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 unexercised options shall terminate 90 days after
the date of such termination (but in no event after 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 years prior to such
date, then all of your unexercised options shall instead terminate 3 years
after the date of such termination (but in no event after 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 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.


 


5.             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.


 


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:


 


	
   

  	
   

  	
  Number of

  	
   

  
	
  Period

  	
   

  	
  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.


 


2

















 


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

  	
   

  



 


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