Exhibit 10.3


 


***FORM***


 


MEDGENICS,
INC.


 


Stock
Incentive Plan


 


Non-Qualified
Stock Option Award Terms


 


The Participant specified
below has been granted this Non-Qualified Option (the “Option”) by Medgenics,
Inc., a Delaware corporation (the “Company”), under the terms of the Medgenics,
Inc. Stock Incentive Plan, as amended from time to time (the “Incentive Plan”).  The Option
shall be subject to the Incentive Plan as well as the following terms and conditions (the “Option Terms”):


 


Section
1.           Terms of Award.  The following words
and phrases relating to the grant of the Option shall have the following meanings:


 


(a)          The
“Participant” is _________________.


 


(b)          The
“Date of Grant” is ______________________.


 


(c)          The
number of “Covered Shares” is ________shares of Common Stock.


 


(d)          The
“Exercise Price” is $______ per share of Common Stock.


 


Except for terms otherwise
defined in the Option Terms, any capitalized term in the Option Terms shall have the meaning ascribed to that term under the Incentive
Plan.


 


Section
2.          Non-Qualified Stock Option.  The Option
is not intended to constitute an “incentive stock option” as that term is used in Code section 422.


 


Section
3.          Date of Exercise.  Subject to the limitations
of the Option Terms, each installment of Covered Shares of the Option
(“Installment”) shall become vested and exercisable on and after the “Vesting Date” for such
Installment as described in the following schedule (but only if the Participant’s Termination of Service has not occurred
before the Vesting Date):


 


	INSTALLMENT	VESTING DATE
	 	APPLICABLE TO INSTALLMENT
	 	 
	 	 
	 	 
	 	 


 




    	 



    	 



    

 


(a)          Notwithstanding
the foregoing provisions of this Section 3, the Option shall become fully exercisable upon a Change in Control that occurs
on or before the Participant’s Termination of Service.


 


(b)          The
Option may be exercised on or after the Participant’s Termination of Service only as to that portion of the Covered Shares
for which it was exercisable immediately prior to the Participant’s Termination of Service, or became exercisable on the
date of the Participant’s Termination of Service.


 


Section
4.           Expiration.  The Option shall not be
exercisable after the Company’s close of business on the last business day that occurs prior to the Expiration Date. 
The “Expiration Date” shall be the earliest to occur of:


 


(a)          _______________,
20__; or


 


(b)          the
twelve (12) month anniversary of the Participant’s Termination of Service if such termination occurs due to death or Disability;
or


 


(c)          the
90th day following Participant’s Termination of Service if such termination occurs for any reason other than death,
Disability or Cause; or


 


(d)          the
effective date of a Termination of Service where such Termination of Service is for Cause.


 


For purposes of this
Agreement, “Cause” shall have the meaning set forth in the employment agreement entered into by and between
the Participant and the Company, if any. In the absence of any such agreement, “Cause” shall mean (1) any act by the
Participant of (A) fraud or intentional misrepresentation, or (B) embezzlement, misappropriation or conversion of assets or opportunities
of the Company or any Affiliate, or (2) any willful violation of any law, rule or regulation in connection with the performance
of the Participant’s duties (other than traffic violations or similar offenses), or (3) with respect to any employee of the
Company or any Affiliate, commission of any act of moral turpitude or conviction of a felony, or (4) the willful or negligent failure
of the Participant to perform his duties in any material respect.


 


Section
5.          Method of Option Exercise.  Subject
to the Option Terms and the Incentive Plan, the Option may be exercised in whole or in part by filing a written notice with the
Secretary of the Company at its corporate headquarters prior to the Company’s close of business on the last business day
that occurs prior to the Expiration Date, together with a signed Investment Representation Statement in the form attached hereto
as Exhibit A in the event that the Common Stock to be issued to the Holder will not be registered under the Securities Act
of 1933, as amended.  Such notice shall specify the number of shares of Common Stock which the Participant elects to purchase,
and shall be accompanied by payment of the Exercise Price for such shares of Common Stock indicated by the Participant’s
election. Payment may be by cash or, subject to limitations imposed by applicable law, by such means as the Committee from time
to time may permit.  The Option shall not be exercisable if and to the extent the Company determines that such exercise would
violate applicable state or federal securities laws or the rules and regulations of any securities exchange on which the Common
Stock is traded and shall not be exercisable during any blackout period established by the Company from time to time.


