Unassociated Document


    MASTER
OPTION AGREEMENT

    2002
NON-QUALIFIED STOCK COMPENSATION PLAN

    


    Composite Technology Corporation
(“Company”) has granted to the individual (the "Optionee") named in the Stock
Option Notice of Modification and Reissuance (the "Notice") to which this Master
Option Agreement (the "Option Agreement") is attached an option (the "Option")
to purchase certain shares of the Company’s $.001 par value common stock,
subject to the terms and conditions of the Composite Technology Corporation 2002
Non-Qualified Stock Compensation Plan, as amended (the "Plan"), this Option
Agreement, and the Notice. By signing this Option Agreement and the Notice, the
Optionee: (a) represents that the Optionee has read, is familiar with and agrees
to the terms and conditions of the Notice, the Plan and this Option Agreement,
including the Effect of Termination of Service set forth in Section 4, (b)
accepts the Option subject to all of the terms and conditions of the Notice, the
Plan and this Option Agreement, (c) agrees to accept all interpretations of the
Plan by the Company’s Board of Directors (“Board”) as binding, conclusive and
final, and (d) acknowledges receipt of a copy of the Notice, the Plan and this
Option Agreement.

    


    WHEREAS,
pursuant to a decision of the Board, acting as the Compensation Committee of the
Board (“Committee”) administrating the Plan, and having considered the at will
employment arrangement, employment agreement, consulting agreement or other
arrangement between the parties, as the case may be (the “Optionee
Relationship”), the Board has agreed to provide the Optionee with options to
acquire shares in the common stock of the Company, subject to the terms and
conditions of this Option Agreement, the Notice and the Plan.

    


    NOW, THEREFORE, the parties agree as
follows:

     

    
      
        	
                1. 

              	
                Option

              


      

    

     

    Pursuant to the provisions of the Plan,
the Company hereby grants to the Optionee, subject to the terms and conditions
set forth or incorporated herein and in the Notice and the Plan, the right to
purchase from the Company all or any part of an aggregate of the number of
shares indicated on the Notice of the Company’s $.001 par value common stock, as
such common stock is now constituted, (“Shares”) at the purchase price set forth
in Section 2 below.

    


    The vested portion of the Option may be
exercised at any time, whether in a single transaction or in multiple
transactions, and in the amounts and at the times determined by the Optionee,
provided however, that the exercise of such Options is not prohibited by
regulations of the Securities and Exchange Commission (“SEC”), or other
applicable laws, or regulations at the time of exercise, including without
limitation, Company-imposed non-trading or blackout periods in which event the
exercise date shall be deemed to be the first business day in which the exercise
is permissible under such laws, rules, regulations, and
restrictions.  The provisions of the Plan governing the terms and
conditions of the Option granted hereby are incorporated in full herein by
reference.

    


    This Option is granted to the Optionee
pursuant to the Optionee Relationship to provide incentive to the Optionee in
the performance of his duties and responsibilities under the Optionee
Relationship.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                2. 

              	
                Purchase
      Price

              


      

    

     

    The
purchase price for each Share subject to the Option shall be as set forth in the
Notice.  The purchase price shall be subject to adjustments in the
event of an adjustment or change in the capitalization of the Company in
accordance with Section 8 hereof.

     

    
      
        	
                3. 

              	
                Vesting

              


      

    

     

    The Option shall be exercisable in
whole or in part on or before December 31, 2016 for the number of options
according to the vesting schedule set forth in the Notice, provided that the
cumulative number of vested Shares as to which this Option may be exercised
(except in the event of a change of control as provided in paragraph 8.2 of the
Plan and/or section 7 below) shall not exceed the vested amounts on any given
date.

    


    The Board
or the Committee may, at its sole and entire discretion, accelerate the vesting
of all or any portion of any unvested Options.

     

    
      
        	
                4. 

              	
                Effect of Termination
      of Optionee
      Relationship

              


      

    

     

    If the Optionee voluntarily terminates
the Optionee Relationship, or if the Company terminates the Optionee
Relationship for any reason, then as of the effective date of such termination,
the unvested portion of the Option shall terminate and shall be of no force or
effect.  This paragraph shall not apply to a termination by the
Optionee as a result of a Change in Control specified in Section 7
below.

    


    If the Optionee voluntarily terminates
the Optionee Relationship, or if the Company terminates the Optionee
Relationship for any reason, then as of the effective date of such termination,
the vested portion of the Option as of the date of termination shall terminate
91 days after the date of termination and thereafter shall be of no force or
effect. This paragraph shall not apply to a termination by the Optionee as a
result of a Change in Control specified in Section 7 below.

    


    The termination of the Optionee
Relationship shall not affect the Optionee’s right to exercise the vested
portion of the Option at any time prior to December 31, 2016.

     

    
      
        	
                5. 

              	
                Exercise

              


      

    

     

    A.  Form
of Exercise:  If at any time the Optionee elects to exercise all or
any part of the vested portion of the Option, it shall so notify Company in
writing.  Such written notice shall specify the number of Shares to be
purchased, the Optionee’s address of residence, the Optionee’s social security
number and the address to which the shares are to be sent.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    B.  Consideration:  Acceptable
consideration for the exercise cost, calculated as the number of Shares
exercised multiplied by the exercise price, shall be:

    i.  Cash
or by cashiers’ check, certified check, bank draft or money order or wire
transfer.

    


    C.  Withholding:

    i.  Requirements:  Before
the delivery of any shares pursuant to an exercise, the Company shall be
entitled to deduct or withhold, or require an Optionee to remit to the Company,
an amount sufficient to satisfy any federal, state and local taxes required to
be paid or withheld with respect to such exercise.

    ii.  Withholding
arrangements:  The Board, in its sole discretion and pursuant to such
procedures as it may specify from time to time may permit the Optionee to
satisfy any tax withholding obligations, in whole or in part by (a) electing to
have the Company withhold otherwise deliverable Common Shares or (b) delivering
to the Company already-owned Shares having a Fair Market Value equal to the
amount required to be withheld.

     

    At no
time shall the Company allow cashless exercise rights for any Options granted or
exercisable under this Option Agreement.

    


    Not less
than 100 Common Shares may be purchased under any option exercise unless the
number purchased is the total number at the time available for purchase under
the Option Agreement.

     

    
      
        	
                6. 

              	
                Issuance of
      Certificates

              


      

    

     

    As soon as practicable after the
exercise of any portion of the Option and provided that the Company is in
receipt of full payment of cleared funds representing the full exercise price
and any required tax withholding, the Company shall deliver to the Optionee a
certificate evidencing the Shares so purchased.

    


    Upon such
delivery the Optionee shall have all rights, powers, and interests of a
shareholder of the Company with respect to the Shares so acquired.

    


    For a period not less than two years
from the later of the date of exercise or termination of the Optionee
relationship, the Optionee shall report to the Company as soon as possible in
writing to:  Attn:  Company Secretary at the Corporate
Headquarters address when any Shares acquired through the exercise of the Option
are sold or transferred.  Information provided shall include the
Optionee’s name, address, number of shares sold, the date of the sale and the
transfer price.  The Optionee shall, at all times abide by the
Company’s policies and SEC regulations regarding trading windows and the
appropriateness of buying or selling the Company’s stock.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                7. 

              	
                Change in
      Control

              


      

    

     

    Notwithstanding Section 3 above, in the event of a Change in Control of the
Company the unvested portion of the Option shall be fully and immediately vested
as of the earlier of (i) the date any proposed Change in Control has been
approved by the Company’s board of directors, whether or not all of the terms of
such transaction have been determined, (ii) the date Change in Control has
actually occurred, or (iii) the occurrence of an event specified in subsection
(c) below.

    


    As used herein, “Change in Control”
shall mean any of the following:

    


    (a)    
The sale or transfer of more than fifty percent (50%) of the assets of the
Company, whether in a single transaction or a series of
transactions.

     

    (b)    
The sale
or transfer to any person or Common Group, or acquisition by any person or
Common Group, of the larger of (i) thirty percent (30%) or more of the
outstanding common stock of the Company or (ii) 80 million shares, whether in a
single transaction or a series of transactions occurring within a six (6) month
period.  “Common Group” means five or fewer persons.  This
subsection shall not apply to common stock acquired by Benton
Wilcoxon.

     

    (c)    
The
death, disability, retirement, or other termination of employment of Benton H
Wilcoxon.

    


    A
transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company’s incorporation or to create a holding company
that will be owned in substantially the same proportions by persons who held the
Company’s securities immediately before such transaction.

     

    
      
        	
                8. 

              	
                Adjustments or Changes
      in Capitalization

              


      

    

     

    If at any time before all Shares
subject to the Option have been delivered to the Optionee, the Company shall
modify its outstanding Shares or exchange for a different number or kind of
shares or other securities (“capital adjustment”) by reason of merger,
consolidation, other reorganization, recapitalization, reclassification,
combination or division (split) of its outstanding common stock, or any
distribution of stock as a dividend, the Company shall adjust the amount of the
Remaining Shares such that the value of the Remaining Shares immediately after
such capital adjustment is equal to the value of the Remaining Shares
immediately before such capital adjustment or reorganization.  As used
herein, “Remaining Shares” shall mean (i) the unexercised portion of the Option,
whether vested or nonvested; and (ii) Shares which have been exercised but which
have not yet been delivered to the Optionee.

    


    The
foregoing adjustments and the manner of the application of these provisions will
be decided and determined solely by the Committee (or in its absence, by the
Board); their determination shall be final, binding, and
conclusive.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                9. 

              	
                Nonalienation.

              


      

    

     

    Except
for the exercise provisions allowable for the death of an Optionee as described
in Sections 6.8 and 6.9 of the Plan, neither the Option nor any rights granted
under the Plan or hereunder may be transferred, assigned, pledged or
hypothecated in any way, whether by operation of law or otherwise, and shall not
be subject to execution, attachment or similar process.

     

    
      
        	
                10. 

              	
                No Rights as a
      Shareholder:

              


      

    

     

    Except as
otherwise specifically set forth herein, no Optionee (nor any beneficiary) shall
have any of the rights or privileges of a stockholder of the Company, including
voting and dividend rights, with respect to any Shares issuable pursuant to an
Option Grant (or exercise thereof), unless and until certificates representing
such Shares shall have been issued, recorded on the books of the Company or of a
duly authorized transfer agent of the Company, and delivered to the Optionee (or
beneficiary). No adjustment will be made for a dividend or other right for which
the record date is prior to the date the share certificate is issued, except as
otherwise provided herein.

     

    
      
        	
                11. 

              	
                Entire
      Agreement

              


      

    

     

    This Option Agreement, the Notice and
the Plan represents the entire agreement of the parties with respect to the
subject matter hereof, and supersedes any prior or contemporaneous written or
oral agreement with respect thereto.

     

    
      
        	
                12. 

              	
                Choice of
      Law

              


      

    

     

    This Option Agreement shall be governed
by the laws of the State of Nevada.

     

    
      
        	
                13. 

              	
                Amendment

              


      

    

     

    This Option Agreement may be amended
only by a writing executed by the parties hereto.

     

    
      
        	
                14. 

              	
                Attorney’s
      Fees

              


      

    

     

    In the event either party incurs legal
expenses to enforce or interpret any provision of this Option Agreement, the
prevailing party shall be entitled to recover its legal expenses, including,
without limitation, reasonable attorney’s fees, costs and necessary
disbursements in addition to any other relief to which such party shall be
entitled.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    In WITNESS WHEREOF, the parties have
entered into this Option Agreement on the date first above written.

    


    Composite Technology
Corporation


    


    
      	
              By:

            	 
      	 
      	
              By:

            	 
      
	 
      	
              Benton
      H Wilcoxon

            	 
      	 
      	
              Domonic
      J. Carney

            
	 
      	
              Chairman
      of the Board of Directors and

            	 
      	 
      	
              Chief
      Financial Officer

            
	 
      	
              Chief
      Executive Officer

            	 
      	 
      	 
      


    

    


    


    The
Optionee:


    


    
      
        
          	
                  By:

                	 
      	 
      	
                  Dated:

                	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                  The
      Optionee hereby acknowledges receipt of a copy of the Plan and accepts
      this Option subject to each and every term and provision of such
      Plan.