Exhibit 4.1


 


ASCENT
SOLAR TECHNOLOGIES, INC.

SECOND AMENDED AND RESTATED

2005 STOCK OPTION PLAN

(Approved by Board of Directors on May 2, 2008;

Adopted by Stockholders on July 1, 2008)


 


1.     Purposes
of the Plan.     The purposes of this 2005 Stock
Option Plan are:


 


·     to attract and retain the best available personnel;


 


·     to provide additional incentive to
Employees, Directors and Consultants; and


 


·     to promote the success of the Company’s
business.


 


        Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant.


 


2.     Definitions.
    As used herein, the following definitions shall apply:


 


        (a)   “
Administrator “ means the Board
or any of its Committees as shall be administering the Plan, in accordance with
Section 4 of the Plan.


 


        (b)   “
Applicable Laws “ means the
requirements relating to the administration of stock option plans under U. S.
state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any foreign country or jurisdiction where
Options are, or will be, granted under the Plan.


 


        (c)   “
Board “ means the Board of Directors
of the Company.


 


        (d)   “
Code “ means the Internal Revenue
Code of 1986, as amended.


 


        (e)   “
Committee “ means a committee of
Directors appointed by the Board in accordance with Section 4 of the Plan.


 


        (f)    “
Common Stock “ means the common
stock of the Company.


 


        (g)   “
Company “ means Ascent Solar
Technologies, Inc., a Delaware corporation.


 


        (h)   “
Consultant “ means any person,
including an advisor, engaged by the Company or a Parent or Subsidiary to render
services to such entity.


 


        (i)    “
Director “ means a member of the
Board.


 


        (j)    “
Disability “ means total and
permanent disability as defined in Section 22(e)(3) of the Code.


 


        (k)   “
Employee “ means any person,
including Officers and Directors, employed by the Company or any Parent or
Subsidiary of the Company. A Service Provider shall not cease to be an Employee
in the case of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. For purposes of Incentive Stock Options, no such
leave may exceed one hundred eighty (180) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, on the one hundred eighty-first (181 st ) day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a director’s fee by the Company shall be
sufficient to constitute “employment” by the Company.


 


        (l)    “
Exchange Act “ means the
Securities Exchange Act of 1934, as amended.


 


        (m)  “
Fair Market Value “ means, as of
any date, the value of Common Stock determined as follows:


 


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        (i)    If
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the Nasdaq Global Market or The
Nasdaq Capital Market, its Fair Market Value shall be the closing sales price
for such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system for the day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;


 


        (ii)   If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, the Fair Market Value of a Share of Common
Stock shall be the mean between the high bid and low asked prices for the
Common Stock on the day of determination, as reported in The Wall Street Journal or such other source
as the Administrator deems reliable; or


 


        (iii)  In
the absence of an established market for the Common Stock, the Fair Market
Value shall be determined in good faith by the Administrator.


 


        (n)   “
Incentive Stock Option “ means an
Option intended to qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder.


 


        (o)   “
Nonstatutory Stock Option “ means
an Option not intended to qualify as an Incentive Stock Option.


 


        (p)   “
Notice of Grant “ means a written
or electronic notice evidencing certain terms and conditions of an individual
Option grant. The Notice of Grant is part of the Option Agreement.


 


        (q)   “
Officer “ means a person who is
an officer of the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder.


 


        (r)   “
Option “ means a stock option
granted pursuant to the Plan.


 


        (s)   “
Option Agreement “ means an
agreement between the Company and an Optionee evidencing the terms and
conditions of an individual Option grant. The Option Agreement is subject to
the terms and conditions of the Plan.


 


        (t)    “
Option Exchange Program “ means a
program whereby outstanding Options are surrendered in exchange for Options
with a lower exercise price.


 


        (u)   “
Optioned Stock “ means the Common
Stock subject to an Option.


 


        (v)   “
Optionee “ means the holder of an
outstanding Option granted under the Plan.


 


        (w)  “
Parent “ means a “parent
corporation,” whether now or hereafter existing, as defined in Section 424(e) of
the Code.


 


        (x)   “
Plan “ means this 2005 Stock
Option Plan, as amended.


 


        (y)   “
Rule 16b-3 “ means Rule 16b-3
of the Exchange Act or any successor to Rule 16b-3, as in effect when
discretion is being exercised with respect to the Plan.


 


        (z)   “
Section 16(b) “ means Section 16(b) of
the Exchange Act.


 


        (aa) “
Service Provider “ means an
Employee, Director or Consultant.


 


        (bb) “
Share “ means a share of the
Common Stock, as adjusted in accordance with Section 12 of the Plan.


 


        (cc) “
Subsidiary “ means a “subsidiary
corporation”, whether now or hereafter existing, as defined in Section 424(f) of
the Code.


 


3.     Stock
Subject to the Plan.     Subject to the
provisions of Section 12 of the Plan, the maximum aggregate number of
Shares which may be optioned and sold under the Plan is one million five  hundred thousand (1,500,000) Shares. The
Shares may be authorized, but unissued, or reacquired Common Stock.


 


        If an
Option expires or becomes unexercisable without having been exercised in full,
or is surrendered pursuant to an Option Exchange Program, the unpurchased
Shares which were subject thereto shall become available for future grant or
sale under the Plan (unless the Plan has terminated); provided , however , that Shares that have actually been issued under
the Plan shall not be returned to the Plan and shall not become available for
future distribution under the Plan.


 


4.     Administration
of the Plan.


 


        (a)     Procedure.


 


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        (i)    
Multiple Administrative Bodies.
    The Plan may be administered by different Committees
with respect to different groups of Service Providers.


 


        (ii)   
Section 162(m).
    To the extent that the Administrator determines it to
be desirable to qualify Options granted hereunder as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the
Plan shall be administered by a Committee of two or more “outside directors”
within the meaning of Section 162(m) of the Code.


 


        (iii)  
Rule 16b-3.
    To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3.


 


        (iv)  
Other Administration.
    Other than as provided above, the Plan shall be
administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.


 


        (b)     Powers of the Administrator.
    Subject to the provisions of the Plan, and in the case
of a Committee, subject to the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its discretion:


 


        (i)    to
determine the Fair Market Value;


 


        (ii)   to
select the Service Providers to whom Options may be granted hereunder;


 


        (iii)  to
determine the number of shares of Common Stock to be covered by each Option
granted hereunder;


 


        (iv)  to
approve forms of agreement for use under the Plan;


 


        (v)   to
determine the terms and conditions, not inconsistent with the terms of the
Plan, of any Option granted hereunder. Such terms and conditions include, but
are not limited to, the exercise price, the time or times when Options may be
exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or the shares of Common Stock relating thereto,
based in each case on such factors as the Administrator, in its sole
discretion, shall determine;


 


        (vi)  to
institute an Option Exchange Program;


 


        (vii) to
construe and interpret the terms of the Plan and awards granted pursuant to the
Plan;


 


        (viii)  to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax laws;


 


        (ix)  to
modify or amend each Option (subject to Section 14(c) of the Plan),
including the discretionary authority to extend the post-termination exercisability
period of Options longer than is otherwise provided for in the Plan;


 


        (x)   to
authorize any person to execute on behalf of the Company any instrument
required to effect the grant of an Option previously granted by the
Administrator; and


 


        (xi)  to
make all other determinations deemed necessary or advisable for administering
the Plan.


 


        (c)     Effect of Administrator’s
Decision.     The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options.


 


5.     Eligibility.
    Nonstatutory Stock Options may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.


 


6.     Limitations.


 


        (a)   Each
Option shall be designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options are exercisable for the first
time by the Optionee during any calendar year (under all plans of the Company
and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated
as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive
Stock Options shall be taken into account in the order in which they were
granted. The Fair Market Value of the Shares shall be determined as of the time
the Option with respect to such Shares is granted.


 


        (b)   Neither
the Plan nor any Option shall confer upon an Optionee any right with respect to
continuing the Optionee’s relationship as a Service Provider with the Company,
nor shall they interfere in any way with the Optionee’s right or the Company’s
right to terminate such relationship at any time, with or without cause.


 


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        (c)   No
Employee shall be granted, in any one fiscal year of the Company, Options to
purchase more than one hundred thousand (100,000) Shares.


 


7.     Term
of Plan.     Subject to Section 18 of the
Plan, the Plan shall become effective upon its adoption by the Board. It shall
continue in effect for a term of ten (10) years unless terminated earlier
under Section 14 of the Plan.


 


8.     Term
of Option.     The term of each Option shall be
stated in the Option Agreement; provided, however, that the term shall be no
more than ten (10) years from the date of grant thereof. In the case of an
Incentive Stock Option, the term shall be ten (10) years from the date of
grant or such shorter term as may be provided in the Option Agreement.
Moreover, in the case of an Incentive Stock Option granted to an Optionee who,
at the time the Incentive Stock Option is granted, owns stock representing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.


 


9.     Option
Exercise Price and Consideration.


 


        (a)     Exercise Price.
    The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:


 


        (i)    In
the case of an Incentive Stock Option


 


        (A)  granted
to an Employee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant.


 


        (B)  granted
to any Employee other than an Employee described in paragraph (A) immediately
above, the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant.


 


        (ii)   In
the case of a Nonstatutory Stock Option


 


        (A)  granted
to a Service Provider who, at the time the Nonstatutory Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than one hundred ten percent (110%)
of the Fair Market Value per Share on the date of grant.


 


        (B)  granted
to a Service Provider other than a Service Provider described in
paragraph (A) immediately above, or intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the
per Share exercise price shall be no less than 100% of the Fair Market Value
per Share on the date of grant.


 


        (iii)  Notwithstanding
the foregoing, Options may be granted with a per Share exercise price of less
than one hundred percent (100%) of the Fair Market Value per Share on the date
of grant pursuant to a merger or other corporate transaction.


 


        (b)     Waiting Period and Exercise
Dates.     At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and
shall determine any conditions which must be satisfied before the Option may be
exercised.


 


        (c)     Form of Consideration.
    The Administrator shall determine the acceptable form
of consideration for exercising an Option, including the method of payment. In
the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of:


 


        (i)    cash;


 


        (ii)   check;


 


        (iii)  other
Shares which (A) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which said Option shall be
exercised;


 


        (iv)  consideration
received by the Company under a cashless exercise program, if implemented by
the Company in connection with the Plan;


 


        (v)   a
reduction in the amount of any Company liability to the Optionee, including any
liability attributable to the Optionee’s participation in any Company-sponsored
deferred compensation program or arrangement;


 


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        (vi)  any
combination of the foregoing methods of payment; or


 


        (vii) such
other consideration and method of payment for the issuance of Shares to the
extent permitted by Applicable Laws.


 


10.     Exercise
of Option.


 


        (a)     Procedure for Exercise;
Rights as a Stockholder.     Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Unless otherwise stated in the Option Agreement,
Options shall become exercisable at a rate one-third (1/3) per year over three (3) years from
the date the Options are granted, with one-third (1/3) of the Shares under the Option vesting on each of
the first, second and third anniversaries of the date of grant. Unless the
Administrator provides otherwise, vesting of Options granted hereunder shall be
suspended during any unpaid leave of absence. An Option may not be exercised
for a fraction of a Share.


 


        An
Option shall be deemed exercised when the Company receives: (i) written or
electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the
Shares with respect to which the Option is exercised. Full payment may consist
of any consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company), no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 12 of the Plan.


 


        Exercising
an Option in any manner shall decrease the number of Shares thereafter
available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.


 


        (b)     Termination of Relationship
as a Service Provider.     If an Optionee ceases
to be a Service Provider, other than upon the Optionee’s death or Disability,
the Optionee may exercise his or her Option within ninety (90) days of
termination, or such longer period of time as specified in the Option
Agreement, to the extent that the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). If, on the date of termination, the Optionee is
not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.


 


        (c)     Disability of Optionee.
    If an Optionee ceases to be a Service Provider as a
result of the Optionee’s Disability, the Optionee may exercise his or her
Option within one (1) year of termination, or such longer period of time
as may be specified in the Option Agreement, to the extent the Option is vested
on the date of termination (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement). If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered
by such Option shall revert to the Plan.


 


        (d)     Death of Optionee.
    If an Optionee dies while a Service Provider, the
Option may be exercised within one (1) year following Optionee’s death, or
such longer period of time as may be specified in the Option Agreement, to the
extent that the Option is vested on the date of death (but in no event later
than the expiration of the term of such Option as set forth in the Notice of
Grant), by the Optionee’s designated beneficiary, provided such beneficiary has
been designated prior to Optionee’s death in a form acceptable to the
Administrator. If no such beneficiary has been designated by the Optionee, then
such Option may be exercised by the personal representative of the Optionee’s
estate or by the person(s) to whom the Option is transferred pursuant to
the Optionee’s will or in accordance with the laws of descent and distribution.
If, at the time of death, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. If the Option is not so exercised within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.


 


        (e)     Buyout Provisions.
    The Administrator may at any time offer to buy out for
a payment in cash or Shares an Option previously granted based on such terms
and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.


 


        (f)     Code Section 162(m) Provisions.


 


        (i)    Notwithstanding
any other provision of the Plan, if the Compensation Committee of the Board
(the “Compensation Committee”) determines at the time an Option is granted to
an Optionee that such Optionee is, or may be as of the end of the tax year for
which the Company would claim a tax deduction in connection with such Option, a
“covered employee” within the 


 


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meaning of Section 162(m)(3) of the Code,
and to the extent the Compensation Committee considers it desirable for
compensation delivered pursuant to such Option to be eligible to qualify for an
exemption from the limit on tax deductibility of compensation under Section 162(m) of
the Code, then the Compensation Committee may provide that this Section 10(f) is
applicable to such Option under such terms as the Compensation Committee shall
determine.


 


        (ii)   If
an Option is subject to this Section 10(f), then vesting of the Option and
issuance of Optioned Stock pursuant thereto, as applicable, may be subject to
satisfaction of one, or more than one, objective performance targets. In such
event, the Compensation Committee shall determine the performance targets that
will be applied with respect to each Option subject to this Section 10(f) at
the time of grant, but in no event later than 90 days after the
commencement of the period of service to which the performance target(s) relate.
The performance criteria applicable to Options subject to this Section 10(f) will
be one or more of the following criteria: (A) stock price; (B) market
share; (C) sales; (D) earnings per share, core earnings per share or
variations thereof; (E) return on equity; (F) costs; (G) revenue;
(H) cash to cash cycle; (I) days payables outstanding; (J) days
of supply; (K) days sales outstanding; (L) cash flow; (M) operating
income; (N) profit after tax; (O) profit before tax; (P) return
on assets; (Q) return on sales; (R) inventory turns; (S) invested
capital; (T) net operating profit after tax; (U) return on invested
capital; (V) total shareholder return; (W) earnings; (X) return
on equity or average shareowners’ equity; (Y) total shareowner return; (Z) return
on capital; (AA) return on investment; (BB) income or net income; (CC)
operating income or net operating income; (DD) operating profit or net
operating profit; (EE) operating margin; (FF) return on operating revenue; (GG)
contract awards or backlog; (HH) overhead or other expense reduction; (II) growth
in shareowner value relative to the moving average of the S&P 500
Index or a peer group index; (JJ) credit rating; (KK) strategic plan
development and implementation; (LL) net cash provided by operating activities;
(MM) gross margin; (NN) economic value added; (OO) customer satisfaction; (PP)
financial return ratios; (QQ) market performance; (RR) production capacity;
(SS) production volume; (TT) achievement of photovoltaic conversion efficiency;
(UU) production yields; (VV) EBITDA; (WW) EBIT; (XX) market
capitalization; (YY) liquidity; (ZZ) strategic partnerships; (AAA) production
agreements and relationships; and (BBB) product certifications.


 


        (iii)  Notwithstanding
any contrary provision of the Plan, the Compensation Committee may not increase
the number of Optioned Stock pursuant to any Option subject to this Section 10(f),
nor may it waive the achievement of any performance target established pursuant
to this Section 10(f).


 


        (iv)  The
Compensation Committee shall have the power to impose such other restrictions
on Options subject to this Section 10(f) as it may deem necessary or
appropriate to ensure that such Option satisfies all requirements for “performance-based
compensation” within the meaning of Code section 162(m)(4)(C) of the
Code, the regulations promulgated thereunder, and any successors thereto.


 


11.     Limited
Transferability of Options.     Unless
determined otherwise by the Administrator, Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or the laws of descent and distribution, and may be exercised during the
lifetime of the Optionee, only by the Optionee. If the Administrator in its
sole discretion makes an Option transferable, such Option may only be
transferred (i) by will, (ii) by the laws of descent and
distribution, or (iii) as permitted by Rule 701 of the Securities Act
of 1933, as amended.


 


12.     Adjustments
Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.


 


        (a)     Changes in Capitalization.
    Subject to any required action by the stockholders of
the Company, the number of shares of Common Stock covered by each outstanding
Option, and the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the price per share of Common Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the
Company; provided , however , that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option
..


 


        (b)     Dissolution or Liquidation.
    In the event of the proposed dissolution or liquidation
of the Company, the Administrator shall notify each Optionee as soon as
practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Optionee to have the right
to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares
as to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option 


 


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shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the
extent it has not been previously exercised, an Option will terminate
immediately prior to the consummation of such proposed action.


 


        (c)     Change of Control.
    Unless otherwise stated in the Option Agreement, in the
event of a Change of Control, then as to each Optionee, fifty percent (50%) of
any outstanding Optioned Stock that has not yet vested at the time such Change
of Control occurs shall become vested and exercisable. In such event, the
Administrator shall notify the Optionee in writing or electronically at least
fifteen (15) calendar days prior to the Change of Control of the
exercisability of the Option. The portion of the Option that is then vested
(including 50% of the unvested portion that becomes vested due to the Change of
Control) shall be exercisable by the Optionee for a period of fifteen
(15) calendar days from the date of such notice, and the Option shall
terminate upon the expiration of such period. Notwithstanding the foregoing and
anything else in this Plan, and unless otherwise stated in the Option
Agreement, if the employment of an Optionee is terminated by the Company or its
successor in connection with a Change of Control (as determined in the sole and
absolute discretion of the Committee), then the Optionee’s entire Option shall
become vested and exercisable upon termination  of employment. For purposes of this paragraph, a “Change
of Control” means the happening of any of the following:


 


        (i)    any
one person, or more than one person acting as a group, acquires ownership of
stock of the Company that, together with stock held by such person or group,
possesses more than 50 percent of the total fair market value or total
voting power of the stock of the Company; provided, however, that if any one
person, or more than one person acting as a group, is considered to own more
than 50 percent of the total fair market value or total voting power of
the stock of the Company, the acquisition of additional stock by the same
person or persons will not be considered a Change of Control. Notwithstanding
the foregoing, an increase in the percentage of stock of the Company owned by
any one person, or persons acting as a group, as a result of a transaction in
which the Company acquires its stock in exchange for property will be treated as
an acquisition of stock of the Company for purposes of this
subsection (i);


 


