Exhibit 10.2
Topspin Medical, Inc.
(the “Corporation”)
2003 Stock Option Plan-Israel
(as amended on February 26, 2009)
1. Name . This plan,
as amended from time to time, shall be known as the “Topspin
Medical Inc. 2003 Israeli Stock Option Plan” (the
“Plan”).
2. Definitions . As
used in this Plan, the following words and phrases shall have the
meanings indicated:
2.1.
“Affiliate” shall mean an affiliate of the Corporation
which is an “employing company” within the meaning of
Section 102(a) of the Ordinance.
2.2.
“Board” shall mean the Board of Directors of the
Corporation.
2.3.
“Cause” shall mean any of the following resulting from
an act or omission of Grantee: (a) fraud, embezzlement or
felony or similar act; (b) failure to substantially perform
duties as an employee or to abide by the general policies of the
Corporation applicable to all employees (including, without
limitation, policies relating to confidentiality and reasonable
workplace conduct); (c) an act of moral turpitude, or any
similar act, to the extent that such act causes injury to the
reputation of the Corporation; (d) any act or omission which
in the reasonable opinion of the Corporation could be financially
injurious to the Corporation or injurious to the business
reputation of the Corporation; or (e) any other act
constituting cause under any employment agreement between the
Grantee and the Corporation.
2.4.
“Committee” shall mean a committee, pursuant to
Section 4 hereinafter, established or authorized by the Board
to administer the Plan.
2.5.
“Controlling Shareholder” shall have the meaning
ascribed to it in Section 32(9) of the Ordinance.
2.6.
“Date of Grant” shall mean as determined by the
Committee, (i) the date as of which the Committee approves a
grant or (ii) such other date as may be specified by the
Committee in the Option Agreement.
2.7.
“Disability” shall mean a Grantee’s inability to
perform his duties with the Corporation or any Affiliate by reason
of any medically determinable physical or mental impairment, as
determined by a physician selected by the Grantee and acceptable to
the Corporation.
2.8.
“Employee” shall mean a person who is employed by the
Corporation or an Affiliate, including an individual who is serving
as a director or an Office Holder, but excluding a Controlling
Shareholder.
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2.9.
“Exchange Act” shall mean the US Securities Exchange
Act of 1934, as now in effect or as hereafter amended.
2.10.
“Exercise Price” shall mean the exercise price for each
share of Common Stock covered by an Option.
2.11.
“Expiration Date” shall mean the date upon which an
Option shall expire as set forth in Section 7.5 of the
Plan.
2.12.
“Fair Market Value” shall mean as of any date, the
value of a share of Stock determined as follows: (i) if the
Stock is listed on any established stock exchange or a national
market system, including without limitation the NASDAQ National
Market system, or the NASDAQ SmallCap Market of the NASDAQ Stock
Market, the Fair Market Value shall be the closing sales price for
such Stock (or the closing bid, if no sales were reported), as
quoted on such exchange or system for the last market trading day
prior to time of determination, as reported in the Wall Street
Journal, or such other source as the Committee deems reliable.
Without derogating from the foregoing and solely for the purpose of
determining the tax liability pursuant to Section 102(b)(3) of
the Ordinance, if at the Date of Grant the Stock is listed on any
established stock exchange or a national market system or if the
Stock will be registered for trading within ninety (90) days
following the Date of Grant, the Fair Market Value of a share of
Stock at the Date of Grant shall be determined in accordance with
the average value of the Stock over the thirty (30) trading
day period preceding the Date of Grant or over the thirty
(30) trading day period following the date of registration for
trading, as the case may be; (ii) if the Stock is regularly
quoted by a recognized securities dealer but selling prices are not
reported, the Fair Market Value shall be the mean between the high
bid and low asked prices for the Stock on the last market trading
day prior to the date of determination; or (iii) in the
absence of an established market for the Stock, the Fair Market
Value thereof shall be determined in good faith by the
Committee.
2.13.
“Grantee” shall mean a person who receives a grant of
Options under the Plan.
2.14.
“Initial Public Offering” or “IPO” shall
mean the underwritten initial public offering of the
Stock.
2.15.
“ Non-Employee” shall mean a consultant, adviser,
service provider, Controlling Shareholder or any other person
providing services to the Corporation or an Affiliate who is not an
Employee.
2.16.
“Office Holder” shall have the meaning ascribed to it
in the Israeli Companies Law, 1999, as now in effect or as
hereafter amended.
2.17.
“Option” shall mean an option to purchase one or more
shares of the Stock, pursuant to the Plan.
2.18.
“102 Option” shall mean an Option granted to an
Employee pursuant to Section 102 of the Ordinance.
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2.19.
“Approved 102 Option” shall mean a 102 Option granted
pursuant to Section 102(b) of the Ordinance and held in trust by a
Trustee.
2.20.
