-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QcC461PWBMFFdeqPWS0EIESL2S0pbrx+qRXOEU6YpSh4dTT7W/2uS+PB8zFoTkNE mpNbhgttbvGRaoRrXyDvBw== 0001031042-97-000001.txt : 19970128 0001031042-97-000001.hdr.sgml : 19970128 ACCESSION NUMBER: 0001031042-97-000001 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970127 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ARC CAPITAL CENTRAL INDEX KEY: 0000795445 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 330256103 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-48049 FILM NUMBER: 97511582 BUSINESS ADDRESS: STREET 1: 2067 COMMERCE DR CITY: MEDFORD STATE: OR ZIP: 97504 BUSINESS PHONE: 5417767700 MAIL ADDRESS: STREET 1: 2067 COMMERCE DR CITY: MEDFORD STATE: OR ZIP: 97504 FORMER COMPANY: FORMER CONFORMED NAME: APPLIED LASER SYSTEMS /CA DATE OF NAME CHANGE: 19930825 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: EWAN JAMES CENTRAL INDEX KEY: 0001031042 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 2067 COMMERCE DRIVE CITY: MEDFORD STATE: OR ZIP: 97504 BUSINESS PHONE: 5417769800 SC 13D 1 SCHEDULE 13D --------------------------------- OMB APPROVAL --------------------------------- OMB Number: 3235-0145 Expires: December 31, 1997 Estimated average burden hours per response...14.90 --------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. )* ARC Capital, Inc. (Name of Issuer) Class A Common Stock (Title of Class of Securities) 002044 10 5 (CUSIP Number) Alan Steel, 2067 Commerce Drive, Medford, Oregon 97504 (541) 776-7700 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 10, 1997 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box . Check the following box if a fee is being paid with the statement . (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Exhibit Index at Page 4 SEC 1746 (12-91) SCHEDULE 13D - -------------------------------------------------------------------------------- CUSIP No. 002044 10 5 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON James Ewan - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) (b) - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 872,000 ---------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 OWNED BY EACH REPORTING PERSON WITH ---------------------------------------------------- 9 SOLE DISPOSITIVE POWER 872,000 ---------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 872,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION Item 1. Security and Issuer. This report relates to the Class A Common Stock, no par value, of ARC Capital, Inc., a California corporation (the "Issuer"). The principal executive officers are: Name Address Title William J. Young 2067 Commerce Drive Chairman, President and Chief Medford, OR 97504 Executive Officer Alan Steel 2067 Commerce Drive Vice President Finance and Medford, OR 97504 Chief Financial Officer Item 2. Identity and Background. (a) The person filing this statement is James Ewan. (b) The principal business address of Mr. Ewan is 2067 Commerce Drive, Medford, Oregon 97504. (c) Mr. Ewan's principal occupation is President of SRC Vision, Inc., a subsidiary of the Issuer, which engages in the business of manufacturing automated visual recognition and defect removal equipment and the principal executive offices of which are located at 2067 Commerce Drive, Medford, Oregon 97504. (d) Mr. Ewan has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) Mr. Ewan was not, during the last five years, a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws. (f) Mr. Ewan is a citizen of the United States. Item 3. Source and Amount of Funds or Other Consideration. The Company issued to Mr. Ewan, in recognition of his good work and service, shares of Class A Common Stock ("Common Stock") and options to purchase shares of Common Stock. No other consideration has been provided at this time. However, the terms of the options covering 300,000 shares of Common Stock provide for an exercise price of $1.00 per share. See Section 1 of the Incentive Stock Option Agreements attached hereto as Exhibits B and C, respectively, and incorporated herein by reference. In addition, the lapse of certain restrictions covering 572,000 shares of Common Stock is conditioned upon the payment of $1.80 per share. See Sections 2 and 3 of the ARC Capital Restricted Stock Agreement attached hereto as Exhibit A and incorporated herein by reference. Item 4. Purpose of Transaction. Pursuant to its 1997 Restricted Stock Plan and 1991 and 1994 Stock Option Plans, each of which meets the requirements of Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Issuer has issued shares of Class A Common Stock ("Common Stock") and options exercisable for shares of Common Stock to certain employees, including Mr. Ewan, in recognition of their good work and service, and as an incentive to remain in the employ of the Issuer. Mr. Ewan has acquired such securities for purposes of investment. Depending upon market conditions and other factors that Mr. Ewan deems material to his investment decision, Mr. Ewan