BEACON POWER CORPORATION
NON-QUALIFIED OPTION AGREEMENT
GRANTED UNDER SECOND AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN
This Agreement, dated as of _______________, ______ (the "GRANT DATE"),
is between Beacon Power Corporation (the "COMPANY") and _____________________
(the "OPTIONEE"), a consultant, service provider or other independent
contractor of the Company.
1. GRANT OF OPTION. This agreement evidences the grant by the COMPANY to
the Optionee, of an option to purchase, in whole or in part, on the terms
provided herein and in the Company's Second Amended and Restated 1998 Stock
Incentive Plan (the "PLAN"), the shares (the "SHARES") of common stock, $0.01
par value per share, of the Company ("COMMON STOCK") at an exercise price per
share, as set forth below:
SHARES: EXERCISE PRICE:
___________________ $________________
Unless earlier terminated, this option shall expire one day before the
10th anniversary of the Grant Date (the "FINAL EXERCISE DATE"). It is
intended that the option evidenced by this agreement shall be a non-qualified
stock option. Except as otherwise indicated by the context, the term
"Optionee", as used in this option, shall be deemed to include any person who
acquires the right to exercise this option validly under its terms.
2. VESTING SCHEDULE . Subject to the other terms of this Agreement
regarding the exercisability of this option, the shares covered by this
option shall vest and become exercisable as follows: one-half of the shares
covered by this option shall vest and become exercisable on the Grant Date
and the remaining one-half of the shares (the "REMAINING SHARES") covered by
this option shall vest and become exercisable on the first anniversary of the
Grant Date, provided that Optionee has been continuously providing services
to the Company from the Grant Date until the first anniversary of the Grant
Date. Should the Company discontinue accepting the services of the Optionee
at any time prior to the first anniversary of the Grant Date, and if the
Optionee is still providing services at that time, then the Remaining Shares
shall vest and become exercisable at that time.
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NUMBER OF SHARES
DATE
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NEWLY VESTED ON THE INDICATED DATE CUMULATIVE VESTED
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The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it
shall continue to be exercisable, in whole or in part, with respect to all
shares for which it is vested until the earlier of the Final Exercise Date or
the termination of this option under this Agreement or the Plan.
3. EXERCISE OF OPTION .
(a) FORM OF EXERCISE. Each election to exercise this option shall be in
writing, signed by the Optionee, and received by the Company at its principal
office, accompanied by a copy of this agreement and by payment in full as
provided below. The Optionee may purchase less than the number of shares
covered hereby, provided that no partial exercise of this option may be for
any fractional share or for fewer than 100 whole shares. Payment shall be as
follows:
(i) in cash or by check, payable to the order of the Company;
(ii) in the sole discretion of the authorized administrator of the
Plan, (A) delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to
pay the exercise price or (B) delivery by the Optionee to the Company of a
copy of irrevocable and unconditional instructions to a creditworthy broker
to deliver promptly to the Company cash or a check sufficient to pay the
exercise price;
(iii) at such time as the Common Stock is registered under the
Exchange Act, delivery of shares of Common Stock owned by the Optionee valued
at Fair Market Value, which Common Stock was owned by the Optionee at least
six months prior to such delivery;
(iv) to the extent permitted by the authorized administrator of the
Plan, in its sole discretion, by payment of such other lawful consideration
as the authorized administrator of the Plan may determine; or
(v) any combination of the above permitted forms of payment.
A certificate or certificates for the Common Shares purchased shall be
issued by the Company after the exercise of the option and payment therefor,
including the provision for any federal and state withholding taxes, and
other applicable employment taxes.
(b) TERMINATION OF OPTION UPON TERMINATION OF SERVICE PROVISION, DEATH
OR DISABILITY.
(i) FOR REASONS OTHER THAN BREACH OF CONDUCT, DEATH OR DISABILITY.
Upon the termination of Optionee's service provision to the Company for any
reason OTHER THAN a Breach of Conduct (as defined in subparagraph (iii)
below) or death or disability, any portion of this option that is not vested
as described in Section 2 hereof shall immediately terminate, and any portion
that vested before the service provision termination date shall continue to
be exercisable until the Final Exercise Date.
(ii) DEATH OR DISABILITY. If termination of service provision is by
reason of death or disability, any portion of this option which is not vested
before such termination of service provision shall immediately terminate.
However, no portion of the option is exercisable after the Final Exercise
Date.
