Exhibit 10.2


 


NONQUALIFIED STOCK
OPTION AGREEMENT


 


INSPIREMD, INC.


2013 LONG-TERM
INCENTIVE PLAN


 


1.          Grant
of Option. Pursuant to the InspireMD, Inc. 2013 Long-Term Incentive Plan (the “Plan”) for key Employees,
key Contractors, and Outside Directors of InspireMD, Inc., a Delaware corporation (the “Company”), and
its Subsidiaries (collectively, the “Group”), the Company grants to


 


	 	James J. Barry PhD	 
	 	(the “Participant”),	 


 


an option (the “Option”
or “Stock Option”) to purchase a total of three hundred thirty-five thousand fifty-eight (335,058) full
shares of Common Stock of the Company (the “Optioned Shares”) at an “Option Price”
equal to $2.61 per share (being equal to the Fair Market Value per share of the Common Stock on the Date of Grant).


 


The “Date
of Grant” of this Stock Option is July 14, 2014. The “Option Period” shall commence on
the Date of Grant and shall expire on the date immediately preceding the tenth (10th) anniversary of the Date of Grant,
unless terminated earlier in accordance with Section 4 below. The Stock Option is a Nonqualified Stock Option. This Stock
Option is intended to comply with the provisions governing nonqualified stock options under the final Treasury Regulations issued
on April 17, 2007, in order to exempt this Stock Option from application of Section 409A of the Code.


 


2.          Subject
to Plan. The Stock Option and its exercise are subject to the terms and conditions of the Plan, and the terms of the Plan shall
control to the extent not otherwise inconsistent with the provisions of this Nonqualified Stock Option Agreement (this “Agreement”).
The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan. The Stock
Option is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant
in writing.


 


3.          Vesting;
Time of Exercise. Except as specifically provided in this Agreement and subject to certain restrictions and conditions set
forth in the Plan, the Optioned Shares shall be vested and the Stock Option shall be exercisable as follows:


 


a.           Over
a three (3)-year vesting period commencing on the Date of Grant:


 


i.            One
third (1/3) of the total Optioned Shares shall vest and that portion of the Stock Option shall become exercisable on the first
anniversary of the Date of Grant, provided the Participant has continuously provided services to the Group as an Employee, Contractor,
or Outside Director through that date.


 


ii.         An
additional one third (1/3) of the total Optioned Shares shall vest and that portion of the Stock Option shall become exercisable
on the second anniversary of the Date of Grant, provided the Participant has continuously provided services to the Group as an
Employee, Contractor, or Outside Director through that date.


 


iii.         The
remaining one third (1/3) of the total Optioned Shares shall vest and that portion of the Stock Option shall become exercisable
on the third anniversary of the Date of Grant, provided the Participant has continuously provided services to the Group as an Employee,
Contractor, or Outside Director through that date.


 




    	 



    	 



    

 


b.           Notwithstanding
the foregoing and subject to Section 3(c) below, upon (A) the Participant’s death, or (B) the Termination Date (as
defined below) if the Participant’s termination of employment or service is due to (1) his Disability (as defined below),
(2) a termination by the Company without Cause (as defined below), or (3) a termination by the Participant for Good Reason (as
defined below), fifty percent (50%) of the total Optioned Shares not previously vested shall thereupon immediately become fully
vested and exercisable


 


c.           Notwithstanding
the foregoing, in the event that a Change in Control (as defined below) occurs and during the Change in Control Period (as defined
below) (A) the Participant terminates his employment or service for Good Reason, or (B) the Company terminates the Participant’s
employment or service without Cause, then upon the Termination Date, one hundred percent (100%) of the total Optioned Shares not
previously vested shall thereupon immediately become fully vested and exercisable.


 


d.           For
purposes of this Agreement, the following terms shall have the meanings set forth below:


 


i.            “Cause”
shall have the meaning set forth in the Employment Agreement, by and between the Company and the Participant, entered into and
effective as of July 14, 2014 (the “Employment Agreement”).


 


ii.         “Change
in Control” shall have the meaning set forth in the Employment Agreement.


 


iii.         “Change
in Control Period” shall have the meaning set forth in the Employment Agreement.


 


iv.         “Disability”
shall have the meaning set forth in the Employment Agreement.


 


v.           “Good
Reason” shall have the meaning set forth in the Employment Agreement.


 


vi.         “Termination
Date” shall mean the date of the Participant’s termination of employment or service with the Company and the
Group.


 


4.          Term;
Forfeiture.


 


a.           Except
as otherwise provided in this Agreement, to the extent the unexercised portion of the Stock Option relates to Optioned Shares which
are not vested on the Participant’s Termination Date, the Stock Option will be terminated on that date. The unexercised portion
of the Stock Option that relates to Optioned Shares which are vested will terminate at the first of the following to occur:


 


i.            5
p.m. on the date the Option Period terminates;


 




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ii.         5
p.m. on the date which is eighteen (18) months following the date of the Participant’s Termination of Service due to (A)
death, (B) Disability, (C) termination by the Participant for Good Reason, or (D) termination by the Company without Cause;


 


iii.         immediately
upon the Participant’s Termination of Service by the Company for Cause;


 


iv.         5
p.m. on the date which is thirty (30) days following the date of the Participant’s Termination of Service for any reason
not otherwise specified in this Section 4.a.; and


 


v.          5
p.m. on the date the Company causes any portion of the Stock Option to be forfeited pursuant to Section 7 hereof.


