Exhibit
10.2


ENPATH MEDICAL, INC.


1999 NON-EMPLOYEE DIRECTOR AND
MEDICAL ADVISORY BOARD


STOCK OPTION PLAN


(as
amended through April 27, 2006)


1.             PURPOSE OF PLAN


This Plan shall be known as the “Enpath Medical, Inc.
1999 Non-Employee Director and Medical Advisory Board Stock Option Plan” and is
hereinafter referred to as the “Plan.” The purposes of the Plan are to attract
and retain the best available personnel for service as members of the Board of
Directors and Medical Advisory Board of Enpath Medical, Inc. (the “Company”)
and to provide additional incentive to the non-employee directors and advisors
to continue to serve on the Board of Directors and Medical Advisory Board,
respectively, by affording them an opportunity to acquire a proprietary
interest in the Company. It is intended that these purposes be effected through
the granting of stock options or restricted stock awards, as provided herein.


2.             DEFINITIONS


The following terms have the meanings set forth below,
unless the context otherwise requires:


(a)           “ADVISOR”
means a member of the Advisory Board.


(b)           “ADVISORY
BOARD” means the Medical Advisory Board of the Company.


(c)           “BOARD”
means the Board of Directors of the Company.


(d)           “CODE”
means the Internal Revenue Code of 1986, as amended.


(e)           “COMMITTEE”
means the group of individuals administering the Plan, as provided in Section 4
of the Plan.


(f)            “COMMON
STOCK” means the common stock of the Company, par value $.01 per share (as such
par value may be adjusted from time to time).


(g)           “DISABILITY”
means the permanent and total disability of the Participant within the meaning
of Section 22 (e) (3) of the Code.


(h)           “EXCHANGE
ACT” means the Securities Exchange Act of 1934, as amended.


(i)            “FAIR
MARKET VALUE” means, with respect to the Common Stock, the following:


(i)            If the
Common Stock is listed or admitted to unlisted trading privileges on any
national securities exchange or is not so listed or admitted but transactions
in the Common Stock are reported on the NASDAQ Stock Market, the last sale
price of the Common Stock on such exchange or reported by the NASDAQ Stock
Market as of such date (or, if no shares were traded on such day, as of the
next preceding day on which there was such a trade).


(ii)           If the
Common Stock is not so listed or admitted to unlisted trading privileges or
reported on the NASDAQ Stock Market, and bid and asked prices therefore in the
over-the-counter market are reported by the NASDAQ System or the National
Quotation Bureau, Inc. (or any comparable reporting service), the average of the
closing bid and asked prices as of such date, as so reported by the NASDAQ
System, or, if-not so reported 



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thereon, as reported by the National Quotation Bureau,
Inc. (or such comparable reporting service).


(iii)          If
the Common Stock is not so listed or admitted to unlisted trading privileges,
or reported on the NASDAQ Stock Market, and bid and asked prices are not so
reported, such price as the Committee determines in good faith in the exercise
of its reasonable discretion.


(j)            “NON-EMPLOYEE
DIRECTOR” means a member of the Board that meets the requirements of Section
5(a) of the Plan.


(k)           “NON-STATUTORY
STOCK OPTION” means a right to purchase Common Stock granted to and pursuant to
the Plan that does not qualify as an Incentive Stock Option, meaning of Section
422 of the Code.


(l)            “OPTION”
means a Non-Statutory Stock Option granted pursuant to this Plan.


(m)          “PARTICIPANT”
means an individual who is eligible to receive and who receives one or more
Options pursuant to the Plan.


(n)           “PERSON”
means any individual, corporation, partnership, group, association or other “person”
(as such term is used in Section 14 (d) of the Exchange Act), other than the
Company, a wholly owned subsidiary of the Company or any employee benefit plan
sponsored by the Company or a wholly owned subsidiary of the Company.


(o)           “PREVIOUSLY
ACQUIRED SHARES” mean shares of Common Stock that are already owned by the
Participant and shares of Common Stock that are to be acquired by the
Participant pursuant to the exercise of an Option.


(p)           “RESTRICTED
STOCK” means an award of Shares that are subject to restrictions under
Section 12 below.


