
any Subsidiary or Parent Corporation terminates by reason of death or Disability,
any Stock Option held by such optionee may thereafter be exercised, to the
extent it was exercisable at the time of death or Disability (or on such
accelerated basis as the Committee shall determine at or after grant), by the
optionee or the legal representative of the estate or by the legatee of the
optionee under the will of the optionee, but may not be exercised after one
year from the date of such death or Disability or the expiration of the stated
term of the option, whichever period is shorter.  In the event of such termination by reason of
death or Disability, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422
of the Code, the option will thereafter be treated as a Non-Qualified Stock
Option.


 


(h)           Termination by Reason of Retirement.  Unless the Stock Option Agreement provides
otherwise or the Committee determines otherwise, if an optionee’s employment by
or relationship with the Company or any Subsidiary or Parent Corporation
terminates by reason of Retirement, any Stock Option held by such optionee may
thereafter be exercised, to the extent it was exercisable at the time of such
Retirement, but may not be exercised after one year from the date of such
Retirement or the expiration of the stated term of the option, whichever period
is shorter.


 


(i)            Other Termination.  Unless the Stock Option Agreement provides
otherwise or the Committee determines otherwise, if an optionee’s employment by
or relationship with the


 


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Company or
any Subsidiary or Parent Corporation terminates for any reason other than
death, Disability or Retirement, any Stock Option held by such optionee may
thereafter be exercised, to the extent it was exercisable as of the effective
date of such termination, for the lesser of three months from the date of such
termination or the expiration of the stated term of the option, whichever
period is shorter.  Notwithstanding the
above, in the event an optionee’s employment is terminated for Cause, all
unexercised Options shall immediately terminate.


 


SECTION 6.  Restricted
Stock.


 


(a)           Administration.  Shares of Restricted Stock may be issued
either alone or in addition to other awards granted under the Plan.  The Committee shall determine the officers,
employees and Consultants of the Company to whom, and the time or times at
which, grants of Restricted Stock will be made, the number of shares to be
awarded, the time or times within which such awards may be subject to
forfeiture, and all other conditions of the awards.  The Committee may also condition the grant of
Restricted Stock upon the attainment of specified performance goals.  The provisions of Restricted Stock awards
need not be the same with respect to each recipient.


 


(b)           Awards and Certificates.  The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such
award, unless and until such recipient has executed an Agreement evidencing the
award and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the then applicable terms and conditions.


 


(i)            Each participant shall be issued a stock certificate in respect of
shares of Restricted Stock awarded under the Plan.  Such certificate shall be registered in the
name of the participant, and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such award, substantially in
the following form:


 


“The
transferability of this certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture) of the Angeion
Corporation 2002 Stock Option Plan and an Agreement entered into between the
registered owner and Angeion Corporation. 
Copies of the Plan and Agreement are on file in the offices of Angeion
Corporation, 350 Oak Grove Parkway, Saint Paul, Minnesota 55127.”


 


(ii)           The Committee shall require that the stock certificates evidencing
such shares be held in custody by the Company until the restrictions thereon
shall have lapsed, and that, as a condition of any Restricted Stock award, the
participant shall have delivered a stock power, endorsed in blank, relating to
the Stock covered by such award.


 


(c)           Restrictions and
Conditions. 
The shares of Restricted Stock awarded pursuant to 


 


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the Plan
shall be subject to the following restrictions and conditions:


 


(i)            Subject to the provisions of this Plan and the award Agreement,
during a period set by the Committee commencing with the date of such award
(the “Restriction Period”), the participant shall not be permitted to sell,
transfer, pledge or assign shares of Restricted Stock awarded under the
Plan.  Within these limits, the Committee
may provide for the lapse of such restrictions in installments where deemed
appropriate.


 


(ii)           Except as provided in paragraph (c)(i) of this Section 6,
the participant shall have, with respect to the shares of Restricted Stock, all
of the rights of a shareholder of the Company, including the right to vote the
shares and the right to receive any cash dividends.  The Committee, in its sole discretion, may
permit or require the payment of cash dividends to be deferred and, if the Committee
so determines, reinvested in additional shares of Restricted Stock (to the
extent shares are available under Section 3).  Certificates for shares of unrestricted Stock
shall be delivered to the grantee promptly after, and only after, the period of
forfeiture shall have expired without forfeiture in respect of such shares of
Restricted Stock.


 


(iii)          Subject to the provisions of the award Agreement and paragraph (c)(iv) of
this Section 6, upon termination of employment for any reason during the
Restriction Period, all shares still subject to restriction shall be forfeited
by the participant.


 


(iv)          In the event of special hardship circumstances of a participant
whose employment is terminated (other than for Cause), including death,
Disability or Retirement, or in the event of an unforeseeable emergency of a
participant still in service, the Committee may, in its sole discretion, when
it finds that a waiver would be in the best interest of the Company, waive in
whole or in part any or all remaining restrictions with respect to such
participant’s shares of Restricted Stock.


 


SECTION 7.  Change of
Control.


 


The Committee may, in its sole and
absolute discretion, at the time of grant provide for the acceleration, in
whole or in part, of any Stock Option or Restricted Stock award granted under
this Plan in the Agreement setting forth such an award.  Any terms and conditions applicable to
acceleration shall be determined on an individual basis and need not be
identical for similarly situated grantees.


 


In addition, if there is a Change of
Control, the Committee may provide for one or more of the following:


 


(a)           the complete termination of this Plan and the cancellation of
outstanding Stock Options and Restricted Stock awards not exercised or vested
prior to a date specified by the


 


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Committee
(which date shall give optionees and other award recipients a reasonable period
of time in which to exercise their awards prior to the effectiveness of such
transaction);


 


(b)           that optionees holding outstanding Stock Options shall receive,
with respect to each share of Stock subject to such award, as of the effective
date of any such Change of Control, cash in an amount equal to the excess of
the Fair Market Value of such Stock on the date immediately preceding the effective
date of such transaction over the Fair Market Value per share of such Stock on
the date of grant of the Stock Options, and award participants holding
Restricted Stock awards shall receive, with respect to each share of Stock
subject to such award, as of the effective date of any such Change of Control,
cash in an amount equal to the Fair Market Value of such Stock on the date
immediately preceding the effective date of such transaction; provided that the
Committee may, in lieu of such cash payment, distribute to such optionees and
other award recipients shares of Stock of the Company or securities of any
corporation succeeding the Company by reason of such transaction, such
securities having a value equal to the cash payment herein;


 


(c)           the continuance of the Plan with respect to the exercise of Stock
Options, Restricted Stock awards, which were outstanding as of the date of
adoption by the Board of such plan for such Change of Control and provision to
optionees and participants of the right to exercise their Stock Options,
Restricted Stock award as to an equivalent number of shares of stock of the
corporation succeeding the Company by reason of such Change of Control.


 


The Board may restrict the rights of or
the applicability of this Section 7 to the extent necessary to comply with
Section 16(b) of the Securities Exchange Act of 1934, the Code or any
other applicable law or regulation.


 


SECTION 8.  Amendments and
Termination.


 


The Committee may amend, alter, or
discontinue the Plan, but no amendment, alteration, or discontinuation shall be
made (a) which would impair the rights of an optionee or participant under
a Stock Option, Restricted Stock or other Stock-based award previously granted,
without the optionee’s consent, or (b) which, without the approval of the
stockholders of the Company, would cause the Plan no longer to comply with Rule 16b-3
under the Securities Exchange Act of 1934, Section 422 of the Code, or the
rules of the Nasdaq Stock Market or any stock exchange upon which the
Stock is traded, or any other regulatory requirements.  Adjustments made by the Committee pursuant to
Section 3 (relating to adjustments of Stock) shall not be subject to the
limitations of this Section 8.


 


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SECTION 9.  General
Provisions.


 


(a)           Compliance With Laws.  No shares of Stock will be issued pursuant to
the Plan unless in compliance with applicable legal requirements, including
without limitation, those relating to securities laws and stock exchange
listing requirements.  The Committee may
require each person purchasing shares pursuant to an award under the Plan to
represent to and agree with the Company in writing that the optionee is
acquiring the Stock for investment purposes and without a view to distribution
thereof.


 


All certificates for shares of Stock
delivered under the Plan shall be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Stock is then listed, and any applicable
federal or state securities laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to
such restrictions.  The issuance of
shares of Stock may be effected on a non-certificated basis to the extent not
prohibited by applicable law or the applicable rules of any stock exchange
upon which the Stock is then listed.


 


(b)           Company Authority; No Rights to Employment.  Nothing contained in this
Plan shall prevent the Board from adopting other or additional compensation
arrangements, subject to stockholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable only in
specific cases.  The adoption of the Plan
shall not confer upon any employee optionee or Consultant of the Company, any
Parent Corporation, or any Subsidiary any right to continued employment or
engagement with the Company, any Parent Corporation, or any Subsidiary, as the
case may be, nor shall it interfere in any way with the right of the Company,
any Parent Corporation, or any Subsidiary to terminate the employment or
engagement of any of its employees or Consultants at any time.


