exv10w14



 





Exhibit 10.14




Alma Lasers Ltd.




August 28,2006




Mr. Howard V. Kelly

[Address]



Dear Howard:



It is our great pleasure to offer you the position of Chief Executive Officer of Alma Lasers Ltd
(the “Company”) effective September 1, 2006. In addition, we would like to formally invite you to
join the Company’s Board of Directors. This letter summarizes the terms and conditions of your
employment.




	 	 	 
	Job Title:

	 	Your title will be Chief Executive Officer and you will
report to the Board. You will be appointed as a member of
the Company’s Board of Directors and thereafter shall serve
as a member of the Board subject to designation by the
Board and election by the stockholders.
	 
	 	 
	Start Date:

	 	Your start date will be September 1, 2006.
	 
	 	 
	Salary:

	 	Your monthly salary will be $33,333, which is equivalent to
$400,000 per annum. Your total compensation will be
reviewed at least annually by the Compensation Committee of
the Board of Directors. All payments made in connection
with your employment will be subject to applicable
withholding taxes required by law.
	 
	 	 
	Annual Bonus:

	 	In addition to your base salary and to the extent such
funds are available; you will be eligible to receive a
yearly performance bonus of up to 30% of your base salary
to be earned upon achievement of certain Company milestones
which are to be agreed upon in advance by you and the
Compensation Committee of the Board of Directors.
	 
	 	 
	 

	 	For 2006, we will provide a one time guarantee of the pro
rata portion of the annual bonus contingent upon your full
employment with the firm at year end 2006 (12-31-2006).
This will be calculated on a monthly basis, and partial
months will be linearly interpolated. As example, if you
join September 1st, your guaranteed year end
bonus would be $40,000.
	 
	 	 
	Stock Option:

	 	At the next meeting of the Board of Directors, you will be
granted a stock option to purchase 18,374,775 shares of the
Company’s common stock in accordance with the Company’s
2005 Share Option Plan (the “Plan”), which represents 2.5%
of the shares of the Company including all outstanding
shares, warrants, share options and unallocated options as
of the effective






 









 





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	 	date of this letter. The option price will reflect the fair
market value of the stock on the date of grant as determined
by the Board of Directors, currently anticipated to be
$0.1733 per share. Your stock option will vest over four
years provided that you remain employed with the Company.
The vesting schedule will be 25% (4,593,694 shares) at the
end of your first year of employment and the remaining 75%
will vest monthly thereafter for the remaining 3 years
(1/36th per month). Your option will be subject to the terms and
conditions of the Plan, your option grant letter and all
related documents evidencing such option.
	 
	 	 
	 

	 	Under separate cover you will receive a copy of the Alma
Lasers Ltd. stock option plan.
	 
	 	 
	Obligations:

	 	You agree to the best of your ability and experience that
you will at all times faithfully perform all of the duties
and obligations required of and from you, consistent and
commensurate with your position with the Company, pursuant
to the terms hereof and to the reasonable satisfaction of
the Board of Directors. During the term of your employment
relationship with the Company, you agree that you will
devote all of your business time and attention to the
business of the Company, that the Company will be entitled
to all of the benefits and profits arising from or incident
to your work services and advice, that you will not render
commercial or professional services of any nature to any
person or organization whether or not for compensation,
without the prior written consent of the Board of Directors
and that you will not directly or indirectly engage or
participate in any-business that is competitive in any
manner with the business of the Company as currently
conducted or proposed to be conducted, as a director,
officer, advisor, employee, consultant or contractor or in
any other capacity with respect to any such competitive
business, or by making an investment in any such competitive
business, Nothing in this letter agreement will prevent you
from accepting speaking or presentation engagements in
exchange for honoraria or, subject to the prior written
consent of the Board of Directors from serving on boards of
non-competitive organizations, or from owning no more than
1% of the outstanding equity securities of a corporation
whose stock is listed on a national stock exchange or the
Nasdaq National Market, provided that such activities do not
materially interfere with your obligations to the Company as
described above. You agree that you will comply with and be
bound by the Company’s operating policies, procedures and
practices from time to time in effect during the term of
your employment relationship with the Company.
	 
