1
EXHIBIT 10.3
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE LASER POWER CORPORATION
SECOND AMENDED AND RESTATED 1981
STOCK OPTION PLAN
For value received, Laser Power Corporation, a Delaware Corporation
("Grantor"), does hereby grant to _________________ ("Grantee") the right and
option to purchase _____________ shares of Common Stock of Grantor at the price
of ($ __________ ) per share ("Option Price") pursuant and subject to the terms
and conditions set forth in the Laser Power Corporation Second Amended and
Restated 1981 Incentive Stock Option Plan ("Plan"), a copy of which is attached
hereto as Exhibit "A", and in accordance with, and subject to, the following
terms and conditions:
1. Time and Manner of Exercise. From and after _____________, and during
each of the four succeeding one-year periods commencing on the anniversary
thereof, Grantee shall have the right to purchase from Grantor __________ shares
of Common Stock of Grantor on a cumulative basis (total __________ shares) upon
delivery to Grantor of notice of exercise and representations in the form
attached hereto as Exhibit "B" accompanied by a certified or cashier's check in
payment of the aggregate option price. In the event an option shall be
exercisable by any person other than the Grantee, the required notice under this
Paragraph shall be accompanied by appropriate proof of the right of such person
to exercise the option.
-1-
2
Promptly upon receipt of such material, Grantor will deliver to Grantee stock
certificates representing the number of shares purchased in accordance with the
foregoing and duly registered in the name(s) of Grantee and, at his election,
his or her spouse, or in the name(s) of his or her personal representatives,
devises or heirs, as the case may be. The failure to exercise an option with
respect to any shares of Grantor's Common Stock for which the right has accrued
during any one-year period shall not result in the termination of the option
with respect to such shares of Stock, but rather, the same shall cumulate and be
eligible for exercise during the remainder the option term.
2. Antidilution Provisions. The number of shares that Grantee is entitled
to purchase upon the exercise of this Option and the purchase price of those
shares are subject only to the adjustments set forth in Section 5.6 of the Plan.
3. Investment Undertaking; Nonassignability. This option may be exercised
only by Grantee during his or her lifetime. Grantee will hold this Option and
the rights arising hereunder for investment and not with a view to distribution,
and upon exercise will deliver a letter in the form attached hereto as Exhibit
"B" concerning Grantee's nondistributive intent with respect to the shares of
Common Stock received. Grantee will not transfer or assign this Option, except
by will or the laws of intestate succession.
-2-
3
4. Expiration. This Option shall terminate and expire at midnight on the
date that is eight (8) years after the date of this Agreement, or one month
after the date that Grantee ceases to be eligible to participate in the Plan in
accordance with Paragraph 3 of said Plan, whichever is earlier; provided,
however, that, in the event of the death of Grantee while still employed by
Grantor, then his executor(s) or administrator(s), or any person or persons who
shall have acquired the Option from the Grantee by bequest or inheritance,
shall, during the 12-month period commencing on the date of the Grantee's death,
have the right to exercise this Option with respect to the shares that remain
subject to this option on that date, subject to the conditions that this Option
(i) shall in no event be exercisable after its expiration in accordance with
this Section 5 and (ii) it shall be exercisable by such representative(s) or
successor(s) only to the extent that the Grantee's right to exercise this Option
had accrued pursuant to Paragraph 2 hereof at the time of the Grantee's death
and had not previously been exercised. Any options not exercisable or not
exercised prior to the end of such 12-month period shall be automatically null
and void.
5. Repurchase Right.
(a) The Stock purchased by the Grantee upon exercise of this Option
shall be subject to repurchase as set forth in the Buy-Out Agreement, a copy of
which is attached hereto as Exhibit "C".
-3-
4
6. Representations by Grantor. So long as this option remains outstanding
and unexpired, Grantor will reserve for issuance upon the exercise of this
Option such number of shares of Common Stock of Grantor as are subject to this
Option. The shares of Common Stock of Grantor subject to this Option shall, when
issued, be validly issued, fully paid and nonassessable and Grantor will pay,
when due and payable, any and all federal and state taxes or fees that may be
payable by Grantor with respect to the grant of this Option or the issuance of
any shares of Common Stock or certificates therefor subject to this Option not
including, however, any federal, state or other personal income tax payable by
the Grantee by virtue of the grant of this Option, the issuance of any share of
Common Stock upon exercise hereof or any subsequent disposition of such shares
which shall remain the obligation of Grantee.
7. Representations of Grantee. Grantee hereby represents and acknowledges
his understanding that the Common Stock acquired upon exercise of this option
must be held for at least one year after the date of exercise and two years
after the date of grant of this option in order for his Option to be treated as
an incentive stock option under Section 422A of the Internal Revenue Code of
1986, as amended. If the Common Stock is sold prior to the later of either such
period (other than in the case of sale after the death of the Grantee) the tax
benefits of an incentive stock option will not be available.
-4-
5
8. Notice. Any notice, request, or instructions given in connection
with this Option shall be in writing and shall be delivered in person or by
certified mail as follows:
(a) If to Grantor, at 00000 Xxxx Xxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000, Attention: Corporate Secretary.
(b) If to Grantee, at____________________________________________,
or at such other address as either of the parties shall have given notice to
the other in accordance with the provisions hereof.
9. Committee Determination Final. The interpretation and construction of
the Plan and this Stock Option Agreement, including any inconsistency between
such documents, shall be reserved to and made by the committee of the Board of
Directors provided for under the Plan, the determination of which shall be final
as between the parties hereto unless otherwise determined by the Board of
Directors of Grantor.
10. Governing Law. This Option is granted and delivered in the State
of California and is intended to be construed and enforced under the laws
thereof.
-5-
6
IN WITNESS WHEREOF, this option is executed on behalf of Grantor and its
officers thereunto duly authorized and by Grantee in his own behalf as of this
____ day of __________, 199___.
GRANTOR
LASER POWER CORPORATION,
a Delaware corporation
By
-----------------------
Xxxxx X. Xxxxxxx
Chairman and
Chief Executive Officer
GRANTEE
--------------------
-6-
