4 West
Rockland Road, 1st Floor, Montchanin, Delaware 19710

     

    Phone:  (302)
656-1708    Fax:  (302) 994-3086

     

    
      
        
Certificate of Stock Option
Award

    

    
      Under
the Acorn Energy, Inc. 2006 Stock Incentive Plan

       

      
        

      

    

    JOHN
A. MOORE

    c/o Acorn
Energy, Inc.

    4 West
Rockland Road, 1st Floor

    Montchanin,
Delaware 19710

    


    You have
been granted an option ("Option") to buy shares of the Common Stock of Acorn
Energy, Inc. stock as follows:

    


    
      
        	
                Date
      of Grant

              	
                March
      4, 2008

              
	
                Stock
      Option Agreement

              	
                Nonqualified
      Stock Option

              
	
                Option
      Price per Share

              	
                $5.11

              
	
                Total
      Number of Options Granted

              	
                200,000

              
	
                Expiration
      Date

              	
                March
      4, 2018

              


      

    

    
      
        
          
            
              
                
                  
                    
                      
                        	 	 	 	 
	 	 	
                                VESTING
      SCHEDULE

                              	 
	
                                On or After

                              	 	
                                Options Available

                                For Exercise

                              	 	 	
                                Cumulative Amount of

                                of Options Available 

                                For Exercise

                              	 
	
                                March 4,
      2008

                              	 	 	0	 	 	 	0	 
	
                                June
      4, 2008

                              	 	 	12,500	 	 	 	12,500	 
	
                                September
      4, 2008

                              	 	 	12,500	 	 	 	25,000	 
	
                                December
      4, 2008

                              	 	 	12,500	 	 	 	37,500	 
	
                                March
      4, 2009

                              	 	 	12,500	 	 	 	50,000	 
	
                                June
      4, 2009

                              	 	 	12,500	 	 	 	62,500	 
	
                                September
      4, 2009

                              	 	 	12,500	 	 	 	75,000	 
	
                                December
      4, 2009

                              	 	 	12,500	 	 	 	87,500	 
	
                                March
      4, 2010

                              	 	 	12,500	 	 	 	100,000	 
	
                                June
      4, 2010

                              	 	 	12,500	 	 	 	112,500	 
	
                                September
      4, 2010

                              	 	 	12,500	 	 	 	125,000	 
	
                                December
      4, 2010

                              	 	 	12,500	 	 	 	137,500	 
	
                                March
      4, 2011

                              	 	 	12,500	 	 	 	150,000	 
	
                                June
      4, 2011

                              	 	 	12,500	 	 	 	162,500	 
	
                                September
      4, 2011

                              	 	 	12,500	 	 	 	175,000	 
	
                                December
      4, 2011

                              	 	 	12,500	 	 	 	187,500	 
	
                                March
      4, 2012

                              	 	 	12,500	 	 	 	200,000	 


                      

                    

                  

                

              

            

          

        

      

    

    


    By your
signature and Acorn’s signature below, you and Acorn agree that this Option is
granted under and governed by the terms and conditions of Acorn’s Stock Option
Agreement and the 2006 Stock Incentive Plan, which are attachments hereto and
are made a part hereof.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    4 West
Rockland Road, 1st Floor, Montchanin, Delaware 19710

     

    Phone:  (302)
656-1708    Fax:  (302) 994-3086

     

    Attachments:

    


    1.           Stock
Option Award Agreement (dated March 4, 2008).

    
      	
              2.

            	
              Acorn
      Energy, Inc. 2006 Stock Incentive
Plan.

            


    

    


    
      
        
          
            
              	
                      ACORN ENERGY, INC.

                    	 
      	
                      OPTIONEE

                    
	 
      	 
      	 
      	 
      
	
                      By:

                    	    
      	 
      	   
      
	 
      	
                      Name: Michael Barth

                    	 
      	
                      John
      A. Moore

                    
	 
      	
                      Title:
      Chief Financial Officer

                    	 
      	 
      


            

          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    NONQUALIFIED
OPTION AWARD AGREEMENT

     

    (Issued
Pursuant to the Acorn Energy, Inc. 2006 Stock Incentive Plan)

    


    THIS
OPTION AWARD AGREEMENT ("Agreement"), effective as of the date (the "Effective
Date") set forth in the Certificate to which this Agreement is attached (the
"Certificate"), represents the grant of a nonqualified option ("Option") by
Acorn Energy, Inc., a Delaware corporation (the "Company"), to John A. Moore
(the "Participant"), subject to the terms and conditions set forth below and
pursuant to the provisions of the Company’s 2006 Stock Incentive Plan adopted by
the Company's Board of Directors on February 8, 2007 (the
"Plan").  The Option granted hereby is intended to be an "NQSO" as
such term is defined in the Plan and is not intended to be an "Incentive Option"
as such term is defined in the Plan.

