


                                   EXHIBIT C

                       NONQUALIFIED STOCK OPTION AGREEMENT



     THIS AGREEMENT is made as of the 5th day of February,  1995, by and between
Applied Laser Systems (the "Company"), and William J. Young ("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 a
nonqualified  stock  option to  purchase  the number of shares of Class A Common
Stock ("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 65,219  shares of Common Stock of the Company for cash
at the price of $1.00 per share.

     2. Term.  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.

     3. Vesting.  This Option shall vest and be  exercisable as to 21,740 shares
on and after the date hereof;  43,480 shares on and after  February 5, 1996; and
65,219 shares on and after February 5, 1997. The Option shall thereafter  remain
wholly  exercisable  until and including  the  Termination  Date,  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 plus the amount of applicable  federal,  state
and local withholding taxes 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 or Directorship. If Optionee shall
cease to be employed by, or ceases to be a director or  consultant  or otherwise
to render services to, the Company,  a Parent or a Subsidiary,  Optionee's right
to exercise  his  options,  if any,  shall be governed by Section 7 of the Stock
Option  Plan.  References  in such  Section  7 to  "employment"  shall  mean the
cessation  of services to the Company,  a Parent or a Subsidiary  in the case of
any person who is not an employee.

     6. Nontransferability. The 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 personal 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 such
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 Sale of Shares. 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 such 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 certificate issued upon exercise of this
Option may bear a legend indicating that their  transferability is restricted in
accordance  with  applicable  state and 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.  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 notice 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.  If Optionee at any time  contemplates  the
disposition (whether by sale, gift, exchange,  or other form or 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.

     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 Company has executed this Nonqualified Stock Option
Agreement as of the date and year first above written.

                                                    APPLIED LASER SYSTEMS



                                                    By:_________________________

                                                    Title:______________________


                                                    OPTIONEE:



                                                    By:_________________________
                                                              (Signature)

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                                                      (Typed or Printed Name)

                                                    Address:

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