Exhibit 10.1


 


PLC SYSTEMS INC.


 


2005 STOCK INCENTIVE PLAN


 


1.                                       Purpose


 


The purpose of this 2005
Stock Incentive Plan (the “Plan”) of PLC Systems Inc., a Yukon Territory  corporation (the “Company”), is to advance the interests of
the Company’s shareholders by enhancing the Company’s ability to attract,
retain and motivate persons who are expected to make important contributions to
the Company and by providing such persons with equity ownership opportunities
and performance-based incentives that are intended to align their interests
with those of the Company’s shareholders. 
Except where the context otherwise requires, the term “Company” shall
include any of the Company’s present or future parent or subsidiary
corporations as defined in Sections 424(e) or (f) of the Internal
Revenue Code of 1986, as amended, and any regulations promulgated thereunder
(the “Code”) and any other business venture (including, without limitation,
joint venture or limited liability company) in which the Company has a
controlling interest, as determined by the Board of Directors of the Company
(the “Board”).


 


2.                                       Eligibility


 


All of the Company’s employees, officers, directors, consultants and
advisors are eligible to receive options to purchase common stock (each, an “Option”)
under the Plan.  Each person who receives
an Option under the Plan is deemed a “Participant.”


 


3.                                       Administration and Delegation


 


(a)           Administration by Board of
Directors.  The Plan will be
administered by the Board.  The Board
shall have authority to grant Options and to adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan as it shall
deem advisable.  The Board may correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
any Option in the manner and to the extent it shall deem expedient to carry the
Plan into effect and it shall be the sole and final judge of such
expediency.  All decisions by the Board
shall be made in the Board’s sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Option.  No director or person acting pursuant to the
authority delegated by the Board shall be liable for any action or
determination relating to or under the Plan made in good faith.


 


(b)           Appointment of Committees.  To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a “Committee”).  All references in the Plan to the “Board”
shall mean the Board or a Committee of the Board or the officers referred to in
Section 3(c) to the extent that the Board’s powers or authority under
the Plan have been delegated to such Committee or officers.


 


(c)           Delegation to Officers.  To the extent permitted by applicable law,
the Board may delegate to one or more officers of the Company the power to
grant Options to employees or 


 

















 


officers of the Company or any of
its present or future subsidiary corporations and to exercise such other powers
under the Plan as the Board may determine, provided that the Board shall fix
the terms of the Options to be granted by such officers (including the exercise
price of such Options, which may include a formula by which the exercise price
will be determined) and the maximum number of shares subject to Options that
the officers may grant; provided further, however, that no officer shall be
authorized to grant Options to any “executive officer” of the Company (as
defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) or to any “officer” of the Company (as defined by Rule 16a-1
under the Exchange Act).


 


4.                                       Stock Available for Options


 


(a)           Number of Shares.  Subject to adjustment under Section 6,
Options may be made under the Plan for up to 2,000,000 shares of common stock,
no par value per share, of the Company (the “Common Stock”), plus (x) such
number of shares as are available for grant under the Company’s 1997 Executive
Stock Option Plan, 2000 Equity Incentive Plan, 2000 Non-Statutory Stock Option
Plan and 2000 Non-Qualified Performance and Retention Equity Plan
(collectively, the “Previous Plans”) on the date that shareholder approval is
obtained for this Plan (the “Shareholder Approval Date”), under which Previous
Plans no further awards may be granted after the Shareholder Approval Date, and
(y) such number of shares as may become available under the Previous Plans
because any award previously granted under any such plan expires or is
terminated, surrendered or cancelled without having been fully exercised or is
forfeited in whole or in part (including as the result of shares of Common
Stock subject to such previously-granted award being repurchased by the Company
at the original issuance price pursuant to a contractual repurchase right) or results
in any Common Stock not being issued, the unused Common Stock covered by such
previously-granted award shall again be available for the grant of Options
under the Plan, provided that the sum of (x) and (y) shall not exceed
2,691,667 shares.  If any Option expires
or is terminated, surrendered or canceled without having been fully exercised
or is forfeited in whole or in part (including as the result of shares of
Common Stock subject to such Option being repurchased by the Company at the
original issuance price pursuant to a contractual repurchase right) or results
in any Common Stock not being issued, the unused Common Stock covered by such
Option shall again be available for the grant of Options under the Plan.  Further, shares of Common Stock tendered to
the Company by a Participant to exercise an Option shall be added to the number
of shares of Common Stock available for the grant of Options under the
Plan.  However, in the case of Incentive
Stock Options (as hereinafter defined), the foregoing provisions shall be
subject to any limitations under the Code. 
Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.