     

    All
capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Plan. The parties hereto agree as follows:

     

    1. General Option Grant
Information. The individual named in the Certificate has been selected to
be a Participant in the Plan and receive a nonqualified option grant as
specified in the Certificate.

    


    2. Grant of Option. The Company
hereby grants to the Participant an Option to purchase the number of Shares set
forth in the Certificate, exercisable at the stated Option Price, which is equal
to or greater than one hundred percent (100%) of the Fair Market Value of a
Share on the Grant Date specified in the Certificate, as determined in the
manner and subject to the terms and conditions of the Plan and this
Agreement.

     

    3. Option Term. The term of this
Option begins as of the Effective Date and continues through the Expiration Date
as specified in the Certificate, unless sooner terminated in accordance with the
terms of this Agreement.

     

    4. Vesting Period. (a) In General. Subject to
the terms of this Agreement and the Plan, this Option shall vest and be
exercisable as indicated in the Certificate, subject to accelerated vesting in
accordance with the terms of the Employment Agreement dated March 4, 2008
between the Participant and the Company (the “Employment Agreement”). For the
specified vesting to occur on any vesting date set forth therein, the
Participant must be continuously employed by the Company from the Effective Date
through such vesting date. Except as may otherwise be provided herein or in the
Employment Agreement, if the Participant's employment terminates before the last
vesting date set forth in the Certificate, the portion of the Option granted
hereby that is unvested as of the date of termination shall be automatically
forfeited.

    


    (b) No Partial
Vesting.  Except as may be otherwise set forth herein or in the
Plan, in no event shall the Participant have any rights to exercise any portion
of the Option granted hereunder prior to the date such portion vests pursuant to
the Vesting Schedule set forth in the Certificate.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Change of
Control.  Notwithstanding the vesting provisions set forth in
paragraph (a) above, upon the consummation of a Change of Control, this Option
shall automatically become 100% vested and exercisable and shall remain
exercisable through the Expiration Date.  As used herein, “Change of
Control” shall have the meaning set forth in the Employment
Agreement.

    


    5. Exercise. The Participant, or
the Participant's representative upon the Participant's death or disability, may
exercise this Option at any time prior to the termination of the Option, subject
to and as provided in Sections 3 and 8.

     

    6. How to Exercise. This Option
shall be exercised by written notice to the Committee or such other
administrator appointed by the Committee, specifying the number of Shares
subject to this Option Participant desires to exercise. The Option Price for the
number of Shares with respect to which this Option is being exercised shall be
payable to the Company in full: (a) in cash or its equivalent, (b) by cashless
(broker-assisted) exercise; or (c) by any other method approved or accepted by
the Committee in its sole discretion, including, without limitation, net
exercise. In no event may the Option be exercised for a fraction of a
share.

     

    Unless
otherwise determined by the Committee, all cash payments under all of the
methods indicated above shall be paid in United States dollars.

     

    7. Nontransferability. (a) In General. Except as may
be provided in Section 7(b) below, this Option may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution, except as provided in the Plan. No
assignment or transfer of this Option in violation of this Section 7, whether
voluntary or involuntary, by operation of law or otherwise, except by will or
the laws of descent and distribution or as otherwise required by applicable law,
shall vest in the assignee or transferee any interest whatsoever.

    


    (b) Transfers With The Consent of
the Committee. With the prior written consent of the Committee, the
Option granted hereby may be transferred by the Participant to any person or
entity specified in such prior written consent (each, a "Permitted Assignee");
provided, however, that if such consent is granted, the Permitted Assignee shall
be subject to the terms of this Agreement and the Plan unless an exception is
granted in writing by the Committee.

    


    8. Termination of Option.
(a) General. Except as
provided in paragraphs (b) and (c) below, in the event of the termination of
Participant's employment with the Company, vesting (including accelerated
vesting) and exercisability of this Option shall be governed by the terms of the
Employment Agreement.