may purchase additional shares of Common Stock or other securities of the Issuer in the open market, in private transactions or from the Issuer, or may dispose of all or a portion of the shares of Common Stock or other securities of the Issuer that he now owns or hereafter may acquire. Other than as set forth above, Mr. Ewan has no plans or proposals which relate to or would result in: (a) The acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) Any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of the Issuer; (f) Any other material change in the Issuer's business or corporate structure; (g) Changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) Causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) Any action similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer. (a) Mr. Ewan is the beneficial owner of 872,000 shares of the Class A Common Stock of the Issuer, constituting 6.5% of such class. (b) Mr. Ewan has sole power to vote, direct the vote of, dispose of, and direct the disposition of the shares described in (a) above. (c) Not applicable. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understanding or Relationships with Respect to Securities of the Issuer. 572,000 shares of Class A Common Stock are subject to the ARC Capital Restricted Stock Agreement dated January 10, 1997 between Mr. Ewan and the Issuer, attached hereto as Exhibit A. The relevant sections affecting such securities are Section 2 "Restrictions; Forfeitability," Section 3 "Payment When Restrictions Lapse," Section 5 "Nontransferability; Legend," and Section 7 "Dissolution of the Company." 150,000 shares of Class A Common Stock underlying options owned by Mr. Ewan and exercisable within the next 60 days are subject to certain restrictions in the Incentive Stock Option Agreement dated February 5, 1995 between James Ewan and the Issuer, attached hereto as Exhibit B, regarding options issued under the Applied Laser Systems 1994 Stock Option Plan. The relevant sections affecting such securities are Section 6 "Nontransferability," Section 9 "Restrictions on Transfer of Shares," Section 12 "Sale or other Disposition," and Section 13 "180-Day Holdback." 150,000 shares of Class A Common Stock underlying options owned by Mr. Ewan and exercisable within the next 60 days are subject to certain restrictions in the Incentive Stock Option Agreement dated February 5, 1995 between James Ewan and the Issuer, attached hereto as Exhibit C, regarding options issued under the Applied Laser Systems 1991 Stock Option Plan. The relevant sections affecting such securities are Section 6 "Nontransferability," Section 9 "Restrictions on Transfer of Shares," Section 12 "Sale or other Disposition," and Section 13 "180-Day Holdback." The relevant sections specified in this Item 6 are incorporated herein by reference. Item 7. Material to be Filed as Exhibits. Three exhibits are filed herewith. Exhibit A is the ARC Capital Restricted Stock Agreement dated January 10, 1997 between Mr. Ewan and ARC Capital, Inc. Exhibit B is the Incentive Stock Option Agreement dated February 5, 1995 between Mr. Ewan and Applied Laser Systems (predecessor to ARC Capital, Inc.) relating to the Applied Laser Systems 1994 Stock Option Plan. Exhibit C is the Incentive Stock Option Agreement dated February 5, 1995 between Mr. Ewan and Applied Laser Systems relating to the Applied Laser Systems 1991 Stock Option Plan. After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: January 10, 1997 ---------------------------------- James Ewan Exhibit Index A. ARC Capital Restricted Stock Agreement dated January 10, 1997 between Mr. Ewan and ARC Capital, Inc........................................ 5 B. Incentive Stock Option Agreement dated February 5, 1995 between Mr. Ewan and Applied Laser Systems (predecessor to ARC Capital, Inc.)relating to the Applied Laser Systems 1994 Stock Option Plan........................ 6 C. Incentive Stock Option Agreement dated February 5, 1995 between Mr. Ewan and Applied Laser Systems relating to the Applied Laser Systems 1991 Stock Option Plan........................ 7 EX-99.B7 2 ARC CAPITAL 1997 RESTRICTED STOCK AGREEMENT EXHIBIT A ARC CAPITAL RESTRICTED STOCK AGREEMENT THIS AGREEMENT is made as of the 10th day of January, 1997, by and between ARC Capital (the "Company"), and James Ewan ("Employee"). R E C I T A L Pursuant to the ARC Capital 1997 Restricted Stock Plan (the "Plan"), the Board of Directors of the Company (the "Plan Committee") has authorized the granting to Employee that number of restricted shares of Class A Common Stock (the "Common Stock") of the Company specified in Paragraph 1 hereof upon the terms and conditions hereinafter stated. A G R E E M E N T 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. Pursuant to said action of the Plan Committee, the Company hereby grants to Employee 572,000 shares of Common Stock of the Company ("Shares") subject to the restrictions and conditions set forth in Paragraphs 2, 3 and 4. 