Exhibit (d)(2)
PLC SYSTEMS INC.
FORM OF NONQUALIFIED STOCK OPTION AGREEMENT
GRANTED UNDER 1993 STOCK OPTION PLAN
1. GRANT OF OPTION.
This agreement evidences the grant by PLC Systems Inc. (the "Company") on
__________ (the "Grant Date") to ______________ (the "Participant"), of an
option to purchase, in whole or in part, on the terms provided herein and in the
Company's 1993 Stock Option Plan (the "Plan"), a total of __________ shares (the
"Shares") of common stock, no par value per share, of the Company ("Common
Stock") at $_____ per Share. Unless earlier terminated, this option shall expire
at 5:00 p.m., Eastern time, on __________ (the "Final Exercise Date").
It is intended that the option evidenced by this agreement shall not be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended, and any regulations promulgated thereunder (the "Code").
Except as otherwise indicated by the context, the term "Participant", as used in
this option, shall be deemed to include any person who acquires the right to
exercise this option validly under its terms.
2. VESTING SCHEDULE.
This option will become exercisable ("vest") as to one-sixth of the
original number of Shares on the Grant Date and as to an additional one-sixth of
the original number of Shares at the end of each successive six-month period
following the Grant Date until two and one-half years following the Grant Date.
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 Final Exercise Date or the
termination of this option under Section 3 hereof or the Plan.
3. EXERCISE OF OPTION.
(a) FORM OF EXERCISE. Each election to exercise this option shall be in
writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided in the Plan. 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 option is less than 100.
(b) CONTINUOUS RELATIONSHIP WITH THE COMPANY REQUIRED. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Participant, at the time he or she exercises this option, is, and has been at
all times since the Grant Date, an employee or officer of the Company or any
parent or subsidiary of the Company as defined in Section 424(e) or (f) of the
Code (an "Eligible Participant").
(c) TERMINATION OF RELATIONSHIP WITH THE COMPANY. If the Participant ceases
to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Final Exercise
Date), provided that this option shall be exercisable only to the extent that
the Participant was entitled to exercise this option on the date of such
cessation. Notwithstanding the foregoing, if the Participant, prior to the Final
Exercise Date, violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this
option shall terminate immediately upon written notice to the Participant from
the Company describing such violation.
(d) EXERCISE PERIOD UPON DEATH OR DISABILITY. If the Participant dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Final Exercise Date while he or she is an Eligible
Participant and the Company has not terminated such relationship for "cause" as
specified in paragraph (e) below, this option shall be exercisable, within the
period of one year following the date of death or disability of the Participant,
by the Participant (or in the case of death by an authorized transferee),
provided that this option shall be exercisable only to the extent that this
option was exercisable by the Participant on the date of his or her death or
disability, and further provided that this option shall not be exercisable after
the Final Exercise Date.
(e) DISCHARGE FOR CAUSE. If the Participant, prior to the Final Exercise
Date, is 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 willful misconduct by the Participant or willful
failure by the Participant to perform his or her responsibilities to the Company
(including, without limitation, breach by the Participant of any provision of
any employment, consulting, advisory, nondisclosure, non-competition or other
similar agreement between the Participant and the Company), as determined by the
Company, which determination shall be conclusive. The Participant shall be
considered to have been discharged for "Cause" if the Company determines, within
30 days after the Participant's resignation, that discharge for cause was
warranted.
4. ACQUISITION EVENT.
In the event of an Acquisition Event (as defined below), the Company shall
give prior notice to the Participant that the Participant may exercise up to
100% of this option as of a time specified in such notice. If the Participant
does not exercise the option prior to the consummation of the Acquisition Event,
all unexercised portions of this option shall terminate and be of no further
force or effect. An "Acquisition Event" means (i) the merger or consolidated of
the Company with or into another corporation where, upon effectiveness of such
merger or consolidation, the Company's shareholders immediately prior to such
merger or consolidation hold 50% or less of the voting securities of the
corporation surviving such merger or consolidation or 50% or less of the then
outstanding common stock of the corporation surviving such merger or
consolidation; or (ii) any sale of all or substantially all of the Company's
assets.
5. WITHHOLDING.
No Shares will be issued pursuant to the exercise of this option unless and
until the Participant pays to the Company, or makes 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.
6. NONTRANSFERABILITY OF OPTION.
This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.
7. PROVISIONS OF THE PLAN.
This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.
IN WITNESS WHEREOF, the Company has caused this option to be executed under
its corporate seal by its duly authorized officer. This option shall take effect
as a sealed instrument.
PLC Systems Inc.
Dated: _________ By: ____________________________________
Name: _____________________________
Title: _____________________________
PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the terms
and conditions thereof. The undersigned hereby acknowledges receipt of a copy of
the Company's 1993 Stock Option Plan.
PARTICIPANT:
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Address: -------------------
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