“Unapproved 102 Option” shall mean a 102 Option granted
pursuant to Section 102(c) of the Ordinance and not held in trust
by a Trustee.
2.21.
“Capital Gains Option (CGO)” shall mean an Approved 102
Option elected and designated by the Corporation to qualify under
the capital gain tax treatment in accordance with the provisions of
Section 102(b)(2) of the Ordinance.
2.22.
“Ordinary Income Option (OIO)” shall mean an Approved
102 Option elected and designated by the Corporation to qualify
under the ordinary income tax treatment in accordance with the
provisions of Section 102(b)(1) of the Ordinance.
2.23.
“3(9) Option” shall mean an Option granted to a
Non-Employee pursuant to Section 3(9) of the
Ordinance.
2.24.
“Option Agreement” shall mean the stock option
agreement between the Corporation and a Grantee that evidences and
sets out the terms and conditions of an Option.
2.25.
“Ordinance” shall mean the Israeli Income Tax Ordinance
[New Version], 1961, as now in effect or as hereafter
amended.
2.26.
“Person” shall mean an individual, corporation,
partnership, joint venture, trust or unincorporated
organization.
2.27.
“Retirement” shall mean a Grantee’s retirement
pursuant to applicable law or in accordance with the terms of any
tax-qualified retirement plan maintained by the Corporation or any
Affiliate in which the Grantee participates.
2.28.
“Section 102” means section 102 of the Ordinance
as now in effect or as hereafter amended.
2.29.
“Stock” shall mean the Common Stock of the Corporation,
bearing a nominal value of US$ 0.001.
2.30.
“Trustee” shall mean a trustee nominated by the
Committee and approved by the Israeli Tax authorities pursuant to
Section 102.
2.31.
“Underlying Shares” shall mean the shares of Stock
received upon exercise of an Option and any other shares of Stock
received by virtue of the Stock received upon exercise of an
Option.
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3. Purpose, Types of
Options; Construction .
3.1.
The purpose and intent of the Plan is to provide incentives to
Employees, and Non-Employees of the Corporation and the Affiliates,
by providing them with opportunities to purchase Stock of the
Corporation, pursuant to the Plan approved by the Board.
3.2.
The Plan is intended to enable the Corporation to issue Options
pursuant and subject to the provisions of Section 102 and any
regulations, rules, orders or procedures promulgated thereunder;
and Section 3(9) of the Ordinance.
3.3. To
the extent any provision herein conflicts with the conditions of
any relevant tax law or regulation which are relied upon for tax
relief in respect of a particular Option granted to a Grantee, the
provisions of said law or regulation shall prevail over those of
the Plan and the Committee is empowered hereunder to interpret and
enforce the said prevailing provisions.
4.
Administration
4.1.
The Plan will be administered by the Board or by a Committee,
which, if appointed, will consist of such number of Directors of
the Corporation as may be fixed, from time to time, by the Board.
If a Committee is not appointed, the term Committee, whenever used
herein, shall mean the Board. The Board shall appoint the members
of the Committee and may, from time to time, remove members from,
or add members to, the Committee and shall fill vacancies in the
Committee however caused.
4.2.
Subject to applicable law, the Committee shall have the authority
in its discretion to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the
Plan or necessary or advisable in the administration of the Plan,
including, without limitation:
4.2.1.
the authority to grant Options;
4.2.2.
to designate the type of Option to be granted;
4.2.3.
to make an election as to the type of Approved 102 Option to be
granted
4.2.4.
to determine the Exercise Price of each Option;
4.2.5.
to determine the Persons to whom, and the time or times at which
Options shall be granted;
4.2.6.
to determine the number of shares of Common Stock to be covered by
each Option;
4.2.7.
subject to Section 2.12 above, to determine the Fair Market
Value of the Stock;
4.2.8.
to accelerate the right of a Grantee to exercise, in whole or in
part, any previously granted Option;
4.2.9.
to prescribe, amend and rescind rules and regulations relating to
the Plan;
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4.2.10.
to determine the terms and provisions of the Option Agreements
(which need not be identical), and to cancel or suspend Options, as
necessary; and
4.2.11.
to make all other determinations deemed necessary or advisable for
the administration of the Plan, including to adjust the terms of
the Plan or any Option Agreement so as to reflect: (i) changes
in applicable laws; and (ii) the laws of other jurisdictions
within which the Corporation wishes to grant Options.
4.3.
The Committee shall select one of its members as its Chairman and
shall hold its meetings at such times and places as it shall
determine. Actions taken by a majority of the members of the
Committee, at a meeting at which a majority of its members is
present, or acts reduced to or approved in writing by all members
of the Committee, shall be the valid acts of the
Committee.
4.4.