 


b.           Notwithstanding
anything herein to the contrary, if the Participant is terminated for Cause, then all Optioned Shares (including vested Optioned
Shares), whether exercisable or not on the date that the Company delivers to the Participant a termination notice, shall expire
and may not be exercised, and the shares of stock covered by the Stock Options shall revert to the Plan.


 


5.          Who
May Exercise. Subject to the terms and conditions set forth in Sections 3 and 4 above, during the lifetime of the Participant,
the Stock Option may be exercised only by the Participant, or by the Participant’s guardian or personal or legal representative.
If the Participant’s Termination of Service is due to his death prior to the dates specified in Section 4.a. hereof,
and the Participant has not exercised the Stock Option as to the maximum number of vested Optioned Shares as set forth in Section 3
hereof as of the date of death, the following persons may exercise the exercisable portion of the Stock Option on behalf of the
Participant at any time prior to the earliest of the dates specified in Section 4.a. hereof: the personal representative
of his estate, or the person who acquired the right to exercise the Stock Option by bequest or inheritance or by reason of the
death of the Participant; provided that the Stock Option shall remain subject to the other terms of this Agreement, the Plan, and
Applicable Laws, rules, and regulations.


 


6.          No
Fractional Shares. The Stock Option may be exercised only with respect to full shares, and no fractional share of stock shall
be issued.


 


7.          Manner
of Exercise. Subject to such administrative regulations as the Committee may from time to time adopt, the Stock Option may
be exercised by the delivery of written notice to the Committee setting forth the number of shares of Common Stock with respect
to which the Stock Option is to be exercised, the date of exercise thereof (the “Exercise Date”) which
shall be at least three (3) days after giving such notice unless an earlier time shall have been mutually agreed upon. On the Exercise
Date, the Participant shall deliver to the Company consideration with a value equal to the total Option Price of the shares to
be purchased, payable as follows: (a) cash, check, bank draft, or money order payable to the order of the Company; (b) if the Company,
in its sole discretion, so consents in writing, Common Stock (including Restricted Stock) owned by the Participant on the Exercise
Date, valued at its Fair Market Value on the Exercise Date, and which the Participant has not acquired from the Company within
six (6) months prior to the Exercise Date; (c) if the Company, in its sole discretion, so consents in writing, by delivery (including
by FAX) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions
from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Common Stock
purchased upon exercise of the Stock Option or to pledge such shares as collateral for a loan and promptly deliver to the Company
the amount of sale or loan proceeds necessary to pay such purchase price; and/or (d) in any other form of valid consideration that
is acceptable to the Committee in its sole discretion. In the event that shares of Restricted Stock are tendered as consideration
for the exercise of a Stock Option, a number of shares of Common Stock issued upon the exercise of the Stock Option equal to the
number of shares of Restricted Stock used as consideration therefor shall be subject to the same restrictions and provisions as
the Restricted Stock so tendered.


 




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Upon payment of all
amounts due from the Participant, the Company shall cause the Common Stock then being purchased to be registered in the Participant’s
name (or the person exercising the Participant’s Stock Option in the event of his death) promptly after the Exercise Date,
unless the Participant, or such other person, requests, in writing, delivery of the certificates for the Common Stock, as provided
in Section 8.3(c) of the Plan and in accordance with the procedures established by the Committee. The obligation of the Company
to register or deliver shares of Common Stock shall, however, be subject to the condition that if at any time the Company shall
determine in its discretion that the listing, registration, or qualification of the Stock Option or the Common Stock upon any securities
exchange or inter-dealer quotation system or under any state or federal law, or the consent or approval of any governmental regulatory
body, is necessary as a condition of, or in connection with, the Stock Option or the issuance or purchase of shares of Common Stock
thereunder, then the Stock Option may not be exercised in whole or in part unless such listing, registration, qualification, consent,
or approval shall have been effected or obtained free of any conditions not reasonably acceptable to the Committee.


 


If the Participant
fails to pay for any of the Optioned Shares specified in such notice or fails to accept delivery thereof, that portion of the Participant’s
Stock Option and right to purchase such Optioned Shares may be forfeited by the Participant.


 


8.          Nonassignability.
The Stock Option is not assignable or transferable by the Participant except by will or by the laws of descent and distribution.


 


9.          Rights
as Stockholder. The Participant will have no rights as a stockholder with respect to any of the Optioned Shares until the issuance
of a certificate or certificates to the Participant, or the registration of such shares in the Participant’s name, for the
shares of Common Stock. The Optioned Shares shall be subject to the terms and conditions of this Agreement. Except as otherwise
provided in Section 10 hereof, no adjustment shall be made for dividends or other rights for which the record date
is prior to the issuance of such certificate or certificates. The Participant, by his execution of this Agreement, agrees to execute
any documents requested by the Company in connection with the issuance of the shares of Common Stock.


