Document:

EXHIBIT 10.2

 

Form of
Stock Option Grant Letter for Non-Employee Directors

 

[Date of Grant]

 

[Name]

[Address]

[City, State Zip]

Dear [Optionee],

 

I am pleased to advise
you that PLC Systems Inc. (the “Company”) has, on this date, pursuant to its
2005 Stock Incentive Plan (the “Plan”), awarded you a nonstatutory stock option
to purchase
                    
shares of the Common Stock, no par value per share, of the Company at a price of
$       per
share.

 

In addition to the terms
of the Plan, the following terms and conditions are applicable with respect to
this option, and your signature below shall constitute your acknowledgement and
acceptance of same:

 

1.                                       This option will become exercisable (“vest”)
as to
[                        ][,
provided that any unvested shares shall become immediately exercisable
upon termination of your service as a Director of the Company for any reason
other than related to your willful misconduct or willful failure to perform
your responsibilities as a Director of the Company, as determined by the
Company, which determination shall be conclusive].  Note: The
preceding clause may be inserted at the discretion of the Company’s Board of
Directors.  The right of
exercise shall be cumulative so that to the extent the option is not exercised
in any period to the maximum extent permissible it shall continue to be
exercisable, in whole or in part, with respect to all shares for which it is
vested until the earlier of the expiration date or the termination of this
option under Section 2 hereof or the Plan.

 

2.                                       This option is subject
to the following exercise terms:

 

(a)                                  Should your service as
a Director of the Company terminate for any reason other than death or
disability (as defined in the Internal Revenue Code of 1986, as amended (the “Code”)),
all unexercised options shall terminate ninety (90) days after the date of such
termination (but in no event after [five (5)/ten (10)] years from the date of
grant); provided, however, that (i) if, as of the date of
such termination for any reason other than death or disability, you have been a
Director of the Company continuously for at least the five (5) years prior
to such date, then all of your unexercised options shall instead terminate
three (3) years after the date of such termination (but in no event after
[five (5)/ten (10)] years from the date of grant), and (ii) this option
shall be exercisable only to the extent that you were entitled to exercise this
option on the date of such termination.

 

(b)                                 In the event your service as a Director
of the Company terminates as a result of your death, the outstanding options
exercisable by you at the date of your death may be exercised by your estate
until one (1) year from the date of your death (but in no event after
[five (5)/ten (10)] years from the date of grant), provided that this
option shall be exercisable only to the extent that this option was exercisable
by you on the date of your death.

 

 

(c)                                  In the event your service as a Director
of the Company terminates as a result of your disability (as defined in the
Code), the outstanding options exercisable by you at the date of such
termination may be exercised until one (1) year from the date of such
termination (but in no event after [five (5)/ten (10)] years from the date of
grant), provided that this option shall be exercisable only to the
extent that this option was exercisable by you on the date of your disability.

 

3.                                       This option may be exercised in whole or
in part from time to time; provided, however, that an option may
not be exercised as to less than 100 shares at any one time unless it is being
exercised in full and the balance of the shares subject to the option is less
than 100.  Each election to exercise this
option shall be in writing, signed by you, and received by the Company at its
principal office, accompanied by this letter, and payment in full in the manner
provided in the Plan.

 

4.                                       The shares of Common Stock underlying
this option and the exercise price therefor shall be equitably adjusted from
time to time for stock splits, reverse splits, stock dividends and
reclassifications of shares in accordance with the Plan.

 

5.                                       [In the event of a Reorganization
Event (as defined in the Plan), the Company shall give prior notice of such an
event to you, and you may exercise up to 100% of this option as of a time
specified in such notice.  If you do not
exercise the option prior to the consummation of the Reorganization Event, all
unexercised portions of this option shall terminate and be of no further force
or effect.]  Note: The preceding clause may be inserted at the
discretion of the Company’s Board of Directors.

 

6.                                       No shares will be issued pursuant to the
exercise of this option unless and until you pay to the Company, or make
provision satisfactory to the Company for payment of, any federal, state or
local withholding taxes required by law to be withheld in respect of this
option.