	 	 
	Acceleration:

	 	In the event that there is a Change of Control (as defined
below) of the Company, then the vesting of any stock options
held by you at the time of such event shall automatically be
accelerated by 100% of the number of shares subject to the
option so that all such shares are vested and exercisable,
immediately prior to the consummation of such Change of
Control.






 









 





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	 	For purposes of this letter.
“Change of Control” means (1)
a sale of all or substantially all of the Company’s assets,
or (2) any merger, consolidation or other business
combination transaction of the Company with or into another
corporation, entity or person, other than a transaction in
which the holders of at least a majority of the shares of
voting capital stock of the Company outstanding immediately
prior to such transaction continue to hold (either by such
shares remaining outstanding or by their being converted
into shares of voting capital stock of the surviving
entity) a majority of the total voting power represented by
the shares of voting capital stock of the Company (or the
surviving entity) outstanding immediately after such
transaction, and other than any transaction involving any
newly issued equity securities solely for cash. An initial
public offering by Alma Lasers Ltd. does not constitute a
Change of Control.
	 
	 	 
	Benefits:

	 	During your employment, you will be fully eligible for all
benefits offered by the Company from time to time, subject
to plan terms and generally applicable Company policies.
Subject to change, the Company currently plans to include
major group medical, [life insurance] and other benefit
programs. A full description of these benefits is being
sent to you under separate cover. We would look to you as
CEO to make suggestions and recommendations for improvement
to the Company benefit plans.
	 
	 	 
	Vacation Time:

	 	In addition to the Company’s annual holiday schedule, your
vacation allowance will be 4 weeks.
	 
	 	 
	Location

	 	It is our understanding that you will operate the
enterprise as CEO initially spending at least 4 days a week
in Ft Lauderdale, Florida. Given your desire to stay in
Chicago, you will, working with the board, lead the process
of relocating the company’s US headquarters from Ft
Lauderdale to Chicago as soon as practical while minimizing
the level of disruption to the organization. This would
include relocating existing managers and employees from Ft.
Lauderdale where feasible, hiring new managers and
employees in Chicago, acquiring new office space in
Chicago, etc. The current expectation is that this will be
significantly progressed by December 31st, 2006.
Periodic trips to company locations to include Fort
Lauderdale and Israel will be necessary. You will be
reimbursed for normal and customary business travel in this
regard, We would look to you to suggest the best
alternative regarding use of hotels or an apartment during
the interim period, whichever is most cost effective for
the company.
	 
	Termination:

	 	Your employment will continue until terminated by you or
the Company in accordance with the following:







	 	(a)	 	Without Cause Termination. If your employment with the
Company is terminated by the Company without Cause;
provided you sign a general release of claims with respect
to the Company or its successor; and you adhere to the
Company’s Employment Proprietary Information and Inventions
Agreement (the “Inventions Agreement Company Non




 









 





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	 	Compete and Non Solicitation Agreement); the obligations of the
Company to you will be as follows:
	 
	 	(i)	 	Severance Payment. You will be awarded twelve months salary
continuation. If your employment terminates as a result of your
death or Disability (defined as a physical or mental impairment
which renders you unable to fulfill all of the essential functions
of your job for 180 consecutive days in any calendar year), such
termination shall be considered a termination without cause under
this Agreement. In the event of a Disability, the payments due to
you by the Company during the Severance Period will be reduced by
any payments made to you during the Severance Period under any
Company-paid disability insurance policy.
	 
	 	(ii)	 	Benefits. During the Severance
Period, the Company will treat you as an employee with regard to
continued health insurance coverage for you and your eligible
dependents to the extent provided under the Consolidated Omnibus
Budget Reconciliation Act (“COBRA”).
	 