 




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Section
6.          Withholding.  The exercise of the Option,
and the Company’s obligation to issue shares of Common Stock upon exercise, is subject to withholding of all applicable taxes.
As permitted by the Committee from time to time, such withholding obligations may be satisfied at the election of the Participant
(a) through cash payment by the Participant, (b) through the surrender of shares of Common Stock that the Participant already owns
or (c) through the surrender of shares of Common Stock to which the Participant is otherwise entitled under the Incentive Plan;
provided, however, that except as otherwise specifically provided by the Committee, such shares under clause (c)
may not be used to satisfy more than the Company’s minimum statutory withholding obligation.


 


Section
7.          Transferability.  The Option, or any
portion thereof, is not transferable except as designated by the Participant by will or by the laws of descent and distribution
or pursuant to a domestic relations order. Except as provided in the immediately preceding sentence, the Option shall not be assigned,
transferred, pledged, hypothecated or otherwise disposed of by the Participant in any way whether by operation of law or otherwise,
and shall not be subject to execution, attachment or similar process. Any attempt at assignment, transfer, pledge, hypothecation
or other disposition of the Option contrary to the provisions hereof, or the levy of any attachment or similar process upon the
Option, shall be null and void and without effect.


 


Section
8.          Heirs and Successors.  The Option Terms
shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, and upon any person acquiring,
whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business.
If any rights of the Participant or benefits distributable to the Participant under the Option Terms have not been exercised or
distributed, respectively, at the time of the Participant’s death, such rights shall be exercisable by the Beneficiary, and
such benefits shall be distributed to the Beneficiary, in accordance with the provisions of the Option Terms and the Incentive
Plan. The “Beneficiary” shall be the beneficiary or beneficiaries designated by the Participant in a writing
filed with the Committee in such form and at such time as the Committee may require. The designation of beneficiary form may be
amended or revoked from time to time by the Participant in accordance with such procedures as may be established by the Committee.
If a Participant fails to designate a Beneficiary, or if the Beneficiary does not survive the Participant, any rights that would
have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed
to the legal representative of the estate of the Participant. If a Participant designates a beneficiary and the Beneficiary survives
the Participant but dies before the Beneficiary’s exercise of all rights under the Option Terms or before the complete distribution
of benefits to the Beneficiary under the Option Terms, then any rights that would have been exercisable by the Beneficiary shall
be exercised by the legal representative of the estate of the Beneficiary, and any benefits distributable to the Beneficiary shall
be distributed to the legal representative of the estate of the Beneficiary.


 




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Section
9.          Administration.  The authority to manage
and control the operation and administration of the Option Terms and the Incentive Plan shall be vested in the Committee, and the
Committee shall have all powers with respect to the Option Terms as it has with respect to the Incentive Plan. Any interpretation
of the Option Terms or the Incentive Plan by the Committee and any decision made by it with respect to the Option Terms or the
Incentive Plan are final and binding on all persons.


 


Section
10.         Incentive Plan Governs. Notwithstanding anything
in the Option Terms to the contrary, the Option Terms shall be subject to the terms of the Incentive Plan, a copy of which may
be obtained by the Participant from the Secretary of the Company; and the Option Terms are subject to all interpretations, amendments,
rules and regulations promulgated by the Committee from time to time pursuant to the Incentive Plan. Notwithstanding anything in
the Option Terms to the contrary, in the event of any discrepancy between the corporate records of the Company and the Option Terms,
the corporate records of the Company shall control.


 


Section
11.         Not An Employment Contract. The Option does not
confer on the Participant any right with respect to continuance of employment or other service with the Company or any Affiliate,
nor shall it interfere in any way with any right the Company or any Affiliate would otherwise have to terminate or modify the terms
of such Participant’s employment or other service at any time.


 


Section
12.         No Rights As Shareholder.  The Participant
shall not have any rights of a shareholder with respect to the Covered Shares subject to the Option until a stock certificate has
been duly issued following exercise of the Option as provided herein.


 


Section
13.         Amendment.  The Option Terms may be amended
in accordance with the provisions of the Incentive Plan, and may otherwise be amended by written agreement of the Participant and
the Company without the consent of any other person.


 


Section
14.         Validity.  If any provision of the Option
Terms is determined to be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts
hereof, but the Option Terms shall be construed and enforced as if such illegal or invalid provision had never been included herein.


