Exhibit 10.1

 

BEACON POWER CORPORATION

 

2010 STOCK INCENTIVE PLAN

 

1.             Purpose

 

The purpose of this 2010 Stock Incentive Plan (the “Plan”) of Beacon Power
Corporation, a Delaware corporation (the “Company”), is to advance the interests
of the Company’s stockholders by enhancing the Company’s ability to attract,
retain and motivate persons who make (or are expected to make) important
contributions to the Company by providing such persons with equity ownership
opportunities and performance-based incentives and thereby better aligning the
interests of such persons with those of the Company’s stockholders.  Except
where the context otherwise requires, the term “Company” shall include any
present or future subsidiary corporations of the Company as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the “Code”).  The Plan represents an
amendment and restatement of the Third Amended and Restated 1998 Stock Incentive
Plan.

 

2.             Eligibility

 

All of the Company’s employees, officers, directors, consultants and advisors
are eligible to be granted options, restricted stock, or other stock-based
awards (each, an “Award”) under the Plan.  Each person who has been granted an
Award under the Plan shall be deemed a “Participant”.

 

3.             Administration, Delegation

 

(a)           Administration by Board of Directors.  The Plan will be
administered by the Board of Directors of the Company (the “Board”).  The Board
shall have authority to grant Awards and to adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan as it shall
deem advisable.  The Board may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Award in the manner and to the
extent it shall deem expedient to carry the Plan into effect and it shall be the
sole and final judge of such expediency.  All decisions by the Board shall be
made in the Board’s sole discretion and shall be final and binding on all
persons having or claiming any interest in the Plan or in any Award.  No
director or person acting pursuant to the authority delegated by the Board shall
be liable for any action or determination relating to or under the Plan made in
good faith.

 

(b)           Delegation to Executive Officers.  To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers.

 

(c)           Appointment of Committees. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a “Committee”).  The Compensation
Committee of the Board, consisting of not less than two members, each member of
which is an “outside director” within the meaning of Section 162(m) of the Code
and a “non-employee director” as defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended, has been appointed by the Board. 
All references in the Plan to the “Board” shall mean the Board or the
Compensation Committee of the Board or the executive officer referred to in
Section 3(b) to the extent that the Board’s powers or authority under the Plan
have been delegated to such Committee or executive officer.

 

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4.             Stock Available for Awards

 

(a)           Number of Shares.  Subject to adjustment under Section 4(c),
Awards may be made under the Plan for up to 38,000,000 shares of common stock of
the Company, $0.01 par value per share (the “Common Stock”).  As of April 26,
2010 13,458,441 shares of Common Stock are covered by outstanding Awards and
4,901,423 shares of Common Stock are available for the grant of new Awards under
the Plan.  If any Award expires or is terminated, surrendered or canceled
without having been fully exercised or is forfeited in whole or in part or
results in any Common Stock not being issued, the unused Common Stock covered by
such Award shall again be available for the grant of Awards under the Plan,
subject, however, in the case of Incentive Stock Options (as hereinafter
defined), to any limitation required under the Code.  Shares issued under the
Plan may consist in whole or in part of authorized but unissued shares or
treasury shares.

 

(b)           Per-Participant Limit.  Subject to adjustment under Section 4(c),
the maximum number of shares of Common Stock with respect to which an Award may
be granted to any Participant under the Plan shall be 1,400,000, per calendar
year.  The per-Participant limit described in this Section 4(b) shall be
construed and applied consistently with Section 162(m) of the Code.

 

(c)           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, (i) the number and class of securities available
under this Plan, (ii) the number and class of security and exercise price per
share subject to each outstanding Option (as hereinafter defined), (iii) the
repurchase price per security subject to each outstanding Restricted Stock Award
(as hereinafter defined), and (iv) the terms of each other outstanding
stock-based Award shall be appropriately adjusted by the Company (or substituted
Awards may be made, if applicable) to the extent the Board shall determine, in
good faith, that such an adjustment (or substitution) is necessary and
appropriate.  If this Section 4(c) applies and Section 9(e)(1) also applies to
any event, Section 9(e)(1) shall be applicable to such event, and this
Section 4(c) shall not be applicable.

 

5.             Stock Options

 

(a)           General.  The Board may grant options to purchase Common Stock
(each, an “Option”) and determine the number of shares of Common Stock to be
covered by each Option, the exercise price per share and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable.  An Option which is not intended to be an Incentive
Stock Option (as hereinafter defined) shall be designated a “Nonstatutory Stock
Option”.

 

(b)           Incentive Stock Options.  An Option that the Board intends to be
an “incentive stock option” as defined in Section 422 of the Code (an “Incentive
Stock Option”) shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of
Section 422 of the Code.  The Company shall have no liability to a Participant,
or any other party, if an Option (or any part thereof) which is intended to be
an Incentive Stock Option is not an Incentive Stock Option.

 

(c)           Exercise Price.  The Board shall establish the exercise price at
the time each Option is granted and specify it in the applicable option
agreement.

 

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(d)           Duration of Options.  Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement; provided, however, that no Option will be granted
for a term in excess of ten (10) years.

 

(e)           Exercise of Option.  Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by
another form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares of Common Stock for which the Option is exercised.

 

(f)            Payment upon Exercise.  Common Stock purchased upon the exercise
of an option granted under the Plan shall be paid for as follows:

 

(1)           in cash or by check, payable to the order of the Company;

 

(2)           except as the Board may, in its sole discretion, otherwise provide
in an option agreement, (i) 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 (ii) delivery by the Participant
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;

 

(3)           delivery of shares of Common Stock owned by the Participant valued
at their fair market value as determined by (or in a manner approved by) the
Board in good faith (“Fair Market Value”), which Common Stock was owned by the
Participant at least six months prior to such delivery;

 

(4)           to the extent permitted by the Board, in its sole discretion,
(i) by delivery of a promissory note of the Participant to the Company on terms
determined by the Board or (ii) by payment of such other lawful consideration as
the Board may determine; or

 

(5)           any combination of the above permitted forms of payment.

 

(g)           Nonqualified Options with Fair Market Value Exercise Price. 
Unless otherwise determined by the Board pursuant to subsection (h) below, to
avoid a deferral of compensation falling within the requirements of Section 409A
of the Code, any Option to purchase stock, other than an Incentive Stock Option
described in Section 422 of the Code will have the following characteristics:
(i) the exercise price will never be less than the fair market value of the
underlying stock on the date the Option is granted, (ii) the receipt, transfer
or exercise of the Option will be subject to taxation under Section 83 of the
Code, and (iii) the Option will not include any feature for the deferral of
compensation other than the deferral of recognition of income until the later of
exercise or disposition of the Option.

 

(h)           Nonqualified Options with Exercise Price Less than Fair Market
Value.  Notwithstanding subsection (g) above, to the extent that any
Nonqualified Option may constitute a deferral of compensation, said Option shall
comply with the requirements of Section 409A of the Code as set forth in the
corresponding option agreement.

 

6.             Restricted Stock

 

(a)           Grants.  The Board may grant Awards entitling recipients to
acquire shares of Common Stock, subject to the right of the Company to
repurchase all or part of such shares at their issue price or other stated or
formula price (or to require forfeiture of such shares if issued at no cost)
from the recipient in the event that conditions specified by the Board in the
applicable Award are not satisfied

 

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prior to the end of the applicable restriction period or periods established by
the Board for such Award (each, a “Restricted Stock Award”).

 

(b)           Terms and Conditions.  The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any.  Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee).  At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant’s death (the “Designated Beneficiary”).  In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant’s estate.

 

(c)           Deferred Compensation.  To the extent that any Award of shares of
restricted stock may constitute a deferral of compensation, the Award shall
comply with the requirements of Section 409A of the Code as set forth in the
corresponding Restricted Stock Award.

 

7.             Other Stock-Based Awards.

 

The Board shall have the right to grant other Awards based upon the Common Stock
having such terms and conditions as the Board may determine, including the grant
of shares based upon certain conditions, the grant of securities convertible
into Common Stock and the grant of stock appreciation rights.

 

Notwithstanding the foregoing, however, the form and/or operation of any such
Award will not constitute “deferred compensation” under Section 409A of the Code
or if such Award, in form or operation, constitute “deferred compensation” the
Award shall comply with the requirements under Section 409A of the Code as set
forth in the corresponding Award agreement.

 

8.             Performance Awards.

 

The Board may, in its discretion, grant performance Awards which become vested
or payable on account of attainment of one or more performance goals during a
specified period as established by the Board. Performance goals established by
the Board shall be based on objectively determinable performance goals selected
by the Board that apply to an individual or group of individuals, a business
unit, or the Company or an affiliate as a whole, over such performance period as
the Board may designate.

