BEACON POWER CORPORATION Restricted Stock Unit and Option Agreement
Exhibit
10.6
BEACON
POWER CORPORATION
This
Restricted Stock Unit and Option Agreement (this “Agreement”),
dated
as of February 14, 2008 (the “Effective
Date”),
is by
and between Beacon Power Corporation (the “Company”)
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ (“Executive”),
an
executive officer of the Company.
WHEREAS,
this Agreement is intended to provide Executive compensation in the form of
restricted stock units (or “RSUs”)
that
convert into shares of the Company’s common stock, $.01 par value per share (the
“Common
Stock”);
WHEREAS,
this Agreement is also intended to provide Executive with a non-qualified stock
option to purchase shares of the Common Stock pursuant to the terms and
conditions set forth herein;
NOW
THEREFORE, it is agreed as follows:
ARTICLE
I. RESTRICTED
STOCK UNIT AWARD
1.1 Restricted
Stock Unit Award.
Subject
to the terms and conditions of this Agreement and pursuant to the Company’s
Third Amended and Restated 1998 Stock Incentive Plan (the “Plan”),
the
Company hereafter will grant RSUs to Executive in accordance with the vesting
table set forth below. On each vesting date set forth below (each a
“Vesting
Date”),
the
Company shall be considered to have awarded RSUs in the indicated amount to
the
Executive.
|
% of total RSUs Vested
|
Vesting Date
|
RSUs Vesting
on Vesting Date
|
Total RSUs Vested
to Date
|
|||
|
8.33%
|
March 31,
2008
|
947
|
947
|
|||
|
8.33%
|
June
30, 2008
|
947
|
1,894
|
|||
|
8.33%
|
September
30, 2008
|
947
|
2,841
|
|||
|
8.33%
|
December
31, 2008
|
947
|
3,788
|
|||
|
8.33%
|
March
31, 2009
|
947
|
4,735
|
|||
|
8.33%
|
June
30, 2009
|
947
|
5,682
|
|||
|
8.33%
|
September
30, 2009
|
947
|
6,629
|
|||
|
8.33%
|
December
31, 2009
|
947
|
7,576
|
|||
|
8.33%
|
March
31, 2010
|
947
|
8,523
|
|||
|
8.33%
|
June
30, 2010
|
947
|
9,470
|
|||
|
8.33%
|
September
30, 2010
|
947
|
10,417
|
|||
|
8.37%
|
December
31, 2010
|
949
|
11,366
|
1.2 Conversion
to Common Stock.
Each
vested RSU shall convert into one (1) share of Common Stock on the applicable
Vesting Date; provided, that, if the applicable Vesting Date occurs during
a
period in which Executive is (a) subject to a lock-up agreement restricting
Executive’s ability to sell Common Stock in the open market, (b) restricted from
selling Common Stock in the open market because a trading window is not
available, in the opinion of Company, or (c) trading is otherwise not
appropriate, in the reasonable and good faith opinion of Company, such
conversion of vested RSUs into shares of Common Stock shall be delayed until
the
date immediately following the expiration of the lock-up agreement or the
opening of a trading window or confirmation by Company that trading is
appropriate, as the case may be.
ARTICLE
II. NON-QUALIFIED
STOCK OPTION GRANT
2.1 Grant
of Option.
The
Company hereby grants Executive an option (the “Option”)
to
purchase, as a whole or in part, on the terms provided herein and in the Plan
the shares (the “Shares”)
of
Common Stock at an exercise price per share, as set forth below:
|
Shares:
|
Exercise Price:
|
|||
|
102,426
|
$
|
1.25
|
||
Unless
earlier terminated, the Option shall expire one day before its 10th anniversary
(the “Final
Exercise Date”).
It is
intended that the Option shall be a non-qualified stock option.
2.2 Vesting
Schedule.
Subject
to the other terms of this Agreement regarding the exercisability of the Option,
the Shares shall vest and become exercisable, as follows; provided, however,
that as of each relevant Vesting Date, Executive’s employment with the Company
has not terminated:
|
% of total Shares Vested
|
Vesting Date
|
Shares Vesting
on Vesting Date
|
Total Shares Vested
to Date
|
|||
|
8.33%
|
March
31, 2008
|
8,532
|
8,532
|
|||
|
8.33%
|
June
30, 2008
|
8,532
|
17,064
|
|||
|
8.33%
|
September
30, 2008
|
8,532
|
25,596
|
|||
|
8.33%
|
December
31, 2008
|
8,532
|
34,128
|
|||
|
8.33%
|
March
31, 2009
|
8,532
|
42,660
|
|||
|
8.33%
|
June
30, 2009
|
8,532
|
51,192
|
|||
|
8.33%
|
September
30, 2009
|
8,532
|
59,724
|
|||
|
8.33%
|
December
31, 2009
|
8,532
|
68,256
|
|||
|
8.33%
|
March
31, 2010
|
8,532
|
76,788
|
|||
|
8.33%
|
June
30, 2010
|
8,532
|
85,320
|
|||
|
8.33%
|
September
30, 2010
|
8,532
|
93,852
|
|||
|
8.37%
|
December
31, 2010
|
8,574
|
102,426
|
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, as a 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
the
Option under this Agreement or the Plan.
2.3 Exercise
of Option.
(a) Form
of Exercise.
Each
election to exercise the Option shall be in writing, signed by Executive, and
received by the Company at its principal office, accompanied by a copy of this
Agreement and by payment in
full
as provided below. Executive may purchase less than the number of Shares covered
by the Option, provided that no partial exercise of the Option may be for any
fractional share or for fewer than 100 whole shares of Common Stock. 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 Executive 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;
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(iii) delivery
of shares of Common Stock owned by Executive valued at fair market value, as
determined in the sole discretion of the board of directors of the Company,
which Common Stock was owned by Executive 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 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) Continuous
Relationship with the Company Required.
Except
as otherwise provided in Article III, the Option may not be exercised unless
Executive, at the time he exercises the Option, is, and has been at all times
since the Effective Date, an employee of the Company or any parent or subsidiary
of the Company as defined in Section 424(e) or (f) of the Internal Revenue
Code
of 1986, as amended (the “Code”).
ARTICLE
III. TERMINATION
OF EMPLOYMENT
3.1 Termination
of Employment.
(a)
General.
Except
as indicated below in (b), if Executive terminates his employment for any
reason, including by resignation, or if the Company terminates his employment
with or without a Breach of Conduct (as defined below), Executive may retain
all
RSUs and Shares underlying the Option that have vested before the Termination
Notice Date (as defined below). However, he will not be entitled to receive
and
shall forfeit any interest in RSUs and Shares underlying the Option that are
scheduled to be vested after the Termination Notice Date.
The
“Termination
Notice Date”
means
the date on which Executive resigns (or if earlier, the date on which Executive
notifies Company that Executive will resign), or the date on which Company
terminates the employment for or without a Breach of Conduct (or if earlier,
the
date on which the Company notifies Executive that employment will be so
terminated).
(b) Special
Rules for Options.
In the
case of termination of employment by reason of death, disability (as defined
under the Executive's employment agreement), resignation or without Breach
of
Conduct, the vested Shares underlying the Option will expire if not exercised
within 365 days after the Termination Notice Date. In the case of termination
of
employment for Breach of Conduct, all vested Shares underlying the Option will
expire immediately on the written declaration of the authorized administrator
of
the Plan.
Such
declaration shall be communicated in writing to Executive. In addition, the
Company may, in its sole discretion, by written notice, demand that any or
all
stock certificates for Shares acquired pursuant to the exercise of the Option,
or any profit realized from the sale or transfer of such Shares, be returned
to
the Company within five days of receipt of such notice, and any exercise price
paid by Executive shall be returned to Executive 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 that, only if
possible to cure as determined by the authorized administrator of the Plan
in
its sole discretion, is not cured within 30 days after receipt of written notice
to Executive, 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 Executive 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 Executive’s employment for which either criminal
or civil 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 Executive 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
or
soliciting their respective employees or customers on behalf of some other
entity during employment or within one year following termination of employment
with 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.
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ARTICLE
IV. GENERAL
PROVISIONS
4.1 Acquisition
Events.
Upon
the occurrence of an Acquisition Event (as defined below), or the execution
by
the Company of any agreement with respect to an Acquisition Event, the
authorized administrator of the Plan shall take any one or more of the following
actions with respect to the RSUs and the Option: (i) provide that the RSUs
and/or the Option shall be assumed, or equivalent equity compensation shall
be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof); (ii) upon written notice to Executive, provide that any portion of
the
RSUs that are vested but not converted and/or any portion of the Shares
underlying the Option that are vested but not exercised will become converted
or
exercisable, as the case may be, in full as of a specified time (the
“Acceleration
Time”)
prior
to the Acquisition Event and will terminate immediately prior to the
consummation of such Acquisition Event, except to the extent exercised by
Executive between the Acceleration Time and the consummation of such Acquisition
Event; (iii) in the event of an Acquisition Event under the terms of which
holders of Common Stock will receive upon consummation thereof a cash payment
for each share of Common Stock surrendered pursuant to such Acquisition Event
(the “Acquisition
Price”),
provide that (A) the unvested RSUs shall terminate upon consummation of such
Acquisition Event and Executive shall receive, in exchange therefor, a cash
payment equal to the amount equal to the Acquisition Price multiplied by the
number of shares of Common Stock subject to such unvested RSUs, (B) the Option
shall terminate upon consummation of such Acquisition Event and Executive shall
receive, in exchange therefor, a cash payment equal to the amount (if any)
by
which (x) the Acquisition Price multiplied by the number of shares of Common
Stock subject to the Option (whether or not then convertible or exercisable),
exceeds (y) the aggregate exercise price of the Option; and (iv) provide that
the unvested RSUs and/or the Option (A) shall become exercisable, realizable
or
vested in full, or shall be free of all conditions or restrictions, as
applicable to the Option, prior to the consummation of the Acquisition Event,
or
(B), if applicable, shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof).
An
“Acquisition
Event”
shall
mean: (a) any merger or consolidation which results in the voting securities
of
the Company outstanding immediately prior thereto representing immediately
thereafter (either by remaining outstanding or by being converted into voting
securities of the surviving or acquiring entity) less than 50% of the combined
voting power of the voting securities of the Company or such surviving or
acquiring entity outstanding immediately after such merger or consolidation;
(b)
any sale of all or substantially all of the assets of the Company; or (c) the
complete liquidation of the Company.
4.2 Acceleration.
The
authorized administrator of the Plan may at any time provide that the Option
shall become immediately exercisable in full or in part, that the Option may
become exercisable in full or in part or free of some or all restrictions or
conditions, or otherwise realizable in full or in part, as the case may
be.
4.3 Golden
Parachute Payment Excise Tax Protection.
In
the
event that the excise tax imposed by Section 4999 of the Code, (or any successor
penalty or excise tax subsequently imposed by law) applies to any payments
or
benefits specifically paid or conferred only under this Agreement (the
“Excise
Tax”),
an
additional amount shall be paid by the Company to the Executive equal to the
amount of such Excise Tax (the “Gross
Up Payment”);
provided, however in no event shall the aggregate amount payable by the Company
to Executive for any excise tax imposed by Section 4999 of the Code pursuant
to
this Agreement and all other agreements between the Company and Executive exceed
$250,000. The Company and its advisers shall make the determination of the
amount of the Gross Up Payment. To the extent that the amount of such Gross
Up
Payment exceeds the amount of Excise Tax actually paid by Executive, Executive
shall promptly pay to the Company such excess amount.
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ARTICLE
V. TRANSFERABILITY
5.1 Nontransferability
of Agreement, RSUs and the Option.
This
Agreement, the RSUs and the Option may not be sold, assigned, transferred,
pledged or otherwise encumbered by Executive,
either
voluntarily or by operation of law, except by will or the laws of descent and
distribution. Notwithstanding
the foregoing, Executive’s transfer to a revocable trust that is solely for the
benefit of Executive and Executive’s spouse and/or issue during Executive’s
lifetime and transfer under such trust at Executive’s death to the trust’s
intended beneficiaries shall not be deemed to be prohibited by the foregoing
provisions. If any person other than Executive, Executive’s then current spouse,
and Executive’s issue shall possess a vested interest in such trust during the
lifetime of Executive, such interest shall not be recognized hereunder as giving
such person any right to the benefit of any RSUs or the shares of Common Stock
issuable upon conversion thereof. In such event the RSUs shall revest in
Executive as if such transfer in trust had not occurred. During the lifetime
of
Executive, the RSUs and the Option shall be exercisable only by
Executive.
ARTICLE
VI. MISCELLANEOUS
6.1 Provisions
of the Plan.
This
Agreement is subject to the provisions of the Plan, a copy of which Executive
hereby acknowledges receiving with this Agreement.
6.2 No
Right to Continued Employment.
This
Agreement shall not confer upon Executive any right with respect to continuance
of employment by the Company, nor shall it interfere in any way with the right
of the Company to terminate Executive’s employment at any time.
6.3 No
Right as Stockholder.
Executive
shall
not be entitled to vote any shares of Common Stock that may be acquired through
conversion of RSUs or the Shares underlying the Option to Common Stock, shall
not receive any dividends attributed to such shares of Common Stock, and shall
have no other rights of a stockholder with respect to the RSUs and/or the Option
unless and until the Common Stock issuable upon conversion of the RSUs has
been
delivered to Executive or the Option is duly exercised by Executive and the
Common Stock is issued.
6.4 Compliance
with Law and Regulations.
This
Agreement and the obligation of the Company to issue, sell and deliver shares
of
Common Stock 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 Shares or to remove restrictions from shares
of
Common Stock previously delivered until (a) the listing of such Shares on any
stock exchange on which the Shares may then be listed, (b) all conditions have
been met or removed to the satisfaction of the Company, (c) in the opinion
of
the Company’s counsel, all other legal matters in connection with the issuance
and delivery of such shares have been satisfied, including any applicable
securities laws and any applicable stock exchange or stock market rules and
regulations, (d) Executive has executed and delivered to the Company such
representations or agreements as the Company may consider appropriate to satisfy
the requirements of any applicable laws, rules or regulations and (e) the
completion of any registration or qualification of such 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,
the Option and the RSUs may not be exercised or converted to Common Stock if
its
exercise or conversion, or the receipt of Shares pursuant thereto, would be
contrary to applicable law.
6.5 Adjustment to
Common Stock.
In the
event of any stock split, stock dividend, recapitalization, reorganization,
merger, consolidation, combination, exchange of shares, liquidation, spin-off
or
other similar change in capitalization or event, or any distribution to holders
of Common Stock other than a normal cash dividend, the number and class of
securities each RSU shall be convertible into under this Agreement and the
number of Shares underlying the Option shall be appropriately adjusted by
Company to the extent the authorized administrator of the Plan shall determine,
in good faith, that such an adjustment is
necessary and appropriate.
6.6 Withholding.
Executive shall pay to Company, or make provision satisfactory to Company for
payment of, any taxes required by
law to
be withheld in connection with this Agreement no later than each Vesting Date
upon which Company vests RSUs to Executive. No shares of Common Stock will
be
issued pursuant to the exercise of the Option unless and until Executive 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 the Option. Executive may satisfy such tax obligations by delivering
to Company cash in the form of wire transfer or check and Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of
any
kind otherwise due to Executive.
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6.7 Common
Stock Reserved.
Company
shall at all times during the term of this Agreement reserve and keep available
such number of shares of Common Stock as will be sufficient to satisfy the
requirements of this Agreement.
6.8 Notices.
Any
notice hereunder to the Company shall be addressed to Beacon Power Corporation,
Attn: Compensation Committee, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
and
any notice hereunder to Executive shall be sent to the address reflected on
the
payroll records of the Company, subject to the right of either party to
designate at any time hereafter in writing some other address.
6.9 Delaware
Law to Govern.
This
Agreement shall be construed and administered in accordance with and governed
by
the laws of the State of Delaware (without giving effect to any conflict or
choice of laws provisions thereof that would cause the application of the
domestic substantive laws of any other jurisdiction).
6.10 Certain
Special Rules. To the extent that this Agreement
and the grant of the RSUs and the Option hereunder become subject to the
provisions of Section 409A of the Code, the Company and Executive agree that
the
RSUs and the Option may be amended, modified, rescinded or substituted by the
Company with an award of comparable economic value as required to maintain
compliance with the provisions of Section 409A of the Code.
6.11 Amendment
of Agreement.
Company
may amend, modify or
terminate this Agreement, provided that Executive’s consent to such action shall
be required unless Company determines that the action, taking into account
any
related action, would not materially and adversely affect
Executive.
6.12 Successors
and Assigns; No Third Party Beneficiaries.
Except
as otherwise expressly provided herein, the provisions hereof shall inure to
the
benefit of, and be binding upon, the successors, assigns, heirs, executors
and
administrators of the parties hereto. There are no third party beneficiaries
of
this Agreement.
6.13 Entire
Agreement.
This
Agreement and the Plan constitute the full and entire understanding and
agreement of the parties with regard to the RSUs and the Option and supersede
in
their entirety all other prior agreements, whether oral or written, with respect
thereto.
6.14 Severability;
Titles and Subtitles; Gender; Singular and Plural; Counterparts;
Facsimile.
(a) In
case
any provision of this Agreement shall be invalid, illegal or unenforceable,
the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.
(b) The
titles of the sections and subsections of this Agreement are for convenience
of
reference only and are not to be considered in construing this
Agreement.
(c) The
use
of any gender in this Agreement shall be deemed to include the other genders,
and the use of the singular in this Agreement shall be deemed to include the
plural (and vice versa), wherever appropriate.
(d) This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which together constitute one instrument.
(e) Counterparts
of this Agreement (or applicable signature pages hereof) that are manually
signed and delivered by facsimile transmission shall be deemed to constitute
signed original counterparts hereof and shall bind the parties signing and
delivering in such manner.
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IN
WITNESS WHEREOF, the parties have executed this Agreement as a sealed instrument
as of the Effective Date.
|
EXECUTIVE:
|
BEACON
POWER CORPORATION
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
|
By:
|
/s/ F. ▇▇▇▇▇▇▇ ▇▇▇▇
|
|
|
Signature
|
Signature
|
|||
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
|
Name:
F.
▇▇▇▇▇▇▇ ▇▇▇▇
|
|||
|
Address:
|
Title:
President and Chief Executive
Officer
|
|||
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