 


(b)           Section 162(m) Per-Participant Limit. 
The maximum number of shares of Common Stock with
respect to which Options may be granted to any Participant under the Plan shall
be 300,000 per calendar year.  The per-Participant
limit described in this Section 4(b)(1) shall be construed and
applied consistently with Section 162(m) of the Code or any successor
provision thereto, and the regulations thereunder (“Section 162(m)”).


 


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5.                                       Stock Options


 


(a)           General.  The Board may grant Options and determine the
number of shares of Common Stock to be covered by each Option, the exercise
price of each Option and the conditions and limitations applicable to the
exercise of each Option, including conditions relating to applicable federal or
state securities laws, as it considers necessary or advisable.  An Option which is not intended to be an
Incentive Stock Option (as hereinafter defined) shall be designated a “Non-statutory
Stock Option.”


 


(b)           Incentive Stock Options.  An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “Incentive Stock
Option”) shall only be granted to employees of PLC Systems Inc., any of PLC
Systems Inc.’s present or future parent or subsidiary corporations as defined
in Sections 424(e) or (f) of the Code, and any other entities the
employees of which are eligible to receive Incentive Stock Options under the
Code, and shall be subject to and shall be construed consistently with the
requirements of Section 422 of the Code. 
The Company shall have no liability to a Participant, or any other
party, if an Option (or any part thereof) that is intended to be an Incentive
Stock Option is not an Incentive Stock Option or for any action taken by the
Board pursuant to Section 7(f), including without limitation the
conversion of an Incentive Stock Option to a Non-statutory Stock Option.


 


(c)           Exercise Price.  The Board shall establish the exercise price
of each Option and specify such exercise price in the applicable option
agreement; provided, however, that the exercise price of Incentive Stock
Options shall be not less than 100% of the Fair Market Value (as defined below)
at the time the Option is granted and that the exercise price of Non-statutory
Stock Options shall be not less than 85% of the Fair Market Value at the time
the Option is granted.


 


(d)           Duration of Options.  Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement; provided, however, that no Option will be granted
for a term in excess of 10 years.


 


(e)           Exercise of Option.  Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(g) for the
number of shares for which the Option is exercised.  Shares of Common Stock subject to the Option
will be delivered by the Company following exercise either as soon as
practicable or, subject to such conditions as the Board shall specify, on a
deferred basis (with the Company’s obligation to be evidenced by an instrument
providing for future delivery of the deferred shares at the time or times
specified by the Board).


 


(f)            Payment Upon Exercise.  Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:


 


(1)           in cash or by check, payable to the order of the Company;


 


(2)           except as the Board may otherwise provide in an option
agreement, by (i) delivery of an irrevocable and unconditional undertaking
by a creditworthy broker to deliver 


 


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promptly to the Company sufficient funds to pay the exercise price and
any required tax withholding or (ii) delivery by the Participant to the
Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price and any required tax withholding;


 


(3)           when the Common Stock is registered under the Exchange
Act, by delivery of shares of Common Stock owned by the Participant valued at
their fair market value as determined by (or in a manner approved by) the Board
(“Fair Market Value”), provided (i) such method of payment is then permitted
under applicable law, (ii) such Common Stock, if acquired directly from
the Company, was owned by the Participant for such minimum period of time, if
any, as may be established by the Board in its discretion and (iii) such
Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting
or other similar requirements;


 


(4)           to the extent permitted by applicable law and by the
Board, by (i) delivery of a promissory note of the Participant to the
Company on terms determined by the Board, or (ii) payment of such other
lawful consideration as the Board may determine; or


 


(5)           by any combination of the above permitted forms of
payment.