    


    (b) Death. In the event the
Participant dies while employed by the Company, the Option to the extent not
previously expired or exercised shall, to the extent vested and exercisable on
the date of death, be exercisable by the estate of such Participant or by any
person who acquired such Option by bequest or inheritance, or by the Permitted
Assignee, at any time within 18 months after the death of the Participant,
unless earlier terminated pursuant to its terms, provided, however, that in no
instance may the term of the Option, as so extended, exceed the date of
expiration set forth in Section 3 above.


    
      
         


      

      
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    (c) Disability. In the event the
Participant’s employment with the Company terminates on account of Disability,
the Participant, or his guardian or legal representative, or a Permitted
Assignee, shall have the unqualified right to exercise the vested portion of the
Option, to the extent not previously exercised or expired, as of the first date
of Disability (as determined in the sole discretion of the Committee), at any
time within 18 months after the first date of Disability, unless earlier
terminated pursuant to its terms, provided, however, that in no instance may the
term of the Option, as so extended, exceed the date of expiration set forth in
Section 3 above. For purposes of this Agreement, “Disability” shall have the
meaning set forth in the Employment Agreement.

    


    9. Administration. This
Agreement and the rights of the Participant hereunder and under the Certificate
are subject to all the terms and conditions of the Plan, as the same may be
amended from time to time, as well as to such rules and regulations as the
Committee may adopt for administration of the Plan. It is expressly understood
that the Committee is authorized to administer, construe, and make all
determinations necessary or appropriate to the administration of the Plan, this
Agreement and the Certificate, all of which shall be binding upon the
Participant. Any inconsistency between the Agreement or the Certificate (on the
one hand) and the Plan (on the other hand) shall be resolved in favor of the
Plan.

    


    10. Reservation of Shares. The
Company hereby agrees that at all times there shall be reserved for issuance
and/or delivery upon exercise of this Option such number of Shares as shall be
required for issuance or delivery upon exercise hereof.

     

    11. Adjustments. The terms of
this Option, including the number and kind of underlying shares as well as the
Option Price, shall be subject to adjustment under the circumstances and in
accordance with the provisions of Section 4.4 and 17.2 of the
Plan.  This Option is also subject to cancellation under the
circumstances and in accordance with the provisions of Section 4.4 of the
Plan.

    


    12. Amendment. Except to the
extent necessary to avoid the imposition of additional tax and/or interest under
Section 409A of the Code with respect to Awards that are treated as nonqualified
deferred compensation, no termination, amendment, suspension, or modification of
the Plan or this Agreement shall adversely affect in any material way the Option
granted under this Agreement without the written consent of the Participant
holding such Options. Notwithstanding the foregoing, the Committee may make
adjustments to the Option granted under this Agreement to take account of
certain events as contemplated by Sections 4.4 and 17.2 of the
Plan.

     

    13. Notices. Any notice which
either party hereto may be required or permitted to give to the other shall be
in writing, and may be delivered personally or by mail, postage prepaid, or
overnight courier, addressed as follows: if to the Company, at its office at 4
West Rockland Road, 1st Floor, Montchanin, Delaware  19710, Attn:
Michael Barth, CFO, or at such other address as the Company by notice to the
Participant may designate in writing from time to time; and if to the
Participant, at the address shown below his or her signature on the Certificate,
or at such other address as the Participant by notice to the Company may
designate in writing from time to time. Notices shall be effective upon
receipt.

     

    
      
        
        

      

      
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    14. Withholding Taxes. The Company
shall have the right to withhold from wages or other amounts otherwise payable
to the Participant (or a Permitted Assignee thereof), or otherwise require such
Participant or Permitted Assignee to pay, any Withholding Taxes arising as a
result of the grant or exercise of this Option, or any other taxable event
occurring pursuant to the Plan, this Agreement or the
Certificate.  If, notwithstanding the foregoing, the Participant (or a
Permitted Assignee thereof) shall fail to actually or constructively make such
tax payments as are required, the Company (or its Affiliates or Subsidiaries)
shall, to the extent permitted by law, have the right to deduct any such
Withholding Taxes from any payment of any kind otherwise due to such Participant
or to take such other action as may be necessary to satisfy such Withholding
Taxes. In satisfaction of the requirement to pay Withholding Taxes, the
Participant (or Permitted Assignee) may make a written election, which may be
accepted or rejected in the discretion of the Committee, (i) to have withheld a
portion of any Shares or other payments then issuable to the Participant (or
Permitted Assignee) pursuant to any Award, or (ii) to tender other Shares to the
Company (either by actual delivery or attestation, in the sole discretion of the
Committee, provided that, except as otherwise determined by the Committee, the
Shares that are tendered must have been held by the Participant for at least six
(6) months prior to their tender to satisfy the Option Price or have been
purchased on the open market), in either case having an aggregate Fair Market
Value equal to the Withholding Taxes.

    


    15. Registration; Legend. The
Company may postpone the issuance and delivery of Shares upon any exercise of
this Option until (a) the admission of such Shares to listing on any stock
exchange or exchanges on which Shares of the Company of the same class are then
listed and (b) the completion of such registration or other qualification of
such Shares under any state or federal law, rule or regulation as the Company
shall determine to be necessary or advisable. The Participant shall make such
representations and furnish such information as may, in the opinion of counsel
for the Company, be appropriate to permit the Company, in light of the then
existence or non-existence with respect to such Shares of an effective
Registration Statement under the Securities Act of 1933, as amended, to issue
the Shares in compliance with the provisions of that or any comparable
act.

    


    The
Company may cause the following or a similar legend to be set forth on each
certificate representing Shares or any other security issued or issuable upon
exercise of this Option unless counsel for the Company is of the opinion as to
any such certificate that such legend is unnecessary:

    


    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS
ESTABLISHED BY AN OPINION FROM COUNSEL TO THE COMPANY.

    


    
      
        
        

      

      
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    16. Miscellaneous. (a) Neither
this Agreement nor the Certificate shall confer upon the Participant any right
to continuation of employment by the Company, nor shall this Agreement interfere
in any way with the Company's right to terminate the Participant's employment at
any time.

    


    (b) The
Participant shall have no rights as a stockholder of the Company with respect to
the Shares subject to this Agreement until such time as the purchase price has
been paid, and the Shares have been issued and delivered to the
Participant.

    


    (c) This
Agreement and the Certificate shall be subject to all applicable laws, rules,
and regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

     

    (d) To
the extent not preempted by federal law, this Agreement and the Certificate
shall be governed by, and construed in accordance with, the laws of the State of
New York, without regard to the principles of conflicts of law which might
otherwise apply.  The Participant submits to the exclusive
jurisdiction and venue of the federal or state courts of New York, as determined
by the Company in its sole discretion, to resolve any and all issues that may
arise out of or relate to the Plan, this Agreement or the
Certificate.

     

    (e) All
obligations of the Company under the Plan, this Agreement and the Certificate
with respect to this Option shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.

     

    (f) The
provisions of this Agreement and the Certificate are severable and if any one or
more provisions are determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions shall nevertheless be binding and
enforceable.

     

    (g) By
accepting this Award or other benefit under the Plan, the Participant and each
person claiming under or through the Participant shall be conclusively deemed to
have indicated their acceptance and ratification of, and consent to, any action
taken under the Plan by the Company, the Board or the Committee.

    


    (h) The
Participant, every person claiming under or through the Participant, and the
Company hereby waives to the fullest extent permitted by applicable law any
right to a trial by jury with respect to any litigation directly or indirectly
arising out of, under, or in connection with the Plan, this Agreement or the
Certificate.

    


    
      
        
        

      

      
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    17. Exculpation. This Option
and all documents, agreements, understandings and arrangements relating hereto
have been issued on behalf of the Company by officers acting on its behalf, and
not by any person individually. None of the Directors, officers or stockholders
of the Company, nor the directors, officers or stockholders of any subsidiary or
affiliate of the Company, shall be bound or have any personal liability
hereunder. Each party hereto shall look solely to the assets of the Company for
satisfaction of any liability of the Company in respect of this Option and all
documents, agreements, understanding and arrangements relating hereto and will
not seek recourse or commence any action against any of the Directors, officers
or stockholders of the Company or any of the directors, officers or stockholders
of any subsidiary or affiliate of the Company, or any of their personal assets
for the performance or payment of any obligation hereunder or thereunder. The
foregoing shall also apply to any future documents, agreements, understandings,
arrangements and transactions between the parties hereto.

     

    18. Captions. The captions in
this Agreement are for convenience of reference only, and are not intended to
narrow, limit or affect the substance or interpretation of the provisions
contained herein.


    
      
         


      

      
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