Exhibit 10.3
EXHIBIT B
ALMA LASERS LTD.
2007 STOCK OPTION AND GRANT PLAN
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| SECTION 1. |
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GENERAL PURPOSE OF THE PLAN; DEFINITIONS |
The name of the plan is the Alma
Lasers Ltd. 2007 Stock Option and Grant Plan, which shall include
the Section 102 Addendum attached hereto as in effect from
time to time (respectively, the “Plan” and the
“Section 102 Addendum”). The purpose of the Plan
is to encourage and enable the officers, employees, directors and
other key persons (including consultants and prospective employees)
of Alma Lasers Ltd. (including any successor entity, the
“Company”) and its Subsidiaries upon whose judgment,
initiative and efforts the Company largely depends for the
successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company’s welfare will
assure a closer identification of their interests with those of the
Company, thereby stimulating their efforts on the Company’s
behalf and strengthening their desire to remain with the
Company.
The following terms shall be defined
as set forth below:
“Act” means the
Securities Act of 1933, as amended, and the rules and regulations
thereunder.
“ Affiliate ” of
any Person means a Person that directly or indirectly, through one
or more intermediaries, controls, is controlled by or is under
common control with the first mentioned Person. A Person shall be
deemed to control another Person if such first Person possesses
directly or indirectly the power to direct, or cause the direction
of, the management and policies of the second Person, whether
through the ownership of voting securities, by contract or
otherwise.
“Award” or
“Awards,” except where referring to a particular
category of grant under the Plan, shall include Incentive Stock
Options, Non-Qualified Stock Options, Restricted Stock Awards,
Unrestricted Stock Awards or any combination of the
foregoing.
“ Bankruptcy ”
shall mean (i) the filing of a voluntary petition under any
bankruptcy or insolvency law, or a petition for the appointment of
a receiver or the making of an assignment for the benefit of
creditors, with respect to the Holder, or (ii) the Holder
being subjected involuntarily to such a petition or assignment or
to an attachment or other legal or equitable interest with respect
to the Holder’s assets, which involuntary petition or
assignment or attachment is not discharged within 60 days
after its date, and (iii) the Holder being subject to a
transfer of its Issued Shares by operation of law (including by
divorce, even if not insolvent), except by reason of death.
“Board” means the
Board of Directors of the Company or its successor entity.
“ Cause ” means
dismissal as a result of (i) the commission of any act by a
grantee constituting financial dishonesty against the Company or
its Subsidiaries (which act would be chargeable as a crime under
applicable law); (ii) a grantee’s engaging in any other
act of dishonesty, fraud, intentional misrepresentation, moral
turpitude, illegality or harassment which, as determined in good
faith by the Board, would: (A) materially adversely affect the
business or the reputation of the Company or any of its
Subsidiaries with their respective current or prospective
customers, suppliers, lenders and/or other third parties with whom
such entity does or might do business; or (B) expose the
Company or any of its Subsidiaries to a risk of civil or criminal
legal damages, liabilities or penalties; (iii) the repeated
failure by a grantee to follow the directives of the chief
executive officer of the Company or any of its Subsidiaries or
Board, or (iv) any material misconduct, violation of the
Company’s or Subsidiaries’ policies, or willful and
deliberate non-performance of duty by the grantee in connection
with the business affairs of the Company or its Subsidiaries.
“Code” means the
Internal Revenue Code of 1986, as amended, and any successor Code,
and related rules, regulations and interpretations.
“Committee” means
the Committee of the Board referred to in Section 2.
“Effective Date”
means the date on which the Plan is approved by shareholders as set
forth at the end of this Plan.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
“ Fair Market Value
” of the Shares on any given date means the fair market value
of the Shares determined in good faith by the Committee.
“Holder” means,
with respect to an Award or any Issued Shares, the Person holding
such Award or Issued Shares, including the initial recipient of the
Award or any Permitted Transferee.
“Incentive Stock
Option” means any Stock Option designated and qualified
as an “incentive stock option” as defined in
Section 422 of the Code.
“Issued Shares”
means, collectively, all outstanding Shares issued pursuant to
Restricted Stock Awards, all outstanding Shares issued pursuant to
Unrestricted Stock Awards, and all Option Shares.
“Joinder
Agreement” shall have the meaning ascribed thereto in the
Shareholders Agreement.
“Non-Qualified Stock
Option” means any Stock Option that is not an Incentive
Stock Option.
“Option Shares”
means outstanding Shares that were issued to a Holder upon the
exercise of a Stock Option.
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“ Optionee ” shall
mean any person employed or associated with the affairs of the
Company who has been granted one or more Stock Options under the
Plan.