Any member of the Committee shall be eligible to receive Options
under the Plan while serving on the Committee, unless otherwise
specified herein. No person shall be eligible to be a member of the
Committee if that person’s membership would prevent the Plan
from complying with exemptions from Section 16 set forth in
Rule 16b-3 promulgated under the Exchange Act, if applicable
to the Corporation. At such time as any class of equity securities
of the Corporation is registered pursuant to Section 12 of the
Exchange Act, the Committee shall consist of at least two
(2) individuals, each of whom is a Non-Employee Director as
that term is defined in said Rule 16b-3.
4.5. No
member of the Board or of the Committee shall be liable for any act
or determination made in good faith with respect to the Plan or any
Option granted thereunder.
4.6.
The interpretation and construction by the Committee of any
provision of the Plan or of any Option Agreement thereunder shall
be final and conclusive unless otherwise determined by the
Board.
4.7.
Without limiting the foregoing, the Committee may, with the consent
of the Grantee and subject to the Board’s approval, from time
to time cancel all or any portion of any Option then subject to
exercise, and the Corporation’s obligation in respect of such
Option may be discharged by (i) payment to the Grantee of an
amount in cash equal to the excess, if any, of the Fair Market
Value of the canceled Stock at the date of such cancellation over
the aggregate Exercise Price of such Stock, (ii) the issuance
or transfer to the Grantee of Stock of the Corporation with a Fair
Market Value at the date of such transfer equal to any such excess,
or (iii) a combination of cash and shares with a combined
value equal to any such excess, all as determined by the Committee
in its sole discretion.
5. Reserved Shares .
The maximum number of shares of Stock reserved for the grant of
Options under the Plan shall be 62,000,000, subject to adjustments
as provided in Section 13 below. Such Stock may, in whole or
in part, be authorized but unissued Stock. Until termination of the
Plan, the Corporation shall at all times reserve a sufficient
number of shares of Stock to meet the requirements of the Plan. If
any Options, for any reason, expire, are canceled or are forfeited
without having been exercised in full, the Stock allocable to the
unexercised, canceled or terminated portion of such Options shall
(unless the Plan shall have been terminated) become available for
subsequent grants of Options under the Plan. Any of such Stock
which may remain unissued and which is not subject to outstanding
Options at the termination of the Plan shall cease to be reserved
for the purpose of the Plan.
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6. Eligible Grantees
.
6.1.
3(9) Options may be granted to Non-Employees of the Corporation and
of any Affiliate.
6.2.
102 Stock Options may be granted only to Employees of the
Corporation or an Affiliate.
6.3.
Anything in this Plan to the contrary notwithstanding, all grants
of Options to directors and Office Holders shall be authorized and
implemented in accordance with the provisions of applicable law, as
in effect from time to time.
6.4.
The grant of an Option to a Grantee hereunder, shall neither
entitle such Grantee to participate, nor disqualify him from
participating, in any other grant of Options pursuant to this Plan
or any other stock option plan of the Corporation.
7. Terms and Conditions
of Options . Each Option granted pursuant to the Plan shall be
evidenced by an Option Agreement between the Corporation and the
Grantee, in such form and containing such terms and conditions as
the Committee shall from time to time approve, which Option
Agreement shall comply with and be subject to the following terms
and conditions, unless otherwise specifically provided in such
Option Agreement.
7.1.
Number of Shares. Each Option Agreement shall state the number of
shares of Stock to which the Option relates, subject to
Section 13 below.
7.2.
Type of Option. Each Option Agreement shall specifically state the
type of Option granted thereunder (whether a CGO, OIO, Unapproved
102 Option or a 3(9) Option).
7.3.
Exercise Price. Each Option Agreement shall state the Exercise
Price. The Exercise Price shall be determined by the Committee in
its sole and absolute discretion; provided, however, that such
Exercise Price shall not be less than the par value of the Stock
into which such Option is exercisable. The Exercise Price shall be
subject to adjustment as provided in Section 13
hereof.
7.4.
Vesting of Options. Subject to Section 14 hereof, each Option
Agreement shall provide the vesting schedule for the Option as
determined by the Committee, provided, that, the Committee shall
have the authority to accelerate or otherwise change the vesting of
any outstanding option at such time and under such circumstances as
it, in its sole discretion, deems appropriate. Unless otherwise
stated in the Option Agreement, Options shall vest and become
exercisable according to the following schedule: twenty-five
percent (25%) of the Stock covered by the Option on the first
anniversary of the Date of Grant of such Option and six and
one-quarter percent (6.25%) of the Stock covered by the Option at
the end of each subsequent quarter over the course of the following
three years.; provided, however, that the Committee, in its
absolute discretion, may, on such terms and conditions as it may
determine to be appropriate, accelerate or otherwise change the
time at which such Option or any portion thereof shall vest and be
exercised. The Option may contain performance goals and
measurements, and the provisions with respect to any Option need
not be the same as the provisions with respect to any other
Option.
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7.5.
Expiration Date . The Options to the extent not previously
exercised, shall termina