 


10.         Adjustment
of Number of Optioned Shares and Related Matters. The number of shares of Common Stock covered by the Stock Option, and the
Option Prices thereof, shall be subject to adjustment in accordance with Articles 11 - 13 of the Plan.


 


11.         Nonqualified
Stock Option. The Stock Option shall not be treated as an Incentive Stock Option.


 


12.         Voting.
The Participant, as record holder of some or all of the Optioned Shares following exercise of this Stock Option, has the exclusive
right to vote, or consent with respect to, such Optioned Shares until such time as the Optioned Shares are transferred in accordance
with this Agreement; provided, however, that this Section shall not create any voting right where the holders of
such Optioned Shares otherwise have no such right.


 


13.         Specific
Performance. The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently
agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative
of all of the rights and remedies at law or in equity of the parties under this Agreement.


 




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14.         Participant’s
Acknowledgments. The Participant acknowledges that a copy of the Plan has been made available for his review by the Company,
and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Stock Option subject to all the
terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations
of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement.


 


15.         Law
Governing. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware
(excluding any conflict of laws rule or principle of Delaware law that might refer the governance, construction, or interpretation
of this Agreement to the laws of another state).


 


16.         No
Right to Continue Service or Employment. Nothing herein shall be construed to confer upon the Participant the right to continue
in the employ or to provide services to the Company or the Group, whether as an Employee, Contractor, or Outside Director, or interfere
with or restrict in any way the right of the Company or the Group to discharge the Participant as an Employee, Contractor, or Outside
Director at any time.


 


17.         Legal
Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement
shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the
invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that
is contained in this Agreement, and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable
term, provision, or agreement had never been contained herein.


 


18.         Covenants
and Agreements as Independent Agreements. Each of the covenants and agreements that is set forth in this Agreement shall be
construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause
of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense
to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.


 


19.         Entire
Agreement. This Agreement together with the Plan and the Employment Agreement supersede any and all other prior understandings
and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole
and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between
the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges
that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting
on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement, or promise that
is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.


 


20.         Parties
Bound. The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure
to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors
and assigns, subject to the limitation on assignment expressly set forth herein.


 


21.         Modification.
No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in
writing and signed by the parties; provided, however, that the Company may change or modify this Agreement without the Participant’s
consent or signature if the Company determines, in its sole discretion, that such change or modification is necessary for purposes
of compliance with or exemption from the requirements of Section 409A of the Code or any regulations or other guidance issued thereunder.
Notwithstanding the preceding sentence, the Company may amend the Plan to the extent permitted by the Plan.


 




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22.         Headings.
The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive
matters to be considered in construing the terms and provisions of this Agreement.


 


23.         Gender
and Number. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in
the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.


 


24.         Notice.
Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company
or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore
specified by written notice delivered in accordance herewith:


 


a.           Notice
to the Company shall be addressed and delivered as follows:


 


InspireMD, Inc.


800 Boylston Street, 16th Floor


Boston, MA 02199


Attn: Craig Shore


 


b.           Notice
to the Participant shall be addressed and delivered as set forth on the signature page.


 


25.         Tax
Requirements. The Participant is hereby advised to consult immediately with his own tax advisor regarding the tax consequences
of this Agreement. The Company or, if applicable, any Subsidiary (for purposes of this Section 25, the term “Company”
shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form
in connection with the Plan, any federal, state, local, or other taxes required by law to be withheld in connection with this Award.
The Company may, in its sole discretion, also require the Participant receiving shares of Common Stock issued under the Plan to
pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant’s income
arising with respect to this Award. Such payments shall be required to be made when requested by the Company and may be required
to be made prior to the registration or delivery of any certificate representing shares of Common Stock. Such payment may be made
by (i) the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under
(iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents
in writing, the actual delivery by the exercising Participant to the Company of shares of Common Stock that the Participant has
not acquired from the Company within six (6) months prior to the date of exercise, which shares so delivered have an aggregate
Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding
payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares
to be delivered upon the exercise of the Stock Option, which shares so withheld have an aggregate Fair Market Value that equals
(but does not exceed) the required tax withholding payment; or (iv) any combination of (i), (ii), or (iii). The Company may, in
its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.


 




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[Remainder of Page Intentionally Left
Blank


Signature Page Follows.]




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IN WITNESS WHEREOF,
the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence his consent
and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.





 


	 	THE COMPANY:
	 	 
	 	INSPIREMD, INC.
	 	 	 
	 	By:	/s/ Craig Shore
	 	Name:	Craig Shore
	 	Title:	Chief Financial Officer
	 	 
	 	THE PARTICIPANT:
	 	 
	 	/s/ James J. Barry, Ph.D.
	 	Signature
	 	 	 
	 	Name:	James J. Barry, Ph.D.
	 	Address:	 
	 	 	 


 




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