RESTORE MEDICAL, INC. MANAGEMENT INCENTIVE PLAN

Exhibit 10.10

RESTORE MEDICAL, INC.

MANAGEMENT INCENTIVE PLAN

1.

PURPOSES.

     (a) The purpose of the Plan is to provide a means by which selected Key Employees of the Company may be given an opportunity to participate in the proceeds of a Change of Control transaction.

     (b) The Company, by means of the Plan, seeks to retain the services of persons who are now Key Employees of the Company, to secure and retain the services of new Key Employees, and to provide incentives for such persons to exert maximum efforts for the success of the Company.

2.

DEFINITIONS.

     (a) “Management Bonus” means an amount of cash and/or securities, determined pursuant to the Plan, equal to twenty-five percent (25%) of the total amount of gross proceeds upon a Change of Control, if any, in excess of $72,000,000, up to a maximum aggregate bonus of $3,300,000.

     (b) “Board” means the Board of Directors of the Company.

     (c) “Change of Control” means any consolidation or merger of the Company with or into another corporation or entity (after which the pre-existing shareholders of the Company do not own a majority of the outstanding shares of the surviving entity), an acquisition or sale of substantially all of the assets of the Company or a sale of stock in a single transaction (or several related transactions) to one person (or a group acting together) who, as a result of such transaction, shall own more than 50% voting control of the Company, or any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

     (d) “Closing” means the closing of a transaction constituting a Change of Control.

     (e) “Company” means Restore Medical, Inc., a Minnesota corporation.

     (f) “Key Employee” means any current or former employee or consultant of the Company who is designated by the Chief Executive Officer and approved by the Board from time to time as a Key Employee. The individuals currently designated as Key Employees are set forth on Exhibit A of the Plan.

     (g) “Plan” means this Restore Medical, Inc. Management Incentive Plan.

     (h) “Restated Articles” means the Amended and Restated Articles of Incorporation of Restore Medical, Inc.

3.

ADMINISTRATION.

     (a) The Plan shall be interpreted and administered by the Board, whose actions shall be final, binding and conclusive on all persons, including the Key Employees. The Board may, in its sole discretion, increase, decrease or eliminate a previously authorized percentage allocation to a Key Employee upon a determination by the Board that such percentage is no longer reflective of the Key Employee’s contributions to the Company. Any such increase of a percentage for a Key Employee shall decrease the other percentages of Key Employees and any such decrease or elimination of a percentage for a Key Employee by the Board shall increase the other percentages of Key Employees, in each case, on a pro rata basis unless otherwise designated by the Chief Executive Officer and approved by the Board.

     (b) The Board, in its sole discretion, shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

     (i) To approve from time to time which employees of the Company are designated by the Chief Executive Officer as Key Employees entitled to participate in the Plan. This authority shall also include the ability to approve the proposal by the Chief Executive Officer and the Executive Chairman that one or more employees previously designated as Key Employees shall no longer be entitled to participate in the Plan.

     (ii) To approve the percentage allocation of the cash or securities in the Management Bonus to each of the Key Employees proposed by the Chief Executive Officer.

     (c) The Board may delegate some or all of its powers and responsibilities under the Plan to a committee of the Board.

4. ALLOCATION OF MANAGEMENT BONUS.

     (a) The allocation of the Management Bonus to individuals designated as Key Employees as of the date hereof shall be as set forth on Exhibit A, and subject to the terms of this Plan.

     (b) In the event that the Company’s outside accounting firm determines that a distribution to a Key Employee under Section 5 would result in the imposition of a “parachute payment” excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the Chief Executive Officer may reallocate the Management Bonus among Key Employees in a manner that reduces or eliminates the amount of such excise tax.

     (c) Any percentage amounts that are unallocated at the time of a Change of Control shall be allocated immediately prior to such Change in Control in accordance with the recommendation of the Company’s Chief Executive Officer and approval of the Board. If no such recommendation is provided and Board approval received, such unallocated percentage amounts shall be distributed on a pro-rata basis among the existing Key Employees at such time.

5.

DISTRIBUTIONS.

     (a) If the conditions for distributions set forth in the Plan are satisfied, each Key Employee shall be entitled to receive upon the Closing and simultaneously with payments to the Company’s shareholders, a distribution equal to (i) such Key Employee’s allocation of the Management Bonus times (ii) the aggregate dollar value of the Management Bonus, subject to the limitations set forth in Section 4 above. Such distributions shall be made in cash and/or securities, as determined by the Board, in its sole discretion. While generally each participant will receive his or her distributive share of the Management Bonus in the same form or forms of payment and in the same proportions paid by the purchaser(s) upon the Change of Control, the Board shall have the discretion to restructure the form and timing of payment of such distributions to accommodate the business objectives of the Company in the Change of Control, which may include, but not be limited to, (x) consideration of the tax consequences to the Company, its shareholders, and the Plan’s participants, (y) financial accounting consequences for the Company or the acquiror, and (z) satisfaction of any applicable securities law requirements.