“ Permitted Transferees
” shall mean any of the following to whom a Holder may
transfer Issued Shares hereunder (as set forth in
Section 9(a)(ii)(A)): the Holder’s spouse, children
(natural or adopted), stepchildren, or a trust for their sole
benefit of which the Holder is the settlor ; provided,
however, that any such trust does not require or permit
distribution of any Issued Shares if it would violate the terms of
this Plan or any applicable Award agreement. Upon the death of the
Holder, the term Permitted Transferees shall also include such
deceased Holder’s estate, executions, administrations,
personal representations, heirs, legatees and distributees, as the
case may be.
“ Person ” shall
mean any individual, corporation, partnership (limited or general),
limited liability company, limited liability partnership,
association, trust, joint venture, unincorporated organization or
any similar entity.
“Option” or
“Stock Option” means any option to purchase
Shares granted pursuant to Section 6.
“Repurchase
Event” means (i) a Termination Event, (ii) the
Holder’s Bankruptcy, or (iii) the consummation of a Sale
Event.
“Restricted Stock
Award” means Awards granted pursuant to Section 7
and “Restricted Stock” means Shares granted
pursuant to such Awards.
“ Sale Event”
means the consummation of (i) the dissolution or liquidation
of the Company, (ii) the sale of all or substantially all of the
assets of the Company on a consolidated basis to an unrelated
person or entity, (iii) a merger, reorganization or
consolidation in which the outstanding Shares are converted into or
exchanged for securities of the successor entity and the holders of
the Company’s outstanding voting power immediately prior to
such transaction do not own at least a majority of the outstanding
voting power of the successor entity immediately upon completion of
such transaction, (iv) the sale of all or a majority of the
share capital or Shares of the Company to an unrelated person or
entity, or (v) any other transaction in which the holders of
the Company’s outstanding voting power immediately prior to
such transaction do not own at least a majority of the outstanding
voting power of the Company or a successor entity immediately upon
completion of the transaction. Notwithstanding anything herein to
the contrary, an initial public offering by the Company shall not
constitute a Sale Event.
“Shareholders
Agreement” means that certain Shareholders Agreement,
dated as of March 23, 2006, by and among the Company and the
Shareholders and Investors named therein, as such agreement may be
amended or modified from time to time.
“ Securities Act ”
means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
“Shares” means
Ordinary Shares, par value NIS 0.01 per share, of the Company,
subject to adjustments pursuant to Section 3.
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“Subsidiary”
means any corporation or other entity (other than the Company) in
which the Company has a controlling interest, either directly or
indirectly.
“Termination
Event” means the termination of the Award
recipient’s employment or service relationship with the
Company and its Subsidiaries for any reason whatsoever, regardless
of the circumstances thereof, and including, without limitation,
upon death, disability, retirement, discharge or resignation for
any reason, whether voluntarily or involuntarily. The following
shall not constitute a Termination Event: (i) a transfer to
the employment of the Company from a Subsidiary or from the Company
to a Subsidiary, or from one Subsidiary to another Subsidiary or
(ii) an approved leave of absence for military service or
sickness, or for any other purpose approved by the Committee, if
the employee’s right to re-employment is guaranteed either by
a statute or by contract or under the policy pursuant to which the
leave of absence was granted or if the Committee otherwise so
provides in writing.
“ Unrestricted Stock
Award ” means any Award granted pursuant to
Section 8 and “Unrestricted Stock” means
Shares granted pursuant to such Awards.
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| SECTION 2. |
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ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT
GRANTEES AND DETERMINE AWARDS |
(a) Administration of
Plan . The Plan shall be administered by the Board, or at the
discretion of the Board, by a committee of the Board, comprised of
not less than two (2) Directors. All references herein to the
Committee shall be deemed to refer to the group then responsible
for administration of the Plan at the relevant time (i.e., either
the Board of Directors or a committee or committees of the Board,
as applicable).
(b) Powers of Committee
. The Committee shall have the power and authority to grant Awards
consistent with the terms of the Plan, including the power and
authority:
(i) to
select the persons to whom Awards may from time to time be
granted;
(ii) to
determine the time or times of grant, and the extent, if any, of
Incentive Stock Options, Non-Qualified Stock Options, Restricted
Stock Awards, Unrestricted Stock Awards, any Awards subject to the
Section 102 Addendum hereto, or any combination of the
foregoing, granted to any one or more grantees;
(iii) to
determine the number of Shares to be covered by any Award;
(iv) to
determine and modify from time to time the terms and conditions,
including restrictions, not inconsistent with the terms of the
Plan, of any Award, which terms and conditions may differ among
individual Awards and grantees, and to approve the form of written
instruments evidencing the Awards;
(v) to
accelerate at any time the exercisability or vesting of all or any
portion of any Award;
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(vi) to
impose any limitations on Awards granted under the Plan, including
limitations on transfers, repurchase provisions and the like and to
exercise repurchase rights or obligations;
(vii) subject
to any restrictions applicable to Incentive Stock Options or any
Awards granted under the Section 102 Addendum hereto, to
extend at any time the period in which Stock Options may be
exercised;
(viii) to
determine at any time whether, to what extent, and under what
circumstances distribution or the receipt of Stock and other
amounts payable with respect to an Award shall be deferred either
automatically or at the election of the grantee and whether and to
what extent the Company shall pay or credit amounts constituting
interest (at rates determined by the Committee) or dividends or
deemed dividends on such deferrals;
(ix) adopt
any sub-plans (such as the Section 102 Addendum hereto)
applicable to residents of any specified jurisdiction as it deems
necessary or appropriate in order to comply with or take advantage
of any tax or other laws applicable to the Company, an Affiliate or
to Award recipients or to otherwise facilitate the administration
of the Plan, which sub-plans may include additional restrictions or
conditions applicable to Stock Options or Issued Shares acquired
upon exercise of Options; and
(x) at
any time to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the
administration of the Plan.