 

7.                                       This option may not be sold, assigned,
transferred, pledged or otherwise encumbered by you, either voluntarily or by
operation of law, except by will or the laws of descent and distribution, and,
during your lifetime, this option shall be exercisable only by you.

 

8.                                       Unless earlier terminated, this option
will expire [five (5)/ten (10)] years from the date of grant.

 

9.                                       This option is subject to the provisions
of the Plan, a copy of which is furnished to you with this option.

 

When you wish to exercise this stock option, please
refer to the provisions of this letter and the Plan and then correspond in
writing with the Chief Financial Officer of the Company. Further, please
indicate your acknowledgment and acceptance of this option by signing the
enclosed copy of this letter and returning it to the undersigned or
                          
within 30 days of your receipt of this grant.

 

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mark R. Tauscher,

  
	
   

  	
   

  	
  President and Chief Executive Officer

  

 

 

	
  ACKNOWLEDGEMENT AND CONSENT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OptioneeExhibit 10.1

 

CONSULTING
SERVICES AGREEMENT

 

1.                                       Agreement:

 

A.                                   MathStar, Inc. (“Company”) agrees to engage A. Harris &
Associates, LLC (“Advisor”) to provide a Chief Executive Officer, Chief
Financial Officer and Special Advisor for the Company.  All such services shall be rendered by
Alex H. Danzberger, Jr. (“Alex”), who is a member and employee
of Advisor.

 

Specifically, Advisor shall act as the Chief
Executive Officer and Chief Financial Officer of the Company, as well as act as
a Special Advisor to the Company.

 

Company understands and agrees that Advisor
is not solely and exclusively engaged to provide services to Company.  Advisor agrees to use its best efforts to
provide the services provided for herein on a timely basis.

 

B.                                     This Agreement shall commence on August 1, 2009 for a
period of one year unless terminated as provided herein.  However, all obligations of the Company
pursuant to this Agreement will automatically extend through the date of the
actual consummation of any Transaction.

 

C.                                     For the purposes of this Agreement, “Transaction” means any
investment or merger and acquisition transaction or transactions, not in the
ordinary course of business, including any sale or exchange of capital stock,
sale or exchange of assets, acquisition, merger, reverse merger, consolidation,
business combination, tender offer, joint venture, majority or minority
investment, strategic alliance, partnership, or any other similar transaction
with Sajan, Inc.

 

2.                                       Services Rendered:  During the term hereof, Advisor will:

 

A.                                   As it relates to the role of Chief Executive Officer and
Chief Financial Officer:

 

i)                                         Perform oversight of the preparation and filing of
regulatory documents required to be filed with the Securities and Exchange
Commission;

 

ii)                                      Provide consultative services to the Board of Directors of
the Company to help address shareholder relations, shareholder meetings and
voting matters put before shareholders;

 

iii)                                   Oversee the continued orderly winding down of former Company
operations;

 

iv)                                  Review documents related to the acquisition of Sajan by the
Company;

 

v)                                     Oversee preparation, review and filing of proxy statements,
current reports on Form 8-K, any Registration Statements on Form S-4
and any other documents related to the acquisition of Sajan by the Company; and

 

 

vi)                                  Perform such other services as the Company and Advisor
agree.

 

vii)                               Perform those job duties customarily performed by the Chief
Financial Officer and Chief Executive Officer of a publicly traded company,
including without limitation, oversight of the preparation, review and approval
of the Company’s financial statements.

 

B.                                     As it relates to the role of Special Advisor:

 

i)                                         Support the general due diligence and acquisition process
with respect to the acquisition of Sajan by the Company;

 

ii)                                      With the support of the Company’s Board of Directors, its
advisors, and executives at Sajan, Advisor shall prepare a 3 to 5 year
strategic plan for Sajan (or such other time frame as the Board of Directors
deems appropriate in its discretion). 
This strategic plan will provide target market identification, a
detailed marketing and sales plan, a supporting product roadmap, a detailed 2010
budget, and a 3 to 5 year sales forecast; and

 

iii)                                   Perform such other services as the Company and Advisor
agree.

