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EXHIBIT 10.3
INITIAL USAGE DATE: 1/2/06
INCENTIVE 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
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
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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,
in the event of a Change in Control, any portion of this option
that is
then not exercisable shall become immediately exercisable. 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
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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 c