	 	(iii)	 	Options. Stock options will cease vesting upon the date of
Termination. According to the Plan, you will have 90 days in which to
exercise your vested options. The Company will then have the option
to purchase these shares at fair market value as determined by the
Board of Directors.






	 	(b)	 	For Cause Termination. If your
employment with the Company is terminated by the Company for Cause, the
obligations of the Company to you will be as follows:






     (i) Compensation. You will be entitled to receive your
base salary through the date of termination, including any accrued
vacation to that date.




     (ii) Benefits. Your entitlement to benefits will cease, except
as otherwise required by the Company’s ERISA plans or by COBRA or any similar law or
regulation then in effect.




     (iii) Options. All options, vested and unvested,
will be cancelled, according to the Plan.



Non-Competition/Non Solicitation;




	 	 	 
	 

	 	During the term of your employment and for a period of twelve (12) months
thereafter, you will not, directly or indirectly, for your own account or as
an employee, officer, director, partner, joint venturer, shareholder,
investor, consultant or otherwise (except as an investor in a corporation
whose stock is publicly traded and in which you hold less than five percent
(5%) of the outstanding shares) and without the prior written consent of the
Company,






 









 





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	 	interest yourself in or engage in any business or enterprise, anywhere in
the world, that directly competes with the business of the Company and/or
its affiliates, that exists now or in the future or is based on similar
technology to the technology that was developed by the Company and/or its
affiliates.
	 
	 

	 	During the term of your employment and for a period of twelve (12) months
thereafter, you shall not employ, directly or indirectly, any
individual employed by the Company and/ or its affiliates during the
six-month period which preceded such date of termination.
	 
	Other:

	 	You will abide by all Company policies and rules, especially its policy
that prohibits any new employee from using or bringing with them from
any-prior employer or any other person or entity any confidential
information, trade secrets or proprietary materials or processes of that
employer or other person or entity.
	 
	 

	 	Your employment at the Company is “At Will,” meaning it is not for a
specific term and can be terminated by you or by the Company at any time
for any reason, with or without cause. If your employment terminates for
any reason, you shall not be entitled to any payments, benefits, damages
award or compensation other than as expressly provided in the sections
entitled “Acceleration” and “Termination” set forth above.
	 
	 

	 	This offer is contingent upon your executing the Company’s Employment
Proprietary Information and Inventions Agreement (the “Inventions
Agreement”), which agreement contains both non-competition and
non-solicitation provisions, and providing the Company with the legally
required proof of identity and authorization to work in the United States.
	 
	 

	 	This offer is contingent on completion of a standard background check.
	 
	 

	 	You hereby acknowledge that you are not a party to any agreement that in
any way prohibits or imposes any restrictions on your employment with the
Company, and your acceptance hereof will not breach any agreement to which
you are a party.
	 
	 

	 	Any dispute arising hereunder or arising out of your employment or other
relations with the Company will be subject to binding arbitration under
the auspices of the American Arbitration Association. This agreement shall
be governed, construed and enforced in accordance with the laws of the
State of Delaware without regard for the principles of conflict law. Once
signed by you, this letter will become a legally binding contract. It will
constitute our complete agreement, and will supersede all prior
agreements, promises, and discussions. This agreement may only be amended
or modified in a subsequent written document signed by a duly authorized
representative of the Company’s Board of Directors.






 









 





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Howard, we truly feel that we have an exciting opportunity ahead of us and we look forward to
working together to make Alma Lasers Ltd. an even more successful company. I hope you will look
favorably upon this offer and reply with your written acceptance. If, after reviewing this
information, you have any questions, please do not hesitate to call.




Sincerely,




	 	 	 
	       /s/ David Lang
 

On Behalf of the Board of Directors of Alma Lasers Ltd.


David Lang

	 	 





Foregoing terms and conditions hereby accepted:




Signed:
  /s/ Howard V. Kelly                                                            

            Howard V. Kelly




Date: