Document:

Form of Addendum to Stock Option Agreement by Non-Employee Directors

 Exhibit 10.7 
  
 HOKU SCIENTIFIC, INC. 
  

ADDENDUM TO STOCK OPTION AGREEMENT 
  
 This Addendum to the Stock Option Agreement is made as of the      day of
             20    , by and among Hoku Scientific, Inc., a Delaware corporation (the “Company”) and
                         (the “Optionee”), and amends that certain Stock Option Agreement (the
“Stock Option Agreement”) and Notice of Stock Option Grant (the “Notice of Grant”, together with the Stock Option Agreement, the “Option”), each by and between the Company and the Optionee and
executed and delivered on                  , 20    . 
  
 RECITALS 
  
 A. This Addendum supplements and amends the Stock Option Agreement to provide for accelerated vesting upon certain conditions. 
  
 AGREEMENT 
  
 The parties hereby agree as follows: 
  
 1) Addendum. The Company and the Optionee agree as follows: 
  
 (a) Change in Control. 
  
 i) In the event that Optionee (i) is required to resign his or her position
as a Director of the Company as a condition of a Change in Control, or (ii) is removed from his or her position as a Director in connection with a Change in Control, the outstanding Options held by such Optionee shall become fully vested and
exercisable immediately prior to the effectiveness of such resignation or removal (and contingent upon the effectiveness of such Change in Control). 
  
 ii) In the event that an Optionee’s Continuous Service Status terminates as of, or within twelve (12) months following a Change in Control, the
Optionee may exercise his Option (to the extent that the Optionee was entitled to exercise such Option as of the date of termination of Continuous Service Status) within such period of time ending on the earlier of (i) the date twelve (12) months
following the effective date of the Change in Control (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous
Service Status, the Optionee does not exercise his or her Option within the time specified herein or in the Option Agreement (as applicable), the Option shall terminate. 
  
 (b) Parachute Payments. 
  
 iii) If the acceleration of the vesting and exercisability of Options provided for in Sections 1)a)i) and 1)a)ii) together with payments and other
benefits of an Optionee, (collectively, the “Payment”) (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, or any comparable successor provisions, and (ii) but for this Section 1)a)iii)
would be subject to the excise tax imposed by Section 4999 of the Code, or 

 any comparable successor provisions (the “Excise Tax”), then such Payment shall be either (1) provided
to such Optionee in full, or (2) provided to such Optionee as to such lesser extent that would result in no portion of such Payment being subject to the Excise Tax, whichever of the foregoing amounts, when taking into account applicable federal,
state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by such Optionee, on an after-tax basis, of the greatest amount of the Payment, notwithstanding that all or some portion of
the Payment may be subject to the Excise Tax. 
  
 iv) Unless the
Company and such Optionee otherwise agree in writing, any determination required under this Section 1(b) shall be made in writing in good faith by the Board of Directors, or its authorized delegate. If a reduction in the Payment is to be made as
provided above, reductions shall occur in the following order unless the Optionee elects in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the date that triggers the Payment
or a portion thereof): (i) reduction of cash payments; (ii) cancellation of accelerated vesting of Options; and (iii) reduction of other benefits paid to the Optionee. If acceleration of vesting of Options is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of date of grant of Options (i.e., the earliest granted Option cancelled last) unless the Optionee elects in writing a different order for cancellation. 
  
 v) For purposes of making the calculations required by this Section 1(b), the
Board of Directors or its authorized delegate may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code and other applicable legal
authority. The Company and the Optionee shall furnish to the Board of Directors or its authorized delegate such information and documents as the Board of Directors or its authorized delegate may reasonably request in order to make such a
determination. The Company shall bear all costs the Board of Directors or its authorized delegate may reasonably incur in connection with any calculations contemplated by this Section 1(b). 
  
 vi) If, notwithstanding any reduction described above, the Internal Revenue
Service (the “IRS”) determines that the Optionee is liable for the Excise Tax as a result of the Payment, then the Optionee shall be obligated to pay back to the Company, within thirty (30) days after a final IRS determination or, in the
event that the Optionee challenges the final IRS determination, a final judicial determination, a portion of the Payment (the “Repayment Amount”). The Repayment Amount with respect to the Payment shall be the smallest such amount,
if any, as shall be required to be paid to the Company so that the Optionee’s net after-tax proceeds with respect to the Payment (after taking into account the payment of the Excise Tax and all other applicable taxes imposed on the Payment)
shall be maximized. The Repayment Amount with respect to the Payment shall be zero if a Repayment Amount of more than zero would not result in the Optionee’s net after-tax proceeds with respect to the Payment being maximized. If the Excise Tax
is not eliminated pursuant to this paragraph, the Optionee shall pay the Excise Tax. 
  