2. Restrictions; Forfeitability. Ten percent (10%) of the Shares shall be forfeited and returned to the Company for cancellation if the Employee's employment with the Company or a subsidiary of the Company terminates for any reason at any time prior to the third anniversary of this award or if the payments required hereunder are not made. Ninety percent (90%) of the Shares shall be forfeited and returned to the Company if either the above termination of employment or failure to pay occurs or if the Common Stock of the Company has not reached a closing price on the Nasdaq Stock Market, Nasdaq National Market, or any stock exchange of at least $20 per share and maintained a price of at least $20 per share for a period of 30 consecutive days at any time prior to the third anniversary of this award. 3. Payment When Restrictions Lapse. The lapse of any restrictions hereunder shall be conditioned upon the payment by the Employee to the Company of the amount of $1.80 per Share (the fair market value of the Share on the date of this award) plus the amount of applicable federal, state and local withholding taxes as required by Paragraph 4. 4. Tax Withholding. As a condition to lapse of the restrictions on the Shares, the Company may require Employee to pay over to the Company all applicable federal, state and local taxes which the Company is required to withhold with respect to the Shares upon their becoming nonforfeitable. At the discretion of the Plan Committee and upon the request of the Employee, the withholding tax requirements may be satisfied by the Employee's returning to the Company Shares with a fair market value equal to the aggregate amount of such taxes. 5. Nontransferability; Legend. Shares may not be assigned or transferred while the restrictions are in effect. The certificates for Shares shall carry the following legend: THESE SHARES MAY NOT BE TRANSFERRED AND ARE SUBJECT TO FORFEITURE UNDER THE TERMS OF A RESTRICTED STOCK AGREEMENT. 6. No Right to Employment. Nothing in this Award shall confer upon Employee any right to continue in the employ of the Company or to continue to perform services for the Company or any subsidiary, or shall interfere with or restrict in any way the rights of the Company to discharge or terminate Employee at any time for any reason whatsoever, with or without good cause. 7. Dissolution of the Company. Any Shares subject to restrictions which are not waived by the Plan Committee shall be forfeited and returned to the Company for cancellation upon the dissolution of the Company. 8. Plan Governs. This Agreement is in all respects limited by and subject to the express terms and provisions of that Plan, as it may be construed by the Plan Committee. Employee hereby acknowledges receipt of a copy of the Plan. 9. Notices. All notices to the Company shall be addressed to the Chairman of the Plan Committee of the Board of Directors of the Company at the principal office of the Company at 2067 Commerce Drive, Medford, OR 97504 and all notices to Employee shall be addressed to Employee at the address of Employee on file with the Company or a subsidiary, 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 notice under this Agreement may be given by personal delivery to Employee or to the Chairman of the Plan Committee of the Board of Directors of the Company (as the case may be). IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. ARC Capital By__________________________ William Young, Chief Executive Officer EMPLOYEE ---------------------------- (Signature) Address: ---------------------------- ---------------------------- ---------------------------- EX-99.B7 3 ALS 1994 INCENTIVE STOCK OPTION AGREEMENT 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 James Ewan ("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 150,000 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 50,000; 100,000 shares on and after February 5, 1996; and 150,000 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 2067 Commerce Drive, Medford, OR 97504, 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: ---------------------------- (Signature) ---------------------------- (Typed or Printed Name) Address: ---------------------------- ---------------------------- ---------------------------- EX-99.B7 4 ALS 1991 INCENTIVE STOCK OPTION AGREEMENT EXHIBIT C 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 James Ewan ("Optionee"). W I T N E S S E T H WHEREAS, pursuant to the Applied Laser Systems 1991 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 150,000 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 50,000; 100,000 shares on and after February 5, 1996; and 150,000 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 2067 Commerce Drive, Medford, OR 97504, 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: ---------------------------- (Signature) ---------------------------- (Typed or Printed Name) Address: ---------------------------- ---------------------------- ---------------------------- -----END PRIVACY-ENHANCED MESSAGE-----