 


(c)           Repurchase Right.  The Committee may, at the time of the grant
of an award under the Plan, provide the Company with the right to repurchase
shares of Stock acquired pursuant to the Plan, pursuant to which the optionee
or participant shall be required to offer to the Company upon termination of
employment, engagement or other relationship, for any reason, any Stock that
the optionee or participant acquired under the Plan, with the price being the
then Fair Market Value of the Stock or, in the case of a termination for Cause,
an amount equal to the cash consideration paid for the Stock, subject to such
other terms and conditions as the Committee may specify at the time of grant.


 


(d)           Forfeiture for Competition.  The Committee may, at the time of the grant
of an award under the Plan, provide the Company with the right to repurchase,
or require the forfeiture of, shares of Stock acquired pursuant to the Plan by
any optionee or participant who at any time violates or breaches any applicable
noncompetition agreement that such optionee has with the Company or any
Subsidiary or Parent Corporation.


 


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(e)           Restrictions on Transfer.  As a further condition to the grant of any
award or the issuance of Stock to participants, the participants agrees to the
following:


 


(i)            In the event the Company
advises the optionee or participant that it plans an underwritten public
offering of its Common Stock in compliance with the Securities Act of 1933, as
amended, and the underwriter(s) seek to impose restrictions under which certain
shareholders may not sell or contract to sell or grant any option to buy or
otherwise dispose of part or of any award granted to participant or any of the
underlying Stock, the participant will not, for a period not to exceed one
hundred and eighty (180) days from the effective date of the prospectus, sell
or contract to sell or grant an option to buy or otherwise dispose of any award
granted to participant pursuant to the Plan or any of the underlying shares of Stock
without the prior written consent of the underwriter(s) or its
representative(s).


 


(ii)           In the event the Company
makes any public offering of its securities and determines in its sole
discretion that it is necessary to reduce the number of issued but unexercised
stock purchase rights so as to comply with any state’s securities or Blue Sky
law limitations with respect thereto, the Committee shall have the right (i) to
accelerate the exercisability of any Stock Option and the date on which such
Stock Option must be exercised or accelerated the vesting of any Restricted
Stock or Deferred Stock, provided that the Company gives the participant prior
written notice of such acceleration, and (ii) to cancel any awards or
portions thereof which the participant does not exercise prior to or
contemporaneously with such public offering.


 


(iii)          In the event of a
transaction which is treated as a “pooling of interests” under generally
accepted accounting principles, the optionee will comply with Rule 145 of
the Securities Act of 1933 and any other restrictions imposed under other
applicable legal or accounting principles if the optionee is an “affiliate” (as
defined in such applicable legal and accounting principles) at the time of the
transaction, and the optionee will execute any documents necessary to ensure
compliance with such rules.


 


The Company reserves the right to place a
legend on any stock certificate issued upon the exercise of a Stock Option
pursuant to the Plan to assure compliance with this Section 8 or other
provisions of the Plan.


 


(f)            Effect of
Transfer/Leave of Absence.  For purposes of the Plan, the following
events shall not be deemed a termination of employment:


 


(i)            a transfer of an employee
from the Company to a Parent Corporation or a Subsidiary, or a transfer of an
employee from a Parent Corporation or a Subsidiary to the Company or any other
Parent Corporation or Subsidiary;


 


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(ii)           a leave of absence,
approved in writing by the Committee, for military service or sickness, or for
any other purpose approved by the Committee if the period of such leave does
not exceed ninety (90) days (or such longer period as the Committee may
approve, in its sole discretion); and


 


(iii)          a leave of absence in
excess of ninety (90) days, approved in writing by the Committee, but only if
the employee’s right to reemployment is guaranteed either by a statute or by
contract, and provided that, in the case of any leave of absence, the employee
returns to work within thirty (30) days after the end of such leave.


 


SECTION 10.  Restrictions
on Resale of Shares Issued Under Plan.


 


Unless otherwise provided by the Board of
Directors, including the approval of the Designee or Designees (as described in
the Company’s Articles of Incorporation), each Option granted under the Plan to
officers of Angeion or officers of Medical Graphics Corporation shall provide
that the optionee is prohibited from transferring more than 60% of the shares
issuable upon exercise of the Option until completion of the two year period
after confirmation of the Plan of Reorganization.


 


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