 

For Awards intended to be “performance-based compensation,” the grant of the
performance Awards and the establishment of the performance measures shall be
made during the period required under Code Section 162(m) and in accordance with
Section 409A of the Code to the extent applicable.

 

The performance goals shall be based on one or more of the following criteria:
stock price, earnings per share, earnings before or after deduction for all or
any portion of interest, taxes, depreciation, or amortization, whether or not on
a continuing operations or an aggregate or per share basis, net earnings,
operating or other earnings, profits, revenues, net cash flow, financial return
ratios, return on assets, stockholder return, return on equity, growth in
assets, market share or strategic business criteria consisting of one or more
objectives based on meeting specified revenue goals, market

 

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penetration goals, geographic business expansion goals or goals relating to
acquisitions or strategic partnerships.

 

At any time prior to the final determination of the performance Awards, the
Board may adjust the performance goals and Awards for Participants to the extent
that the Board deems appropriate considering the requirements of Code
Section 162(m); provided that if a performance Award is intended to qualify for
the “performance-based compensation” exemption under Code Section 162(m), the
Board shall be precluded from increasing the amount of compensation payable
under the terms of such performance Award (but may decrease the amount of
compensation payable in its sole discretion). Upon completion of a performance
period, the Board shall determine whether the performance goals have been met
and certify in writing to the extent that such goals have been satisfied. To the
extent permitted under Code Section 162(m), the Board may, in its sole
discretion, also exclude, or adjust to reflect, the impact of an event or
occurrence that the Board determines should be appropriately excluded or
adjusted, including: (a) restructurings, discontinued operations, extraordinary
items or events, and other unusual or non-recurring charges; (b) an event either
not directly related to the operations of the Company or not within the
reasonable control of the Company’s management; or (c) a change in tax law or
accounting standards required by generally accepted accounting principles. In
addition, the performance goals may be based upon the attainment of specified
levels of Company (or subsidiary, division, other operational unit or
administrative department of the Company) performance under one or more of the
measures described above relative to the performance of other corporations.

 

For purposes of this Section 8, references to the Board shall mean the
“compensation committee” within the meaning of Treas. Reg. §1.162-27(c)(4).

 

9.             General Provisions Applicable to Awards

 

(a)           Transferability of Awards.  Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant.  References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.

 

Notwithstanding the foregoing, a Participant’s transfer to a revocable trust
that is solely for the benefit of the Participant and the Participant’s spouse
and/or issue during his lifetime and transfer under such trust at the
Participant’s death to the trust’s intended beneficiaries shall not be deemed to
be prohibited by the foregoing provisions.  If any person other than the
Participant, the Participant’s then current spouse, and the Participant’s issue
shall possess a vested interest in such trust during the lifetime of the
Participant, such interest shall not be recognized hereunder as giving such
person any right the benefit of an Award.  In such event the Award shall revest
in the Participant as if such transfer in trust had not occurred.  Any Award
that consists of an incentive stock option and that is transferred to a trust as
permitted in this paragraph, and any shares purchased thereunder, are subject to
any applicable rules of the Internal Revenue Code concerning the effects of such
transfers on incentive stock option status.

 

(b)           Documentation.  Each Award shall be evidenced by a written
instrument in such form as the Board shall determine.  Each Award may contain
terms and conditions in addition to those set forth in the Plan.  In addition,
each such written Award shall contain such terms and conditions as are necessary
to comply with the requirements of Section 409A of the Code.

 

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(c)           Board Discretion.  Except as otherwise provided by the Plan, each
Award may be made alone or in addition or in relation to any other Award.  The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.

 

(d)           Termination of Status.  The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant’s legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

 

(e)           Acquisition Events

 

(1)           Consequences of 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 Board shall take any one or
more of the following actions with respect to then outstanding Awards:
(i) provide that all outstanding Options shall be assumed, or equivalent Options
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof), provided that any such Options substituted for Incentive
Stock Options shall satisfy, in the determination of the Board, the requirements
of Section 424(a) of the Code; (ii) upon written notice to the Participants,
provide that all then unexercised Options will become exercisable 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 the Participants 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 all outstanding Options shall terminate upon consummation of such
Acquisition Event and each Participant shall receive, in exchange therefor, a
cash payment equal to the amount (if any) by which (A) the Acquisition Price
multiplied by the number of shares of Common Stock subject to such outstanding
Options (whether or not then exercisable), exceeds (B) the aggregate exercise
price of such Options; (iv) provide that all Restricted Stock Awards then
outstanding shall become free of all restrictions prior to the consummation of
the Acquisition Event; and (v) provide that any other stock-based Awards
outstanding (A) shall become exercisable, realizable or vested in full, or shall
be free of all conditions or restrictions, as applicable to each such Award,
prior to the consummation of the Acquisition Event, or (B), if applicable, shall
be assumed, or equivalent Awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof).

