Exhibit 10.41
[Executive Officers (Other than CEO)]
COLOR KINETICS INCORPORATED
Incentive Stock Option Agreement
     Color Kinetics Incorporated, a Delaware corporation (the “Company”), hereby
grants as of the date below (the “Grant Date”) to the person named below (the
“Employee”) and the Employee hereby accepts, an option to purchase the number of
shares (the “Option Shares”) listed below of the Company’s Common Stock $.001
par value per share (“Common Stock”), at the price per share and with a vesting
start date (the “Vesting Start Date”) listed below, such option to be subject to
the terms and conditions specified herein and in the attached Exhibit A.
     Employee Name:
     Grant Date:
     Total Number of Shares:
     Exercise Price Per Share:
     Expiration Date of Option:
Vesting Schedule: This Option shall become exercisable for 25% of the Total
Number of Option Shares on ____________, and for an additional 6.25% of the
Total Number of Option Shares at the end of every three month period thereafter.
Acceleration of Vesting Upon Change-in Control: If, within 12 months after or
during the 3 months prior to a Change in Control, your employment is terminated
(A) by the Company for any reason other than for Cause or (B) by you for Good
Reason, then, provided you sign, on the date of your termination, the Release
Agreement previously provided to you as Exhibit A to your agreement dated May 1,
2007, the vesting of your Option Shares shall be fully accelerated on the date
of your termination (after giving effect to any applicable revocation periods in
the Release Agreement). In addition, the vesting of your Option Shares shall
accelerate by twelve months upon a Change in Control, provided you are still an
employee at the time of the Change in Control. For purposes of clarity, in the
case of a Change in Control in which the consideration received by holders of
the Company’s common stock consists entirely of cash, options vesting at or post
the Change in Control are cash settlement instruments, payable at the difference
between the Change in Control purchase price and the exercise price.
     For purposes of this Agreement, “Cause” shall mean (i) any material breach
by you of (A) any provision of any Employment Agreement, if any, between
yourself and the Company, (B) any written Company policy, or (C) any other
agreement between yourself and the Company, or (ii) the commission of,
conviction of or plea of nolo contendere by you to (A) a felony or (B) a
misdemeanor involving moral turpitude, dishonesty or fraud, or (iii) any other
materially dishonest act or statement of you with respect to the Company or any
of its affiliates, or (iv) any material misconduct, willful or deliberate
non-performance or gross negligence in the performance (other than by reason of
disability, as reasonably determined by the Company) by you of any of your
duties and responsibilities. The cessation of your employment shall not be for
Cause unless (x) there shall have been delivered to you written notice from the
Company specifying the basis for such termination and (y), with respect to
clauses (i) and (iv), you have been provided with a period of not less than
thirty (30) days to cure such conduct determined to constitute Cause hereunder.
     For purposes of this Agreement, “Good Reason” shall mean (i) a substantial
adverse change or diminution in the substantive nature or scope of your
responsibilities, authority, powers, functions and duties (including office,
titles and reporting requirements); provided, however, that neither any failure
of the Company to continue you in the position of director, officer or employee
of any of its subsidiaries or other affiliates, nor the mere fact of a Change in
Control in which the Company thereafter becomes a subsidiary or division of a
corporation or similar entity shall in and of itself constitute a substantial
adverse change or diminution in the substantive nature or scope of your
responsibilities, authority, powers, functions and duties (including office,
titles and reporting requirements), or (ii) a reduction in your compensation to
which you are entitled, or (iii) any material failure of the Company to provide
you with such other material employee benefits to which you received

 

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immediately prior to termination (for purposes of clarity, a reduction in the
amount of a benefit does not constitute a material failure to provide such
benefit so long as you are receiving such benefit in a manner consistent with
other employees who receive such benefit), or (iv) the relocation of the offices
at which you are principally employed to a location more than 25 miles from
Boston, MA (until August 30, 2007) or, thereafter, Burlington, MA without your
consent.
     For purposes of this Agreement, a “Change of Control” with respect to a
party means (a) the direct or indirect acquisition, whether in one or a series
of transactions, by any person or related person constituting a group, of
(i) beneficial ownership of issued and outstanding shares of stock of such
party, the result of which is that such person or such group possesses in excess
of fifty percent (50%) of the combined voting power of all then-issued and
outstanding stock of such party, or (ii) the power to elect, appoint, or cause
the election or appointment of at least a majority of the members of the board
of directors (or equivalent governing body) of such party; (b) a merger or
consolidation of a party with a person, or a reorganization or recapitalization
of a party, provided that the result of such transaction, whether in one or a
series of related transactions, is that the holders of the outstanding voting
stock of such party immediately prior to such consummation do not possess in
excess of fifty percent (50%) of the combined voting power of all of the
then-issued and outstanding stock of such party or surviving person of such
party, whether directly or indirectly, immediately after the consummation of
such transaction; or (c) the sale or disposition, whether directly or
indirectly, in one or a series of related transactions, of substantially all of
the assets of a party. For purposes of the preceding sentence, the terms
“person,” “group” and “beneficial ownership” shall have the meanings given to
such terms under the Securities Exchange Act of 1934, as amended.
Lock-Up Agreement; Other Terms and Conditions: All shares purchased upon
exercise of this Option are subject to the lock-up agreement set forth in
Section 9 of the attached Terms and Conditions and to the other terms of the
Option and Plan.
     IN WITNESS WHEREOF, the Company and the Employee have caused this
instrument to be executed as of the Grant Date set forth above.

     
__________________________________________
(Employee Signature and Date)

  COLOR KINETICS INCORPORATED
10 Milk Street, Suite 1100
Boston, MA 02108

__________________________________________
(Street Address)

 
By:__________________________________________
      William J. Sims
      President & CEO
__________________________________________
(City/State/Zip Code)

   

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EXHIBIT A
Incentive Stock Option Agreement
Terms and Conditions
Color Kinetics Incorporated 2004
Stock Incentive Plan
     This option is granted pursuant to and governed by the Company’s 2004 Stock
Incentive Plan (the “Plan”) and, unless the context otherwise requires, terms
used herein shall have the same meaning as in the Plan. Determinations made in
connection with this Option pursuant to the Plan shall be governed by the Plan
as it exists on the Grant Date.
     Section 1. Grant of Option. Subject to the terms and conditions hereinafter
set forth, the Holder is hereby given the right and option to purchase from the
Company shares of the Company’s Common Stock, $.001 par value per share (the
“Common Stock”). The Incentive Stock Option Agreement to which these Terms and
Conditions are attached sets forth (i) the expiration date of the Option,
(ii) its exercise price per share, (iii) the maximum number of shares that the
Holder may purchase upon exercise hereof, (iv) the vesting schedule and
(v) certain other terms and conditions applicable to this Option and
incorporated herein. The right to purchase shares hereunder shall be cumulative.
     This Option is and shall be subject in every respect to the provisions of
the Company’s 2004 Stock Incentive Plan, as amended from time to time, which is
incorporated herein by reference and made a part hereof. The Holder hereby
accepts this Option subject to all the terms and provisions of the Plan and
agrees that (i) in the event of any conflict between the terms hereof and those
of the Plan, the latter shall prevail, and (ii) all decisions under and
interpretations of the Plan by the Board of Directors of the Company (the
“Board”) or the Committee shall be final, binding and conclusive upon the Holder
and his heirs and legal representatives. References herein to the “Committee”
shall mean the Committee as defined in the Plan.
     Although this Option is intended to qualify as an incentive stock option
under the Internal Revenue Code of 1986, as amended, the Company makes no
representation as to the tax treatment to the Holder upon receipt or exercise of
this Option or sale or other disposition of the shares covered by this Option .
     Section 2. Exercise of Option. This Option may be exercised only to the
extent such Option has vested pursuant to the terms of Section 1. Purchase of
any shares hereunder shall be made by delivery to the Company of a written
notice of exercise (the “Notice”) setting forth the number of shares with
respect to which the Option is being exercised and the address to which the
certificate for such shares is to be mailed, accompanied by:
     (i) cash, certified or bank check or postal money order payable to the
order of the Company for an amount equal to the Option price of such shares;
     (ii) with the consent of the Committee, shares of Common Stock of the
Company which (a) either have been purchased by the Holder on the open market,
or (b) have been beneficially owned by the Holder for a period of at least six
months and are not then subject to restriction under any Company plan (“mature
shares”); such surrendered shares shall have a fair market value equal to or
less than the Option price of such shares and shall be accompanied by cash or a
certified or bank check or postal money order in an amount equal to the
difference, if any, between the Option price of such shares and the fair market
value of such shares;
     (iii) with the consent of the Committee, a personal recourse note issued by
the Holder to the Company in a principal amount equal to such aggregate exercise
price and with such other terms, including interest rate and maturity, as the
Company may determine in its discretion, provided that the interest rate borne
by such note shall not be less than the lowest applicable federal rate, as
defined in Section 1274(d) of the Internal Revenue Code of 1986, as amended.
     (iv) with the consent of the Committee, if the class of Common Stock is
registered under the Securities Exchange Act of 1934 at that time, subject to
rules as may be established by the Committee, irrevocable instructions

