EXHIBIT 10.3
INITIAL USAGE DATE: 1/1/05
NON-QUALIFIED STOCK OPTION AGREEMENT TERMS - OFFICER
UNDER THE PERCEPTRON, INC. 2004 STOCK INCENTIVE PLAN
THESE STOCK OPTION AGREEMENT TERMS pertain to stock options granted
effective _________________, under the 2004 Stock Incentive Plan (the "Plan") as
detailed in the accompanying Notice of Grant of Stock Options and Option
Agreement (the "Notice") between Perceptron, Inc., a Michigan corporation ("the
Corporation"), and the employee named in the Notice who is currently employed by
the Corporation or one of its subsidiaries (the "Optionee"). A copy of the 2004
Stock Incentive Plan is not attached hereto but is available upon written
request made to the Secretary of the Corporation.
1. GRANT OF OPTION. Subject to the terms and conditions hereof, the
Corporation hereby grants to the Optionee an option to purchase from
the Corporation up to, but not exceeding in the aggregate, the number
of shares of the Corporation's Common Stock detailed in the
accompanying Notice at the price per share designated in the Notice.
This option is not intended to constitute an "incentive stock option"
within the meaning of Section 422 of the Internal Revenue Code
("Code").
2. RIGHT TO EXERCISE OPTION. Unless otherwise indicated in the Notice, the
Optionee may purchase from the Corporation on and after the first
anniversary of the date of grant, 25% of the shares covered by this
option, and on each succeeding one year anniversary thereof may
exercise an additional 25% of the shares covered by the option, so that
on the fourth anniversary of the date of grant this option shall be
fully exercisable. To the extent not exercised, installments shall
accumulate and the Optionee may exercise them in whole or in part in
any subsequent period. Unless a shorter period is specified in the
Notice under the "Expiration" column, and notwithstanding any provision
of this Agreement, no portion of this option shall be exercisable on or
after the tenth anniversary of the date of grant. The Committee (as
defined in the Plan), in its sole discretion, may accelerate the time
at which this option may be exercised in whole or in part.
3. TERMINATION OF EMPLOYMENT. If, prior to the date that this option shall
first become exercisable, the Optionee's employment with the
Corporation or any of its subsidiaries shall be terminated for any
reason, the Optionee's right to exercise this option shall terminate
and all rights hereunder shall cease. As used in this Agreement, the
term "subsidiary" of the Corporation means any "subsidiary corporation"
as defined in Section 424(f) of the Code, the term "employment" means
employment with the Corporation or any subsidiary of the Corporation,
and the term "disability" means "total and permanent disability," as
defined in Section 22(e) of the Code.
If, on or after the date that this option shall first become
exercisable, the Optionee's employment shall be terminated for any
reason other than death or disability, the Optionee shall have the
right to exercise this option to the extent that it shall have been
exercisable and
unexercised on the date of such termination of services, at any time on
or before the earlier of: (i) the expiration date of the option, or
(ii) three (3) months after the date of such termination of employment,
subject to any other limitation on the exercise of such option in
effect at the date of exercise.
If on or after the date that this option shall first become exercisable
the Optionee's employment shall be terminated due to death or
disability, the Optionee or the executor or administrator of the estate
of the Optionee (as the case may be) or the person or persons to whom
the option shall have been transferred by will or by the laws of
descent and distribution, shall have the right to exercise this option,
at any time on or before the earlier of: (i) the expiration date of the
option, or (ii) one (1) year from the date of the Optionee's death or
disability, to the extent that it was exercisable and unexercised on
the date of the Optionee's death or disability, subject to any other
limitation on exercise in effect at the date of exercise.
The transfer of the Optionee from one corporation to another among the
Corporation and any of its subsidiaries, or a leave of absence with the
written consent of the Corporation, shall not be a termination of
services for purposes of this option.