 


Section
15.         Section 409A Amendment. The Committee reserves
the right (including the right to delegate such right) to unilaterally amend the Option Terms and the Incentive Plan without the
consent of the Participant to maintain compliance with Code Section 409A. The Participant’s acceptance of the Option constitutes
acknowledgement and consent to such rights of the Committee.


 


Section
16.         Clawback. The Option and any amount or benefit
received under the Incentive Plan shall be subject to potential cancellation, recoupment, rescission, payback or other similar
action in accordance with the terms of any applicable Company clawback policy (the “Policy”) or any applicable
law. The Participant’s acceptance of the Option constitutes acknowledgement and consent to the Company’s application,
implementation and enforcement of (a) the Policy and any similar policy established by the Company that may apply to the Participant
and (b) any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation, as well as
the Participant’s express agreement that the Company may take such actions as are necessary to effectuate the Policy, any
similar policy and applicable law, without further consideration or action.


 




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IN WITNESS WHEREOF,
the Company has caused the Option Terms to be executed in its name and on its behalf, and the Participant acknowledges understanding
and acceptance of, and agrees to, the terms of the Option Terms, all as of the Date of Grant.


 


	PARTICIPANT	 	MEDGENICS, INC.
	 	 	 	 
	 	 	By:	             
	Signature	 	Its:	 
	 	 	 	 
	 	 	 	 
	Print Name	 	 	 


 




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EXHIBIT A

INVESTMENT REPRESENTATION STATEMENT


 


[This form is to be completed at the
time option is exercised, 

unless the stock to be issued upon exercise of this option


has been registered under the Securities
Act of 1933, as amended]


 


Effective as of ___________________
[insert date of option exercise] (the “Effective Date”), the undersigned (“Participant”) has elected
to purchase __________ shares of the Common Stock (the “Shares”) of Medgenics, Inc. (the “Company”) under
and pursuant to the Medgenics, Inc. Stock Incentive Plan (the “Incentive Plan”) and the Non-Qualified Stock Option
Terms dated ______________ [insert grant date of option] (the “Option Terms”). The Participant hereby makes
the following certifications, representations, warranties and agreements with respect to the purchase of the Shares:


 


The Participant acknowledges
that he or she is aware of the Company’s business affairs and financial condition and has acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire the Shares. The Participant represents and warrants
to the Company that he or she is acquiring these Shares for investment for the Participant’s own account only and not with
a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of
1933, as amended (the “Securities Act”).


 


The Participant further
acknowledges that the Shares have not been registered under the Securities Act, are deemed to constitute “restricted securities”
under Rule 701 and Rule 144 promulgated under the Securities Act and must be held indefinitely unless they are subsequently registered
under the Securities Act and qualified under any applicable state securities laws or an exemption from such registration and qualification
is available. The Participant further acknowledges that the Company is under no obligation to register the Shares.


 


The Participant further
acknowledges that he or she is familiar with the provisions of Rule 144, which, in substance, permits limited public resale of
“restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject
to the satisfaction of certain conditions. The Participant further acknowledges that in the event all of the applicable requirements
of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration
exemption will be required in order to resell the Shares. The Participant understands that no assurances can be given that any
such registration will be made or any such exemption will be available in such event.


 


The Participant further
acknowledges and understands that all certificates representing any of the Shares shall have endorsed thereon appropriate legends
reflecting the foregoing limitations, as well as any legends reflecting any other restrictions pursuant to the Company’s
Articles of Incorporation, Bylaws, the Option, the Incentive Plan and/or applicable securities laws.


 




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The Participant further
agrees that, if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”)
in connection with any registration of the offering of any securities of the Company under the Securities Act, the Participant
shall not sell or otherwise transfer any Shares or other securities of the Company during the 180-day period, or such other period
as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company (the “Market Standoff
Period”), following the effective date of a registration statement of the Company filed under the Securities Act. Such restriction
shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes
securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company
may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market
Standoff Period.


 


The Participant further
acknowledges and agrees that the Company shall not be required (i) to transfer on its books any Shares that have been sold
or otherwise transferred in violation of any of the representations, warranties, agreements or other provisions contained in this
Notice of Exercise or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or
other transferee to whom such Shares shall have been so transferred.


 


	 	Submitted by Participant:
	 	 
	 	 
	 	Signature


 



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