(q)           “RETIREMENT”
means the retirement of a Participant pursuant to and in accordance with the
regular or, if approved by the Board for purposes of the Plan, any early
retirement plan or practice of the Company or Subsidiary then covering the
Participant.


(r)            “SECURITIES
ACT” means the Securities Act of 1933, as amended.


(s)           “SHARE”
or “SHARES” means one or more shares of Common Stock.


(t)            “SUBSIDIARY”
means any subsidiary corporation of the Company within the meaning of Section
424(f) and (g) of the Code.



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3.             STOCK SUBJECT TO PLAN


The stock subject to option grants or restricted stock
awards under the Plan shall be shares of the Company’s authorized Common Stock.
Subject to the adjustment as provided in Section 15 hereof, the maximum number
of Shares for which options may be exercised or restricted stock awards made
under this Plan shall be 400,000(1) Shares. Any Shares subject to an option or
restricted stock award under the Plan which, for any reason, is forfeited,
expires, lapses or is otherwise terminated unexercised as to such Shares shall
be available for options and restricted stock awards thereafter granted during
the term of the Plan and may be again subjected to an option or restricted
stock grant under the Plan.


4.             ADMINISTRATION
OF PLAN


The Plan shall be effective as of July 29, 1999,
according to the terms and conditions herein, and, if required by Section 17 of
the Exchange Act or the rules and regulations thereunder, subject to subsequent
approval by the shareholders of the Company. The Plan shall be administered by
the Board. The Board may authorize the compensation or other committee thereof,
consisting of at least two (2) members appointed by the Board to exercise the
powers conferred on the Board under the Plan, other than the power under
Section 15 hereof to amend or terminate the Plan.


The interpretation and construction by the Board or
Committee of any provisions of the Plan or of any option or award of restricted
stock granted hereunder shall be final. No member of the Board or Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any option or award of restricted stock granted hereunder.


5.             ELIGIBILITY
AND GRANT


(a)           NON-EMPLOYEE
DIRECTORS.


Each
member of the Board who satisfies all of the following criteria shall
automatically be a Participant in the Plan:


(i)            Such
member is not, and has not during the immediately preceding 12-month period
been, an employee of the Company or any Subsidiary; and


(ii)           Such
member does not hold any options to purchase Common Stock of the Company,
except for stock options previously granted pursuant to the Plan, the 1996 or
the 1992 Non-Employee Director Stock Option Plan.


(b)           ADVISORY
BOARD MEMBERS.


Each
member of the Advisory Board who satisfies all of the following criteria shall
be eligible to be a Participant in the Plan:


(i)            Such
member is not, and has not during the immediately preceding 12-month period,
been an employee of the Company or any Subsidiary; and


(ii)           Such
member does not hold any options to purchase Common Stock of the Company,
except for stock options previously granted pursuant to the Plan.






(1)   The Plan originally authorized
200,000 Shares for issuance.  An
amendment to the Plan to increase the number of Shares authorized under the
Plan by 200,000 shares was approved by the Board on February 16, 2005 and by
the Company’s shareholders on April 28, 2005.



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6.             NON-EMPLOYEE
DIRECTOR OPTIONS (2)


(a)   GRANT
OF NON-EMPLOYEE DIRECTOR OPTIONS. 
Beginning at the 2006 Annual Meeting of Shareholders, each Non-Employee
Director will receive, by virtue of serving as a Non-Employee Director of the
Company, an annual grant of a Non-Statutory Stock Option to purchase 5,000
Shares.  The Option will be issued on the
Monday following the Annual Shareholder meeting at a price equal to Fair Market
Value on that date.


(b)   EXERCISABILITY
OF OPTIONS.


Non-Employee
Director Options will vest and become exercisable as follows:


(i)            Each
option granted on or after the date of the 2006 Annual Meeting of Shareholders
will vest 100% 330 days after issuance;


(ii)           Each
option granted to Non-Employee Directors prior to the date of the 2006 Annual
Meeting of Shareholders pursuant to the transition option grants set forth in
Section 6(e) will vest one-third on the date of grant and one-third each on the
first and second anniversary of the grant date.