4. CHANGE IN CONTROL. Notwithstanding the provisions of Section 2 "Right
to Exercise Option" and Section 3 "Termination of Employment" of this
Agreement, (i) in the event of a termination by the Corporation of the
Optionee's employment Without Cause (as defined below) or Diminishment
of the Optionee's Responsibilities Without Cause (as defined below),
following a Change in Control of the Corporation, or (ii), in the event
of a Change in Control, if one of the corporations surviving the Change
in Control or the person purchasing the Corporation's assets in the
Change in Control does not assume this option, any portion of this
option that is then not exercisable shall become immediately
exercisable. For purposes hereof, "Without Cause" shall mean the
Optionee's employment is terminated by the Corporation, or there is a
Diminishment of the Optionee's Responsibilities, for any reason except
(i) personal dishonesty; (ii) willful misconduct; (iii) breach of
fiduciary duty to the Corporation; (iv) conviction for violation of any
law (other than traffic violations or similar offenses); or (v)
repeated or intentional failure to perform duties, after written notice
is delivered identifying the failure, and it is not cured within ten
(10) days following receipt of such notice. For purposes hereof,
"Diminishment of the Optionee's Responsibilities" shall mean the
Corporation, or any successor thereto, (i) reassigning the Optionee
substantial duties which are materially inconsistent with the
Optionee's position, duties and responsibilities with the Corporation
immediately prior to the Change in Control, except for reassignments of
duties which constitute a bona fide promotion of the Optionee, or (ii)
reducing the Optionee's compensation such that (a) the Optionee's
annual base salary is less than eighty (80%) percent of the Optionee's
annual base salary prior to the Change in Control; and (b) the
Optionee's annual base salary and the annual cash bonus which the
Optionee is eligible to earn (including any performance based bonus),
combined, is not at least equal to the combination of the Optionee's
annual base salary prior to the Change in Control and the average of
the annual cash bonuses which the Optionee was eligible to earn
(including any performance based bonus, but excluding any bonus payable
to the Optionee for completing the Change in Control), whether or not
actually earned, for the year in which
the Change in Control occurred and for the year prior thereto. For
purposes hereof, a "Change in Control" shall be deemed to have occurred
in the event of (i) a merger involving the Corporation in which the
Corporation is not the surviving corporation (other than a merger with
a wholly-owned subsidiary of the Corporation formed for the purpose of
changing the Corporation's corporate domicile); (ii) a share exchange
in which the shareholders of the Corporation exchange their stock in
the Corporation for stock of another corporation (other than a share
exchange in which all or substantially all of the holders of the voting
stock of the Corporation, immediately prior to the transaction,
exchange, on a pro rata basis, their voting stock of the Corporation
for more than 50% of the voting stock of such other corporation); (iii)
the sale of all or substantially all of the assets of the Corporation;
or (iv) any person or group of persons (as defined by Section 13(d) of
the Securities Exchange Act of 1934, as amended) (other than any
employee benefit plan or employee benefit trust benefiting the
employees of the Corporation) becoming a beneficial owner, directly or
indirectly, of securities of the Corporation representing more than
fifty (50%) percent of either the then outstanding Common Stock of the
Corporation, or the combined voting power of the Corporation's then
outstanding voting securities.
In the event of a Change of Control, the Committee may, in its sole
discretion and without the consent of the Optionee, cancel this option
in exchange for a payment with respect to each vested share of Common
Stock as provided in Section 9.2(b) of the Plan.
5. EXERCISE OF OPTION.
(a) At any time that this option may be exercised as provided in
this Agreement, the Optionee may exercise any portion of this
option which is then exercisable, in whole or in part, by
delivery to the Corporation of a written notice, in the form
attached hereto, signed by the Optionee.
(b) In addition, the Optionee shall deliver, on the date of
exercise:
(i) cash equal to the purchase price of the shares being
purchased,
(ii) such documents as are or may be required under the
terms of Section 2.4(b) of the Plan to effect a
cashless exercise, except to the extent that the
Corporation determines that the Optionee is not
permitted to use a cashless exercise under applicable
law, or
(iii) Permitted Shares with a Fair Market Value (as defined
in the Plan and determined as of the date of exercise
of the option) and equal to the purchase price of the
shares being purchased and in accordance with Section
2.4 of the Plan (the "Delivered Shares Method").
(c) "Permitted Shares" are shares of Corporation Common Stock to
be delivered to pay the exercise price of the option (the
"Delivered Shares"):
(i) which have been owned by the Optionee for at least
six months prior to the date of delivery, or
(ii) if they have not been owned by the Optionee for at
least six months prior to the date of delivery, the
Optionee then owns, and has owned for at least six
months prior thereto, a number of shares of
Corporation Common Stock at least equal in number to
the Delivered Shares.
(d) Shares which have been counted during the prior six months as
owned by the Optionee for purposes of determining whether the
Optionee may exercise options to purchase Common Stock
pursuant to the Delivered Shares Method:
(i) may not be used as Delivered Shares, and
(ii) may not be counted as owned by the Optionee for
purposes of making calculations under the Delivered
Shares Method.
6. COMPLIANCE WITH SECURITIES LAWS. Anything to the contrary herein
notwithstanding, the Corporation's obligation to sell and deliver stock
under this option is subject to such compliance with federal and state
laws, rules and regulations applying to the authorization, issuance or
sale of securities, and applicable stock exchange requirements, as the
Corporation deems necessary or advisable.
7. NON-ASSIGNABILITY. The option hereby granted shall not be transferable
by the Optionee other than by will or the laws of descent and
distribution, and the option may be exercised during the Optionee's
lifetime only by the Optionee. Any transferee of the option shall take
the same subject to the terms and conditions of this Agreement. No such
transfer of the option shall be effective to bind the Corporation
unless the Corporation shall have been furnished with written notice
thereof and a copy of the will and/or such other evidence as the
Corporation may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the
terms and conditions of this Agreement. No assignment or transfer of
this option, or of the rights represented thereby, whether voluntary or
involuntary, by operation of law or otherwise, except a transfer by the
Optionee by will or by the laws of descent and distribution, shall vest
in the purported assignee or transferee any interest or right herein
whatsoever.
8. DISPUTES. As a condition of the granting of the option granted hereby,
the Optionee and the Optionee's successors and assigns agree that any
dispute or disagreement which shall arise under or as a result of this
Agreement shall be determined by the Committee in its sole discretion
and judgment and that any such determination and any interpretation by
the Committee of the terms of this Agreement shall be final and shall
be binding and conclusive for all purposes.
9. ADJUSTMENTS. In the event of any stock dividend, subdivision or
combination of shares, reclassification, or similar transaction
affecting the shares covered by this option, determined by the
Committee to be covered by this Section 9, a proposed dissolution or
liquidation of the Corporation, a merger of the Corporation with or
into another corporation where the
Corporation is not the surviving corporation, but its stock is
exchanged for stock of the parent Corporation of the other party to the
merger, the sale of substantially all of the assets of the Corporation,
the reorganization of the Corporation or other similar transaction
determined by the Committee to be covered by this Section 9, a proposed
spin-off or a transfer by the Corporation of a portion of its assets
resulting in the employment of the Optionee by the spin-off entity or
the entity acquiring assets of the Corporation, the rights of the
Optionee shall be as provided in Section 9.1 of the Plan and any
adjustment therein provided shall be made in accordance with Section
9.1 of the Plan.
10. RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a
shareholder of the Corporation with respect to any of the shares
covered by this option until the issuance of a stock certificate or
certificates upon the exercise of the option in full or in part, and
then only with respect to the shares represented by such certificate or
certificates.
11. NOTICES. Every notice relating to this Agreement shall be in writing
and if given by mail shall be given by registered or certified mail
with return receipt requested. All notices to the Corporation shall be
delivered to the Secretary of the Corporation at the Corporation's
headquarters or addressed to the Secretary of the Corporation at the
Corporation's headquarters. All notices by the Corporation to the
Optionee shall be delivered to the Optionee personally or addressed to
the Optionee at the Optionee's last residence address as then contained
in the records of the Corporation or such other address as the Optionee
may designate. Either party by notice to the other may designate a
different address to which notices shall be addressed. Any notice given
by the Corporation to the Optionee at the Optionee's last designated
address shall be effective to bind any other person who shall acquire
rights hereunder.