All decisions and interpretations of
the Committee shall be binding on all persons, including the
Company and Plan grantees.
(c) Indemnification .
Neither the Board nor the Committee, nor any member of either or
any delegatee thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in
connection with the Plan, and the members of the Board and the
Committee (and any delegatee thereof) shall be entitled in all
cases to indemnification and reimbursement by the Company in
respect of any claim, loss, damage or expense (including, without
limitation, reasonable attorneys’ fees) arising or resulting
therefrom to the fullest extent permitted by law and/or under any
directors’ and officers’ liability insurance coverage
which may be in effect from time to time.
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| SECTION 3. |
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SHARES ISSUABLE UNDER THE PLAN; CHANGES IN SHARE CAPITAL;
SUBSTITUTION |
(a) Shares Issuable .
The maximum number of Shares reserved and available for issuance
under the Plan shall be 143,013,000 Shares, subject to adjustment
as provided in Section 3(b). For purposes of this limitation,
the Shares underlying any Awards which are forfeited, canceled,
reacquired by the Company, satisfied without the issuance of Shares
or otherwise terminated (other than by exercise) shall be added
back to the Shares available for
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issuance
under the Plan. Subject to such overall limitation, Shares may be
issued up to such maximum number pursuant to any type or types of
Award; provided, however, that from and after the date the Company
becomes subject to the deduction limit imposed by Section 162(m) of
the Code, Stock Options with respect to no more than 1,000,000
Shares may be granted to any one individual grantee during any one
calendar year period. The Shares available for issuance under the
Plan may be authorized but unissued Shares or Shares reacquired by
the Company and held in its treasury.
(b) Changes in Share
Capital . Subject to Section 4 hereof, if, as a result of
any reorganization, recapitalization, reclassification, share
dividend, share split, reverse share split or other similar change
in the Company’s share capital, the outstanding Shares are
increased or decreased or are exchanged for a different number or
kind of shares or other securities of the Company, or additional
shares or new or different shares or other securities of the
Company or other non-cash assets are distributed with respect to
such Shares or other securities, or, if, as a result of any merger,
consolidation or sale of all or substantially all of the assets of
the Company, the outstanding Shares are converted into or exchanged
for a different number or kind of securities of the Company or any
successor entity (or a parent or subsidiary thereof), the Committee
shall make an appropriate or proportionate adjustment in
(i) the maximum number of shares reserved for issuance under
the Plan, (ii) the number of Stock Options that can be granted
to any one individual grantee, (iii) the number and kind of
shares or other securities subject to any then outstanding Awards
under the Plan, (iii) the repurchase price per share subject
to each outstanding Award, if any, and (iv) the exercise price
and/or exchange price for each share subject to any then
outstanding Stock Options under the Plan, without changing the
aggregate exercise price (i.e., the exercise price multiplied by
the number of Stock Options) as to which such Stock Options remain
exercisable. The adjustment by the Committee shall be final,
binding and conclusive. No fractional Shares shall be issued under
the Plan resulting from any such adjustment, but the Committee in
its discretion may make a cash payment in lieu of fractional
shares.
(c) Substitute Awards .
The Committee may grant Awards under the Plan in substitution for
stock and stock based awards held by employees, directors or other
key persons of another corporation in connection with a merger or
consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Committee may
direct that the substitute awards be granted on such terms and
conditions as the Committee considers appropriate in the
circumstances. Any substitute Awards granted under the Plan shall
not count against the share limitation set forth in Section
3(a).
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| SECTION 4. |
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TREATMENT UPON SALE EVENT OR OTHER EXTRAORDINARY
TRANSACTION |
(a) Options .
