Exhibit 10.45
 
ENER1, INC.
AMENDED AND RESTATED
2002 STOCK PARTICIPATION PLAN
 
The Board of Directors of Ener1, Inc. (the "Company") determined, pursuant to
resolutions dated August 19, 2008, November 18, 2008 and March 13, 2009, that it
was in the best interests of the Company to amend the Ener1, Inc. 2002 Stock
Participation Plan (the "Plan") as provided herein.  Therefore, effective as of
May 7, 2009, the Plan is amended and restated to read as follows:
 
1.
ESTABLISHMENT, EFFECTIVE DATE AND TERM

 
The Company established the Plan, effective April 15, 2002 (the "Effective
Date"), subject to approval of the Plan by the Company's shareholders, which was
subsequently obtained.  Unless earlier terminated pursuant to Section 9 hereof,
the Plan shall terminate on the tenth anniversary of the Effective
Date.  Capitalized terms used herein are defined in Exhibit 1 attached hereto.
 
2.
PURPOSE

 
The purpose of the Plan is to advance the interests of the Company by allowing
the Company to attract, retain and motivate Eligible Individuals by providing
them with an opportunity to acquire or increase a proprietary interest in the
Company and incentives to expend maximum effort for the growth and success of
the Company and the Company's subsidiaries.  It is intended that all Options be
exempt from the requirements of Internal Revenue Code Section 409A pursuant
to Treasury Regulations Section 1.409A-1(b)(5), and the Plan and all Option
Agreements shall be interpreted to reflect this intent.
 
3.
ELIGIBILITY

 
Options may be granted under the Plan to any Eligible Individual, provided that
Incentive Stock Options may only be granted to Section 424 Employees.
 
4.
ADMINISTRATION

 
(a)           Board. The Plan shall be administered by the Board, which shall
have the full power and authority to take all actions, and to make all
determinations required or provided for under the Plan, any Option granted or
any Option Agreement entered into under the Plan and all such other actions and
determinations not inconsistent with the specific terms and provisions of the
Plan deemed by the Board to be necessary or appropriate to the administration of
the Plan, any Option granted or any Option Agreement entered into hereunder. The
Board may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Option Agreement in the manner and to the
extent it shall deem expedient to carry the Plan into effect as it may determine
in its sole discretion. The decisions by the Board shall be final, conclusive
and binding with respect to the interpretation and administration of the Plan
and any Option under the Plan.
 
 
 

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(b)           Committees. The Board may, in its sole discretion, from time to
time appoint one or more Committees to perform such functions with respect to
the Plan as it may determine. Without limiting the foregoing, the Board may
provide that the role of the Committees shall be limited to making
recommendations to the Board concerning any determinations to be made and
actions to be taken by the Board pursuant to or with respect to the Plan, or the
Board may delegate to the Committees all functions related to the administration
of the Plan. The Board may add or remove members and fill vacancies on the
Committees or abolish Committees from time to time. The majority vote of a
Committee, or acts reduced to or approved in writing by a majority of the
members of a Committee, shall be the valid acts of the Committee. The Board
shall appoint an Outside Director Committee.
 
(c)           No Liability. No member of the Board or of the Committees shall be
liable for any action or determination made in good faith with respect to the
Plan, any Option granted or any Option Agreement entered into hereunder.
 
5.
COMMON STOCK

 
The capital stock of the Company that may be issued pursuant to Options granted
under the Plan shall be shares of Common Stock.  Such shares may be treasury
shares or authorized but unissued shares. The total number of shares of Common
Stock that may be issued pursuant to Options granted under the Plan shall be
976,643 shares (of which 41,162 shares remain as of May 7, 2009), subject to
adjustment as provided in the Plan.  If any Option expires, terminates, or is
canceled for any reason prior to exercise in full, the shares of Common Stock
that were subject to the unexercised portion of such Option shall be available
for future Options granted under the Plan.  Options granted under the Plan may
consist entirely of Incentive Stock Options, entirely of Non-qualified Stock
Options, or of a combination of the two types of Options.
 