The
vesting of a Non-Employee Director Option will accelerate and the Non-Employee
Director Option will become immediately exercisable in full in accordance with
Section 16 hereof.  Each Non-Employee
Director Option, to the extent exercisable, may be exercisable in whole or in
part.


(c)   TERM.


Subject
to Section 13 hereof, Non-Employee Director Options will expire at the earlier
of


(i)            the
8-year anniversary date of the grant of the Non-Employee Director Option, and


(ii)           except
as otherwise provided in Section 16 hereof, one year after the date the
Non-Employee Director ceases to be a director of the Company to the extent that
the Option was vested on the date of termination.


In no
event will any Non-Employee Director Option be exercisable at any time after
its expiration date.  When a Non-Employee
Director Option is no longer exercisable, it will be deemed to have lapsed or
terminated.


(d)   EXERCISE
PRICE.


The
purchase price of each Share subject to a Non-Employee Director Option will be
the Fair Market Value per Share on the date of grant.  A Non-Employee Director may exercise a
Non-Employee Director Option using as payment any form of consideration
provided for in Section 8 hereof.


(e)   TRANSITION
GRANTS.


In
order to create an effective transition to this new Section 6, Non-Employee
Directors that would otherwise be entitled to a grant of options under the
provisions of prior Section 6 on or after October 1, 2005 and prior to the 2006
Annual Shareholders Meeting will receive a grant equal to the pro rata portion
of the grant that Non-Employee Director would otherwise have received had the
prior program remained in effect.  The
Board of Directors is authorized by resolution to designate the amount of each
pro rata option and to issue it to the director.


(f)    CANCELLATION
OF UNVESTED OPTIONS.


Upon
approval of this revised Section 6 by Shareholders at the 2006 Annual
Shareholders Meeting, all unvested options issued to Non-Employee Directors
(other than the transition option 






(2)   As
approved by the Board of Directors on December 30, 2005 and approved by the
shareholders on April 27, 2006. 



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grants set forth
in Section 6(e)) will be cancelled and the expiration date for the vested, but
unexercised portion of these options (as set forth in Section 6(c)(i)) will be
extended for one additional year.


7.             ADVISORY
COMMITTEE MEMBER OPTIONS


(a)           GRANT OF
ADVISOR OPTIONS. An Advisor may be granted from time to time one or more
Non-Statutory Stock Options under the Plan and such Advisor Options shall be
subject to such terms and conditions, consistent with the other provisions of
the Plan, as shall be determined by the Committee in its sole discretion.


(b)           EXERCISABILITY.
An Advisor Option shall become exercisable at such times and in such
installments (which may be cumulative) as shall be determined by the Committee
in its sole discretion at the time the Advisor Option is granted.


(c)           TERM.
Subject to Section 13 hereof, the duration of Advisor Options shall be fixed by
the Committee in its sole discretion at its date of grant.


(d)           EXERCISE
PRICE. The per share purchase price to be paid by the Advisor at the time an Advisor
Option is exercised shall be determined by the Committee in its sole discretion
at the time the Advisor Option is granted; provided, however, that such price
shall not be less than the Fair Market Value of one share of Common Stock on
the date the Advisor Option is granted.


8.             PAYMENT
OF EXERCISE PRICE


The purchase price of each Share subject to Options
granted under the Plan shall be payable at the time written notice of exercise
is given to the Company. Payment for Shares issued upon exercise of an option
may consist of cash, check, exchange of Previously Acquired Shares (by
tendering to the Company shares previously owned by the Participant which have
a Fair Market Value on the date of exercise equal to the option price), or a
combination thereof.


9.             OPTION AGREEMENT


Each Option granted under this Plan shall be evidenced
by a stock option agreement between the Company and the Participant to whom the
option is granted.


10.          EXERCISE
OF OPTION


(a)           The
exercise of any Option may be contingent upon receipt from the Participant (or
other person rightfully exercising the option) of a representation that, at the
time of such exercise, it is his of her present intention to acquire the Shares
received thereunder for investment and not with a view to distribution thereof.
Certificates for Shares so issued may be restricted as to transfer upon advice
of legal counsel that such restriction is appropriate to comply with applicable
securities laws.