 vii) Notwithstanding any other provision of this Section 1(b), if (i) there is a reduction in the Payment as described above, (ii) the IRS later determines that the Optionee is liable for the Excise Tax, the payment
of which would result in the 
  

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 maximization of the Optionee’s net after-tax proceeds of the Payment (calculated as if the Payment had not
previously been reduced), and (iii) the Optionee pays the Excise Tax, then the Company shall pay or otherwise provide to the Optionee that portion of the Payment that was reduced pursuant to this Section 1(b) contemporaneously or as soon as
administratively possible after the Optionee pays the Excise Tax so that the Optionee’s net after-tax proceeds with respect to the Payment are maximized. 
  

viii) If the Optionee either (i) brings any action to enforce rights pursuant to this Section 1(b), or (ii) defends any legal challenge to his or her
rights under this Section 1(b), the Optionee shall be entitled to recover attorneys’ fees and costs incurred in connection with such action, regardless of the outcome of such action; provided, however, that if such action is commenced by the
Optionee, the court finds that the action was brought in good faith. 
  
 (c) “Continuous Service Status” has the meaning set forth in the 2002 Stock Plan, as amended (the “Plan”). 
  
 (d) “Change of Control” has the meaning set forth in the Plan. 
  
 2) Miscellaneous. This Addendum shall be deemed a part of and subject to the Stock Option Agreement, which is hereby ratified, confirmed,
and approved, as amended hereby. This Addendum may be signed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. All terms that are defined in the Stock Option Agreement
shall, unless otherwise defined herein, be used herein as defined in the Stock Option Agreement. 
  
 [Signature Page Follows] 
  

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 The parties hereto have executed this Addendum to the Stock Option Agreement as of the date first above
written. 
  

					
	COMPANY:	 	 
	
	HOKU SCIENTIFIC, INC.
		
	By:	 	  

	 	 	Dustin M. Shindo, President
		
	Address:	 	2153 North King Street, Suite 306
	 	 	Honolulu, Hawaii 96819
	
	OPTIONEE:
	
	  

	Signature	 	 
		
	Address:	 	 

  

 SIGNATURE PAGE TO ADDENDUM TO STOCK OPTION AGREEMENTForm of Indemnity Agreement

 Exhibit 10.8 
  
 INDEMNITY AGREEMENT 
  
 THIS AGREEMENT is made and entered into this
             day of                 , 20     by and between
HOKU SCIENTIFIC, INC., a Delaware corporation (the “Corporation”), and
                     (“Agent”). 
  
 RECITALS 
  
 WHEREAS, Agent performs a valuable service to the Corporation in his capacity as [a/an] [director/officer] of
the Corporation; 
  
 WHEREAS,
the stockholders of the Corporation have adopted bylaws (the “Bylaws”) providing for the indemnification of the directors, officers, employees and other agents of the Corporation, including persons serving at the request of
the Corporation in such capacities with other corporations or enterprises, as authorized by the Delaware General Corporation Law, as amended (the “Code”); 
  
 WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit contracts
between the Corporation and its agents, officers, employees and other agents with respect to indemnification of such persons; and 
  
 WHEREAS, in order to induce Agent to serve as [a/an] [director/officer] of the Corporation, the Corporation
has determined and agreed to enter into this Agreement with Agent; 
  
 NOW, THEREFORE, in consideration of Agent’s service as [a/an] [director/officer] after the date hereof, the parties hereto agree as follows: 
  
 AGREEMENT 
  
 1. Services to the Corporation. Agent will serve, at the will of the
Corporation or under separate contract, if any such contract exists, as [a/an] [director/officer] of the Corporation or as a director, officer or other fiduciary of an affiliate of the Corporation (including any employee benefit plan of the
Corporation) faithfully and to the best of his ability so long as he [is duly elected and qualified in accordance with the provisions of the Bylaws or other applicable charter documents/is a duly appointed officer] of the Corporation or such
affiliate; provided, however, that Agent may at any time and for any reason resign from such position (subject to any contractual obligation that Agent may have assumed apart from this Agreement) and that the Corporation or any affiliate
shall have no obligation under this Agreement to continue Agent in any such position. 
  
 2. Indemnity of Agent. The Corporation hereby agrees to hold harmless and indemnify Agent to the fullest extent authorized or permitted by the provisions of the Bylaws and the Code, as the same may be amended
from time to time (but, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the Bylaws or the Code permitted prior to adoption of such amendment). 
  

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 3. Additional Indemnity. In addition to and not in limitation of the indemnification otherwise
provided for herein, and subject only to the exclusions set forth in Section 4 hereof, the Corporation hereby further agrees to hold harmless and indemnify Agent: 
  
 (a) against any and all expenses (including attorneys’ fees), witness fees, damages, judgments,
fines and amounts paid in settlement and any other amounts that Agent becomes legally obligated to pay because of any claim or claims made against or by him in connection with any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, arbitrational, administrative or investigative (including an action by or in the right of the Corporation) to which Agent is, was or at any time becomes a party, or is threatened to be made a party, by reason of the fact that Agent
is, was or at any time becomes a director, officer, employee or other agent of Corporation, or is or was serving or at any time serves at the request of the Corporation as a director, officer, employee or other agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise; and 
  
 (b) otherwise to the fullest extent as may be provided to Agent by the Corporation under the non-exclusivity provisions of the Code
and Section 43 of the Bylaws. 
  
 4. Limitations on Additional
Indemnity. No indemnity pursuant to Section 3 hereof shall be paid by the Corporation: 
  
 (a) on account of any claim against Agent for an accounting of profits made from the purchase or sale by Agent of securities of the
Corporation pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law; 
  
 (b) on account of Agent’s conduct that is established by a final judgment as knowingly
fraudulent or deliberately dishonest or that constituted willful misconduct; 
  
 (c) on account of Agent’s conduct that is established by a final judgment as constituting a breach of Agent’s duty of loyalty to the Corporation or resulting in any personal profit or advantage to
which Agent was not legally entitled; 
  
 (d) for which payment is actually made to Agent under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, bylaw or agreement, except in respect of any excess beyond payment under such
insurance, clause, bylaw or agreement; 
  
 (e)
if indemnification is not lawful (and, in this respect, both the Corporation and Agent have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is
against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication); or 
  
 (f) in connection with any proceeding (or part thereof) initiated by Agent, or any proceeding by Agent against the Corporation or
its directors, officers, employees or other agents, unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Corporation, (iii) such indemnification is provided by
the Corporation, in its sole discretion, pursuant to the powers 

  

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vested in the Corporation under the Code, or (iv) the proceeding is initiated pursuant to Section 9 hereof. 
  
 5. Continuation of Indemnity. All agreements and obligations of the
Corporation contained herein shall continue during the period Agent is a director, officer, employee or other agent of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as Agent shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether
civil, criminal, arbitrational, administrative or investigative, by reason of the fact that Agent was serving in the capacity referred to herein. 
  
 6. Partial Indemnification. Agent shall be entitled under this Agreement to indemnification by the Corporation for a portion of the expenses
(including attorneys’ fees), witness fees, damages, judgments, fines and amounts paid in settlement and any other amounts that Agent becomes legally obligated to pay in connection with any action, suit or proceeding referred to in Section 3
hereof even if not entitled hereunder to indemnification for the total amount thereof, and the Corporation shall indemnify Agent for the portion thereof to which Agent is entitled. 
  
 7. Notification and Defense of Claim. Not later than thirty (30) days after Agent becomes aware, by written or other
overt communication, of any pending or threatened litigation, claim or assessment, Agent will, if a claim in respect thereof is to be made against the Corporation under this Agreement, notify the Corporation of such pending or threatened litigation,
claim or assessment; but the omission so to notify the Corporation will not relieve it from any liability which it may have to Agent otherwise than under this Agreement. With respect to any such pending or threatened litigation, claim or assessment
as to which Agent notifies the Corporation of the commencement thereof: 
  
 (a) the Corporation will be entitled to participate therein at its own expense; 
  
 (b) except as otherwise provided below, the Corporation may, at its option and jointly with any other indemnifying party similarly
notified and electing to assume such defense, assume the defense thereof, with counsel reasonably satisfactory to Agent. After notice from the Corporation to Agent of its election to assume the defense thereof, the Corporation will not be liable to
Agent under this Agreement for any legal or other expenses subsequently incurred by Agent in connection with the defense thereof except for reasonable costs of investigation or otherwise as provided below. Agent shall have the right to employ
separate counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Agent unless (i) the employment of counsel
by Agent has been authorized by the Corporation, (ii) Agent shall have reasonably concluded, and so notified the Corporation, that there is an actual conflict of interest between the Corporation and Agent in the conduct of the defense of such action
or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of Agent’s separate counsel shall be at the expense of the Corporation. The Corporation shall
not be entitled to assume the defense of 

  

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any action, suit or proceeding brought by or on behalf of the Corporation or as to which Agent shall have made the conclusion provided for in clause (ii)
above; and 
  
 (c) the Corporation shall
not be liable to indemnify Agent under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent, which shall not be unreasonably withheld. The Corporation shall be permitted to settle any action
or claim except that it shall not settle any action or claim in any manner which would impose any penalty or limitation on Agent without Agent’s written consent, which may be given or withheld in Agent’s sole discretion. 
  
 8. Expenses. The Corporation shall advance, prior to the final
disposition of any proceeding, promptly following request therefor, all expenses incurred by Agent in connection with such proceeding upon receipt of an undertaking by or on behalf of Agent to repay said amounts if it shall be determined ultimately
that Agent is not entitled to be indemnified under the provisions of this Agreement, the Bylaws, the Code or otherwise. 
  
 9. Enforcement. Any right to indemnification or advances granted by this Agreement to Agent shall be enforceable by or on behalf of Agent in any
court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. Agent, in such enforcement action, if
successful in whole or in part, shall be entitled to be paid also the expense of prosecuting his claim. It shall be a defense to any action for which a claim for indemnification is made under Section 3 hereof (other than an action brought to enforce
a claim for expenses pursuant to Section 8 hereof, provided that the required undertaking has been tendered to the Corporation) that Agent is not entitled to indemnification because of the limitations set forth in Section 4 hereof. Neither
the failure of the Corporation (including its Board of Directors or its stockholders) to have made a determination prior to the commencement of such enforcement action that indemnification of Agent is proper in the circumstances, nor an actual
determination by the Corporation (including its Board of Directors or its stockholders) that such indemnification is improper shall be a defense to the action or create a presumption that Agent is not entitled to indemnification under this Agreement
or otherwise. 
  
 10. Subrogation. In the event of payment
under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Agent, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to
enable the Corporation effectively to bring suit to enforce such rights. 
  
 11. Non-Exclusivity of Rights. The rights conferred on Agent by this Agreement shall not be exclusive of any other right which Agent may have or hereafter acquire under any statute, provision of the
Corporation’s Certificate of Incorporation or Bylaws, agreement, vote of stockholders or directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding office. 
  
 12. Survival of Rights. 
  
 (a) The rights conferred on Agent by this Agreement
shall continue after Agent has ceased to be a director, officer, employee or other agent of the Corporation or to serve 

  

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at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise and shall inure to the benefit of Agent’s heirs, executors and administrators. 
  
 (b) The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Corporation, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had
taken place. 
  
 13. Separability. Each of the provisions
of this Agreement is a separate and distinct agreement and independent of the others, so that if any provision hereof shall be held to be invalid for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of
the other provisions hereof. Furthermore, if this Agreement shall be invalidated in its entirety on any ground, then the Corporation shall nevertheless indemnify Agent to the fullest extent provided by the Bylaws, the Code or any other applicable
law. 
  
 14. Governing Law. This Agreement shall be
interpreted and enforced in accordance with the laws of the State of Delaware. 
  
 15. Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties hereto. 
  
 16. Identical Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute but one and the same Agreement. Only one such counterpart need be produced to evidence the existence of this Agreement.

  
 17. Headings. The headings of the sections of this
Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof. 
  
 18. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (i)
upon delivery if delivered by hand to the party to whom such communication was directed or (ii) upon the third business day after the date on which such communication was mailed if mailed by certified or registered mail with postage prepaid: (a) if
to Agent, at the address indicated on the signature page hereof, and (b) if to the Corporation, to Hoku Scientific, Inc., 2153 N. King St., Suite 300 Honolulu, HI 96819, or (c) to such other address as may have been furnished to Agent by the
Corporation. 
  
 19. Entire Agreement. This Agreement
constitutes the full and complete agreement of the Corporation and Agent and supersedes all prior written or oral agreements between the parties with respect to the Corporation’s indemnification of Agent. 
  

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 IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on and as of the day and year first above written. 
  

			
	HOKU SCIENTIFIC, INC.
		
	By:	 	 
	
	AGENT
	
	 
	[Name]
	
	Address:

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