Exhibit 10.3

 

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 shall not be transferable under any circumstances
except by operation of law.

 

2.             The price at which this option may be exercised shall be
$          per share.

 

3.             This option is subject to the following 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 of your unvested options shall terminate
immediately.

 

(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 year from the date
of your death (but in no event after 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
year from the date of such termination (but in no event after 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.

 

4.             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.

 

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

 

6.             [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: This clause may be inserted at the discretion of
the Company’s Board of Directors.

 

7.             Notwithstanding anything contained herein to the contrary
[(except paragraph (6) hereof)], the maximum number of shares of options that
may be exercised, subject to your continued service as a Director of the
Company, is as follows:

 

Period

 

Number of
Options Exercisable

 

 

 

 

 

 

8.             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.

 

9.             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.

 

10.           Unless earlier terminated, this option will expire 10 years from
the date of grant.

 

11.           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:

 

 

 

 

 

 

 

 

Optionee

 

 

2

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