EXHIBIT B
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of the 5th day of February, 1995 by and between
Applied Laser Systems (the "Company"), and Xxxx X. Steel ("Optionee").
W I T N E S S E T H
WHEREAS, pursuant to the Applied Laser Systems 1994 Stock Option Plan (the
"Stock Option Plan"), the Plan Committee of the Board of Directors of the
Company (the "Plan Committee") has authorized the granting to Optionee of an
incentive stock option to purchase the number of shares of Class A common stock
(the "Common Stock") of the Company specified in Paragraph 1 hereof, at the
price specified therein, such option to be for the term and upon the terms and
conditions hereinafter stated;
NOW, THEREFORE, in consideration of the promises and of the undertakings of
the parties hereto contained herein, it is hereby agreed:
1. Number of Shares; Option Price. Pursuant to said action of the Plan
Committee, the Company hereby grants to Optionee the option ("Option") to
purchase, upon and subject to the terms and conditions of said Stock Option
Plan, all or any part of 250,000 shares of Common Stock of the Company for cash
at the price of $1.00 per share.
2. Terms. This Option shall expire on February 4, 2005, unless such Option
shall have been terminated prior to that date in accordance with the provisions
of the Stock Option Plan or this Agreement (the "Termination Date). The terms
"Parent" and "Subsidiary" herein mean a parent corporation or a subsidiary
corporation, as such terms are defined in the Stock Option Plan. If Optionee
owns more than 10% of the voting stock of the Company, a Parent or a Subsidiary
on the date of this Agreement, the Termination Date shall be no later than the
day before the fifth anniversary of the date of this Agreement.
3. Vesting. This Option shall vest and be exercisable immediately as to
83,333 shares; 166,667 shares on and after February 5, 1996; and 250,000 shares
on and after February 5, 1997. The Option shall thereafter remain wholly
exercisable for the term specified in Paragraph 2 hereof, provided that Optionee
is then and has continuously been in the employ of the Company, a Parent or a
Subsidiary; subject, however, to the provisions of Paragraph 5 hereof.
4. Exercise. The Option may be exercised by written notice delivered to the
Company stating the number of shares with respect to which the Option is being
exercised, together with a check made payable to the Company in the amount of
the purchase price of such shares and the written statement provided for in
Paragraph 9 hereof, if required by said Paragraph 9. Not less than 100 shares
may be purchased at any one time unless the number purchased is the total number
purchasable under such Option at the time. Only whole shares may be purchased.
5. Exercise on Termination of Employment. In the event Optionee's
employment is terminated Optionee's right to exercise his options, if any, shall
be governed by Section 7 of the Stock Option Plan.
6. Nontransferability. This Option may not be assigned or transferred
except by will or by the laws of descent and distribution, and may be exercised
only by Optionee during his lifetime and after his death, by his representative
or by the person entitled thereto under his will or the laws of intestate
succession.
7. Optionee Not a Shareholder. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by the
Option until the date of issuance of a stock certificate or stock certificates
to him upon exercise of the Option. No adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock
certificate or certificates are issued, except as provided in Section 10 of the
Stock Option Plan.
8. Modification and Termination. The rights of Optionee are subject to
modification and termination in certain events as provided in Sections 7 and 10
of the Stock Option Plan.
9. Restrictions on Transfer of Shares.
a. Securities Law Restrictions. Optionee represents and agrees that, upon
his exercise of the Option in whole or in part, unless there is in effect at
that time under the Securities Act of 1933 a registration statement relating to
the shares issued to him, he will acquire the shares issuable upon exercise of
this Option for the purpose of investment and not with a view to their resale or
further distribution, and that upon each exercise thereof he will furnish to the
Company a written statement to such effect, satisfactory to the Company in form
and substance. Optionee agrees that any certificates issued upon exercise of
this Option may bear a legend indicating that their transferability is
restricted in accordance with applicable state or federal securities law. Any
person or persons entitled to exercise this Option under the provisions of
Paragraphs 5 and 6 hereof shall, upon each exercise of the Option under
circumstances in which Optionee would be required to furnish such a written
statement, also furnish to the Company a written statement to the same effect,
satisfactory to the Company in form and substance.
10. Plan Governs. This Agreement and the Option evidenced hereby are made
and granted pursuant to the Stock Option Plan and are in all respects limited by
and subject to the express terms and provisions of that Plan, as it may be
amended from time to time and construed by the Plan Committee of the Board of
Directors of the Company. It is intended that this Option shall qualify as an
incentive stock option as defined by Section 422 of the Code, and this Agreement
shall be construed in a manner which will enable this Option to be so qualified.
Optionee hereby acknowledges receipt of a copy of the Stock Option Plan.
11. Notices. All notices to the Company shall be addressed to the President
of the Company at the principal office of the Company at 0000 Xxxxxxxx Xxxxx,
Xxxxxxx, XX 00000, and all notices to Optionee shall be addressed to Optionee at
the address of Optionee on file with the Company or its Subsidiaries, or to such
other address as either may designate to the other in writing. A notice shall be
deemed to be duly given if and when enclosed in a properly addressed sealed
envelope deposited, postage prepaid, with the United States Postal Service. In
lieu of giving notice by mail as aforesaid, written notices under this Agreement
may be given by personal delivery to Optionee or to the President of the Company
(as the case may be).
12. Sale or Other Disposition. Optionee understands that, under current
law, beneficial tax treatment resulting from the exercise of this Option will be
available only if certain requirements of the Code are satisfied, including
without limitation, the requirement that no disposition of shares of Common
Stock of the Company acquired pursuant to exercise of this Option be made within
two years from the grant date or within one year after the transfer of such
shares to him or her. If Optionee at any time contemplates the disposition
(whether by sale, gift, exchange, or other form of transfer) of any shares
acquired by exercise of this Option, he or she will first notify the Company in
writing of such proposed disposition and cooperate with the Company in complying
with all applicable requirements of law, which, in the judgment of the Company,
must be satisfied prior to such disposition. In addition to the foregoing,
Optionee hereby agrees that if Optionee disposes (whether by sale, exchange,
gift, or otherwise) of any of the shares acquired by exercise of this Option
within two years of the grant date or within one year after the transfer of such
shares to Optionee upon exercise of this Option, then Optionee shall notify the
Company of such disposition in writing within 30 days from the date of such
disposition. Said written notice shall state the date of such disposition, and
the type and amount of the consideration received for such share or shares by
Optionee in connection therewith. In the event of any such disposition, the
Company shall have the right to require Optionee to immediately pay the Company
the amount of taxes (if any) which the Company is required to withhold under
federal and/or state law as a result of the granting or exercise of the subject
Option in the disposition of the subject shares.
13. 180-Day Holdback. In accepting the grant of this Option, Optionee
hereby agrees that, in the event of an underwritten public offering of the
Company's securities pursuant to which any of its securities are registered
pursuant to the Securities Act of 1933, as amended, and to the extent the
underwriter of such offering requests that the shareholders of the Company agree
to do so, the Optionee will agree not to sell any of the Common Stock issued or
issuable upon exercise of this Option for a period of at least 180 days after
the closing of such public offering, and to sign a 180- day holdback agreement
to that effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
APPLIED LASER SYSTEMS
By__________________________
Title:______________________
OPTIONEE:
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(Signature)
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(Typed or Printed Name)
Address:
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