EXHIBIT
10.1


 


Form of
Stock Option Grant Letter for Employees


 


[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 [an incentive stock
option/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 will become exercisable (“vest”)
as to
[                        ].  The right of exercise shall be cumulative so
that to the extent the option is not exercised in any period to the maximum
extent permissible it shall continue to be exercisable, in whole or in part,
with respect to all shares for which it is vested until the earlier of the
expiration date or the termination of this option under Section 2 hereof
or the Plan.


 


2.                                       This option is subject
to the following exercise terms:


 


(a)                                  Should your employment
with the Company (or a parent or subsidiary of the Company) be terminated for
any reason other than death or disability (as defined in the Internal Revenue
Code of 1986, as amended (the “Code”)) or for “Cause” (as defined below), all
unexercised options shall terminate ninety (90) days after the date of your
termination (but in no event after [five (5)/ten (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, disability or for Cause, you
are at least 59.5 years old and have been employed by the Company continuously
for at least the five (5) years prior to such date, then all of your
unexercised options shall instead terminate three (3) years after the date
of your termination (but in no event after [five (5)/ten (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
cessation of employment.


 


(b)                                 In the event of termination of your
employment 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 (1) year
from the date of your death (but in no event after [five (5)/ten (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 of termination of your
employment as a result of your disability (as defined in the Code), all
outstanding options exercisable by you at the date of such termination shall
terminate one (1) year from the date your employment terminates (but in no
event after [five 


 

















 


(5)/ten (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.


 


(d)                                 If you are discharged by the Company for “Cause”
(as defined below), the right to exercise this option shall terminate
immediately upon the effective date of such discharge.  “Cause” shall mean your willful misconduct or
willful failure to perform your responsibilities to the Company (including,
without limitation, your breach of any provision of any employment, consulting,
advisory, nondisclosure, non-competition or other similar agreement between you
and the Company), as determined by the Company, which determination shall be
conclusive.


 


(e)                                  If you violate the non-competition or
confidentiality provisions of any employment contract, confidentiality and
nondisclosure agreement or other agreement between you and the Company, the
right to exercise this option shall terminate immediately upon written notice
to you from the Company describing such violation.


 


3.                                       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.


 


4.                                       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.


 


5.                                       [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.


 


6.                                       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.


 


7.                                       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.


 


8.                                       Unless earlier terminated, this option
will expire [five (5)/ten (10)] years from the date of grant.


 


9.                                       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