 

Except as otherwise may be required with respect to any Award constituting
deferred compensation under Section 409A of the Code, in which case the
provisions of said Section 409A shall prevail as set forth in the individual
Award agreement, 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.

 

(2)           Assumption of Options Upon Certain Events.  The Board may grant
Awards under the Plan in substitution for stock and stock-based awards held by
employees of another corporation who become employees of the Company as a result
of a merger or consolidation of the employing corporation with the Company or
the acquisition by the Company of property or stock of the employing

 

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corporation The substitute Awards shall be granted on such terms and conditions
as the Board considers appropriate under the circumstances.  Such substitute
Awards shall not constitute a deferral of compensation under Section 409A of the
Code.  Notwithstanding the foregoing, to the extent that the Board determines
that any such substitute Award shall constitute a deferral of compensation under
Section 409A of the Code such Award shall be accompanied by a written Award
agreement which shall set forth the terms and conditions required to comply with
the provisions of Section 409A of the Code.

 

(f)            Withholding.  Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability.  Except as the Board may otherwise
provide in an Award, Participants may satisfy such tax obligations in whole or
in part by delivery of shares of Common Stock, including shares retained from
the Award creating the tax obligation, valued at their Fair Market Value.  The
Company may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to a Participant.

 

(g)           Amendment of Award.  The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, accelerating the vesting of an Award (and in appropriate cases,
providing that the portion so accelerated be held as restricted stock), and
converting an Incentive Stock Option to a Nonstatutory Stock Option, provided
that the Participant’s consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.  Notwithstanding the foregoing,
any amendment pursuant to this subsection 9(g) shall not be permitted to the
extent that the individual Award or this Plan, in general, would constitute
deferred compensation subject to Section 409A of the Code unless the Award
agreement sets forth the terms and conditions necessary to comply with the
requirements of Section 409A of the Code.

 

(h)           Conditions on Delivery of Stock.  The Company will not be
obligated to deliver any shares of Common Stock pursuant to the Plan or to
remove restrictions from shares previously delivered under the Plan until
(i) all conditions of the Award have been met or removed to the satisfaction of
the Company, (ii) 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, and (iii) the Participant 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.

 

(i)            Acceleration.  The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of all restrictions or that any other Awards 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. 
Notwithstanding the foregoing, to the extent that any acceleration pursuant to
this subsection 8(i) pertains to an Award which constitutes “deferred
compensation” under Section 409A of the Code such acceleration shall comply with
any requirements of Section 409A which may be applicable.

 

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10.           Miscellaneous

 

(a)            No Right To Employment or Other Status.  No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company.  The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

 

(b)           No Rights As Stockholder.  Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such shares. 
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the close of
business on the record date for such stock dividend and the close of business on
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.

 

(c)            Effective Date and Term of Plan.  The Plan shall become effective
on the date on which it is adopted by the Board.  No Awards shall be granted
under the Plan after April 27, 2020, but Awards previously granted may extend
beyond that date.

 

(d)           Amendment of Plan.  The Board may amend, waive, suspend or
terminate the Plan or any portion thereof at any time and with respect to any or
all Participants.  Notwithstanding the foregoing, any amendment, waiver,
suspension or termination pursuant to this subsection 10(d) shall not be
permitted to the extent that the individual Award or this Plan, in general,
would constitute deferred compensation subject to Section 409A of the Code
unless the Award agreement sets forth the terms and conditions necessary to
comply with the requirements of Section 409A of the Code or unless otherwise
consented to in writing by a Participant whose Award would become subject to
Section 409A of the Code as a result of such action.  In addition, the Board
expressly reserves the right to amend the Plan, as required, to comply with any
regulatory guidance issued with respect to Section 409A of the Code.

 

(e)            Stockholder Approval.  For purposes of this Plan, stockholder
approval shall mean approval by a vote of the stockholders in accordance with
the requirements of Section 162(m) of the Code.

 

(f)            Governing Law.  The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.

 

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