 


(g)           Substitute Options.  In connection with a merger or consolidation
of an entity with the Company or the acquisition by the Company of property or
stock of an entity, the Board may grant Options in substitution for any options
or other stock or stock-based awards granted by such entity or an affiliate
thereof.  Substitute Options may be
granted on such terms as the Board deems appropriate in the circumstances,
notwithstanding any limitations on Options contained in the other sections of
this Section 5 or in Section 2.


 


6.                                       Adjustments for Changes in Common Stock and Certain
Other Events.


 


(a)           Changes in Capitalization.  In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than an ordinary
cash dividend, (i) the number and class of securities available under this
Plan, (ii) the limit set forth in Section 4(b), and (iii) the
number and class of securities and exercise price per share of each outstanding
Option, shall be appropriately adjusted by the Company (or substituted Options
may be made, if applicable) to the extent determined by the Board.


 


(b)           Reorganization Events.


 


(1)           Definition. 
A “Reorganization Event” shall mean: 
(a) any merger or consolidation of the Company with or into another
entity as a result of which all of the Common Stock of the Company is converted
into or exchanged for the right to receive cash, securities or other property
or is cancelled, (b) any exchange of all of the Common Stock of the Company
for cash, securities or other property pursuant to a share exchange transaction
or (c) any liquidation or dissolution of the Company.


 


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(2)           Consequences of a Reorganization Event on Options.  In connection with a Reorganization Event,
the Board shall take any one or more of the following actions as to all or any
outstanding Options on such terms as the Board determines:  (i) provide that Options shall be
assumed, or substantially equivalent Options shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof), (ii) upon
written notice to a Participant, provide that the Participant’s unexercised
Options or other unexercised Options shall become exercisable in full and will
terminate immediately prior to the consummation of such Reorganization Event
unless exercised by the Participant within a specified period following the
date of such notice, (iii) provide that outstanding Options shall become
realizable or deliverable, or restrictions applicable to an Option shall lapse,
in whole or in part prior to or upon such Reorganization Event, (iv) in
the event of a Reorganization Event under the terms of which holders of Common
Stock will receive upon consummation thereof a cash payment for each share
surrendered in the Reorganization Event (the “Acquisition Price”), make or
provide for a cash payment to a Participant equal to (A) the Acquisition
Price times the number of shares of Common Stock subject to the Participant’s
Options or other Options (to the extent the exercise price does not exceed the
Acquisition Price) minus (B) the aggregate exercise price of all such
outstanding Options or other Options, in exchange for the termination of such
Options or other Options, (v) provide that, in connection with a
liquidation or dissolution of the Company, Options shall convert into the right
to receive liquidation proceeds (if applicable, net of the exercise price
thereof) and (vi) any combination of the foregoing.


 


For
purposes of clause (i) above, an Option shall be considered assumed if,
following consummation of the Reorganization Event, the Option confers the
right to purchase, for each share of Common Stock subject to the Option
immediately prior to the consummation of the Reorganization Event, the
consideration (whether cash, securities or other property) received as a result
of the Reorganization Event by holders of Common Stock for each share of Common
Stock held immediately prior to the consummation of the Reorganization Event
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided, however, that if the consideration received as a
result of the Reorganization Event is not solely common stock of the acquiring
or succeeding corporation (or an affiliate thereof), the Company may, with the
consent of the acquiring or succeeding corporation, provide for the
consideration to be received upon the exercise of Options to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate
thereof) equivalent in fair market value to the per share consideration
received by holders of outstanding shares of Common Stock as a result of the
Reorganization Event.