 

3.                                       Compensation:  For the services rendered by Advisor
hereunder, the Company shall pay Advisor as follows:

 

A.                                   A non-refundable initial retainer of $20,000.00 shall be due
and payable as of the date this Agreement is signed by the Parties, which will
fully discharge any obligations between Company and Advisor pursuant to any
prior agreements, whether oral or written;

 

B.                                     A non-refundable monthly retainer of $20,000.00 will be
payable on the last day of each month for services rendered during the course
of the month.  The first such payment
shall be due on August 31, 2009.  There
shall be a minimum of 2 and one half payments ($50,000.00) made.

 

C.                                     Company agrees to provide Advisor with options to purchase
15,000 shares of Company’s common voting stock. 
The exercise price shall be the closing price of the Company’s common
stock on the date this Agreement is signed by the Parties.  Such options shall vest in Advisor upon the
successful completion of the Transaction, and will terminate 5 years from the
date of the vesting.  The options shall
contain standard anti-dilution provisions.

 

4.                                       Expenses:  The Company shall reimburse Advisor for any
and all of Advisor’s expenses incurred in connection with this Agreement.  Such fees shall include, but not be limited
to, the fees and expenses of any advisor or legal counsel retained by Advisor
in conjunction with this Agreement, travel expenses, postage, and copying
fees.  Company shall not be responsible
for reimbursing Advisor for any single expense item in excess of $500.00 unless
Advisor receives prior authorization from Company therefore.

 

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5.                                       Limitation of Liability and Indemnification:

 

A.                                   Unless as otherwise set forth herein, Company shall
indemnify and hold harmless Advisor and Alex from and against all liability,
claims, actions, damages, fines, expenses, costs, and any other losses,
including attorney’s fees, incurred by Advisor or Alex, arising as a result of
or in connection with this Agreement (including, for example, alleged liability
based on the relationship of the parties, breach, misrepresentation, furnishing
incorrect or incomplete information, undisclosed material facts affecting the
Company) or the activities, status, condition, operations, liabilities, debts
or obligations of Company.  Company shall
not indemnity or hold harmless Advisor and Alex to the extent related or due to
Advisor’s or Alex’s gross negligence or intentional wrong doing.  This provision will survive termination of
this Agreement.

 

B.                                     Company shall list Advisor and Alex as additional insureds
under any applicable directors’ and officers’ insurance policy, or any other
applicable insurance policy.  Company
agrees that any such coverage extended to Advisor and Alex shall be consistent
with, or greater than, the coverage granted to the former CEO, excluding health
and life insurance provided to the former CEO.

 

C.                                     Advisor shall indemnify and hold harmless Company from and
against all liability, claims, actions, damages, fines, expenses, costs, and
any other losses, including attorney’s fees, incurred by Company arising as a
result of Advisor’s intentional misrepresentation of any material fact related
to the Company’s activities, status, condition, operations, liabilities, debts
or obligations.  This provision will
survive termination of this Agreement.

 

D.                                    Advisor’s liabilities in any event shall be limited to
consideration received under this Agreement.

 

E.                                      Advisor shall not indemnify or hold harmless Company to the
extent related or due to Company’s negligence or intentional wrongdoing.

 

6.                                       Disclosure:  Upon completion of the Transaction, Advisor
may place advertisements in financial publications and other media at its own
expense describing Advisor’s services to the Company hereunder, subject to the
Company’s prior review and approval of such advertisements.  Advisor shall not disclose the purchase price
unless previously agreed by the Company. 
Neither party shall publish any information which is misleading,
defamatory, or negative as to the non-publishing party, or if such information
constitutes confidential information.

 

7.                                       Access to Information:

 

A.                                   In connection with Advisor’s engagement, the Company will
furnish Advisor with all information which Advisor reasonably requests, and
will provide Advisor with reasonable access to the Company’s officers,
directors, accountants, counsel and other advisors.  Advisor will not release any such information
to anyone without the prior written consent of the Company.

 

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B.                                     The Company represents and warrants to Advisor that, if such
information is included in a document prepared by the Company and authorized by
the Company for release to any potential Transaction party:

 

i)                                         all such information is and will be true and accurate in all
material respects, and does not and will not contain any untrue statement of a
material fact, or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading; and

 

ii)                                      any projected financial information or other forward-looking
information which the Company provides to Advisor will be made by the Company
in good faith, based on management’s best estimates then available, and based
on facts and assumptions which the Company believes to be reasonable.

