1
EXHIBIT 10.6
LASER POWER CORPORATION
STOCK OPTION AGREEMENT
(Non-Qualified)
AGREEMENT made as of the ____________ day of ___________ , 19_____ , by and
between LASER POWER CORPORATION, a Delaware corporation (hereinafter called
"Company"), and _____________________________ (hereinafter called "Optionee).
WITNESSETH:
RECITALS
A. The Board of Directors of the Company has adopted the Company's 1993
Stock Option Plan (the "Plan") for the purpose of attracting and retaining the
services of selected key employees (including officers and directors), and
non-employee directors, consultants or advisors, who contribute to the financial
success of the Company or its parent or subsidiary corporations.
B. Optionee is a key employee of the Company or its parent or
subsidiary corporations, and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the Company's
grant of a stock option to Optionee.
C. The granted option is NOT intended to be an incentive stock option
within the meaning of Section 422A of the Internal Revenue Code ("Incentive
Option").
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. Subject to and upon the terms and conditions set
forth in this Agreement, there is hereby granted to Optionee, as of the date of
this Agreement (the "Grant Date"), a stock option to purchase up ______________
to shares of the Company's Common Stock (the "Optioned Shares") from time to
time during the option term at the option price of $_______________.(the "Option
Price").
2. Option Term. This option shall have a maximum term of __________
(____) years measured from the Grant Date and shall accordingly expire at the
close of business on ____________, _____________ (the "Expiration Date"), unless
sooner terminated in accordance with Paragraph 5, 7(a) or 18.
3. Option Nontransferable; Exception. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution and may be exercised, during Optionee's lifetime, only
by Optionee.
4. Dates of Exercise. This option may not be exercised in whole or in
part at any time prior to the time the Plan is approved by the Company's
stockholders in accordance with Paragraph 17. Provided such stockholder approval
is obtained, Optionee may, within the specified
-1-
2
term of this option and pursuant to the provisions of this Agreement, purchase
the Optioned Shares according to the vesting schedule set forth in Exhibit "A"
hereto, which is incorporated herein by this reference. Exercisable installments
may be exercised in whole or in part and, to the extent not exercised, will
accumulate and be exercisable at any time on or before the Expiration Date
unless sooner terminated.
5. Accelerated Termination of Option Term. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should one of the following provisions become
applicable:
(a) Except as otherwise provided in subparagraphs (b), (c) or
(d) below, should Optionee cease to be an employee of the Company at any time
during the option term, then the Optionee shall have up to a
______________________ (____) month period commencing with the date of such
cessation of employee status, in which to exercise this option for any or all of
the Optioned Shares for which this option is at the time of such cessation of
employee status exercisable, but in no event shall this option be exercisable at
any time after the Expiration Date. Upon the expiration of such ____________
(____) month period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding.
(b) Should Optionee die while this option is outstanding, then
the executors or administrators of Optionee's estate or Optionee's heirs or
legatees (as the case may be) shall have the right to exercise this option for
the number of Optioned Shares (if any) for which the option is exercisable on
the date of the Optionee's death. Such right shall lapse and this option shall
cease to be exercisable upon the earlier of (i) __________ month anniversary of
the date of the optionee's death or (ii) the Expiration Date.
(c) Should Optionee become permanently disabled and cease by
reason thereof to be an employee of the Company at any time during the option
term, then the Optionee shall have a period of _____________ (____) months
(commencing with the date of such cessation of employee status) in which to
exercise this option for any or all of the Optioned Shares for which this option
is exercisable at the time of such cessation of employee status; provided,
however, that in no event shall this option be exercisable at any time after the
Expiration Date. Optionee shall be deemed to be permanently disabled if Optionee
is, by reason of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of not less than
_____________ (____) months, unable to perform his/her usual duties for the
Company or the parent or subsidiary corporation retaining his/her services. Upon
the expiration of such limited period of exercisability or (if earlier) upon the
Expiration Date, this option shall terminate and cease to be outstanding.
(d) Should the Optionee's status as an employee be terminated
for willful misconduct, theft, fraud, embezzlement or any unauthorized
disclosure or use of confidential information or trade secrets or should the
Optionee make or attempt to make any unauthorized use or disclosure of the
confidential information or trade secrets of the Company or any parent or
subsidiary corporation, then in any such event this option shall terminate and
cease to be exercisable immediately upon such termination of employee status.
-2-
3
(e) For purposes of this Paragraph 5 and for all other
purposes under this Agreement, the Optionee shall be deemed to be an employee of
the Company and to continue in the Company's employ for so long as the Optionee
remains in the employ of the Company or one or more of its parent or subsidiary
corporations.
6. Adjustment in Option Shares. In the event any change is made to the
Common Stock issuable under the Plan by reason of any stock split, stock
dividend, combination of shares, or other change affecting the outstanding
Common Stock as a class without receipt of consideration, then appropriate
adjustments will be made to (i) the total number of Optioned Shares subject to
this option and (ii) the Option Price payable per share in order to reflect such
change and thereby preclude a dilution or enlargement of benefits hereunder.
7. Special Termination of Option.
(a) In the event of any of the following transactions (a
"Corporate Transaction"):
(i) a merger or consolidation in which the Company is
not the surviving entity, except for a transaction the
principal purpose of which is to change the State of the
Company's incorporation,
(ii) the sale, transfer or other disposition of all
or substantially all of the assets of the Company, or
(iii) any reverse merger in which the Company is the
surviving entity but in which fifty percent (50%) or more of
the Company's outstanding voting stock is then this
transferred to holders different from those who held the stock
immediately prior to such merger,
then this option, if not to be assumed by the successor corporation or parent
thereof (or replaced with a comparable option to purchase shares of the capital
stock of such successor corporation or parent thereof) , automatically shall be
accelerated so that this option shall, immediately prior to the specified
effective date for such Corporate Transaction, become fully exercisable with
respect to the total number of shares of Common Stock purchasable under this
option and may be exercised for all or any portion of such shares. No such
acceleration of this option, however, shall occur if and to the extent the
acceleration of this option would, when added to the present value of certain
other payments in the nature of compensation which become due and payable to
Optionee in connection of excess parachute payments under Section (28OG(b) of
the Internal Revenue Code. The existence of such excess parachute payment shall
be determined by the Plan Administrator in the exercise of its reasonable
business judgment and on the basis of tax counsel provided the Company. This
option, to the extent not previously exercised, shall terminate upon the
consummation of such Corporate Transaction and cease to be exercisable, unless
it is expressly assumed by the successor corporation or parent thereof (or
replaced with a comparable option to purchase shares of the capital stock of
such successor corporation or parent thereof).
-3-
4
(b) This Agreement shall not in any way affect the right of
the Company to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
8. Privilege of Stock Ownership. The holder of this option shall not
have any of the rights of a stockholder with respect to the Optioned Shares
until such individual shall have exercised the option and paid the Option Price.
9. Manner of Exercising Option.
(a) In order to exercise this option with respect to all or
any part of the Optioned Shares for which this option is at the time
exercisable, Optionee (or in the case of exercise after Optionee's death, the
Optionee's executor, administrator, heir or legatee, as the case may be) must
take the following actions:
(i) Execute and deliver to the Secretary of the
Company a stock purchase agreement in substantially the form
of Exhibit "B" to this Agreement (the "Purchase Agreement");
(ii) Pay the aggregate option price for the purchased
shares in one or more of the following alternative forms:
(A) full payment, in cash or cash
equivalents; or
(B) full payment in shares of Common Stock
of the Company having a Fair Market Value on the
Exercise Date (as such terms are defined below) in an
amount equal to the option price; or
(C) full payment in a combination of shares
of Common Stock of the Company valued at Fair Market
Value on the Exercise Date and cash or cash
equivalents, equal in the aggregate to the option
price; or
(D) any other form which the Plan
Administrator (as that term is defined in the Plan)
may, in its discretion, approve at the time of
exercise, in accordance with the provisions of
paragraph 15 of this Agreement; and
(iii) Furnish to the Company appropriate
documentation that the person or persons exercising the
option, if other than Optionee, have the right to exercise
this option.
(b) For purposes of Paragraph 9 (a) above, the Fair Market
Value of a share of Common Stock shall be determined in accordance with
subparagraphs (i) through (iii) below, and the Exercise Date shall be the first
date on which there shall have been delivered to the Company both (I) the
executed Purchase Agreement and (II) the payment of the option price for the
purchased shares.
-4-
5
(i) If the Common Stock is not on the Exercise Date
listed or admitted to trading on any stock exchange, but is
traded in the over-the-counter market, the Fair Market Value
shall be the mean between the highest bid and lowest asked
prices (or if such information is available, the closing
selling price) of one share of Common Stock on the Exercise
Date in the over-the-counter market, as such prices are
reported by the National Association of Securities Dealers
through its NASDAQ system or any successor system. If there
are no reported bid and asked prices (or closing selling
price) for the Common Stock on the Exercise Date, then the
mean between the highest bid and lowest asked prices (or
closing selling price) on the last preceding date for which
such quotations exist shall be determinative of Fair Market
Value.