(iii) BREACH OF CONDUCT. In the event of a Breach of Conduct by
Optionee at any time while providing service to the Company or within two
years after termination of service provision, any portion of this option
which has not been exercised by the time of such Breach, whether or not
vested under Section 2, shall immediately terminate upon written declaration
by the authorized administrator of the Plan. Such declaration shall be
communicated in writing to the Optionee. In addition, upon a Breach of
Conduct, the Company may, in its sole discretion, by written notice demand
that any or all stock certificates for Common Shares acquired pursuant to the
exercise of this option, or any profit realized from the sale or transfer of
such Common Shares, be returned to the Company within five (5) days of
receipt of such notice, and any exercise price paid by the Optionee shall be
returned to Optionee by the Company immediately thereafter, without interest.
The Company shall be entitled to reimbursement of reasonable attorney fees
and expenses incurred in seeking to enforce its rights under this paragraph.
"BREACH OF CONDUCT" shall mean activities which constitute a serious
breach of conduct as determined by the authorized administrator of the Plan
in its sole discretion, including, but not limited to: (i) the disclosure or
misuse of confidential information, trade secrets or other intellectual
property of the Company or third parties who have disclosed such information,
secrets or intellectual property to the Company or a company that controls,
is controlled by or is under common control with the Company (collectively,
an "AFFILIATE"); (ii) activities in violation of the policies of the Company
or any Affiliate, including without limitation, the Company's ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
policy; (iii) the violation or breach of any material provision in any
applicable contract or agreement between the Optionee and the Company (or an
Affiliate), including, for example, a violation or breach which is grounds
for discharge for cause; (iv) engaging in conduct relating to the Optionee's
service provision for which either criminal or civil
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penalties have been sought; (v) engaging in activities which adversely affect
or which are contrary or harmful to the interests of the Company or
Affiliate, or (vi) in the event that the Optionee and Company have not signed
a noncompetition agreement (which therefore otherwise would govern issues of
noncompetition), engaging in competition with the Company or any Affiliate
during service provision or within one (1) year following termination of
service provision to the Company or Affiliate. The determination of Breach of
Conduct shall be determined by the authorized administrator of the Plan in
good faith and in its sole discretion.
4. RIGHT OF FIRST REFUSAL.
(a) If the Optionee proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "TRANSFER") any Shares acquired upon exercise of this option,
then the Optionee shall first give written notice of the proposed transfer
(the "TRANSFER NOTICE") to the Company. The Transfer Notice shall name the
proposed transferee and state the number of such Shares the Optionee proposes
to transfer (the "OFFERED SHARES"), the price per share and all other
material terms and conditions of the transfer.
(b) For 30 days following its receipt of such Transfer Notice, the
Company shall have the option to purchase all (but not less than all) of the
Offered Shares at the price and upon the terms set forth in the Transfer
Notice. In the event the Company elects to purchase all of the Offered
Shares, it shall give written notice of such election to the Optionee within
such 30-day period. Within 10 days after his receipt of such notice, the
Optionee shall tender to the Company at its principal offices the certificate
or certificates representing the Offered Shares, duly endorsed in blank by
the Optionee or with duly endorsed stock powers attached thereto, all in a
form suitable for transfer of the Offered Shares to the Company. Upon receipt
of such certificate or certificates, the Company shall deliver or mail to the
Optionee a check in payment of the purchase price for the Offered Shares;
PROVIDED THAT if the terms of payment set forth in the Transfer Notice were
other than cash against delivery, the Company may pay for the Offered Shares
on the same terms and conditions as were set forth in the Transfer Notice.
(c) At and after the time at which the Offered Shares are required to be
delivered to the Company for transfer to the Company pursuant to subsection
(b) above, the Company shall not pay any dividend to the Optionee on account
of such Shares or permit the Optionee to exercise any of the privileges or
rights of a stockholder with respect to such Offered Shares, but shall, in so
far as permitted by law, treat the Company as the owner of such Offered
Shares.
(d) If the Company does not elect to acquire all of the Offered Shares,
the Optionee may, within the 30-day period following the expiration of the
option granted to the Company under subsection (b) above, transfer the
Offered Shares to the proposed transferee, PROVIDED THAT such transfer shall
not be on terms and conditions more favorable to the transferee than those
contained in the Transfer Notice. Notwithstanding any of the above, all
Offered Shares transferred pursuant to this Section 4 shall remain subject to
the right of first refusal set forth in this Section 4 and such transferee
shall, as a condition to such transfer, deliver to the Company a written
instrument confirming that such transferee shall be bound by all of the terms
and conditions of this Section 4.
(e) The following transactions shall be exempt from the provisions of
this Section 4:
(1) any transfer of Shares to or for the benefit of any
spouse, child or grandchild of the Optionee, or to
a trust for their benefit;
(2) any transfer pursuant to an effective registration
statement filed by the Company under the Securities
Act of 1933, as amended (the "Securities Act"); and
(3) any transfer of the Shares pursuant to the sale of
all or substantially all of the business of the
Company;
PROVIDED HOWEVER, that in the case of a transfer pursuant to clause (1)
above, such Shares shall remain subject to the right of first refusal set
forth in this Section 4 and such transferee shall, as a condition to such
transfer, deliver to the
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Company a written instrument confirming that such transferee shall be bound
by all of the terms and conditions of this Section 4.
(f) The Company may assign its rights to purchase Offered Shares in any
particular transaction under this Section 4 to one or more persons or
entities.
(g) The provisions of this Section 4 shall terminate upon the earlier of
the following events.
(1) the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed by the Company under the Securities Act; or
(2) the sale of all or substantially all of the capital stock,
assets or business of the Company, by merger, consolidation, sale of assets
or otherwise.
(h) The Company shall not be required (i) to transfer on its books any
of the Shares which shall have been sold or transferred in violation of any
of the provisions set forth in this Section 4, or (ii) to treat as owner of
such Shares or to pay dividends to any, transferee to whom any such Shares
shall have been so sold or transferred.
5. AGREEMENT IN CONNECTION WITH PUBLIC OFFERING. The Optionee agrees, in
connection with the initial underwritten public offering of the Company's
securities pursuant to a registration statement under the Securities Act, (a)
not to sell, make short sale of, loan, grant any options for the purchase of,
or otherwise dispose of any shares of Common Stock held by the Optionee
(other than those shares included in the offering) without the prior written
consent of the Company or the underwriters managing such initial underwritten
public offering of the Company's securities for a period of 180 days from the
effective date of such registration statement, and (b) to execute any
agreement reflecting clause (a) above as may be requested by the Company or
the managing underwriters at the time of such offering.
6. WITHHOLDING. No Shares will be issued pursuant to the exercise of this
option unless and until the Optionee pays to the Company, or makes provision
satisfactory to the Company for payment of, any federal, state or local
withholding taxes required by law to be withheld in respect of this option.
7. NONTRANSFERABILITY OF OPTION. This option may not be sold, assigned,
transferred, pledged or otherwise encumbered by the Optionee, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the lifetime of the Optionee, this option shall be
exercisable only by the Optionee.
8. PROVISIONS OF THE PLAN. This option is subject to the provisions of the
Plan, a copy of which Optionee hereby acknowledges receiving with this option.
9. NO RIGHT TO CONTINUED EMPLOYMENT. This option shall not confer upon the
Optionee any right with respect to continuance of service provision to the
Company, nor shall it interfere in any way with the right of the Company to
terminate the Optionee's service provision at any time.
10. COMPLIANCE WITH LAW AND REGULATIONS. This option and the obligation of
the Company to sell and deliver shares hereunder shall be subject to all
applicable federal and state laws, rules and regulations and to such
approvals by any government or regulatory agency as may be required. The
Company shall not be required to issue or deliver any certificates for Common
Shares prior to (a) the listing of such Common Shares on any stock exchange
on which the Common Shares may then be listed, and (b) the completion of any
registration or qualification of such Common Shares under any federal or
state law, or any rule or regulation of any government body which the Company
shall, in its sole discretion, determine to be necessary or advisable.
Moreover, this option may not be exercised if its exercise, or the receipt of
Common Shares pursuant thereto, would be contrary to applicable law.
11. NOTICES. Any notice hereunder to the Company shall be addressed to it at
its principal business office, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and any
notice hereunder to the Optionee shall be sent to the address reflected on
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the payroll records of the Company, subject to the right of either party to
designate at any time hereafter in writing some other address.
12. DELAWARE LAW TO GOVERN. This Agreement shall be construed and
administered in accordance with and governed by the laws of Delaware.
IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument, as of the date first set forth above.
OPTIONEE: BEACON POWER CORPORATION
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