(i) In
the case of and subject to the consummation of a Sale Event, the
Plan and all Options issued hereunder shall terminate upon the
effective time of any such Sale Event unless provision is made in
connection with the Sale Event in the sole discretion of the
parties thereto for the assumption or continuation of Options
theretofore granted by the successor entity,
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or the
substitution of such Options with new Options of the successor
entity or parent thereof, with appropriate adjustment as to the
number and kind of shares and, if appropriate, the per share
exercise prices, as such parties shall agree (after taking into
account any acceleration hereunder).
(ii) In
the event of the termination of the Plan and all Options issued
hereunder, each Holder of Options shall be permitted, within a
specified period of time prior to the consummation of the Sale
Event as determined by the Committee, to exercise all such Options
which are then exercisable or will become exercisable as of the
effective time of the Sale Event; provided, however , that
the exercise of Options not exercisable prior to the Sale Event
shall be subject to the consummation of the Sale Event.
(iii) Notwithstanding
anything to the contrary in Section 4(a)(i), in the event of a
Sale Event pursuant to which holders of Shares of the Company will
receive upon consummation thereof a cash payment for each share
surrendered in the Sale Event, the Company shall have the right,
but not the obligation, to make or provide for a cash payment to
the grantees holding vested Options in exchange for the
cancellation thereof, in an amount equal to the difference between
(A) the value as determined by the Committee of the
consideration payable per Share pursuant to the Sale Event (the
“Sale Price”) times the number of Shares subject to
outstanding vested Options (to the extent then exercisable at
prices not in excess of the Sale Price) and (B) the aggregate
exercise price of all such outstanding vested Options.
(b) Option Shares and
Restricted Stock Awards . Unless otherwise provided in an Award
agreement, in the case of and subject to the consummation of a Sale
Event, Option Shares and shares of Restricted Stock shall be
subject to the repurchase right set forth in Section 9(c)(i)
and 9(c)(ii), respectively.
(c) Unrestricted Stock
Awards . Unless otherwise provided in an Award agreement, any
shares of Unrestricted Stock shall be treated in a Sale Event the
same as all other Shares then outstanding.
Grantees under the Plan will be such
full or part-time officers and other employees, directors and key
persons (including consultants and prospective employees) of the
Company and its Subsidiaries as are selected from time to time by
the Committee in its sole discretion.
(a) Nature of Stock
Options . A Stock Option is an Award entitling the recipient to
acquire, at such exercise price as determined by the Committee,
Shares subject to such restrictions and conditions as the Committee
may determine at the time of grant. Conditions may be based on
continuing employment (or other service relationship) and/or
achievement of pre-established performance goals and objectives.
The grant of a Stock Option is contingent on the grantee executing
the Stock Option agreement. The terms and conditions of each such
agreement shall be determined by the Committee, and such terms and
conditions may differ among individual Awards and grantees.
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Stock Options granted under the Plan
may be either Incentive Stock Options or Non-Qualified Stock
Options. Incentive Stock Options may be granted only to employees
of the Company or any Subsidiary that is a “subsidiary
corporation” within the meaning of Section 424(f) of the
Code. To the extent that any Option does not qualify as an
Incentive Stock Option, it shall be deemed a Non-Qualified Stock
Option.
No Incentive Stock Option shall be
granted under the Plan after the date which is ten (10) years from
the date the Plan is approved by Board of Directors.
(b) Grants of Stock
Options . The Committee in its discretion may grant Stock
Options to eligible directors, officers, employees and key persons
of the Company or any Subsidiary. Stock Options granted under the
Plan shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall
deem desirable. If the Committee so determines, Stock Options may
be granted in lieu of cash compensation at the Optionee’s
election, subject to such terms and conditions as the Committee may
establish.
(i)
Exercise Price . The exercise price per share for the Shares
covered by a Stock Option granted under the Plan shall be
determined by the Committee at the time of grant but shall not be
less than 100 percent (100%) of the Fair Market Value on the
date of grant. If an employee owns or is deemed to own (by reason
of the attribution rules of Section 424(d) of the Code) more than
10 percent (10%) of the combined voting power of all classes
of share capital of the Company or any parent or subsidiary
corporation and an Incentive Stock Option is granted to such
employee, the option price of an Incentive Stock Option shall be
not less than 110 percent (110%) of the Fair Market Value on
the grant date.
(ii)
Option Term . The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be exercisable more
than 10 years after the date the Stock Option is granted. If
an employee owns or is deemed to own (by reason of the attribution
rules of Section 424(d) of the Code) more than 10 percent
(10%) of the combined voting power of all classes of shares of the
Company or any parent or subsidiary corporation and an Incentive
Stock Option is granted to such employee, the term of such Stock
Option shall be no more than five years from the date of
grant.
(iii)
Exercisability; Rights of a Shareholder. Stock Options shall
become exercisable at such time or times, whether or not in
installments, as shall be determined by the Commit
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