12. "OPTIONEE" TO INCLUDE CERTAIN TRANSFEREES. Whenever the word "Optionee"
is used in any provision of this Agreement under circumstances where
the provision should logically apply to any other person or persons to
whom the option, in accordance with the provisions of Section 6 hereof,
may be transferred, the word "Optionee" shall be deemed to include such
person or persons.
13. GOVERNING LAW. This Agreement has been made in and shall be construed
in accordance with the laws of the State of Michigan, without regard to
its choice of law rules.
14. PROVISIONS OF PLAN CONTROLLING. The provisions hereof are subject to
the terms and provisions of the Plan, copies of which are available for
review upon request. In the event of any conflict between the
provisions of this option and the provisions of the Plan, the
provisions of the Plan shall control, except to the extent that the
provisions of this option limit or restrict the rights of the Optionee
to a greater extent than set forth in the Plan.
15. 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.
16. CAPTIONS. The captions to the sections and subsections contained in
this Agreement are for reference only, do not form a substantive part
of this Agreement and shall not restrict or enlarge substantive
provisions of this Agreement.
17. PARTIES IN INTEREST. This Agreement shall bind and shall inure to the
benefit of the parties hereto, their respective permitted successors
and assigns.
18. COMPLETE AGREEMENT. This Agreement shall constitute the entire
agreement between the parties hereto and shall supersede all proposals,
oral or written, and all other communications between the parties
relating to the subject matter of this Agreement.
19. MODIFICATIONS. The terms of this Agreement cannot be modified except in
writing and signed by each of the parties hereto.
20. SEVERABILITY. In the event that any one or more of the provisions of
this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
21. WITHHOLDING. The Optionee hereby authorizes the Corporation to withhold
from his compensation or agrees to tender the applicable amount to the
Corporation to satisfy any requirements for withholding of income and
employment taxes in connection with the exercise of the option granted
hereby.
NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION
UNDER THE PERCEPTRON, INC.
2004 STOCK INCENTIVE PLAN
Perceptron, Inc.
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Dear Sir:
A non-qualified stock option was granted to me on ____________, ______ to
purchase ___________ shares of Perceptron, Inc. Common Stock at a price of
$_________ per share.
I hereby elect to exercise my non-qualified stock option with respect to shares
for an aggregate purchase price of $________. I hereby elect to pay for such
shares as follows:
Personal Check $_______
Cash $_______
Bank Draft $_______
Money Order $_______
Cashless Exercise $_______
Perceptron Common Stock $_______
Total $_______
A personal check [or cash, bank draft or money order] for the purchase price is
enclosed herewith.
Documents as are required to effect a cashless exercise are enclosed.
I hereby elect to exercise my stock option with respect to ______ shares through
a combination of cash payments and ______ shares of Perceptron, Inc. Common
Stock, as described on the attached Exhibit A. A personal check for the purchase
price to be paid in cash is enclosed herewith. Certificates for shares of
Perceptron, Inc. Common Stock are enclosed herewith, along with a duly executed
stock power in proper form for transfer, with all signatures properly guaranteed
by a national bank or member firm of the NYSE or AMEX. I represent that the
shares of Perceptron, Inc. Common Stock enclosed herewith have been owned by me
for more than six months or I currently own more than shares of Perceptron, Inc.
Common Stock which have been owned by me for more than six months. Such shares
have not been counted during the prior six months as owned by me for purposes of
determining whether I may exercise options to purchase Common Stock pursuant to
the Delivered Shares Method. I represent that the shares of stock that I am
purchasing upon this exercise of my option are being purchased for investment
purposes and not with a view to resale. This representation shall not be binding
upon me if the shares of Common Stock that I am purchasing are subject to an
effective Registration Statement under the Securities Act of 1933.
Optionee Dated
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