(b)           The
exercise of any Option shall only be effective at such time as counsel to the
Company shall have determined that the issuance and delivery of Shares pursuant
to such exercise will not violate any state or federal securities or other
laws. The Company may, in its sole discretion, defer the effectiveness of any
Option exercised hereunder in order to permit registration or an exemption from
registration for such issuance of Shares for the purpose of compliance with
applicable federal and state securities laws.


(c)           A
Participant electing to exercise an Option shall give written notice to the
Company of such election and of the number of Shares subject to such exercise.
The full purchase price of such Shares shall be tendered with such notice of
exercise. Until such person has been issued a certificate or certificates for the
Shares subject to such exercise, he or she shall possess no rights as a
shareholder with respect to such Shares.



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11.          RIGHT
TO TERMINATE SERVICE


Nothing in the Plan or in any agreement hereunder
shall confer on any Participant any right to continue as a Director or Advisor
of the Company or affect, in any way, the right of the Company to terminate his
or her service as a Director or Advisor at any time.


12.          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 has the right to determine to
whom, and the time or times at which, Restricted Stock awards 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 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 Enpath Medical, Inc. 1999
Non-Employee Director and Medical Advisory Board Stock Option Plan and an
Agreement entered into between the registered owner and Enpath Medical,
Inc.  Copies of such Plan and Agreement are
on file in the offices of Enpath Medical, Inc., 15301 Hwy 55 West, Plymouth, MN
55447.”


(ii)           The
Committee must 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 Shares
covered by such award.


(c)           Restrictions
and Conditions.  The shares of
Restricted Stock awarded pursuant to 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 12, 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 and subject to paragraph (c)(vi) of this Section 12).



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(iii)          Subject
to the provisions of the award agreement and paragraph (c)(iv) of this Section
12, 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 directorship 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.


(v)           Notwithstanding
the foregoing, in the event of the sale by the Company of substantially all of
its assets and the consequent discontinuance of its business, or in the event
of a merger, exchange, consolidation or liquidation of the Company, the Board
shall, in its sole discretion, in connection with the Board’s adoption of the
plan for sale, merger, exchange, consolidation or liquidation, provide for one
or more of the following with respect to Restricted Stock Awards that are, on
such date, still subject to a Restriction Period:  (i) the removal of the restrictions on any or
all outstanding Restricted Stock Awards; (ii) the complete termination of this
Plan and forfeiture of outstanding Restricted Stock Awards prior to a date
specified by the Board; and (iii) the continuance of the Plan with respect to
the Restricted Stock Award which were outstanding as of the date of adoption by
the Board of such plan for sale, merger, exchange, consolidation or liquidation
and provide to participants holding Restricted Stock Awards the right to an
equivalent number of restricted shares of stock of the corporation succeeding
the Company by reason of such sale, merger, exchange, consolidation or
liquidation.  The grant of a Restricted
Stock 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, sell or transfer all or any part of its
business or assets.


(vi)          As a
condition of any Restricted Stock award, the Company may require the
participant to represent and warrant to the Company at the time of the award
that the Shares are being acquired only for investment and without any present
intention to sell or distribute the Shares if, in the opinion of counsel for
the Company, that such representation is required under the Securities Act of
1933, or any other applicable law, regulation or rule of any governmental
agency.


13.          SUSPENSION
OR TERMINATION OF OPTIONS


If the President of the Company or his or her designee
reasonably believes that a Participant has committed an act of misconduct, the
President may suspend the Participant’s right to exercise any Option pending a
determination by the Board (excluding the Director accused of such misconduct).
If the Board (excluding the Director accused of such misconduct) determines
that the Participant has committed an act of embezzlement, fraud, dishonesty,
nonpayment of an obligation owed to the Company, breach of fiduciary duty or
deliberate disregard of Company rules or policies resulting in loss, damage or
injury to the Company, or if a Participant makes an unauthorized disclosure of
any Company trade secret or confidential information, engages in any conduct
constituting unfair competition, induces any Company customer to breach a
contract with the Company, or induces any principal for whom the Company acts
as agent to terminate such agency relationship, neither the Participant nor his
or her estate shall be entitled to exercise any Option whatsoever. In making
such a determination, the Board (excluding the Director accused of such
misconduct) shall give the Participant an opportunity to appear and present
evidence on the Participant’s behalf at a hearing before the Board.


14.          NON-TRANSFERABILITY


No Option granted under the Plan shall be transferable
by a Participant, other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Internal
Revenue Code 



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of 1986, as amended, or Title I of the Employee
Retirement Income Security Act or the rules thereunder. During the lifetime of
a Participant, the Option shall be exercisable only by such Participant.


15.          DILUTION
OR OTHER ADJUSTMENTS


If there shall be any change in the Shares of the
Company through merger, consolidation, reorganization, recapitalization, stock
dividend (of whatever amount), stock split or other change in the corporate
structure, appropriate adjustments in the Plan and outstanding options shall be
made by the Board. In the event of any such changes, adjustments shall include,
where appropriate, changes in the aggregate number of Shares subject to the
Plan and in the number of Shares and the price per Share subject to outstanding
options, in order to prevent dilution or enlargement of option rights.


16.          CHANGE
OF CONTROL OF THE COMPANY


In the event of a Change in Control (as hereinafter
defined), an Option granted to a Participant shall become fully exercisable if,
within one year of such Change in Control, such Participant shall cease for any
reason to be a member of the Board or Advisory Board, as the case may be. Any
exercise of an Option permitted by these Change of Control provisions may be
made at any time during the remaining term of the Option. A Change in Control
shall be deemed to have occurred if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which Shares would be
converted into cash, securities, or other property, other than a merger in
which shareholders of the Company immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange, or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company; or (ii) the shareholders of
the Company approve any plan or proposal for the liquidation or dissolution of
the Company; or (iii) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934 (the “1934 Act”)) shall become
the beneficial owner (within the meaning of Rule 1 3d-3 under the 1934 Act) of
30% or more of the Company’s outstanding Common Stock; or (iv) during any
period of two consecutive years, individuals who at the beginning of such
period constitute the entire Board of Directors shall cease for any reason to
constitute a majority thereof unless the election, or the nomination for
election by the Company’s shareholders, of each new Director was approved by a
vote of at least two-thirds of the Directors then still in office who were
Directors at the beginning of the period.


17.          AMENDMENT
OR DISCONTINUANCE OF PLAN


The Board may amend or discontinue the Plan at any
time provided, however, that, if necessary to maintain the Plan in compliance
with Exchange Act Rule 16b-3, the Plan may not be amended more than once every
six months, other than to comport with changes in the Internal Revenue Code,
the Employee Retirement Income Security Act, or the rules thereunder. Further,
if necessary to maintain the Plan in compliance with Exchange Act Rule 16b-3,
no amendment of the Plan shall, without shareholder approval: (i) increase by
more than 10% the number of Shares issuable under the Plan (not including
increases to reflect stock splits and stock dividends); (ii) change the
eligibility requirements or the limits on Options; (iii) decrease the minimum
option price; (iv) extend the maximum option term; or (v) materially increase
the benefits which may accrue to Participants under the Plan. Except as
provided in Section 13 hereof, the Board shall not alter or impair any Option
previously granted under the Plan without the consent of the holder of the
Option.


18.          TERMINATION
OF PLAN


Unless the Plan shall have been discontinued as
provided in Section 17 hereof, the Plan shall terminate on July 29, 2011. No
Option may be granted after such date, but termination of the Plan shall not,
without the consent of the Optionee, alter or impair any rights or obligations
under any Option granted prior to termination of the Plan.



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19.          SHAREHOLDER
APPROVAL


Provided that approval of the Company’s shareholders
is required under Section 17 of the Exchange Act and the rules and regulations
thereunder, the Plan shall be null and void, and each option granted hereunder
shall be null and void, if the shareholders of the Company shall not have
approved the Plan prior to May 1, 2000.



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