Exhibit 10.4

ENERGY CONVERSION DEVICES, INC.

 

Form of Stock Option Agreement Under

the Energy Conversion Devices, Inc. 2006 Stock Incentive Plan

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Participant:

_________________________________________________________________

Grant Date:

___________________, 2007

Shares:

___________________________________________ common stock, par value $.01 per
share, of the Company

Exercise Price (per Share):          ________________________

  

This Stock Option Agreement (this “Agreement”), dated as of the Grant Date, is
entered into by and between Energy Conversion Devices, Inc., a Delaware
corporation (the “Company”), and the Participant. Capitalized terms not defined
herein have the meanings ascribed to such terms in the Energy Conversion
Devices, Inc. 2006 Stock Incentive Plan of the Company, as amended from time to
time (the “Plan”).

1.     Grant of Options. The Company hereby grants to the Participant a
Nonstatutory Option (the "Option") to purchase all or any part of the Shares at
the Exercise Price, pursuant to and subject to all of the terms and conditions
of this Agreement and the Plan, the provisions of which are incorporated herein.
A copy of the Plan is on file in the office of the Company. If there is any
conflict between the provisions of this Agreement and the Plan, the Plan shall
control.

2.        Exercisability of Options. The Option shall vest and shall be
exercisable in four equal annual installments beginning on the first anniversary
of the Grant Date, subject to the prior expiration or sooner termination of the
Option, provided that the Option may not be exercised at any one time as to
fewer than 100 Shares (or such number of Shares as to which the Option is then
exercisable if such number of Shares is less than 100). The Option shall expire
and shall not be exercisable on or after the tenth anniversary of the Grant
Date.

 

3.

Method of Exercise of the Options.

(a)    That portion of the Option as to which the Participant is vested shall be
exercisable in whole or in part (subject to Section 2 above), by delivery to the
Company of a written notice stating the number of shares to be purchased
pursuant to this Agreement and accompanied by payment for the full Option Price
with respect thereto. Fractional share interests shall be disregarded except
that they may be accumulated.

(b)    The Option Price shall be paid (i) in cash or by certified check or bank
draft payable to the order of the Company or other instrument acceptable to the

 

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Committee, (ii) by the exchange of Mature Shares of the Company and which have
an aggregate Fair Market Value (as determined on the date of exercise) equal to
the aggregate exercise price, (iii) except as prohibited by applicable law, by
providing instructions to the Company that upon receipt of the Option Price in
cash, certified check or wire transfer of immediately available funds from a
broker or dealer acting at the direction of the Participant, in payment for any
Shares pursuant to the exercise of the Option, the Company shall issue such
Shares directly to the designated broker or dealer, or (iv) by any combination
of the foregoing.

 

4.

Termination of Service.

(a)    Termination of Employment by Reason of Death or Disability. Upon a
termination of the Participant's employment with the Company or any Affiliate
thereof, including if the Participant's employer ceases to be an Affiliate of
the Company ("Termination of Employment"), by reason of death or disability (as
determined by the Committee in its sole discretion), the Option shall become
fully exercisable and may thereafter be exercised (in whole or in part) by the
legal representative or legatee of the Participant, for a period of one (1) year
(or such longer period as the Committee shall specify at any time) from the date
of Termination of Employment, or until the expiration of the stated term of the
Option, if earlier, at which time all rights of the Participant or the
Participant's legal representative or legatee in such Option shall terminate.

(b)    Termination of Employment for Cause. If the Participant's Termination of
Employment is for Cause (as defined below), the Option, even if it is
immediately exercisable at the time of such termination, shall immediately
terminate and be of no further force and effect; provided, however, that the
Committee may, in its sole discretion, provide that the Option can be exercised
for a period of up to thirty (30) days from the date of Termination of
Employment or until the expiration of the stated term of the Option, if earlier.
If the Participant is subject to a written employment agreement with the Company
or any Affiliate thereof that defines "Cause", or is a “Participant” in the
Company’s Executive Severance Plan, then, for purposes of this Agreement,
“Cause” shall have the definition set forth in such employment agreement or
Plan, as applicable. Otherwise "Cause" means the occurrence of one or more of
the following: (i) the Participant is convicted of, pleads guilty to, or
confesses to any felony or any act of fraud, misappropriation or embezzlement
which has an immediate and materially adverse effect on the Company or any of
its Affiliates, as determined by the Committee in good faith in its sole
discretion, (ii) the Participant engages in a fraudulent act to the material
damage or prejudice of the Company or any of its Affiliates or in conduct or
activities materially damaging to the property, business or reputation of the
Company or any of its Affiliates, all as determined by the Committee in good
faith in its sole discretion, (iii) any material act or omission by the
Participant involving malfeasance or negligence in the performance of the
Participant's duties to the Company or any of its Affiliates to the material
detriment of the Company or any of its Affiliates, as determined by the
Committee in good faith in its sole discretion, which has not been corrected by
the Participant within 30 days after written notice of any such act or omission,
(iv) failure by the Participant to comply in any material respect with any
written policies or directives of the Company or any of its Affiliates as
determined by the Committee in good faith in its sole discretion, which has not
been

 

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corrected by the Participant within 30 days after written notice of such
failure, or (v) material breach by the Participant of any noncompetition
agreement with the Company or any of its Affiliates, as determined by the
Committee in good faith in its sole discretion.

(c)     Other Termination of Employment. If the Participant's Termination of
Employment is for any reason other than death, disability or for Cause, the
Option may thereafter be exercised, to the extent it was exercisable on the date
of Termination of Employment, for six (6) months (or such other period as the
Committee shall specify at any time) from the date of Termination of Employment
or until the expiration of the stated term of the Option, if earlier, at which
time all of the Participant's rights in such Option shall terminate.

5.        Nontransferability of Options. The Option is nontransferable by the
Participant other than by will or the laws of descent and distribution, and,
during the lifetime of an Participant, the Option may be exercised only by the
Participant or by the Participant's guardian or legal representative.

6.        Rights of Participant. The Participant or a transferee of the Option
shall have no rights as a stockholder with respect to any Shares covered by the
Option until the date of the issuance of a stock certificate to such individual
for such Shares. The Option does not confer on the Participant any right to
continue in the employ of the Company or any of its affiliates or interfere in
any way with the right of the Company or any of its affiliates to determine the
terms of the Participant’s employment.

7.        Payment of Transfer Taxes, Fees and Other Expenses. The Company shall
pay any and all original issue taxes and stock transfer taxes that may be
imposed on the issuance of Shares acquired pursuant to exercise of the Option,
together with any and all other fees and expenses necessarily incurred by the
Company in connection therewith.

8.        Other Restrictions. The obligation of the Company to sell or deliver
Shares with respect to the Option shall be subject to all applicable laws, rules
and regulations, including all applicable federal and state securities laws, and
the obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee. The Company intends to have an
effective registration statement on file with the Securities and Exchange
Commission with respect to the shares of Common Stock subject to the Option. The
Company intends to maintain this registration but has no obligation to do so. If
the registration ceases to be effective, the Participant will not be able to
transfer or sell shares issued pursuant to the Option unless exemptions from
registration under applicable securities laws are available. Such exemptions
from registration are very limited and might be unavailable. The Participant
agrees that any resale by him or her of the shares of Common Stock issued
pursuant to the Option will comply in all respects with the requirements of all
applicable securities laws, rules, and regulations (including, without
limitation, the provisions of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the respective rules and
regulations promulgated thereunder) and any other law, rule, or regulation
applicable thereto, as such laws, rules, and regulations may be amended from
time to time. The

 

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Company will not be obligated to either issue the shares or permit the resale of
any shares if such issuance or resale would violate any such requirements.

9.        Taxes and Withholdings. No later than the date of exercise of the
Option, the Participant shall pay to the Company or make arrangements
satisfactory to the Committee, including pursuant to Section 5.5 of the Plan,
regarding payment of any federal, state or local taxes of any kind required by
law to be withheld upon the exercise of the Option. The Company shall, to the
extent permitted or required by law, have the right to deduct from any payment
of any kind otherwise due to the Participant federal, state and local taxes of
any kind required by law to be withheld upon the exercise of the Option.

10.        Recoupment. The Company will, to the extent permitted by governing
law, in all appropriate cases as determined by its Board of Directors (the
“Board”), require, and the Participant shall pay, reimbursement to the Company
of the gain realized on the Option where all of the following factors, as
determined by the Board (and whose determination shall be conclusive), are
present: (a) the gain realized on the Option was attributable, at least in part,
to the achievement of certain financial results that were subsequently the
subject of a restatement, (b) the Participant engaged in fraud or intentional
misconduct that was a substantial contributing cause to the need for the
restatement, and (c) the Participant would have received less or no gain with
respect to the Option based upon the restate d financial results. In each such
instance, the Participant shall pay to the Company the entire gain realized by
the Participant on the Option, plus a reasonable rate of interest. For purposes
of this Section, a Participant’s gain realized on the Option is the spread on
the Option on the date of exercise, which is (i) the amount by which the fair
market value of one Share on the date of exercise (without regard to the
restatement) exceeds the Exercise Price, multiplied by (ii) the number of
Shares.

 

 

ENERGY CONVERSION DEVICES, INC.,

 

By:

 

Title:

 

 

 

 

PARTICIPANT

 

 

 

 

 

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