6.
OPTIONS

 
(a)           Type of Options. Each Option granted under the Plan may be
designated by the Board, in its sole discretion, as either (i) an Incentive
Stock Option, or (ii) a Non-qualified Stock Option.  Options designated as
Incentive Stock Options that fail to continue to meet the requirements of Code
Section 422 shall be re-designated as Non-qualified Stock Options automatically
on the date of such failure to continue to meet such requirements without
further action by the Board.  In the absence of any designation, Options granted
under the Plan will be deemed to be Non-qualified Stock Options.
 
(b)           Grant of Options. Subject to the terms and conditions of the Plan,
the Board may from time to time, prior to the date of termination of the Plan,
grant to such Eligible Individuals as the Board may determine, Options to
purchase such number of shares of Common Stock on such terms and conditions as
the Board may determine.  The date on which the Board approves the grant of an
Option (or such later date as is specified by the Board) shall be considered the
date on which such Option is granted.  Any Option granted to a Covered Employee
shall be made by the Outside Director Committee, and the maximum number of
shares of Common Stock subject to Options that may be granted during any
calendar year under the Plan to any Covered Employee shall be 214,286.
 
 
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(c)           Option Agreements. All Options granted pursuant to the Plan must
be evidenced by an Option Agreement. Option Agreements may contain different
terms; provided, however, that all such Option Agreements shall comply with all
terms of the Plan.
 
(d)           Exercise Price. Subject to the limitations set forth in this Plan,
the Exercise Price of an Option shall be fixed by the Board and stated in each
Option Agreement.  Under no circumstances shall the Exercise Price for an Option
be less than the Fair Market Value of the Common Stock subject to the Option,
determined as of the Grant Date.  Incentive Stock Options shall be subject to
the additional Exercise Price rules in Subsection (f).
 
(e)           Limitations on Option Period. Options granted under the Plan and
all rights to purchase Common Stock thereunder shall terminate no later than the
tenth anniversary of the Grant Date of such Options, or on such earlier date as
may be stated in the Option Agreement relating to such Option.  In the case of
Options expiring prior to the tenth anniversary of the Grant Date, the Board may
in its discretion, at any time prior to the expiration or termination of said
Options, extend the term of any such Options for such additional period as it
may determine, but in no event beyond the earlier of (i) the latest date on
which the Option would have expired by its original terms under any
circumstances or (ii) ten (10) years from the Grant Date.
 
(f)           Limitations on Incentive Stock Options. Notwithstanding any other
provisions of this Plan, the following provisions shall apply with respect to
Incentive Stock Options granted pursuant to this Plan.
 
(i)           Section 424 Employees Only. Incentive Stock Options may only be
granted to Section 424 Employees. Subject to the terms and conditions of this
Plan and the Option Agreement (including all vesting provisions and option
periods), any and all Incentive Stock Options which an employee fails to
exercise within 90 days after the date said employee ceases to be a Section 424
Employee for reason other than death of Disability shall automatically be
classified as Non-qualified Stock Options to the extent that said Options
otherwise have not been terminated.
 
(ii)           Limitation on Grants. The aggregate Fair Market Value (determined
at the time such Incentive Stock Option is granted) of the shares of Common
Stock for which any individual may have Incentive Stock Options which first
become vested and exercisable in any calendar year (under all incentive stock
option plans of an Employer) shall not exceed $100,000. Options granted to such
individual in excess of the $100,000 limitation, and any Options issued
subsequently which first become vested and exercisable in the same calendar
year, shall be treated as Non-qualified Stock Options.
 
(iii)           Minimum Exercise Price. In no event may the Exercise Price of an
Incentive Stock Option be less than 100% of the aggregate Fair Market Value as
of the Grant Date of the total number of shares of Common Stock that are subject
to such Option.
 
 
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(iv)           Ten Percent Shareholder. Notwithstanding any other provision of
this Plan to the contrary, in the case of Incentive Stock Options granted to an
individual who, at the time the Option is granted, owns (after application of
the rules set forth in Code Section 424(d)) stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company, such
Incentive Stock Options (i) must have an Exercise Price that is at least 110% of
the aggregate Fair Market Value as of the Grant Date of the total number of
shares of Common Stock that are subject to such Option, and (ii) must not be
exercisable after the fifth anniversary of the Grant Date.
 
(g)           Vesting Schedule and Condition. No Options may be exercised prior
to the satisfaction of the conditions and vesting schedule provided for in the
Option Agreement relating thereto.  Notwithstanding the foregoing, any vesting
requirement or other condition on the exercise of an Option may be rescinded,
modified or waived by the Board at any time in its sole discretion so as to
permit the exercise of the Option at such time as the Board may determine;
provided, however, that such rescission, modification, or waiver does not cause
the Option to become subject to Code Section 409A.
 
(h)           Exercise. When the conditions to the exercise of an Option have
been satisfied, the Optionee may exercise the Option only in accordance with the
following provisions. The Optionee shall deliver to the Company a written notice
stating that the Optionee is exercising the Option and specifying the number of
shares of Common Stock which are to be purchased pursuant to the Option, and
such notice shall be accompanied by payment in full of the Exercise Price of the
shares for which the Option is being exercised, by one or more of the methods
provided for in this Plan. Said notice must be delivered to the Company at its
principal office and addressed to the attention of the Company’s Stock Option
Administrator. The minimum number of shares of Common Stock with respect to
which an Option may be exercised, in whole or in part, at any time shall be the
lesser of 100 shares or the maximum number of shares available for purchase
under the Option at the time of exercise. An attempt to exercise any Option
granted hereunder other than as set forth in this Plan shall be invalid and of
no force and effect.
 
(i)           Payment. Payment of the Exercise Price for the shares of Common
Stock purchased pursuant to the exercise of an Option shall be made by certified
or cashier’s check. Notwithstanding the foregoing, the Board may, in its sole
and absolute discretion and to the extent permitted by applicable law, permit
such payment to be made by one of the following methods or in any combination
thereof as it may determine:
 
(i)           by the delivery of a promissory note of the Optionee to the
Company on such terms as the Board shall specify in its sole and absolute
discretion;
 
(ii)           through the delivery to the Company of shares of Common Stock
previously owned by the Optionee for the requisite period necessary to avoid a
charge to the Company’s earnings for financial reporting purposes; such shares
shall be valued, for purposes of determining the extent to which the Exercise
Price has been paid thereby, at their Fair Market Value on the date of exercise;
without limiting the foregoing, the Board may require the Optionee to furnish an
opinion of counsel acceptable to the Board to the effect that such delivery
would not result in the grantee incurring any liability under Section 16(b) of
the Act;
 
 
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(iii)           if the Company is a Public Company at the time of exercise,
through a "cashless exercise sale and remittance procedure" pursuant to which
the Optionee shall concurrently provide irrevocable instructions (1) to a
brokerage firm approved by the Board to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds available on
the settlement date, sufficient funds to cover the aggregate exercise price
payable for the purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld by the Company by reason of
such exercise and (2) to the Company to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete the sale;
or
 
(iv)           through a "cashless exercise withholding procedure" pursuant to
which the Company shall withhold a sufficient number of shares of Common Stock
otherwise issuable to the Optionee upon exercise of the Option so that the Fair
Market Value of such withheld shares at such time will equal the sum of the
aggregate Exercise Price of the shares of Common Stock delivered to the Optionee
and withheld by the Company, plus all applicable Federal, state and local income
and employment taxes required to be withheld by the Employer by reason of such
exercise.
 
(j)           Issuance of Certificates. The Company shall deliver to the
Optionee a certificate evidencing his ownership of shares of Common Stock issued
pursuant to the exercise of an Option as soon as administratively practicable
after satisfaction of all conditions relating to the issuance of such
shares.  An Optionee shall not have any of the rights of a shareholder with
respect to Option Stock prior to satisfaction of all conditions relating to the
issuance of such Option Stock, and, except as expressly provided in this Plan,
no adjustment shall be made for dividends, distributions or other rights of any
kind for which the record date is prior to the date on which all such conditions
have been satisfied.
 
(k)           Use of Proceeds. The proceeds received by Company from the sale of
Common Stock pursuant to Options granted under the Plan shall constitute general
funds of the Company.
 
(l)           Transferability.
 
(i)           Incentive Stock Options. An Optionee may not Transfer an Incentive
stock Option other than by will or the laws of descent and distribution.
Incentive Stock Options may be exercised during the Optionee’s lifetime only by
the Optionee.
 
 
(ii)           Transferability of Non-qualified Stock Options. Unless otherwise
expressly permitted by the Board in its sole and absolute discretion, an
Optionee may not Transfer a Non-qualified Stock Option other than by will or the
laws of descent and distribution.
 
(iii)           Transfers in Violation Void. Any purported Transfer of an Option
in contravention of the provisions of this Plan shall have no force or effect
and shall be null and void, and the purported transferee of such Option shall
not acquire any rights with respect to such Option.
 
 
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(iv)           Certain Gratuitous Transfers. Without limiting the foregoing
provisions, the Board may in its sole and absolute discretion permit the
Transfer of a Non-qualified Stock Option without payment of consideration to a
member of the Optionee’s immediate family or to a trust or partnership whose
beneficiaries are members of the Optionee’s immediate family. In such case, said
Non-qualified Stock Option shall be exercisable only by the transferee approved
of by the Board. For purposes of this provision, an Optionee’s "immediate
family" shall mean the Optionee’s spouse, children and grandchildren.
 
(m)           Termination of Employment, Death or Disability. Unless otherwise
provided in an Option Agreement or by the Board, upon the termination of the
employment or other service of an Optionee with the Employer, the provisions of
this Section 6(m) shall apply.  Notwithstanding anything to the contrary, the
Board may provide, in its sole and absolute discretion, that following the
termination of employment or service of an Optionee with the Employer for any
reason other than for Cause, an Optionee may exercise an Option, in whole or in
part, at any time subsequent to such termination of employment or service and
prior to termination of the Option pursuant to Section 6(e) above, either
subject to or without regard to any vesting or other limitation on exercise
imposed pursuant to Section 6(g) above; provided, however, that such Option may
not be exercised after the earlier of (i) the latest date on which the Option
would have expired by its original terms under any circumstances or (ii) ten
(10) years from the Grant Date thereof.
 
(i)           General.  Upon the termination of the employment or other service
of an Optionee with the Employer, other than by reason of Cause, death or
Disability of such Optionee, any Option granted to such Optionee which has
vested as of the date upon which the termination occurs shall be exercisable, in
whole or in part, for a period not to exceed not to exceed sixty (60) days after
such termination (or such other period provided in the applicable Option
Agreement or by the Board in its discretion); provided, however, such Option may
not be exercised after the earlier of (i) the latest date on which the Option
would have expired by its original terms under any circumstances or (ii) ten
(10) years from the Grant Date thereof.  Subject to Section 6(g) above, upon
such termination, the Optionee’s unvested Options shall expire, and the Optionee
shall have no further right to purchase shares of Common Stock pursuant to such
unvested Option.  Unless otherwise determined by the Board, temporary absence
from employment or service because of illness, vacation, approved leaves of
absence, military service and transfer of employment shall not constitute a
termination of employment or service with the Company.
 
(ii)           Cause. Upon termination of the employment or other service of an
Optionee with the Employer for Cause, any Option granted to the Optionee shall
expire immediately and the Optionee shall have no further right to purchase
shares of Common Stock pursuant to such Options; provided, however, the Board
may, in its discretion, permit such Optionee to exercise part or all it his
Options to the extent vested as of the date upon which the termination occurs
for a period not to exceed thirty (30) days after such termination; provided,
however, such Option may not be exercised after the earlier of (i) the latest
date on which the Option would have expired by its original terms under any
circumstances or (ii) ten (10) years from the Grant Date thereof.  Subject to
Section 6(0g) above, upon such termination, the Optionee's unvested Options
shall expire, and the Optionee shall have no further right to purchase shares of
Common Stock pursuant to such unvested Option.
 
 
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(iii)           Disability. Upon termination the employment or other service of
an Optionee with the Employer by reason of Disability, any Option granted to
such Optionee which has vested as of the date upon which the termination occurs
shall be exercisable, in whole or in part, for a period not to exceed not to
exceed six (6) months after the date of such Optionee’s termination (or such
other period provided in the applicable Option Agreement or by the Board in its
discretion); provided, however, such Option may not be exercised after the
earlier of (i) the latest date on which the Option would have expired by its
original terms under any circumstances or (ii) ten (10) years from the Grant
Date thereof.  Upon such termination, the Optionee’s unvested Options shall
expire, and the Optionee shall have no further right to purchase shares of
Common Stock pursuant to such unvested Option.
 
(iv)           Death.  Upon a the termination the employment or other service of
an Optionee with the Employer by reason of death, any Option granted to such
Optionee which has vested as of the date upon which the termination occurs shall
be exercisable, in whole or in part, for a period not to exceed not to exceed
one (1) year after the date of such Optionee's death (or such other period
provided in the applicable Option Agreement or by the Board in its discretion);
provided, however, such Option may not be exercised after the earlier of (i) the
latest date on which the Option would have expired by its original terms under
any circumstances or (ii) ten (10) years from the Grant Date thereof.  Upon such
termination, the Optionee’s unvested Options shall expire, and the Optionee’s
estate, devisee, or heir at law (whichever is applicable) shall have no further
right to purchase shares of Common Stock pursuant to such unvested Option.
 
7.
RECAPITALIZATION, REORGANIZATIONS, CHANGE IN CONTROL AND OTHER CORPORATE EVENTS

 
(a)           Recapitalization. If the outstanding shares of Common Stock are
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company by reason of any
recapitalization, reclassification, reorganization (other than as described in
Section 10(b) below), stock split, reverse split, combination of shares,
exchange of shares, stock dividend or other distribution payable in capital
stock of the Company or other increase or decrease in such shares effected
without receipt of consideration by the Company occurring after the Effective
Date, an appropriate and proportionate adjustment shall be made by the Board
(i) in the aggregate number and kind of shares of Common Stock available under
the Plan, (ii) in the number and kind of shares of Common Stock issuable upon
exercise (or vesting) of outstanding Options granted under the Plan, and
(iii) in the Exercise Price per share of outstanding Options granted under the
Plan.  For the avoidance of doubt, the number of shares of Common Stock subject
to and reflected in this Plan takes into account the Company’s 7 for 1 reverse
stock split effectuated on April 24, 2008.
 
(b)           Reorganization. Unless otherwise provided in an Option Agreement,
in the event of a Reorganization of the Company, the Board may in its sole and
absolute discretion, provide on a case by case basis that (i) some or all
outstanding Options may become immediately exercisable or vested, without regard
to any limitation imposed pursuant to this Plan, (ii) some or all outstanding
Options shall terminate upon a Reorganization, provided however, that Optionee
shall have the right, immediately prior to the occurrence of such Reorganization
and during such reasonable period as the Board in its sole discretion shall
determine and designate, to exercise any vested Option in whole or in part, or
(iii) terminate all options in exchange for a cash payment equal to the excess
of the Fair Market Value of the share subject to the Options (to the extent then
exercisable) over the Exercise Price thereof. In the event that the Board does
not terminate an Option upon a Reorganization of the Company then each
outstanding Option shall upon exercise thereafter entitle the holder thereof to
such number of shares of Common Stock or other securities or property to which a
holder of shares of Common Stock would have been entitled to upon such
Reorganization.
 
 
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(c)           Change in Control.  Irrespective of what is provided in an Option
Agreement, in the event of a Change in Control of the Company, all outstanding
Options shall become immediately exercisable and vested, without regard to any
limitation imposed pursuant to this Plan or any Option Agreement.  If a
Reorganization of the Company also constitutes a Change of Control of the
Company, the provisions of this Section 7(c) shall govern, unless otherwise
determined by the Board.
 
(d)           Change in Status of Parent or Subsidiary. Unless otherwise
provided in an Option Agreement, in the event of a Change in Control or
Reorganization of a parent or a subsidiary, or in the event that a parent or
subsidiary ceases to be a "parent corporation" or "subsidiary corporation" as
defined in and in accordance with Section 424 of the Code, the Board may, in its
sole and absolute discretion, (i) provide on a case by case basis that some or
all outstanding Options held by an Optionee employed by or performing service
for such parent or subsidiary may become immediately exercisable or vested,
without regard to any limitation imposed pursuant to this Plan and/or (ii) treat
the employment or other services of an Optionee employed by such parent or
subsidiary as terminated (and such Optionee shall have the right to exercise his
or her Options in accordance with Section 6 of the Plan) if such Optionee is not
employed by the Company or any parent or subsidiary immediately after such
event. For purposes of this Section, the Board or Committee shall determine
whether an entity is a parent or subsidiary, in its sole and absolute discretion
 
(e)           Dissolution or Liquidation. Upon the dissolution or liquidation of
the Company, the Plan shall terminate and all Options outstanding hereunder
shall terminate. In the event of any termination of the Plan under this Section
10(e), each individual holding an Option shall have the right, immediately prior
to the occurrence of such termination and during such reasonable period as the
Board in its sole discretion shall determine and designate, to exercise such
Option in whole or in part, whether or not such Option was otherwise exercisable
at the time such termination occurs and without regard to any vesting or other
limitation on exercise imposed pursuant to Section 6(g) above.
 
(f)           Adjustments. Adjustments under this Section 7 related to stock or
securities of the Company shall be made by the Board, whose determination in
that respect shall be final, binding, and conclusive. No fractional shares of
Common Stock or units of other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole share or unit.
 
(g)           No Limitations. The grant of an Option pursuant to the Plan shall
not affect or limit in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate, dissolve or liquidate, or to sell
or transfer all or any part of its business or assets.
 
 
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8.
REQUIREMENTS OF LAW

 
(a)           Violations of Law. The Company shall not be required to sell or
issue any shares of Common Stock under any Option if the sale or issuance of
such shares would constitute a violation by the individual exercising the Option
or the Company of any provisions of any law or regulation of any governmental
authority, including without limitation any federal or state securities laws or
regulations. Any determination in this connection by the Board shall be final,
binding, and conclusive. The Company shall not be obligated to take any
affirmative action in order to cause the exercise of an Option or the issuance
of shares pursuant thereto to comply with any law or regulation of any
governmental authority.
 
(b)           Registration. At the time of any exercise of any Option, the
Company may, if it shall determine it necessary or desirable for any reason,
require the Optionee (or Optionee’s heirs, legatees or legal representative, as
the case may be), as a condition to the exercise or grant thereof, to deliver to
the Company a written representation of present intention to hold the shares for
their own account as an investment and not with a view to, or for sale in
connection with, the distribution of such shares, except in compliance with
applicable federal and state securities laws with respect thereto. In the event
such representation is required to be delivered, an appropriate legend may be
placed upon each certificate delivered to the Optionee (or Optionee’s heirs,
legatees or legal representative, as the case may be) upon his or her exercise
of part or all of the Option and a stop transfer order may be placed with the
transfer agent. Each Option shall also be subject to the requirement that, if at
any time the Company determines, in its discretion, that the listing,
registration or qualification of the shares subject to the Option upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of or in connection with, the issuance or purchase of the shares
thereunder, the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company in its
sole discretion. The Company shall not be obligated to take any affirmative
action in order to cause the exercisability or vesting of an Option, to cause
the exercise of an Option or the issuance of shares pursuant thereto to comply
with any law or regulation of any governmental authority.
 
(c)           Withholding. The Board may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of any taxes
that the Company is required by any law or regulation of any governmental
authority, whether federal, state or local, domestic or foreign, to withhold in
connection with the exercise of any Option including, but not limited to:
(i) the withholding of delivery of shares of Common Stock until the holder
reimburses the Company for the amount the Company is required to withhold with
respect to such taxes, (ii) the canceling of any number of shares of Common
Stock issuable in an amount sufficient to reimburse the Company for the amount
it is required to so withhold, (iii) withholding the amount due from any such
person’s wages or compensation due to such person, or (iv) requiring the
Optionee to pay the Company cash in the amount the Company is required to
withhold with respect to such taxes.
 
 
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(d)           Governing Law.  This Plan shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York applicable to
contracts made and to be performed entirely within the State of New York.  Each
party subject to this Plan hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City and County of
New York for the adjudication of any dispute hereunder, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper.
 
9.
AMENDMENT AND TERMINATION OF THE PLAN

 
The Board may, at any time and from time to time, amend, suspend or terminate
the Plan as to any shares of Common Stock as to which Options have not been
granted; provided, however, that the approval by a majority of the votes present
and entitled to vote at a duly held meeting of the shareholders of the Company
at which a quorum representing a majority of all outstanding voting stock is,
either in person or by proxy, present and voting on the amendment, or by written
consent in accordance with applicable state law and the Articles of
Incorporation and By-Laws of the Company shall be required for any amendment (i)
that changes the requirements as to Eligible Individuals to receive Options
under the Plan, (ii) that increases the maximum number of shares of Common Stock
in the aggregate that may be subject to Options that are granted under the Plan
(except as permitted under Section 7 hereof), or (iii) if approval of such
amendment is necessary to comply with federal or state law (including without
limitation Section 162(m) of the Code and Rule 16b-3 under the Exchange Act) or
with the rules of any stock exchange or automated quotation system on which the
Common Stock may be listed or traded. Except as permitted under Section 7
hereof, no amendment, suspension or termination of the Plan shall, without the
consent of the holder of an Option, alter or impair rights or obligations under
any Option theretofore granted under the Plan.
 
10.
DISCLAIMER OF RIGHTS

 
No provision in the Plan, any Option granted or any Option Agreement entered
into pursuant to the Plan shall be construed to confer upon any individual the
right to remain in the employ of or service with an Employer or to interfere in
any way with the right and authority of an Employer either to increase or
decrease the compensation of any individual, including any Option holder, at any
time, or to terminate any employment or other relationship between any
individual and the Employer.  A holder of an Option shall not be deemed for any
purpose to be a shareholder of the Company with respect to such Option except to
the extent that such Option shall have been exercised with respect thereto and,
in addition, a stock certificate shall have been issued theretofore and
delivered to the holder.  No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as expressly provided in Section 7 hereof.
 
11.
NONEXCLUSIVITY OF THE PLAN

 
The adoption of the Plan shall not be construed as creating any limitations upon
the right and authority of the Board to adopt such other incentive compensation
arrangements (which arrangements may be applicable either generally to a class
or classes of individuals or specifically to a particular individual or
individuals) as the Board in its discretion determines desirable, including,
without limitation, the granting of stock options or stock appreciation rights
other than under the Plan.
 
 
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12.
SEVERABILITY

 
If any provision of the Plan or any Option Agreement shall be determined to be
illegal or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction.
 
13.
NOTICES

 
Any communication or notice required or permitted to be given under the Plan
shall be in writing, and mailed by registered or certified mail or delivered by
hand, if to the Company, to its principal place of business, attention: Stock
Option Administrator, and if to the holder of an Option, to the address as
appearing on the records of the Company.
 
 
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EXHIBIT 1
 
Definitions Section
 
"Board" means the Board of Directors of the Company.
 
"Cause" means (i) failure or refusal of the Optionee to perform the duties and
responsibilities that the Employer requires to be performed by him, (ii) gross
negligence or willful misconduct by the Optionee in the performance of his
duties, (iii) commission by the Optionee of an act of dishonesty affecting the
Employer, or the commission of an act constituting common law fraud or a felony,
or (iv) the Optionee’s commission of an act (other than the good faith exercise
of his business judgment in the exercise of his responsibilities) resulting in
material damages to the Employer.  Notwithstanding the above, if an Optionee and
the Employer have entered into an employment or consulting agreement which
defines the term "Cause" for purposes of such employment or consulting
agreement, "Cause" shall be defined pursuant to the definition in such
employment or consulting agreement with respect to such Optionee’s Options. The
Board shall determine whether Cause exists for purposes of this Plan.
 
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
 
"Company" means Ener1, Inc, a Florida corporation.
 
"Change in Control" shall be deemed to occur with respect to an entity if a
Person or a group of Persons shall acquire direct or indirect beneficial
ownership (whether as a result of stock ownership, revocable or irrevocable
proxies or otherwise) of securities of such entity pursuant to a transaction or
a series of related transactions, such that after the consummation and as a
result of such transaction(s), the Persons constituting all of the equity
holders of such entity immediately prior to the commencement of such
transaction(s) fail to directly or indirectly own, immediately after the
consummation of such transaction(s), more than 50% of (i) the total combined
voting power with respect to the election of directors of such entity or (ii)
the issued and outstanding common equity of such entity (or surviving entity, in
the case of a merger, consolidation, asset sale or similar transaction).
 
"Committees" means the committees appointed by the Board pursuant to
Section 4(b) herein.
 
"Common Stock" means common stock, with $.01 par value per share, of the
Company.
 
"Covered Employee" means a "covered employee" as defined in Section 162(m)(3) of
the Code.
 
"Disability" means a "permanent and total disability" within the meaning of
Section 22(e)(3) of the Code.
 
"Effective Date" has the meaning ascribed thereto in Section 1.
 
 
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"Eligible Individual" means any employee, officer, or consultant of an Employer,
as determined by the Board from time to time on the basis of their importance to
the business of the Employers.
 
"Employers" means the Company and all entities whose financial statements are
required to be consolidated with the financial statements of the Company
pursuant to United States generally accepted accounting principles, and Employer
means any of such entities, including the Company.
 
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
 
"Exercise Price" means the purchase price of each share of Common Stock subject
to an Option.
 
"Fair Market Value" shall mean, if the Common Stock is then listed on any
national securities exchange, the mean between the high and low sales price, if
any, on such exchange on the last trading day immediately prior to the Grant
Date, or if none, shall be determined by taking a weighted average of the means
between the highest and lowest sales price on the nearest date before and the
nearest date after the Grant Date in accordance with Treasury Regulations
Section 25.2512-2; provided, however, that when granting Incentive Stock
Options, the Board shall determine fair market value in accordance with the
provisions of Section 422 of the Code. If the Common Stock is not listed on any
such exchange, the fair market value shall be the mean between the high and low
sales price, if any, as reported in the National Association of Securities
Dealers Automated Quotation System National Market System ("NASDAQ/NMS”) for the
last trading day immediately prior to the Grant Date, or if none, shall be
determined by taking a weighted average of the means between the highest and
lowest sales price on the nearest date before and the nearest date after the
Grant Date in accordance with Treasury Regulations Section 25.2512-2.  If the
Common Stock is not then either listed on any such exchange or quoted in
NASDAQ/NMS, the Fair Market Value shall be the mean between the high and low
sales price of our common stock as reported by the OTC Bulletin Board for the
trading day immediately preceding the Grant Date, or if none, shall be
determined by taking a weighted average of the means between the highest and
lowest sales prices on the nearest date before and the nearest date after the
Grant Date in accordance with Treasury Regulations Section 25.2512-2.  If the
Fair Market Value cannot be determined under the preceding three sentences, it
shall be determined in good faith by the Board.
 
"Grant Date" means the date on which an Option is granted to an Eligible
Individual, as determined pursuant to the applicable provisions of the Code and
the regulations thereunder.
 
"Incentive Stock Option" means an "incentive stock option" within the meaning of
Code Section 422.
 
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended.
 
"Non-qualified Stock Option" means a non-qualified stock option which is not
intended to meet the requirements of Code Section 422.
 
"Option" shall mean an option to purchase Common Stock granted pursuant to
Section 6.
 
 
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"Option Agreement" means a written agreement, executed by the Company and by the
Optionee, in such forms as the Board shall determine, which sets forth the terms
of an Option grant.
 
"Optionee" shall mean an Eligible Individual to whom an Option is granted to
pursuant to the terms of the Plan.
 
"Outside Director Committee" means a Committee consisting of not less than two
members of the Board, none of whom shall be an officer or other salaried
employee of an Employer, and each of whom shall qualify in all respects as a
"non-employee director" as defined in Rule 16b-3 under the Exchange Act, and as
an "outside director" for purposes of Code Section 162(m)
 
"Person" shall mean any person, corporation, partnership, joint venture or other
entity or any group (as such term is defined for purposes of Section 13(d) of
the Exchange Act), other than a Parent or Subsidiary, and "beneficial ownership"
shall be determined in accordance with Rule 13d-3 under the Exchange Act.
 
"Plan" means the Ener1, Inc. 2002 Stock Participation Plan.
 
"Public Company" means a "publicly held corporation" as defined in Section
162(m)(2) of the Code.
 
"Reorganization" of an entity shall be deemed to occur if such entity is a party
to a merger, consolidation, reorganization, or other business combination with
one or more entities in which said entity is not the surviving entity, if such
entity disposes of substantially all of its assets, or if such entity is a party
to a spin-off, split-off, split-up or similar transaction; provided, however,
that the transaction shall not be a Reorganization, if the Company, or any
entity whose financial statements are required to be consolidated with the
financial statements of the Company pursuant to United States generally accepted
accounting principles is the surviving entity.
 
"Section 424 Employee" means an employee of the Company or any "subsidiary
corporation" of the Company or "parent corporation" of the Company, as such
terms are defined in and in accordance with Code Section 424.  The term
Section 424 Employees also includes employees of a corporation issuing or
assuming a stock option in a transaction to which Code Section 424(a) applies.
 
"Transfer" means to assign, encumber, pledge, transfer, gift, bequest or
otherwise dispose in any way whatsoever.
 
 
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