        (ii)   during
any period of 12 consecutive months, individuals who at the beginning of such
period constituted the Board (together with any new or replacement directors whose
election by the Board, or whose nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the directors then in office; or


 


        (iii)  any
one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by the person or persons) assets from the Company, outside of the
ordinary course of business, that have a gross fair market value equal to or
more than 50 percent of the total gross fair market value of all of the
assets of the Company immediately prior to such acquisition or acquisitions.
For purposes of this subsection (iii), “gross fair market value” means the
value of the assets of the Company, or the value of the assets being disposed
of, determined without regard to any liabilities associated with such assets.
Notwithstanding anything to the contrary in this Agreement, the following shall
not be treated as a Change of Control under this subsection (iii): (A) a
transfer of assets from the Company to a shareholder of the Company (determined
immediately before the asset transfer); (B) a transfer of assets from the
Company to an entity, 50 percent or more of the total value or voting
power of which is owned, directly or indirectly, by the Company; (C) a
transfer of assets from the Company to a person, or more than one person acting
as a group, that owns, directly or indirectly, 50 percent or more of the
total value or voting power of all the outstanding stock of the Company; or (D) a
transfer of assets from the Company to an entity, at least 50 percent of
the total value or voting power of which is owned, directly or indirectly, by a
person described in (iii)(C) above.


 


13.     Date
of Grant.     The date of grant of an Option
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option, or such other later date as is determined
by the Administrator. Notice of the determination shall be provided to each
Optionee within a reasonable time after the date of such grant.


 


14.     Amendment
and Termination of the Plan.


 


        (a)     Amendment and Termination.
    The Board may at any time amend, alter, suspend or
terminate the Plan.


 


        (b)     Stockholder Approval.
    The Company shall obtain stockholder approval of any
Plan amendment to the extent necessary and desirable to comply with Applicable
Laws.


 


        (c)     Effect of Amendment or
Termination.     No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator’s ability to
exercise the powers granted to it hereunder with respect to Options granted
under the Plan prior to the date of such termination.


 


7

















 


15.     Conditions
Upon Issuance of Shares.


 


        (a)     Legal Compliance.
    Shares shall not be issued pursuant to the exercise of
an Option unless the exercise of such Option and the issuance and delivery of
such Shares shall comply with Applicable Laws and shall be further subject to
the approval of counsel for the Company with respect to such compliance.


 


        (b)     Investment Representations.
    As a condition to the exercise of an Option, the
Company may require the person exercising such Option to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.


 


16.     Inability
to Obtain Authority.     The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.


 


17.     Reservation
of Shares.     The Company, during the term of
this Plan, will at all times reserve and keep available such number of Shares
as shall be sufficient to satisfy the requirements of the Plan.


 


18.     Stockholder
Approval.     The Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the manner and to the degree required under Applicable Laws.


 


19.     Information
to Optionees.     The Company shall provide, or
make available, to each Optionee and to each individual who acquires Shares
pursuant to the Plan, not less frequently than annually during the period such
participant has one or more Options outstanding, and, in the case of an
individual who acquires Shares pursuant to the Plan, during the period such
individual owns such Shares, copies of annual financial statements. The Company
shall not be required to provide such statements to key employees whose duties
in connection with the Company assure their access to equivalent information.


 


8

















 


ASCENT
SOLAR TECHNOLOGIES, INC.

SECOND AMENDED AND RESTATED 2005 STOCK OPTION PLAN

STOCK OPTION AGREEMENT


 


        Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Option Agreement.


 


I. NOTICE OF STOCK OPTION GRANT


 


«NAME»


 


        The undersigned
Optionee has been granted an Option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:


 


	
   

  	
  Date of Grant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Vesting Commencement Date:

  	
   

  	
   

  
	
   

  	
  (same as Date of Grant, if left blank)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Exercise Price per Share:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total Number of Shares Granted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Type of Option:

  	
   

  	
            Incentive
  Stock Option

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
            Nonstatutory
  Stock Option

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Expiration Date:

  	
   

  	
   

  
	
   

  	
  (10 years from Date of Grant, if left blank)

  	
   

  	
   

  



 


Vesting Schedule:


 


        One-third
(1/3 ) of the Shares subject to the Option shall vest on
each of the first, second and third anniversaries of the Vesting Commencement
Date, subject to Optionee continuing as a Service Provider on such dates.


 


Termination Period:


 


        This
Option shall be exercisable for ninety (90) days after Optionee ceases to
be a Service Provider. Upon Optionee’s death or disability, this Option may be
exercised for such longer period as provided in the Plan. In no event may
Optionee exercise this Option after the Term/Expiration Date as provided above.


 


II. AGREEMENT


 


        1.     Grant of Option.
    The Plan Administrator of the Company hereby grants to
the Optionee named in the Notice of Grant (the “Optionee”), an option (the “Option”)
to purchase the number of Shares set forth in the Notice of Grant, at the
exercise price per Share set forth in the Notice of Grant (the “Exercise Price”),
and subject to the terms and conditions of the Plan, which is incorporated
herein by reference. Subject to Section 14(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this
Option Agreement, the terms and conditions of the Plan shall prevail.


 


        If
designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this
Option is intended to qualify as an Incentive Stock Option as defined in Section 422
of the Code. Nevertheless, to the extent that it exceeds the $100,000 rule of
Code Section 422(d), this Option shall be treated as a Nonstatutory Stock
Option (“NSO”).


 


9

















 


        2.     Exercise of Option.


 


        (a)     Right to Exercise.
    This Option shall be exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and with
the applicable provisions of the Plan and this Option Agreement.


 


        (b)     Method of Exercise.
    This Option shall be exercisable by delivery of an
exercise notice in the form attached as Exhibit A
(the “Exercise Notice”) which shall state the election to exercise the Option,
the number of Shares with respect to which the Option is being exercised, and
such other representations and agreements as may be required by the Company.
The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares. This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by the aggregate Exercise Price.


 


        No
Shares shall be issued pursuant to the exercise of an Option unless such
issuance and such exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Shares shall be considered transferred
to the Optionee on the date on which the Option is exercised with respect to
such Shares.


 


        3.     Method of Payment.
    Payment of the aggregate Exercise Price shall be by any
of the following, or a combination thereof, at the election of the Optionee:


 


        (a)   cash
or check;


 


        (b)   consideration
received by the Company under a formal cashless exercise program adopted by the
Company in connection with the Plan;


 


        (c)   surrender
of other Shares which, (i) in the case of Shares acquired from the
Company, either directly or indirectly, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (ii) have a
Fair Market Value on the date of surrender equal to the aggregate Exercise
Price of the Exercised Shares; or


 


        (d)   any
other form or manner endorsed in the Plan.


 


        4.     Restrictions on Exercise.
    This Option may not be exercised until such time as the
Plan has been approved by the shareholders of the Company, or if the issuance
of such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any Applicable Law.


 


        5.     Non-Transferability of
Option.     This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by Optionee. The
terms of the Plan and this Option Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.


 


        6.     Term of Option.
    This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.


 


        7.     Tax Obligations.


 


        (a)     Taxes.     Optionee
acknowledges and agrees that Optionee is solely responsible for the
satisfaction of all federal, state, local and foreign income and other tax
arising from or applicable to the Option exercise and the acquisition or sale of
the Optioned Stock. Optionee agrees that Optionee shall indemnify the Company
for any liability, including attorneys’ fees and expenses, accrued by the
Company as a result of the Optionee’s failure to satisfy those taxes.


 


        (b)     Notice of Disqualifying
Disposition of ISO Shares.     If the Option
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two (2) years after the Date of Grant, or (2) the
date one year after the date of exercise, the Optionee shall immediately notify
the Company in writing of such disposition.


 


        8.     Entire Agreement; Governing
Law.     The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of Colorado.


 


        9.     No Guarantee of Continued
Service.     OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE 


 


10

















 


PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE
ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE
OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.


 


        Optionee
acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all of the terms and provisions thereof. Optionee has reviewed the
Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel and other advisors prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company upon any change in the residence address indicated below.


 


	
  OPTIONEE:

  	
   

  	
  ASCENT SOLAR TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
  Residence Address

  	
   

  	
   

  



 


 


11

















 


EXHIBIT A


 


EXERCISE NOTICE AND AGREEMENT


 


Ascent Solar Technologies, Inc.

8120 Shaffer Parkway

Littleton, CO 80127


 


Attention: Stock Option Plan Administrator


 


Re:


 


Exercise of Stock Option Pursuant to Second Amended
and Restated 2005 Stock Option Plan


 


	
  Name of Optionee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Optionee’s Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Optionee’s Social Security Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Option Agreement:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The Shares Purchased are Incentive Stock Options:
  (circle one)

  	
   

  	
  Yes / No

  
	
   

  	
   

  	
   

  
	
  Number of Shares Purchased Pursuant to this Notice::

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise Price per Share:

  	
  $

  	
   

  
	
   

  	
   

  	
   

  
	
  Aggregate Exercise Price:

  	
  $

  	
   

  
	
   

  	
   

  	
   

  
	
  Amount of Payment Enclosed:

  	
  $

  	
   

  



 


        1.     Exercise of Option.
    Pursuant to the Second Amended and Restated 2005 Stock
Option Plan (the “Plan”) of Ascent Solar Technologies, Inc., a Delaware
corporation (the “Company”) and the Stock Option Agreement (“Option Agreement”)
entered into as of the date set forth above between the undersigned Optionee
and the Company, Optionee hereby elects, effective as of the date of this
notice, to exercise Optionee’s option to purchase the number of shares of
common stock (the “Shares”) of the Company indicated above.


 


        2.     Payment.
    Enclosed is Optionee’s payment in the amount indicated
above, which is the full exercise price for the Shares.


 


        3.     Deemed Date of Exercise.
    The date of exercise shall be deemed to be the first
date after which this Notice is filed with Company upon which Shares become
eligible for issuance to Optionee under applicable state and federal laws and
regulatory requirements.


 


        4.     Compliance with Laws.
    Optionee understands and acknowledges that the purchase
and sale of the Shares may be subject to approval under the state and federal
securities laws and other laws and, notwithstanding any other provision of the
Option Agreement to the contrary, the exercise of any rights to purchase Shares
is expressly conditioned upon approval (if necessary) and compliance with all
such laws.


 


        5.     Representations of Optionee.
    Optionee represents and warrants to the Company, as
follows:


 


12

















 


        (a)   Optionee
has received, read, and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.


 


        (b)   The
Options exercised herewith are exercisable only according to the schedule in
the Option Agreement.


 


        (c)   Optionee
is aware of the business affairs and financial condition of the Company and has
acquired sufficient information about the Company to reach an informed and knowledgeable
decision to acquire the Shares.


 


        6.     Refusal to Transfer.
    The Company shall not be required (a) to transfer
on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement, the Option Agreement, or
the Plan or (b) to treat as owner of such Shares or to accord the right to
vote or receive dividends to any purchaser or other transferee to whom such
Shares shall have been so transferred.


 


        7.     Tax Consultation.
    Optionee understands that Optionee may suffer adverse
tax consequences as a result of Optionee’s purchase or disposition of the
Shares. Optionee represents that Optionee is not relying on the Company for any
tax advice.


 


        8.     Entire Agreement.
    The Plan and the Option Agreement are incorporated
herein by reference. This Agreement, the Plan, and the Option Agreement
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Optionee with respect
to the subject matter hereof.


 


	
  Submitted by:

  “OPTIONEE”:

  	
   

  	
  Accepted by:

  “COMPANY”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ascent Solar Technologies, Inc.,

  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  



 


13