 


To
the extent all or any portion of an Option becomes exercisable solely as a
result of clause (ii) above, the Board may provide that upon exercise of
such Option the Participant shall receive shares subject to a right of
repurchase by the Company or its successor at the Option exercise price; such
repurchase right (x) shall lapse at the same rate as the Option would have
become exercisable under its terms and (y) shall not apply to any shares
subject to the Option that were exercisable under its terms without regard to
clause (ii) above.


 


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7.                                       General Provisions Applicable to Options


 


(a)           Transferability of Options.  Except as the Board may otherwise determine
or provide in an Option, Options shall not be sold, assigned, transferred,
pledged or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution or, other than in the case of an Incentive Stock Option, pursuant
to a qualified domestic relations order, and, during the life of the
Participant, shall be exercisable only by the Participant.  References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.


 


(b)           Documentation.  Each Option shall be evidenced in such form
(written, electronic or otherwise) as the Board shall determine.  Each Option may contain terms and conditions
in addition to those set forth in the Plan.


 


(c)           Board Discretion.  Except as otherwise provided by the Plan,
each Option may be made alone or in addition or in relation to any other
Option.  The terms of each Option need
not be identical, and the Board need not treat Participants uniformly.


 


(d)           Termination of Status.  The Board shall determine the effect on an
Option of the disability, death, retirement, authorized leave of absence or
other change in the employment or other status of a Participant and the extent
to which, and the period during which, the Participant, or the Participant’s
legal representative, conservator, guardian or Designated Beneficiary, may
exercise rights under the Option.


 


(e)           Withholding.  Each Participant shall pay to the Company, or
make provision satisfactory to the Company for payment of, any taxes required
by law to be withheld in connection with an Option to such Participant.  If provided for in an Option or approved by
the Company, in its sole discretion, a Participant may satisfy such tax
obligations in whole or in part by delivery of shares of Common Stock, including
shares retained from the Option creating the tax obligation, valued at their
Fair Market Value; provided, however, except as otherwise provided by the
Board, that the total tax withholding where stock is being used to satisfy such
tax obligations cannot exceed the Company’s minimum statutory withholding
obligations (based on minimum statutory withholding rates for federal and state
tax purposes, including payroll taxes, that are applicable to such supplemental
taxable income).  Shares surrendered to satisfy
tax withholding requirements cannot be subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements.  The Company may, to the extent permitted by
law, deduct any such tax obligations from any payment of any kind otherwise due
to a Participant.


 


(f)            Amendment of Option.  The Board may amend, modify or terminate any
outstanding Option, including but not limited to, substituting therefor another
Option of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Non-statutory Stock
Option, provided that the Participant’s consent to such action shall be
required unless the Board determines that the action, taking into account any
related action, would not materially and adversely affect the Participant.


 


(g)           Conditions on Delivery of Stock.  The Company will not be obligated to deliver
any shares of Common Stock pursuant to the Plan or to remove restrictions from
shares 


 


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previously delivered under the
Plan until (i) all conditions of the Option have been met or removed to
the satisfaction of the Company, (ii) in the opinion of the Company’s
counsel, all other legal matters in connection with the issuance and delivery
of such shares have been satisfied, including any applicable securities laws
and any applicable stock exchange or stock market rules and regulations,
and (iii) the Participant has executed and delivered to the Company such
representations or agreements as the Company may consider appropriate to
satisfy the requirements of any applicable laws, rules or regulations.


 


(h)           Acceleration.  The Board may at any time provide that any
Option shall become immediately exercisable in full or in part, free of some or
all restrictions or conditions, or otherwise realizable in full or in part, as
the case may be.


 


8.                                       Miscellaneous


 


(a)           No Right To Employment or Other
Status.  No person shall have any
claim or right to be granted an Option, and the grant of an Option shall not be
construed as giving a Participant the right to continued employment or any
other relationship with the Company.  The
Company expressly reserves the right at any time to dismiss or otherwise
terminate its relationship with a Participant free from any liability or claim
under the Plan, except as expressly provided in the applicable Option.