(ii) If the Common Stock is on the Exercise Date
listed or admitted to trading on any stock exchange, then the
Fair Market Value shall be the closing selling price of one
share of Common Stock on the Exercise Date on the stock
exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions on
such exchange. If there is no reported sale of Common Stock on
such exchange on the Exercise Date, then the Fair Market Value
shall be the closing selling price on the exchange on the last
preceding date for which such quotation exists.
(iii) If the Common Stock is on the Exercise Date
neither listed or admitted to trading on any stock exchange
nor traded in the over-the-counter market, then the Fair
Market Value shall be determined by the Plan Administrator
after taking into account such factors as the Plan
Administrator shall deem appropriate, including one or more
independent professional appraisals.
(c) This option shall be deemed to have been exercised with
respect to the number of Optioned Shares specified in the Purchase Agreement at
such time as the executed Purchase Agreement for such shares shall have been
delivered to the Company. Payment of the option price shall immediately become
due and shall accompany the Purchase Agreement. As soon thereafter as practical,
the Company shall mail or deliver to Optionee or to the other person or persons
exercising this option a certificate or certificates representing the shares so
purchased and paid for, with the appropriate legends affixed thereto.
(d) In no event may this option be exercised for any
fractional shares.
10. Compliance with Laws and Regulations.
(a) The exercise of this option and the issuance of Optioned
Shares upon such exercise shall be subject to compliance by the Company and the
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange on
-5-
6
which shares of the Company's Common Stock may be listed at the time of such
exercise and issuance.
(b) In connection with the exercise of this option, Optionee
shall execute and deliver to the Company such representations in writing as may
be requested by the Company in order for it to comply with the applicable
requirements of federal and state securities laws.
11. Successors and Assigns. Except to the extent otherwise provided in
Paragraph 3 or 7 (a), the provisions of. this Agreement shall inure to the
benefit of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Company.
12. Liability of Company.
(a) If the Optioned Shares covered by this Agreement exceed,
as of the Grant Date, the number of shares of Common Stock which may without
stockholder approval be issued under the Plan, then this option shall be void
with respect to such excess shares unless stockholder approval of an amendment
sufficiently increasing the number of shares of Common Stock issuable under the
Plan is obtained in accordance with the provisions of Section 10 of the Plan.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the
lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Company of any liability with respect to the non-issuance or sale of
the Common Stock as to which such approval shall not have been obtained. The
Company, however, shall use its best efforts to obtain all such approvals.
13. No Employment or Service Contract. Except to the extent the terms
of any employment contract between the Company and the Optionee may expressly
provide otherwise, the Company (or any parent or subsidiary corporation of the
Company employing Optionee) shall be under no obligation to continue the
employee status of Optionee for any period of specific duration and may
terminate such employee status at any time, with or without cause.
14. Notices. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Company in care of its Secretary at its corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature line on this
Agreement. All notices shall be deemed to have been given or delivered upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and properly
addressed to the party to be notified.
15. Construction. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan. All decisions of the
Plan Administrator with respect to any question or issue arising under the Plan
or this Agreement shall be conclusive and binding on all persons having an
interest in this option.
-6-
7
16. Governing Law. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of California as
applied to agreements between California residents entered into and to be fully
performed in California.
17. Stockholder Approval. The grant of this option is subject to
approval of the Plan by the Company's stockholders within twelve (12) months
after the adoption of the Plan by the Board of Directors, and this option may
not be exercised in whole or in part until such shareholder approval is
obtained. In the event that such stockholder approval is not obtained, then this
option shall thereupon terminate and the Optionee shall have no further rights
to acquire any Optioned Shares hereunder.
18. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
19. Withholding. Optionee hereby agrees to make appropriate
arrangements with the Company or parent or subsidiary corporation employing
Optionee (if any) for the satisfaction of any federal, state or local income tax
withholding requirements applicable to the exercise of this option.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate on its behalf by its duly authorized officer and Optionee
has also executed this Agreement in duplicate, all as of the day and year
indicated above.
COMPANY:
LASER POWER CORPORATION,
a Delaware corporation
By: ______________________________________
Title: ___________________________________
Address: 00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
OPTIONEE:
Name: ___________________________________
Address: ________________________________
________________________________
________________________________
-7-
8
[SIGNATURE PAGE TO LASER POWER CORPORATION
STOCK OPTION AGREEMENT (NON-QUALIFIED)]
-8-
9
EXHIBIT "A"
VESTING SCHEDULE
-9-
10
EXHIBIT "B"
STOCK PURCHASE AGREEMENT
-10-
