Form of 1996 Stock Incentive Plan Stock Option Agreement



 Exhibit 10.5 
  
 PLANAR SYSTEMS, INC. 
  
 1996 STOCK INCENTIVE PLAN 
  
 STOCK OPTION AGREEMENT 
  
 Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement. 
  
 I. NOTICE OF STOCK OPTION GRANT 
  
 You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Stock Option Agreement, as follows: 
  

			
	 Grant Number
	  	  


		
	 Date of Grant
	  	  


		
	 Vesting Commencement Date
	  	  


		
	 Exercise Price per Share
	  	  


		
	 Total Number of Shares Granted
	  	  


		
	 Total Exercise Price
	  	  


		
	 Type of Option:
	  	  


		
	 Term/Expiration Date:
	  	  



  
 Vesting
Schedule: 
  
 This Option may be exercised, in whole or in
part, in accordance with the following schedule: 
  
 Twenty-five
percent (25%) of the Shares subject to the Option shall vest at each of the thirtieth, thirty-sixth, forty-second and forty-eighth months after the Vesting Commencement Date, or shall be accelerated to the second anniversary date from the date of
grant if the performance goal is met. The performance goal is based on the change in the average daily closing price for Planar stock. If the average daily closing price for the Company’s shares is more favorable than the average change in the
NASDAQ, as calculated for the two year period which ends one fiscal year following the year in which the options are granted, the performance goal is met. 







 Termination Period: 
  
 This Option may be exercised for ninety (90) days after termination of employment or consulting relationship, or such longer period as may be applicable
upon death or Disability of Optionee as provided in the Plan, but in no event later than the Term/Expiration Date as provided above. 
  
 II. AGREEMENT 
  
 1. Grant of Option. The Plan Administrator of the Company hereby grants to the Optionee named in the Notice of Grant attached as Part I of
this Agreement (the “Optionee”), an option (the “Option”) to purchase a number of Shares, as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the “Exercise Price”),
subject to the terms and conditions of the Plan, which is incorporated herein by reference. Subject to Section 13(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Option
Agreement, the terms and conditions of the Plan shall prevail. 
  
 If designated in the Notice of Grant as an Incentive Stock Option, this Option is intended to qualify as an Incentive Stock Option under Section 422 of the Code. 
  
 2. Exercise of Option. 
  
 (a) Right to Exercise. This option is exercisable during its term in accordance with the Vesting Schedule set out in
the Notice of Grant and the applicable provisions of the Plan and this Option Agreement. In the event of Optionee’s death, Disability or other termination of Optionee’s employment or consulting relationship, the exercisability of the
Option is governed by the applicable provisions of the Plan and this Option Agreement. 
  
 (b) Method of Exercise. This Option is exercisable by delivery of an exercise notice, in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to exercise the Option,
the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice
shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option shall
be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price. 







 No Shares shall be issued pursuant to the exercise of this Option unless such issuance and exercise
complies with all relevant provisions of law and requirements of any stock exchange upon which the Shares are then listed. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the
date the Option is exercised with respect to such Exercised Shares. 
  
 3. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: 
  
 (a) cash; or 
  
 (b) check; or 
  
 (c) surrender of other Shares which (i) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six (6)
months on the date of surrender, and (ii) have a fair market value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares; or 
  
 (d) delivery of a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company the amount of
sale or loan proceeds required to pay the exercise price; 
  
 (e)
delivery of instructions to the Company to withhold from the Shares that would otherwise be issued on the exercise that number of Shares having a fair market value at the time of such exercise equal to the Option exercise price. 
  
 4. Non-Transferability Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent and distribution and may be exercised during the lifetime of Optionee only by the Optionee. The terms of the Plan and this Option Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee. 
  
 5. Term of Option. This Option may be exercised only within the terms set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and terms of this Option
Agreement. 
  
 6. Tax Consequences. Some of the
federal tax consequences relating to this Option, as of the date of this Option, are set forth below. Although Oregon tax consequences for Oregon residents are substantially similar to the federal tax consequences discussed below, the Company has
not reviewed the tax laws of other states which may apply if the Optionee is not an Oregon resident. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND STATE AND FEDERAL TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX
ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. 







 (a) Exercising the Option. 
  
 (i) Nonqualified Stock Option (“NSO”). If this Option does not qualify as an ISO, the Optionee may incur
regular federal income tax liability upon exercise. 
  
 The
Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the fair market value of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If the
Optionee is an employee, the Company will be required to withhold from his or her compensation or collect from Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise.

  
 (ii) Incentive Stock Option (“ISO”). If this
Option qualifies as an ISO, the Optionee will have no regular federal income tax liability upon its exercise, although the excess, if any, of the fair market value of the Exercised Shares on the date of exercise over their aggregate Exercise Price
will be treated as an adjustment to the alternative minimum tax for federal tax purposes and may subject the Optionee to alternative minimum tax in the year of exercise. 
  
 (b) Disposition of Shares. 
  

(i) NSO. If the Optionee holds NSO Shares for at least one year, any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes. 
  
 (ii)
ISO. If the Optionee holds ISO Shares for at least one year after exercise and two years after the grant date, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. If the
Optionee disposes of ISO Shares within one year after exercise or two years after the grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of
the lesser of (A) the difference between the fair market value of the Shares acquired on the date of exercise and the aggregate Exercise Price, or (B) the difference between the sale price of such Shares and the aggregate Exercise Price. 

 
 (c) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later of (i) two years after the grant date, or (ii) one year after the exercise date, the Optionee shall immediately notify the Company in
writing of such disposition. The Optionee agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized from such early disposition of ISO Shares by payment in cash or out of the current earnings
paid to the Optionee. 







 By your signature and the signature of the Company’s representative below, you and the Company agree
that this Option is granted under and governed by the terms and conditions of the Plan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain the advise of counsel
prior to executing this Option Agreement and fully understands all provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any
questions relating to the Plan and Option Agreement. 
  

					
	OPTIONEE:	 	PLANAR SYSTEMS, INC.:
			
	  

	 	By: