EX-10.7



 Exhibit 10.7 
 ORION ENERGY SYSTEMS, INC. 
 2004 STOCK AND INCENTIVE AWARDS PLAN

 STOCK OPTION AWARD 
 [Name] 
 [Address] 
 You have been granted an option (your “Option”) to purchase shares of common stock (“Shares”) of Orion Energy Systems, Inc. (the “Company”) under the Orion Energy Systems,
Inc. 2004 Stock and Incentive Awards Plan (the “Plan”) with the following terms and conditions: 
  

			
	Grant Date:	  	            , 20        
	Type of Option:	  	[Nonqualified or Incentive Stock Option]
	Number of Option Shares:	  	________
	Exercise Price per Share:	  	U.S. $                
	Vesting:	  	 ________percent (___%) of your Option will vest and become exercisable on each of the first ______ anniversaries of the Grant Date,
provided you remain in employment or service during such period. Upon your termination of employment or service with the Company and its Affiliates, any senior officer of the Company may in his or her discretion cause any then-unvested portion of
your Option to become vested and exercisable in whole or in part if, based on the circumstances of the termination of employment or service, such officer deems such action to be in the best interests of the Company.

Any portion of your Option that is not vested upon such termination of employment or service and is not caused by a senior officer to become vested and
exercisable pursuant to the foregoing will immediately terminate upon such termination of employment or service.

	Termination Date:	  	 Your Option expires at, and cannot be exercised after, the close of business at the Company’s headquarters on the earliest to occur
of:
  

•    The tenth (10th) anniversary of the Grant Date;
  

•    One year after your termination of employment or service as a result of death or
disability (within the meaning of Code Section 22(e)(3)); or
  
 •    90 days after your termination of employment or service for any other reason, provided that (i) if you die during this 90-day period, the exercise period will be extended
until one year after the date of your death, and (ii) any senior officer of the Company may, in his or her discretion, extend this 90-day period for up to one year after such termination of employment if, based on the circumstances of the
termination of employment or service, such officer deems such an extension to be in the best interests of the Company.
  
 If the date this Option terminates as specified above falls on a day on which the stock market is not open for trading or on a date that you are prohibited by Company policy (such as an insider trading
policy) from exercising the Option, the termination date shall be automatically extended to the first available trading day following the original termination date, but not beyond the tenth
(10th) anniversary of the Grant
Date.










			
		  	 Notwithstanding the above, your entire Option is terminated immediately if the Company or an Affiliate terminates you for Cause (as
defined below), or if your employment or service is otherwise terminated at a time when you could be terminated for Cause, or you voluntarily terminate without the Company’s prior consent.

 
 For purposes of this Agreement, “Cause” means any of the following: (i)
failure to perform or observe any of the terms or provisions of any written employment agreement with the Company or an Affiliate, or if no written employment agreement exists, the gross dereliction of your employment duties; (ii) failure to comply
fully with the lawful directives of the Board of Directors of the Company; (iii) dishonesty; (iv) misconduct; (v) conviction of a crime involving moral turpitude; (vi) substance abuse; (vii) misappropriation of funds: (viii) disloyalty or
disparagement of the Company, and of its Affiliates, or any of their management or employees; or (ix) other proper cause determined in good faith by the Committee.

	Manner of Exercise:	  	 You may exercise your Option only to the extent vested and only if it has not terminated. To exercise your Option, you must complete the
“Notice of Stock Option Exercise” form provided by the Company and return it to the address indicated on the form. The form will be effective when it is received by the Company, but exercise will not be completed until you pay the total
exercise price and all applicable withholding taxes due as a result of the exercise to the Company.
  
 If someone else wants to exercise your Option after your death, that person must contact the Company and prove to the Company’s satisfaction that he or she is entitled to do so.

Your ability to exercise your Option may be restricted by the Company if required by applicable law.

 

	Restrictions on Resale:	  	 By accepting your Option, you agree not to sell any Shares acquired under your Option at a time when applicable laws, Company policies
or an agreement between the Company and its underwriters prohibit a sale.
  

	Restrictions on Transfer:	  	During your lifetime, this Option is only exercisable by you. You may not transfer, pledge or assign this Option, by operation of law or otherwise, except pursuant to your will or
the laws of descent and distribution. If you attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this Option, except as provided above, or in the event this Option is subject to levy or attachment, execution or similar process,
the Company may terminate this Option by providing written notice to you.
	Rescission of Exercise; Disgorgement of Option Gains:	  	If you are terminated for Cause, or if you are not terminated for Cause but the Committee later determines that you could have been terminated for Cause if all facts had been known
at that time, or if the Committee determines that, after your termination of employment, you have violated the provisions of any non-competition, non-solicitation, confidentiality or assignment of inventions agreement then in effect, then your
Option will terminate immediately on the date of such termination or determination, as applicable, and the Committee may, in its sole and absolute discretion, (i) rescind any notice of exercise submitted by you for which payment or the issuance of
Shares has not been completed, in which event any exercise price you have tendered will be promptly returned to you or retained by the Company as an offset as provided below, and/or (ii) notify you in writing within two (2) years after exercise of
all or any portion of the Option that any exercise made within the one (1) year period prior to your termination or prior to your breach of any non-competition, non-solicitation, confidentiality or assignment of inventions agreement, is rescinded.
Within ten (10) days after receiving such notice from the Company, you shall pay to the Company the amount of any cash payment received, or the value of any other gain realized, as a result of the rescinded exercise. Notwithstanding the foregoing,
the Company shall have the right to retain (as an offset against any amounts due hereunder), the exercise price and withholding amount tendered by you with respect to any rescinded exercise, and the Company shall have the right to offset against any
other amounts due from the Company to you the amount owed by you hereunder.


  
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	Notice of Sale:	  	 If your Option is designated as an incentive stock option, you must promptly report to the Secretary of the Company any disposition of
the Shares acquired under your Option that is made within two (2) years from the Grant Date or within twelve (12) months from the date you acquired the Shares (the “Notice Period”). In addition, the Company may, at any time during the
Notice Period, place a legend or legends on any certificate(s) for the Shares issued under your Option requesting the Company’s transfer agent to notify the Company of any transfer of the Shares.

 

	Miscellaneous:	  	 •       As a condition of the granting of your Option,
you agree, for yourself and your legal representatives or guardians, that this Stock Option Award shall be interpreted by the Committee and that any interpretation by the Committee of the terms of this Stock Option Award or the Plan and any
determination made by the Committee pursuant to this Stock Option Award or the Plan shall be final, binding and conclusive. Notwithstanding the foregoing, this Stock Option Award may not be amended, and the Company may not take any other action the
effect of which is, to reduce the Exercise Price per Share other than (i) pursuant to Section 6.4 of the Plan, and in accordance with Section 1.409A-1(b)(5)(v)(B) of the Treasury Regulations, or (ii) in connection with a transaction which is
considered the grant of a new option for purposes of Section 409A of the Code, provided that the new Exercise Price per Share is not less than Fair Market Value of a Share on the new grant date.

 

•       As a condition of the granting of your Option, except as required
by law, you agree not to disclose information regarding the existence, terms, or conditions of this Option to any person or entity whatsoever, including without limitation any members of the media (including, but not limited to, print journalists,
newspapers, radio, television, cable, satellite programs, or Internet media) or any Internet web page or “chat room,” or any other entity or person, with the exception of your spouse, accountant, tax advisor, and/or attorneys. Any
violation of this provision may result in immediate and complete forfeiture of all rights granted under this Option if so determined by the Committee.
  

•       As a condition of the granting of your Option, you acknowledge
and agree that this Stock Option Award and the Plan constitute the entire agreement of the parties with respect to the subject matter of this Stock Option Award. This Stock Option Award and the Plan supersede any and all other agreements or
representations, both verbal and written, between the parties to this Stock Option Award with respect to your Option. You represent and warrant that you have no other outstanding options to purchase Common Stock or any other security of the Company
other than your Option or any options previously granted and described in any agreement similar to this Stock Option Award, and you hereby release the Company from any claims and liabilities relating thereto.

 

•       This Stock Option Award may be executed in
counterparts.


 Your Option is granted under and governed by the terms and conditions of the Plan. Additional provisions regarding your
Option and definitions of capitalized terms used and not defined in your Option can be found in the Plan. 
 **************

 BY SIGNING BELOW AND ACCEPTING THIS STOCK OPTION AWARD, YOU AGREE TO ALL OF THE 

TERMS AND CONDITIONS DESCRIBED HEREIN AND IN THE PLAN. YOU ALSO ACKNOWLEDGE 

RECEIPT OF THE PLAN. 
  

					
	 	 	                     	 	 
	Authorized Officer	 		 	Optionee


  
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