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to a broker to promptly deliver to the Company cash or a check payable and
acceptable to the Company for the purchase price;
     (v) with the consent of the Committee, instructions to reduce the number of
shares otherwise issuable to the Holder upon the exercise of the Option by a
number of shares of Common Stock having a fair market equal to the aggregate
exercise price; provided, however, that the Holder otherwise owns an equal
number of mature shares; or
     (vi) with the consent of the Committee, a combination of (i), (ii), (iii),
(iv) and/or (v).
     For the purpose of the foregoing, the fair market value per share of the
Common Stock so delivered to the Company shall be the closing price per share on
the date of delivery as reported by such registered national securities exchange
on which the Common Stock is listed, or, if the Common Stock is not listed on
such an exchange, as quoted on NASDAQ; provided, that, if there is no trading on
such date, the fair market value shall be deemed to be the closing price per
share on the last preceding date on which the Common Stock was traded. If the
Common Stock is not listed on any national registered securities exchange or
quoted on NASDAQ, the fair market value of the Common Stock shall be determined
in good faith by the Committee.
     Section 3. Conditions and Limitations. The Company, in its discretion, may
file a registration statement on Form S-8 under the Securities Act of 1933 to
register shares of Common Stock reserved for issuance under the Plan. At any
time at which such a registration statement is not in effect, it shall be an
additional condition precedent to any exercise of this Option that the Holder
shall deliver to the Company a customary “investment letter” satisfactory to the
Company and its counsel in which, among other things, the Holder shall state
that the Holder is purchasing the shares for investment and acknowledges that
they are not freely transferable except in compliance with state and federal
securities laws.

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     Section 4. Delivery of Shares. Within a reasonable time after receipt by
the Company of the Notice and payment for any shares to be purchased hereunder
and, if required as a condition to exercise, the investment letter described in
Section 3, the Company will deliver or cause to be delivered to the Holder (or
if any other individual or individuals are exercising this Option, to such
individual or individuals) at the address specified in the Notice a certificate
or certificates for the number of shares with respect to which the Option is
then being exercised, registered in the name or names of the individual or
individuals exercising the Option, either alone or jointly with another person
or persons with rights of survivorship, as the individual or individuals
exercising the Option shall prescribe in writing to the Company at or prior to
such purchase; provided, however, that if any law or regulation or order of the
Securities and Exchange Commission or other body having jurisdiction in the
premises shall require the Company or the Holder (or the individual or
individuals exercising this Option) to take any action in connection with the
shares then being purchased, the date for the delivery of the certificates for
such shares shall be extended for the period necessary to take and complete such
action, it being understood that the Company shall have no obligation to take
and complete any such action. The Company may imprint upon such certificate the
legend set forth in the Plan or such other legends referencing stock transfer
restrictions which counsel for the Company considers appropriate. Delivery by
the Company of the certificates for such shares shall be deemed effected for all
purposes when the Company or a stock transfer agent of the Company shall have
deposited such certificates in the United States mail, addressed to the Holder,
at the address specified in the Notice.
     Section 5. Adjustments Upon Changes in Capitalization. The existence of
this Option shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company’s capital structure or its
business, or any merger or consolidation of the Company, or any issue of Common
Stock, or any issue of bonds, debentures, preferred or prior preference stock or
other capital stock ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.
     If the Company shall effect a stock dividend, stock split or similar change
in capitalization affecting the shares of Common Stock outstanding, in any such
case without receiving compensation therefor in money, services or property,
then the number, class, and price per share of shares of Common Stock subject to
this Option shall be appropriately adjusted in such a manner as to entitle the
Holder to receive upon exercise of this Option, for the same aggregate cash
consideration, the same total number and class of shares as the Holder would
have received as a result of the event requiring the adjustment had the Holder
exercised this Option in full immediately prior to such event.
     Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services, either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
the conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
therefor shall be made with respect to, the number or price of shares of Common
Stock then subject to option.
     Section 6. Effect of Certain Transactions. After a merger of one or more
corporations with or into the Company or after a consolidation of the Company
and one or more corporations in which the stockholders of the Company
immediately prior to such merger or consolidation own after such merger or
consolidation shares representing at least fifty percent (50%) of the voting
power of the Company or the surviving or resulting corporation, as the case may
be, the Holder shall, at no additional cost, be entitled upon exercise of this
Option to receive in lieu of the shares of Common Stock as to which this Option
was exercisable immediately prior to such event, the number and class of shares
of stock or other securities, cash or property (including, without limitation,
shares of stock or other securities of another corporation or Common Stock) to
which the Holder would have been entitled pursuant to the terms of the agreement
of merger or consolidation if, immediately prior to such merger or
consolidation, the Holder had been the holder of record of a number of shares of
Common Stock equal to the number of shares for which this Option shall be so
exercised.
     If the Company is merged with or into or consolidated with another
corporation, other than a merger or consolidation in which the stockholders of
the Company immediately prior to such merger or consolidation continue to own
after such merger or consolidation shares representing at least fifty percent
(50%) of the voting power of the Company or the surviving or resulting
corporation, as the case may be, or if the Company is liquidated, or sells or
otherwise disposes of substantially all its assets to another corporation while
this Option remains outstanding, then
     (i) subject to the provisions of clause (ii) below, after the effective
date of such merger, consolidation, liquidation, sale or disposition, as the
case may be, the Holder of this Option shall be entitled, upon exercise of this

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Option, to receive, in lieu of the shares of Common Stock as to which this
Option was exercisable immediately prior to such event, the number and class of
shares of stock or other securities, cash or property (including, without
limitation, shares of stock or other securities of another corporation or Common
Stock) to which the Holder would have been entitled pursuant to the terms of the
merger, consolidation, liquidation, sale or disposition if, immediately prior to
such event, the Holder had been the holder of a number of shares of Common Stock
equal to the number of shares as to which such Option shall be so exercised; or
     (ii) this Option may be canceled by the Committee as of the effective date
of any such merger, consolidation, liquidation, sale or disposition provided
that (x) notice of such cancellation shall be given to the Holder and (y) the
Holder shall have the right to exercise this Option to the extent that the same
is then exercisable or, if the Committee shall have accelerated the time for
exercise of this Option pursuant to clause (ii) above, in full during the 10-day
period preceding and including the effective date of such merger, consolidation,
liquidation, sale or disposition.
     Section 7. Rights of Holder. No person shall, by virtue of the granting of
this Option to the Holder, be deemed to be a holder of any shares purchasable
under this Option or to be entitled to the rights or privileges of a holder of
such shares unless and until this Option has been exercised with respect to such
shares and they have been issued pursuant to that exercise of this Option.
     The granting of this Option shall not impose upon the Company any
obligations to employ or to continue to employ the Holder; and the right of the
Company to terminate the employment of the Holder shall not be diminished or
affected by reason of the fact that this Option has been granted to the Holder.
     The Company shall, at all times while any portion of this Option is
outstanding, reserve and keep available, out of shares of its authorized and
unissued stock or reacquired shares, a sufficient number of shares of its Common
Stock to satisfy the requirements of this Option; shall comply with the terms of
this Option promptly upon exercise of the Option rights; and shall pay all fees
or expenses necessarily incurred by the Company in connection with the issuance
and delivery of shares pursuant to the exercise of this Option.
     Section 8. Transfer and Termination. This Option is not transferable by the
Holder otherwise than by will or under the laws of descent and distribution.
     This Option is exercisable, during the Holder’s lifetime, only by the
Holder, and by the Holder only while the Holder is an employee of the Company,
except that if the Holder’s employment by the Company terminates for any reason
other than death, Disability (as defined in the Plan), Normal Retirement (as
defined in the Plan) or for Cause, the Holder shall have the right to exercise
this Option within thirty (30) days after the date of such termination of
employment (but not later than the expiration date of this Option) with respect
to shares which were purchasable by the Holder by exercise of this Option at the
time of said termination of employment.
     As used herein, “Cause” shall mean (x) any material breach by the Holder of
any agreement to which the Holder and the Company (or any parent or subsidiary)
are both parties, (y) any act (other than retirement) or omission to act by the
Holder which may have a material and adverse effect on the business of the
Company (or any parent or subsidiary) or on the Holder’s ability to perform
services for the Company (or any parent or subsidiary), including, without
limitation, the commission of any crime (other than ordinary traffic
violations), or (z) any material misconduct or material neglect of duties by the
Holder in connection with the business or affairs of the Company (or any parent
or subsidiary) or any affiliate of the Company (or any such parent or
subsidiary).
     In the event of the Normal Retirement or Disability of the Holder while the
Holder is in the employ of the Company (or any parent or subsidiary of the
Company) and before the expiration date of this Option, this Option shall
terminate on the earlier of its expiration date or ninety (90) days from the
date of said Normal Retirement or Disability.
     In the event of the death of the Holder while the Holder is in the employ
of the Company (or any parent or subsidiary of the Company) and before the
expiration date of this Option, this Option shall terminate on the earlier of
its expiration date or a date one hundred eighty (180) days after the date of
his or her death. After the death of the Holder, the Holder’s executors,
administrators or any person or persons to whom the Holder’s Option has been
transferred by will or by the laws of descent and distribution shall have the
right to exercise this Option at any time prior to the earlier of the date of
expiration of this Option or one hundred eighty (180) days after the date of the
death of the original Holder.

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     Section 9. Lock-Up Agreement. The Holder agrees for a period of up to
180 days from the effective date of any registration of securities of the
Company (upon request of the Company or the underwriters managing any
underwritten offering of the Company’s securities), not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of any
shares issued pursuant to the exercise of such Option, without the prior written
consent of the Company or such underwriters, as the case may be.
     Section 10. Notification of Disqualifying Disposition. The Holder agrees to
notify the Company in writing immediately after making a Disqualifying
Disposition of any shares of Common Stock received pursuant to the exercise of
this Option. The Holder also agrees to provide the Company with any information
that the Company shall request concerning any such Disqualifying Disposition.
          10.1 Disqualifying Disposition. A “Disqualifying Disposition” shall
have the meaning specified in Section 421(b) of the Internal Revenue Code of
1986, as amended, or any successor provision; as of the date of grant of this
Option, a Disqualifying Disposition is any disposition (including any sale) of
such shares before the later of (i) the second anniversary of the date of grant
of this Option or (ii) the first anniversary of the date on which the Holder
acquired such shares by exercising this Option, provided that such holding
period requirements terminate upon the death of the Holder.
          10.2 Forfeiture of Favorable Tax Treatment. The Holder acknowledges
that he or she will forfeit the favorable income tax treatment otherwise
available with respect to the exercise of this Option if he or she makes a
Disqualifying Disposition of shares received upon exercise of this Option.
     Section 11. Withholding of Taxes.
          11.1 Upon a Disqualifying Disposition. If the Company in its
discretion determines that it is obligated to withhold tax with respect to a
Disqualifying Disposition of shares of Common Stock received on exercise of this
Option, the Holder agrees that the Company may withhold from the Holder’s wages,
or other amounts due to the Holder from the Company, the appropriate amount of
federal, state or local withholding taxes attributable to such Disqualifying
Disposition.
          11.2 Upon Treatment as a Non-Statutory Option. If any portion of this
Option is treated as a Non-Statutory Option (as defined in the Plan), the Holder
hereby agrees that the Company may withhold from the Holder’s wages, or other
amounts due to the Holder from the Company, the appropriate amount of federal,
state and local withholding taxes attributable to the Holder’s exercise of such
Non-Statutory Option.
          11.3 Election as to Method of Satisfying Withholding Obligation. At
the Holder’s election, the amount required to be withheld may be satisfied, in
whole or in part, by: (i) authorizing the Company to withhold from shares of
Common Stock to be issued pursuant to the exercise of such Non-Statutory Option
a number of shares with an aggregate fair market value that would satisfy the
minimum withholding amount due with respect to such exercise, or
(ii) transferring to the Company a sufficient number of mature shares of Common
Stock with an aggregate fair market value that would satisfy the minimum
withholding amount due.
          11.4 Agreement to Reimburse Company for Withholding Obligation. The
Holder further agrees that, if the Company does not withhold an amount from the
Holder’s wages sufficient to satisfy the Company’s withholding obligation, the
Holder will reimburse the Company on demand, in cash, for the amount
underwithheld.
     Section 12. Notice. Any notice to be given to the Company hereunder shall
be deemed sufficient if addressed to the Company and delivered by hand or by
mail to the Chief Financial Officer of the Company, 10 Milk Street, Suite 1100,
Boston , Massachusetts 02108, or such other address as the Company may hereafter
designate.
     Any notice to be given to the Holder hereunder shall be deemed sufficient
if addressed to and delivered in person to the Holder or when deposited in the
mail, postage prepaid, addressed to the Holder at the Holder’s address furnished
to the Company.
     Section 13. Government and Other Regulations. This Option is subject to all
laws, regulations and orders of any governmental authority which may be
applicable thereto and, notwithstanding any of the provisions hereof, the Holder
agrees that the Holder will not exercise the Option granted hereby nor will the
Company be obligated to issue or sell any shares of stock hereunder if the
exercise thereof or the issuance or sale of such shares, as the case may be,
would constitute a violation by the Holder or the Company of any such law,
regulation or order or any provision thereof. The Company shall not be

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obligated to take any affirmative action in order to cause the exercise of this
Option or the issuance or sale of shares pursuant hereto to comply with any such
law, regulation, order or provision.
     Section 14. Governing Law. This Option shall be governed by, and construed
and enforced in accordance with, the substantive laws of The Commonwealth of
Massachusetts.

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