     (b) Any securities that are issued to the Key Employees pursuant to this Plan shall be subject to the same or similar restrictions as imposed by a purchaser on the securities of the Company’s shareholders as set forth in the agreement pursuant to which the Control of Control occurs.

     (c) Subject to any adjustments made under Section 5(a) above, if any, payments to Key Employees under the Plan shall be made within 30 days of the Closing (provided that proceeds from the Change of Control event shall have been made available to the Company within such period, or otherwise immediately upon receipt of such proceeds from the Change of Control), except for payments to be made with respect to contingent payments payable in connection with a Change of Control, which shall be made as soon as administratively reasonable following the receipt by the Company or its shareholders of such payments.

     (d) Key Employees must be employed as of the closing date of the Change of Control transaction in order to be eligible to receive any payments pursuant to the Plan.

6.

AMENDMENT OR TERMINATION OF THE PLAN.

     (a) The Board at any time, and from time to time prior to the Closing, may amend or terminate the Plan, so long as such actions are approved after consultation with the Chief Executive Officer and, subject to Section 3(a), do not adversely affect any beneficiary of this Plan.

     (b) The Plan shall automatically terminate upon the earliest to occur of (i) December 31, 2003, unless a Change of Control has occurred prior to such date, (ii) the Closing and completion of all payments under the terms of the Plan, and (iii) the automatic conversion of all of the Company’s outstanding preferred stock into common stock pursuant to Section 3.7 of the Restated Articles (or any successor provision thereto).

7.

NO GUARANTEE OF FUTURE SERVICE.

     Selection of an individual to participate in the Plan shall not provide any guarantee or promise of continued service of the participant with the Company, and the Company retains the right to terminate the employment of any employee at any time, with or without cause, for any reason or no reason, except as may be restricted by law or contract.

8.

TAX WITHHOLDING.

     The Company shall withhold from any distributions under the Plan any amount required to satisfy the Company’s income and employment tax withholding obligations under any applicable Federal and State laws.

9.

COMPANY OBLIGATIONS.

     The Plan shall constitute a liability of the Company that shall be satisfied prior to any distributions to shareholders of the Company. Further, the Company shall use its best efforts to provide that a portion of the net proceeds from any transaction that results in a Change in Control be distributed in substantial accordance with the terms of this Plan, subject to the fiduciary duties applicable to the Company and the Board; provided, however, that failure by the Chief Executive Officer to propose a reasonable initial recommendation of allocations for the Management Bonus or failure by the Board to reasonably approve such initial recommendation shall not operate to delay, block or otherwise impede the Company’s undertaking a Change of Control or making payments to the Company’s shareholders resulting therefrom

10.

CHOICE OF LAW.

     All questions concerning the construction, validation and interpretation of the Plan will be governed by the law of the State of Minnesota.

11.

SUCCESSORS; THIRD PARTY BENEFICIARIES.

     This Plan shall be binding upon any successor to the Company. The Company acknowledges that the Key Employees will rely on the provisions of this Plan and therefore agrees that the Key Employees shall be deemed to be third parties beneficiaries hereof.

12.

SEVERABILITY.

     If any provision of this Plan is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated in any way and shall be construed in accordance with the purposes, tenor and effect of this Plan.

13.

HEADINGS.

     The headings in the Plan are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

     The Plan has been adopted by the Board of Directors of the Company effective as of the 12^th day of June, 2003

EXHIBIT A

Name of Key Employee		Percent of Management Bonus
Mark B. Knudson			10.0	%
Susan L. Critzer			14.0	%
Bob Campbell			10.0	%
Ed Numainville			7.5	%
Tim Conrad			3.0	%
Robert S. Nickoloff			3.0	%
Brian Erickson			3.0	%
Phil Radichel			3.0	%
John Sopp			3.0	%
Jim Kruse			3.0	%
Dale Noel			3.0	%
Lisa Asper			3.0	%
Dean Horstman			3.0	%
Dave Coleman			3.0	%
Glen Peterson			3.0	%
Brett Biener			3.0	%
New Sales Representative			3.0	%
All Other Employees			15.0	%
TOTAL:			100.0	%