Exhibit 10.3(h)

NON-QUALIFIED STOCK OPTION AGREEMENTFOR NON-EMPLOYEE DIRECTORS

UNDER THE STOCKERYALE, INC.2000 STOCK OPTION AND INCENTIVE PLAN

 

Name ofOptionee:__________________________No. of Option Shares: __________Option Exercise Price per Share:_______________                                                                   [FMV]Grant Date:_________________________________             [fifth business day aftereach annual meeting]

ExpirationDate:____________________                                        [10years]

 

             Pursuant to the StockerYale, Inc.2000 Stock Option and Incentive Plan (the “Plan”) as amended through the datehereof, StockerYale, Inc. (the “Company”) hereby grants to the Optionee namedabove, who is a Director of the Company but is not an employee of the Company,an option (the “Stock Option”) to purchase on or prior to the Expiration Datespecified above all or part of the number of shares of Common Stock, par value$.001 per share (the “Stock”) of the Company specified above at the OptionExercise Price per Share specified above subject to the terms and conditionsset forth herein and in the Plan.

             1.          Vesting.  No portion of this Stock Option may beexercised until this Stock Option shall have vested.  Except as set forth below, this Stock Option shall be fullyvested and exercisable on the [__________] anniversary of the Grant Date.

             In the event of (i) thetermination of the Optionee’s service as a director of the Company because ofDisability or death, or (ii) a Change of Control of the Company as definedin Section 17 of the Plan, this Stock Option shall become immediately vested andexercisable in full, whether or not vested and exercisable at such time.  Once vested, this Stock Option shallcontinue to be exercisable at any time or times prior to the close of businesson the Expiration Date, subject to the provisions hereof and of the Plan.

             2.          Exerciseof Stock Option.

             (a)         TheOptionee may exercise this Option only in the following manner:  from time to time on or prior to theExpiration Date of this Option, the Optionee may give written notice to theCommittee of his or her election to purchase some or all of the vested OptionShares purchasable at the time of such notice. This notice shall specify the number of Option Shares to be purchased.

             Payment of the purchase price forthe Option Shares may be made by one or more of the following methods:  (i) in cash, by certified or bank checkor other instrument acceptable to the Committee; (ii) in the form ofshares of Stock that are not then subject to restrictions under any Companyplan and that have been held by the Optionee for at least six months;(iii) by the Optionee delivering to the Company a properly executedexercise notice together with irrevocable instructions to a broker to promptlydeliver to the Company cash or a check payable and acceptable to the Company topay the option purchase price, provided that in the event the Optionee choosesto pay the option purchase price as so provided, the Optionee and the brokershall comply with such procedures and enter into such agreements of indemnityand other agreements as the Committee shall prescribe as a condition of suchpayment procedure; or (iv) a combination of (i), (ii) and (iii)above.  Payment instruments will bereceived subject to collection.

             The delivery of certificates representing the Option Shares will be contingentupon the Company’s receipt from the Optionee of full payment for the OptionShares, as set forth above and any agreement, statement or other evidence thatthe Company may require to satisfy itself that the issuance of Stock to bepurchased pursuant to the exercise of Options under the Plan and any subsequentresale of the shares of Stock will be in compliance with applicable laws andregulations.
                           (b)        Certificates for shares of Stockpurchased upon exercise of this Stock Option shall be issued and delivered tothe Optionee upon compliance to the satisfaction of the Committee with allrequirements under applicable laws or regulations in connection with suchissuance and with the requirements hereof and of the Plan.  The determination of the Committee as tosuch compliance shall be final and binding on the Optionee.  The Optionee shall not be deemed to be theholder of the shares subject to this Stock Option, or to have any of the rightsof a holder, unless and until this Stock Option shall have been exercisedpursuant to the terms hereof, the Company shall have issued and delivered theshares to the Optionee, and the Optionee’s name shall have been entered as thestockholder of record on the books of the Company.  Thereupon, the Optionee shall have full voting, dividend andother ownership rights with respect to such shares of Stock.

                           (c)         The minimum number of shares withrespect to which this Stock Option may be exercised at any one time shall be100 shares, unless the number of shares with respect to which this Stock Optionis being exercised is the total number of shares subject to exercise under thisStock Option at the time.

                           (d)        Notwithstanding any other provisionhereof or of the Plan, no portion of this Stock Option shall be exercisableafter the Expiration Date hereof.

             3.          Terminationas Director. If the Optionee ceases to be a Director of the Company, theperiod within which to exercise the Stock Option may be subject to earliertermination as set forth below.

 

                           (a)         Termination For Cause.  If the Optionee ceases to be a Director forCause (as defined in the Plan), any Stock Option held by the Optionee shallimmediately terminate and be of no further force and effect.

                           (b)        Termination by Reason of Death.  If the Optionee ceases to be a Director byreason of death, any Stock Option held by the Optionee may be exercised by hisor her legal representative or legatee for a period of  twelve months from the date of death oruntil the Expiration Date, if earlier.

                           (c)         Other Termination.  If the Optionee ceases to be a Director forany reason other than Cause or death, any Stock Option held by the Optionee maybe exercised, to the extent exercisable on the date of termination, for aperiod of three years from the date of termination or until the ExpirationDate, if earlier.  Any Option that isnot exercisable at such time shall terminate immediately and be of no furtherforce or effect.

             4.          Incorporationof Plan.  Notwithstanding anythingherein to the contrary, this Stock Option shall be subject to and governed byall the terms and conditions of the Plan. Capitalized terms in this Agreement shall have the meaning specified inthe Plan, unless a different meaning is specified herein.

             5.          Transferability.  This Agreement is personal to the Optionee,is non-assignable and is not transferable in any manner, by operation of law orotherwise, other than by will or the laws of descent and distribution.  This Stock Option is exercisable, during theOptionee’s lifetime, only by the Optionee, and thereafter, only by theOptionee’s legal representative or legatee.

             6.          Miscellaneous.

                           (a)         Notice hereunder shall be given to theCompany at its principal place of business, and shall be given to the Optioneeat the address set forth below, or in either case at such other address as oneparty may subsequently furnish to the other party in writing.

                           (b)        This Stock Option does not confer uponthe Optionee any rights with respect to continuance as a Director.

                           (c)         Pursuant to Section 15 of the Plan, theCommittee may at any time amend or cancel any outstanding portion of this StockOption, but no such action may be taken which adversely affects the Optionee’srights under this Agreement without the Optionee’s consent.

 
                            By:                      Title:     
 

The foregoingAgreement is hereby accepted and the terms and conditions thereof hereby agreedto by the undersigned.

 
Dated:                          Optionee’s Signature                           Optionee’s name and address: