Document:

CYBEROPTICS CORPORATION EXHIBIT 4.1 TO FORM S-8 MAY, 2004

EXHIBIT 4.1  

As Amended
By the
Board on March 24, 2003 

CYBEROPTICS
CORPORATION
1992 EMPLOYEE STOCK PURCHASE PLAN 

ARTICLE I. INTRODUCTION 

        Section
1.01 Purpose. The purpose of the CYBEROPTICS CORPORATION 1992 EMPLOYEE
STOCK PURCHASE PLAN (the “Plan”) is to provide employees of
CYBEROPTICS CORPORATION, a Minnesota corporation (the
“Company”), and certain related corporations with an opportunity to
share in the ownership of the Company by providing them with a convenient means
for regular and systematic purchases of the Company’s Common Shares,
without par value, and, thus, to develop a stronger incentive to work for the
continued success of the Company. 

        Section
1.02 Rules of Interpretation. It is intended that the Plan be an
“employee stock purchase plan” as defined in Section 423(b) of the Internal
Revenue Code of 1986, as amended (the “Code”), and Treasury Regulations
promulgated thereunder. Accordingly, the Plan shall be interpreted and administered in a
manner consistent therewith if so approved. All Participants in the Plan will have the
same rights and privileges consistent with the provisions of the Plan. 

        Section
1.03 Definitions. For purposes of the Plan, the following terms will have the
meanings set forth below: 

        (a)       “Acceleration Date” means
the earlier of the date of shareholder approval or approval by the Company’s Board
of Directors of (i) any consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which Company Common Shares
would be converted into cash, securities or other property, other than a merger of the
Company in which shareholders of the Company immediately prior to the merger have the
same proportionate share ownership in the surviving corporation immediately after the
merger; (ii) any sale, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company; or (iii)
any plan of liquidation or dissolution of the Company.  

        (b)       “Affiliate” means
any subsidiary corporation of the Company, as defined in Section 424(f) of the
Code, whether now or hereafter acquired or established. 

        (c)       “Committee” means
the committee described in Section 10.01.  

        (d)       “Company” means
CyberOptics Corporation, a Minnesota corporation, any subsidiary of the Company
and any successors to the Company by merger or consolidation as contemplated by
Article XI herein. 

  

        (e)       “Current Compensation” means
all regular wage, salary and commission payments paid by the Company to a
Participant in accordance with the terms of his or her employment, including
bonus payments and all other forms of special compensation. 

        (f)       “Fair Market Value” as
of a given date means such value of the Common Shares as reasonably determined
by the Committee in a manner consistent with Section 423 of the Code.

        (g)       “Participant” means
a Full-Time Employee who is eligible to participate in the Plan under Section
2.01 and who has elected to participate in the Plan. 

        (h)       “Participating Affiliate” means
an Affiliate which has been designated by the Committee in advance of the
Purchase Period in question as a corporation whose eligible Full-Time Employees
may participate in the Plan. 

        (i)       “Full-Time Employee” means
an employee of the Company or a Participating Affiliate as of the first day of a
Purchase Period, including an officer or director who is also an employee, but
excluding employees (I) whose customary employment is less than 20 hours per
week, (II) who have not yet completed six months of employment, or (III) whose
customary employment is not more than 5 months in a calendar year. 

        (j)       “Plan” means
the CyberOptics Corporation 1992 Employee Stock Purchase Plan, as amended, the
provisions of which are set forth herein. 

        (k)       “Purchase Period” means
each of the 12-month periods beginning on the first business day in August of
each year and ending on the last business day in the following July,
respectively. 

        (l)       “Common Shares” means
the Company’s Common Shares, without par value, as such Shares may be
adjusted for changes in the Shares or the Company as contemplated by Article XI
herein. 

        (m)       “Share Purchase Account” means
the account maintained on the books and records of the Company recording the
amount received from each Participant through payroll deductions made under the
Plan and from the Company through matching contributions. 

ARTICLE II. 
ELIGIBILITY AND PARTICIPATION 

        Section
2.01 Eligible Employees. All Full-Time Employees shall be eligible to
participate in the Plan beginning on the first day of the first Purchase Period to
commence after such person becomes a Full-Time Employee. Subject to the provisions of
Article VI, each such employee will continue to be eligible to participate in the Plan so
long as he or she remains a Full-Time Employee.  

        Section
2.02 Election to Participate. An eligible Full-Time Employee may
elect to participate in the Plan for a given Purchase Period by filing with the Company,
in advance of that Purchase Period and in accordance with such terms and conditions as the
Committee in its sole discretion may impose, a form provided by the Company for such
purpose (which authorizes regular payroll deductions from Current Compensation beginning
with the first 

  

payday in that Purchase Period and
continuing until the employee withdraws from the Plan or ceases to be eligible to
participate in the Plan). 

        Section
2.03 LimitsonSharesPurchased. No employee shall be granted
any right to purchase Common Shares hereunder if such employee, immediately after such a
right to purchase is granted, would own, directly or indirectly, within the meaning of
Section 423(b)(3) and Section 424(d) of the Code, Common Shares possessing 5% or more of
the total combined voting power or value of all the classes of the capital shares of the
Company or of all Affiliates.  

        Section
2.04 Voluntary Participation. Participation in the Plan on the part of a
Participant is voluntary and such participation is not a condition of employment nor does
participation in the Plan entitle a Participant to be retained as an employee. 

ARTICLE III. PAYROLL
DEDUCTIONS, COMPANY CONTRIBUTIONS AND SHARE PURCHASE ACCOUNT 

        Section
3.01 Deduction from Pay. The form described in Section 2.02 will
permit a Participant to elect payroll deductions of not less than 1% and not more than 10%
of such Participant’s Current Compensation for each pay period, subject to such other
limitations as the Committee in its sole discretion may impose. 

        Section
3.02 Interest and Company Contributions. The Company may, in
the sole discretion of and subject to such limitations as the Committee may impose, pay
interest with respect to each Participant’s Share Purchase Account. 

        Section
3.03 Credit to Account. Payroll deductions will be credited to the
Participant’s Share Purchase Account on each payday. 

        Section
3.04 Nature of Account. The Share Purchase Account is established
solely for accounting purposes, and all amounts credited to the Share Purchase Account
will remain part of the general assets of the Company or the Participating Affiliate (as
the case may be). 

        Section
3.05 No Additional Contributions. A Participant may not make any
payment into the Share Purchase Account other than the payroll deductions made pursuant to
the Plan. 

  

ARTICLE IV. RIGHT
TO PURCHASE SHARES 

        Section
4.01 Number of Shares. Each Participant will have the right to
purchase on the last business day of the Purchase Period all, but not less than all, of
the largest number of whole Common Shares that can be purchased at the price specified in
Section 4.02 with the entire credit balance in the Participant’s Share Purchase
Account, subject to the limitations that (a) no more than 10,000 Common Shares may be
purchased under the Plan by any one Participant for a given Purchase Period, (b) in
accordance with Section 423(b)(8) of the Code, no more than $25,000 in Fair Market Value
(determined at the beginning of each Purchase Period) of Common Shares and other shares
may be purchased under the Plan and all other employee share purchase plans (if any) of
the Company and the Affiliates by any one Participant for any calendar year and (c) if the
purchases for all Participants in any Purchase Period would result in the sale of more
than 100,000 Common Shares in the aggregate under the Plan for such Purchase Period, each
Participant shall be allocated a pro rata portion of the 100,000 Common Shares to be sold
for that Purchase Period. If the purchases for all Participants would otherwise cause the
aggregate number of Common Shares to be sold under the Plan to exceed the number specified
in Section 10.03, each Participant shall be allocated a pro rata portion of the Common
Shares to be sold. 

        Section
4.02 Purchase Price. The purchase price for any Purchase Period shall be the
lesser of (a) 85% of the Fair Market Value of the Common Shares on the first business day
of that Purchase Period or (b) 85% of the Fair Market Value of the Common Shares on the
last business day of that Purchase Period, in each case rounded up to the next higher full
cent. 

ARTICLE V. EXERCISE
OF RIGHT 

        Section
5.01 Purchase of Shares. On the last business day of a Purchase
Period, the entire credit balance in each Participant’s Share Purchase Account will
be used to purchase the largest number of whole Common Shares purchasable with such amount
(subject to the limitations of Section 4.01), unless the Participant has filed with the
Company, in advance of that date and subject to such terms and conditions as the Committee
in its sole discretion may impose, a form provided by the Company which requests the
distribution of the entire credit balance in cash. 

        Section
5.02 Cash Distributions. Any amount remaining in a Participant’s Share
Purchase Account after the last business day of a Purchase Period will be paid to the
Participant in cash in a timely fashion after the end of that Purchase Period. 

        Section
5.03 Notice of Acceleration Date. The Company shall use its
best efforts to notify each Participant in writing at least ten days prior to any
Acceleration Date that the then current Purchase Period will end on such Acceleration
Date. 

ARTICLE VI. WITHDRAWAL
FROM PLAN; SALE OF SHARES  

        Section
6.01 Voluntary Withdrawal. A Participant may, in accordance with such terms
and conditions as the Committee in its sole discretion may impose, withdraw from the Plan
and cease making payroll deductions by filing with the Company a form provided for this
purpose. In such event, the entire credit balance in the Participant’s Share Purchase
Account will be paid to the Participant in cash within 30 days. A Participant who
withdraws from the Plan will not be eligible to reenter the Plan until the beginning of
the next Purchase Period following the date of such withdrawal. 

  

        Section
6.02 Death. Subject to such terms and conditions as the Committee in its sole
discretion may impose, upon the death of a Participant, no further amounts shall be
credited to the Participant’s Share Purchase Account. Thereafter, on the last
business day of the Purchase Period during which such Participant’s death occurred
and in accordance with Section 5.01, the entire credit balance in such Participant’s
Share Purchase Account will be used to purchase Common Shares, unless such
Participant’s estate has filed with the Company, in advance of that day and subject
to such terms and conditions as the Committee in its sole discretion may impose, a form
provided by the Company which elects to have the entire credit balance in such
Participant’s Shares Account distributed in cash within 30 days after the end of that
Purchase Period or at such earlier time as the Committee in its sole discretion may
decide. Each Participant, however, may designate one or more beneficiaries who, upon
death, are to receive the Common Shares or the amount that otherwise would have been
distributed or paid to the Participant’s estate and may change or revoke any such
designation from time to time. No such designation, change or revocation will be effective
unless made by the Participant in writing and filed with the Company during the
Participant’s lifetime. Unless the Participant has otherwise specified the
beneficiary designation, the beneficiary or beneficiaries so designated will become fixed
as of the date of the death of the Participant so that, if a beneficiary survives the
Participant but dies before the receipt of the payment due such beneficiary, the payment
will be made to such beneficiary’s estate. 

        Section
6.03 Termination of Employment. Subject to such terms and conditions
as the Committee in its sole discretion may impose, upon a Participant’s normal or
early retirement with the consent of the Company under any pension or retirement plan of
the Company or Participating Affiliate, no further amounts shall be credited to the
Participant’s Share Purchase Account. Thereafter, on the last business day of the
Purchase Period during which such Participant’s approved retirement occurred and in
accordance with Section 5.01, the entire credit balance in such Participant’s Share
Purchase Account will be used to purchase Common Shares, unless such Participant has filed
with the Company, in advance of that day and subject to such terms and conditions as the
Committee in its sole discretion may impose, a form provided by the Company which elects
to receive the entire credit balance in such Participant’s Share Purchase Account in
cash within 30 days after the end of that Purchase Period, provided that such Participant
shall have no right to purchase Common Shares in the event that the last day of such a
Purchase Period occurs more than three months following the termination of such
Participant’s employment with the Company by reason of such an approved retirement.
In the event of any other termination of employment (other than death) with the Company or
a Participating Affiliate, participation in the Plan will cease on the date the
Participant ceases to be a Full-Time Employee for any reason. In such event, the entire
credit balance in such Participant’s Share Purchase Account will be paid to the
Participant in cash within 30 days. For purposes of this Section 6.03, a transfer of
employment to any Affiliate, or a leave of absence which has been approved by the
Committee, will not be deemed a termination of employment as a Full-Time Employee. 

ARTICLE VII. 
NONTRANSFERABILITY 

        Section
7.01 Nontransferable Right to Purchase. The right to purchase
Common Shares hereunder may not be assigned, transferred, pledged or hypothecated (whether
by operation of law or otherwise), except as provided in Section 6.02, and will not be
subject to execution, attachment or similar process. Any attempted assignment, transfer,
pledge, 

  

hypothecation or other disposition
or levy of attachment or similar process upon the right to purchase will be null and void
and without effect. 

        Section
7.02 Nontransferable Account. Except as provided in Section 6.02, the
amounts credited to a Share Purchase Account may not be assigned, transferred, pledged or
hypothecated in any way, and any attempted assignment, transfer, pledge, hypothecation or
other disposition of such amounts will be null and void and without effect. 

ARTICLE VIII. SHARE
CERTIFICATES 

        Section
8.01 Delivery. Promptly after the last day of each Purchase Period and subject to
such terms and conditions as the Committee in its sole discretion may impose, the Company
will cause to be delivered to or for the benefit of the Participant a certificate
representing the Common Shares purchased on the last business day of such Purchase Period. 

        Section
8.02 Securities Laws. The Company shall not be required to issue or deliver
any certificate representing Common Shares prior to registration under the Securities Act
of 1933, as amended, or registration or qualification under any state law if such
registration is required. The Company shall use its best efforts to accomplish such
registration (if and to the extent required) not later than a reasonable time following
the Purchase Period, and delivery of certificates may be deferred until such registration
is accomplished. 

        Section
8.03 Completion of Purchase. A Participant shall have no interest in
the Common Shares purchased until a certificate representing the same is issued to or for
the benefit of the Participant. 

        Section
8.04 Form of Ownership. The certificates representing Common Shares
issued under the Plan will be registered in the name of the Participant. 

ARTICLE IX. EFFECTIVE
DATE, AMENDMENT AND TERMINATION OF PLAN 

        Section 9.01 
Effective Date. The Plan as amended, was approved by the Board of Directors
on March 24, 2003, and by the shareholders of the Company within twelve (12) months
thereof. In the event that the Plan is not so approved by the shareholders of the Company,
for any reason, it shall then be of no force or effect whatsoever, and no Common Shares
shall be purchased hereunder. The Plan will terminate upon completion of the Purchase
Period which ends on the first business day occurring on or after July 31, 2012. 

        Section
9.02 Plan Commencement. The initial Purchase Period under the Plan will
commence on August 3, 1992. Thereafter, each succeeding Purchase Period will commence and
terminate in accordance with Section 1.03(k). 

        Section
9.03 Powers of Board. The Board of Directors may amend or discontinue
the Plan at any time. No amendment or discontinuation of the Plan, however, shall without
shareholder approval be made that: (i) absent such shareholder approval, would cause Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the “Act”) to
become unavailable with respect to the Plan, (ii) requires shareholder approval under any
rules or regulations of the National Association of Securities Dealers, Inc. or any
securities exchange that 

  

are applicable to the Company, or
(iii) permit the issuance of Common Shares before payment therefor in full 

        Section
9.04 Automatic Termination. The Plan shall automatically terminate when all
of the Common Shares provided for in Section 10.03 have been sold. 

ARTICLE X. 
ADMINISTRATION 

        Section
10.01 The Committee. The Plan shall be administered by a committee (the
“Committee”) of two or more directors of the Company, none of whom shall be
officers or employees of the Company and all of whom shall be “disinterested
persons” with respect to the Plan within the meaning of Rule 16b-3 under the Act. The
members of the Committee shall be appointed by and serve at the pleasure of the Board of
Directors. 

        Section
10.02 Powers of Committee. Subject to the provisions of the Plan, the
Committee shall have full authority to administer the Plan, including authority to
interpret and construe any provision of the Plan, to establish deadlines by which the
various administrative forms must be received in order to be effective, and to adopt such
other rules and regulations for administering the Plan as it may deem appropriate. The
Committee shall have full and complete authority to determine whether all or any part of
the Common Shares acquired pursuant to the Plan shall be subject to restrictions on the
transferability thereof or any other restrictions affecting in any manner a
Participant’s rights with respect thereto but any such restrictions shall be
contained in the form by which a Participant elects to participate in the Plan pursuant to
Section 2.02. Decisions of the Committee will be final and binding on all parties who have
an interest in the Plan. 

        Section
10.03 Shares to be Sold. The Common Shares to be issued and
sold under the Plan may be treasury shares or authorized but unissued shares, or the
Company may purchase Common Shares in the market for sale under the Plan. Except as
provided in Section 11.01, the aggregate number of Common Shares to be sold under the Plan
will not exceed 800,000 shares. 

        Section
10.04 Notices. Notices to the Committee should be addressed as
follows: 

Compensation Committee
CyberOptics Corporation
5900 Golden Hills Drive
Golden Valley, MN 55416 

ARTICLE XI. 
ADJUSTMENT FOR CHANGES IN SHARES OR COMPANY 

        Section
11.01 Share Dividend or Reclassification. If the outstanding
Common Shares are increased, decreased, changed into or exchanged for a
different number or kind of securities of the Company, or shares of a different
par value or without par value, through reorganization, recapitalization,
reclassification, share dividend, share split, amendment to the Company’s
Articles of Incorporation, reverse share split or otherwise, an appropriate
adjustment shall be made in the maximum numbers and kind of securities to be
purchased under the Plan with a corresponding adjustment in the purchase price
to be paid therefor. 

  

        Section
11.02 Merger or Consolidation. If the Company is merged into or
consolidated with one or more corporations during the term of the Plan, appropriate
adjustments will be made to give effect thereto on an equitable basis in terms of issuance
of shares of the corporation surviving the merger or of the consolidated corporation, as
the case may be. 

ARTICLE XII. 
APPLICABLE LAW 

        Rights
to purchase Common Shares granted under the Plan shall be construed and shall take effect
in accordance with the laws of the State of Minnesota.CYBEROPTICS CORPORATION EXHIBIT 4.2 TO FORM S-8 MAY, 2004

EXHIBIT 4.2  

CYBEROPTICS
CORPORATION  

NONQUALIFIED STOCK
OPTION AGREEMENT  

THIS AGREEMENT, made as of the 15thof
February, 2002 by and between CyberOptics Corporation, a Minnesota corporation (“the
Company”), and Kathleen P. Iverson (“Employee”). 

WITNESSETH, THAT:  

WHEREAS, the Company wishes to grant
this stock option to Employee, 

NOW, THEREFORE, in consideration of
the premises and of the mutual covenants herein contained, the parties hereto hereby
agree as follows: 

1. Definitions  

        For
all purposes of this Option, the following terms shall have the meanings ascribed to them
below: 

	  	  	(a)  	  	An “Adverse
Change” in Employee’s employment shall mean the occurrence of any of
the following events: 

	  	  	  	(i)  	  	the
assignment to Employee of employment responsibilities which are not of
comparable responsibility and status as the employment responsibilities held by
Employee immediately prior to a Change in Control; 

	  	  	  	(ii)  	  	a
reduction by the Company in Employee’s compensation (including targeted
bonus compensation) as in effect immediately prior to a Change in Control;

	  	  	  	(iii)  	  	the
Company’s requiring Employee to be based anywhere after a Change of Control
other than within fifty (50) miles of Employee’s office location
immediately prior to a Change in Control, except for requirements of temporary
travel on the Company’s business to an extent substantially consistent with
Employee’s business travel obligations immediately prior to a Change in
Control; or 

	  	  	(b) 	  	“Change
in Control” shall mean: 

	  	  	  	(i)  	  	a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), whether or not the
Company is then subject to such reporting requirement; 

	  	  	  	(ii)  	  	the public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) that such person has become the “beneficial
owner” (as defined in Rule 13d-3 promulgated 

  

	  	
under the Exchange Act), directly or indirectly, of securities of the Company
representing 40% or more of the combined voting power of the Company’s then
outstanding securities; 

	  	  	  	(iii)  	  	the
Continuing Directors cease to constitute a majority of the Company’s Board
of Directors; 

	  	  	  	(iv)  	  	the
shareholders of the Company approve (x) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of Company stock would be converted into cash,
securities or other property, other than a merger of the Company in which
shareholders immediately prior to the merger have the same proportionate
ownership of stock of the surviving corporation immediately after the merger;
(y) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all of the assets of the
Company; or (z) any plan of liquidation or dissolution of the Company; or

	  	  	  	(v)  	  	the
majority of the Continuing Directors determine in their sole and absolute
discretion that there has been a change in control of the Company. 

	  	  	(c)  	  	“Code” shall
mean the Internal Revenue Code of 1986, as amended.  

	  	  	(d)  	  	“Company”
shall mean CyberOptics Corporation, a Minnesota corporation, and with respect to
any reference to Employee’s employer, any subsidiary of CyberOptics Corporation. 

	  	  	(e)  	  	“Common
Stock” shall mean the common stock, no par value, of the Company.

	  	  	(f)  	  	“Continuing
Director” shall mean any person who is a member of the Board of Directors
of the Company, while such person is a member of the Board of Directors, who is
not an Acquiring Person (as defined below) or an Affiliate or Associate (as
defined below) of an Acquiring Person, or a representative of an Acquiring
Person or of any such Affiliate or Associate, and who (x) was a member of the
Board of Directors on the effective date of this Option or (y) subsequently
becomes a member of the Board of Directors, if such person’s initial
nomination for election or initial election to the Board of Directors is
recommended or approved by a majority of the Continuing Directors. For purposes
of this subparagraph (ii), “Acquiring Person” shall mean any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) who beneficially owns (as defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, securities of the Company representing 40% or more
of the combined voting power of the Company’s then outstanding securities,
but shall not include the Company, any subsidiary of the Company or any employee
benefit plan of the Company or of any subsidiary of the Company or any entity
holding shares of Common Stock organized, appointed or established for, or
pursuant to the terms of, any such plan; and “Affiliate” and
“Associate” shall have the respective meanings ascribed to such terms
in Rule 12b-2 promulgated under the Exchange Act. 

	  	  	(g)  	  	“Disabled” or
“Disability” shall have the meaning attributed to it by Section
105(d)(4) of the Code or any successor section. 

	  	  	(h)  	  	“Option” shall
mean the right to purchase Common Stock of the Company represented by this
Agreement. 

  

	  	  	  	(i)  	  	“Resign” or
“Resignation” shall mean the voluntary termination by Employee of
employment with the Company, unless the Company agrees, through its Board of
Directors, that such voluntary termination shall not constitute a resignation
for purposes of this Option. 

2. Grant of Option  

The Company hereby grants to
Employee, on the date set forth above and at the times and subject to the conditions set
forth below, the right and option to purchase all or any part of an aggregate of 50,000
shares of Common Stock at the price of $11.87 per share on the terms and conditions set
forth herein. This Option is not intended to be an incentive stock option within the
meaning of Section 422 of the Code. 

3. Duration and
Exercisability  

	  	  	(a)  	  	Except as
provided in paragraph 3(b) or 4(b) below, this Option may not be exercised by
Employee until the expiration of one (1) year from the date hereof and shall
become exercisable on the first anniversary of the date hereof with respect to
25% of the shares subject hereto and with respect to an additional cumulative
25% of the shares subject to this Option on the anniversary of the date hereof
in each year thereafter until the fourth anniversary of the date hereof when
this Option shall be exercisable in full. This Option shall terminate in all
events ten (10) years after the date of grant. 

	  	  	(b)  	  	Notwithstanding
Section 3(a), the exercisability of this Option shall be accelerated, and this
Option shall become exercisable with respect to all of the shares subject to
this Option on the date of, and in the event of, an Adverse Change in
Employee’s employment after a Change In Control. 

	  	  	(c)  	  	During the
lifetime of Employee, the Option shall be exercisable only by Employee and shall
not be assignable or transferable by Employee, other than by will or the laws of
descent and distribution. 

4. Effect of Termination of Employment  

	  	  	(a)  	  	In the event
that Employee (i) shall cease to be employed by the Company prior to a Change of
Control for any reason other than Employee’s gross and willful misconduct
or Employee’s death or Disability, or (ii) shall Resign after a Change of
Control and prior to an Adverse Change, then Employee shall have the right to
exercise the Option at any time within three months after such termination of
employment or Resignation to the extent of the full number of shares Employee
was entitled to purchase under the Option on the date of termination or
resignation, subject to the condition that no Option shall be exercisable after
the expiration of the term of the option. 

	  	  	(b)  	  	In the event
that Employee’s employment with the Company is terminated by the Company
within two years after a Change of Control, Employee shall have the right to
exercise the Option at any time within three months after such termination of
employment with respect to the full number of shares subject to this Option.

	  	  	(c)  	  	In the event
that Employee shall cease to be employed by the Company by reason of
Employee’s gross and willful misconduct during the course of employment,
including but not limited to wrongful appropriation of the Company funds or the

  

	  	
commission of a gross misdemeanor or felony, the option shall be terminated as
of the date of the misconduct. 

	  	  	(d)  	  	If Employee
shall die while in the employ of the Company or within three months after
termination of employment for any reason other than gross and willful misconduct
or become Disabled while in the employ of the Company and Employee shall not
have fully exercised the option, such option may be exercised at any time within
twelve months after Employee’s death or Disability by the personal
representatives or administrators, or if applicable guardian, of Employee or by
any person or persons to whom the option is transferred by will or the
applicable laws of descent and distribution, to the extent of the full number of
shares Employee was entitled to purchase under the option on the date of death,
Disability or termination of employment, if earlier, and subject to the
condition that no option shall be exercisable after the expiration of the term
of the option. 

5. Manner of Exercise  

	  	  	(a)  	  	The option can
be exercised only by Employee or other proper party by delivering within the
option period written notice to the Company at its principal office. The notice
shall state the number of shares as to which the option is being exercised and
be accompanied by payment in full of the option price for all shares designated
in the notice. 

	  	  	(b)  	  	Employee may pay
the option price by check (bank check, certified check or personal check) or
with the approval of the Company by delivering to the Company for cancellation
Common Stock of the Company with a fair market value equal to the option price;
provided, however, that Employee shall not be entitled to tender shares of the
Common Stock pursuant to successive, substantially simultaneous exercises of
this Option or any other stock option of the Company. For these purposes, the
fair market value of the Common Stock shall be as reasonably determined by the
Company but shall not be less than, if applicable, (i) the closing price of the
stock as reported for composite transactions, if the Common Stock is then traded
on a national securities exchange, (ii) the last sale price if the Common Stock
is then quoted on the NASDAQ National Market System or (iii) the average of the
closing representative bid and asked prices of the Common Stock as reported on
NASDAQ on the date as of which fair market value is being determined.

6. Miscellaneous  

	  	  	(a)  	  	This Agreement
shall not confer on Employee any right with respect to employment or continuance
of employment by the Company, nor will it interfere in any way with the right of
the Company to terminate such employment at any time. Employee shall have none
of the rights of a shareholder with respect to shares subject to this Option
until such shares shall have been issued to Employee upon exercise of this
Option. 

	  	  	(b)  	  	The exercise of
all or any parts of this Option shall only be effective at such time that the
sale of Common Stock pursuant to such exercise will not violate any state or
federal securities or other laws. 

	  	  	(c)  	  	If Employee
exercises all or any portion of the Option subsequent to any change in the
number or character of the Common Stock (through merger, consolidation,

  

	  	
reorganization, recapitalization, stock dividend or otherwise), Employee shall
then receive for the aggregate price paid by Employee on such exercise of the
Option, the number and type of securities or other consideration which Employee
would have received if such Option had been exercised prior to the event
changing the number or character of outstanding shares. 

	  	  	(d)  	  	The Company
shall at all times during the term of the Option reserve and keep available such
number of shares as will be sufficient to satisfy the requirements of this
Agreement. 

	  	  	(e)  	  	In order to
provide the Company with the opportunity to claim the benefit of any income tax
deduction which may be available to it upon the exercise of the Option, and in
order to comply with all applicable federal or state income tax laws or
regulations, the Company may take such action as it deems appropriate to insure
that, if necessary, all applicable federal or state payroll, withholding, income
or other taxes are withheld or collected from Employee. Employee may elect to
satisfy his federal and state income tax withholding obligations upon exercise
of the Option by (i) having the Company withhold a portion of its common
shares otherwise to be delivered upon exercise of the Option having a fair
market value equal to the amount of federal and state income tax required to be
withheld upon such exercise, or (ii) delivering to the Company shares of
Common Stock other than the shares issuable upon exercise of the Option with a
fair market value equal to such taxes. 

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed on the day and year first above written. 

	CYBEROPTICS CORPORATION  	EMPLOYEE  
	 
	 
	  /s/ Steven K. Case          
Steven K. Case
Chairman  	  /s/ Kathleen P. Iverson          
Kathleen P. Iverson

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