 

C.                                     The Company acknowledges and agrees that Advisor will be
using and relying upon such information supplied by the Company and its
officers, agents and others and any prospective Transaction party, and any
other publicly available information concerning the Company and any prospective
Transaction party, without any independent investigation or verification
thereof, or independent appraisal by Advisor of the Company or its business or assets,
or any other Transaction party or its business or assets, nor will Advisor be
providing a solvency opinion with respect to the Company.

 

8.                                       Representation and Warranty:  The Company further represents and warrants
to Advisor that entering into this Agreement does not violate or constitute a
breach or default under any contract, agreement, arrangement or understanding,
whether written or oral, to which the Company or any of its subsidiaries is a
party or which binds its or their assets.

 

9.                                       Confidentiality:

 

A.                                   The Company will not publicly refer to Advisor or (except as
required by applicable law, rule or regulation; or in any dispute between
the Company and Advisor, to the extent required to assert or protect the rights
of the Company in such dispute) publicly disclose or otherwise make available
to third parties (except the Company’s counsel or other advisers, provided the
Company informs them of this provision) any advice, either oral or written, or
work product which Advisor provides to the Company in connection with this
Agreement, without the prior written consent of Advisor.  Advisor acknowledges and understands that the
Company is required to announce Advisor’s appointment as Chief Executive
Officer and Chief Financial Officer and to describe and file this Agreement in
a Current Report on Form 8-K filed with the Securities and Exchange
Commission.

 

B.                                     Nothing in this Agreement shall restrict Advisor from
conducting its business with others in undertakings similar to this Agreement;
provided that Advisor shall 

 

4

 

treat
as confidential any non-public information supplied by the Company unless
disclosure thereof has been authorized by the Company.

 

10.                                 Assignment & Benefit:  The benefits of this Agreement shall inure to
the respective successors and permitted assigns of the parties hereto, and the
obligations and liabilities assumed in this Agreement by the parties hereto
shall be binding upon their respective successors and assigns.  This Agreement may not be assigned without
the prior written consent of the nonassigning party (or parties), which consent
shall not be unreasonably withheld.  In
the case of such an assignment, the Company hereby guarantees payment of any
fees and expenses due to Advisor pursuant to the terms of this Agreement.

 

11.                                 Amendment:  This Agreement may not be amended or modified
except in a writing signed by the parties.

 

12.                                 Nature of Relationship:

 

A.                                   The Advisor will provide the services contemplated hereunder
to the Company as an independent contractor. 
The advisory relationship between Advisor and the Company refers to the
fact that the services to be provided by Advisor hereunder are to be provided
solely by Advisor, and that the fees to be paid by the Company hereunder are
solely for the benefit of Advisor.  There
may be other services which are required to be provided to the Company in
connection with the Transaction contemplated by this Agreement, and which will
be provided by others (e.g., independent auditors or appraisers).

 

B.                                     The Advisor is engaged as an independent consultant and not
an employee of the Company.  Company
shall not withhold or pay payroll or employment taxes of any kind with respect
to any amounts paid under this Agreement, including but not limited to, FICA,
FUTA, federal and state personal income tax, state disability insurance tax,
and state reemployment insurance benefits tax. 
Except as specifically provided herein, Company shall not provide
Advisor with workers compensation, reemployment benefits or any other benefits,
including, but not limited to, health, life and disability insurance, salary,
bonuses, vacation, sick and other leaves of absence, and retirement plan
benefits.  Advisor shall make all filings
with and payments to the Internal Revenue Service and state and local taxing
authorities as are appropriate to Advisor’s status as an independent
contractor.  Advisor shall be solely
responsible for obtaining workers compensation insurance and complying with the
workers’ compensation laws.  In the event
that the Internal Revenue Service or any other state or federal agency
challenges the independent contractor status of Advisor, the parties agree that
Advisor and Company shall have the right to participate in any discussion or
negotiation occurring with the Internal Revenue Service or such agency
regarding this Agreement or the Services provided under this Agreement.

 

This Agreement is for the benefit of the
Advisor and the Company, and is not intended to create rights or obligations of
either party for the benefit of third parties, including, without limitation,
the creditors of the Company.

 

5

 

C.                                     Company acknowledges its understanding that Advisor is not
registered as a Broker/Dealer under Section 3(a)(4)(A) of The
Securities Exchange Act of 1934 (“The Act”) and that Advisor’s standing under
The Act does not negate Company’s obligations or commitments under this
Agreement in any way.

 

13.                                 Termination and other provisions:

 

A.                                   Either party hereunder may terminate this Agreement by
giving at least thirty (30) days’ prior written notice to the other party.

 

B.                                     The applicable provisions of this Agreement (including MathStar’s
liability for payment) shall
survive and remain in full force and effect notwithstanding any termination of
this Agreement, whether through passage of time or otherwise.

 

C.                                     This Agreement may be executed in one or more counterparts.

 

D.                                    If this Agreement, a provision hereof or portion of a
provision hereof, shall be held to be invalid, illegal or unenforceable within
any governmental jurisdiction, such invalidity, illegality or unenforceability
shall not effect any other provision or the remainder of the invalid, illegal
or unenforceable provision of this Agreement. 
This Agreement shall be construed as if such invalid, illegal or
unenforceable provision or portion thereof had never been contained herein and
there shall be deemed substituted such other provision or portion thereof as
will most nearly accomplish the Parties’ intent to the extent permitted by
applicable law.

 

E.                                      The failure to enforce at any time any of the provisions of
this Agreement or to require at any time performance by the other party of any
of the provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect either the validity of this Agreement or any part
hereof, or the right of either party thereafter to enforce each and every
provision in accordance with the terms of this Agreement.

 

F.                                      This Agreement contains the entire agreement of the parties
relating to the subject matter hereof. 
The parties hereby acknowledge that there are no agreements or
understandings of any nature, oral or written, regarding their relationship
apart from this Agreement.

 

G.                                     This Agreement supersedes all other agreements between the
parties pertaining to the subject matter hereof and no amendment hereto shall
be of any force or effect unless signed by both of the parties hereto.

 

H.                                    All notices, requests, consents, and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally or sent by prepaid
telegram, or mailed first-class, postage prepaid, certified mail, return
receipt requested, to Advisor at:

 

A.  Harris & Associates, LLC

4815
Sheridan Avenue South

Minneapolis,
MN 55410

 

6

 

and to Company at:

 

MathStar, Inc.

19075 NW Tanasbourne Drive, Suite 200

Hillsboro, OR 97124

 

I.                                         Governing Law, Jurisdiction, and Venue — This Agreement is
governed by the laws of the state of Minnesota, without reference to such state’s
conflicts of law principles.  Each part
submits to venue and jurisdiction in the federal and state courts located in
Hennepin County, Minnesota.

 

J.                                        Company acknowledges that Advisor does not render legal
and/or accounting advice.  Company shall
seek such advice from attorneys and accountants of their choosing.

 

K.                                    No results guaranteed — Advisor does not guarantee that its
performance of the services contemplated by this Agreement will result in any
particular outcome or result, and the Company acknowledges that it is entering
into this Agreement without any representation, warranty or promise from
Advisor as to any particular outcomes or results that may be obtained as a
result of this Agreement.

 

L.                                      Non-exclusivity — Company acknowledges that the services
provided by Advisor pursuant to this Agreement are non-exclusive, and that
Advisor will offer the same or similar services to others on an ongoing basis.

 

I am delighted to be engaged
as an Advisor to the Company, and look forward to working with you.  Please confirm your acceptance of the terms
of this Agreement by signing the enclosed duplicate of this letter and returning
it to me.

 

With
best regards,

 

	
  /s/Alex
  H. Danzberger, Jr.

  	
   

  
	
   

  	
   

  
	
  Alex
  H. Danzberger, Jr., President

  	
   

  
	
  A.
  Harris & Associates, LLC

  

 

Accepted
by:

 

 

	
  /s/Richard
  C. Perkins

  	
   

  
	
  Richard
  C. Perkins, Director

  	
   

  
	
  MathStar, Inc.

  	
   

  

 

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