 


(b)           No Rights As Shareholder.  Subject to the provisions of the applicable
Option, no Participant or Designated Beneficiary shall have any rights as a
shareholder with respect to any shares of Common Stock to be distributed with
respect to an Option until becoming the record holder of such shares.  Notwithstanding the foregoing, in the event
the Company effects a split of the Common Stock by means of a stock dividend
and the exercise price of and the number of shares subject to such Option are
adjusted as of the date of the distribution of the dividend (rather than as of
the record date for such dividend), then an optionee who exercises an Option
between the record date and the distribution date for such stock dividend shall
be entitled to receive, on the distribution date, the stock dividend with
respect to the shares of Common Stock acquired upon such Option exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.


 


(c)           Effective Date and Term of Plan.  The Plan shall become effective on the date
on which it is adopted by the Board, but no Option may be granted unless and
until the Plan has been approved by the Company’s shareholders.  No Options shall be granted under the Plan
after the completion of 10 years from the earlier of (i) the date on which
the Plan was adopted by the Board or (ii) the Shareholder Approval Date,
but Options previously granted may extend beyond that date.


 


(d)           Amendment of Plan.  The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that, to the extent required
by Section 162(m), no Option granted to a Participant that is intended to
comply with Section 162(m) after the date of such amendment shall
become exercisable, realizable or vested, as applicable to such Option, unless
and until such amendment shall have been approved by the Company’s shareholders
if required by Section 162(m) (including the vote required under Section 162(m));
and provided further that, without approval of the Company’s shareholders, no
amendment may (i) increase 


 


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the number of shares authorized
under the Plan (other than pursuant to Section 6), (ii) materially
increase the benefits provided under the Plan, (iii) materially expand the
class of participants eligible to participate in the Plan, (iv) expand the
types of Options provided under the Plan or (v) make any other changes
that require shareholder approval under the rules of the American Stock
Exchange.  In addition, if at any time
the approval of the Company’s shareholders is required as to any other
modification or amendment under Section 422 of the Code or any successor
provision with respect to Incentive Stock Options, the Board may not effect
such modification or amendment without such approval.  No Option shall be made that is conditioned
upon shareholder approval of any amendment to the Plan.


 


(e)           Provisions for Foreign
Participants.  The Board may modify
Options or Options granted to Participants who are foreign nationals or
employed outside the United States or establish subplans or procedures under
the Plan to recognize differences in laws, rules, regulations or customs of
such foreign jurisdictions with respect to tax, securities, currency, employee
benefit or other matters.


 


(f)            Compliance with Code Section 409A.  No Option shall provide for deferral of
compensation that does not comply with Section 409A of the Code, unless
the Board, at the time of grant, specifically provides that the Option is not
intended to comply with Section 409A of the Code.


 


(g)           Governing Law.  The provisions of the Plan and all Options
made hereunder shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Massachusetts, without regard to any applicable
conflicts of law.


 


 


	
   

  	
  Adopted by the Board of
  Directors on

  
	
   

  	
  March 28, 2005

  
	
   

  	
   

  
	
   

  	
  Approved by the
  shareholders on

  
	
   

  	
  May 18, 2005

  



 


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PLC SYSTEMS INC.


 


Amendment No. 1 to 2005 Stock Incentive Plan


 


The first
sentence of Section 4(a) of the 2005 Stock Incentive Plan of PLC
Systems Inc. be, and hereby is, amended by deleting “2,000,000” and inserting “4,000,000”
in lieu thereof.


 


 


	
   

  	
  Adopted by the Board of
  Directors on

  
	
   

  	
  April 29, 2008

  
	
   

  	
   

  
	
   

  	
  Approved by the
  shareholders on

  
	
   

  	
  June 18, 2008