Document:

exv10w1

 

Exhibit 10.1

CAPSTONE TURBINE CORPORATION

INDUCEMENT STOCK OPTION AGREEMENT

     THIS AGREEMENT is entered into on this 5th day of August, 2005 by and between Capstone Turbine
Corporation (the “Company”) with Walter J. McBride (the “Optionee”) to evidence the award of an
option to purchase the common stock of the Company that was made on July 11, 2005.

RECITALS:

     WHEREAS, the Company, through action of the compensation committee of its board of directors
taken on July 1, 2005, made a conditional option award to Optionee to purchase the Company’s Common
Stock (the “Option”) as an inducement to encourage Optionee to accept an offer of employment as the
Company’s chief financial officer;

     WHEREAS, Optionee has accepted such employment and the parties desire to set forth the terms
of such Option and to acknowledge that the shares of Common Stock that may be acquired hereunder
shall be registered under the Securities Act of 1933, as amended (“Securities Act”) on Form S-8;
and

     WHEREAS, the parties further acknowledge that this Option is granted separately from the
Capstone Turbine Corporation 2000 Equity Incentive Plan (the “2000 Plan”), but desire that this
Option be subject to the terms contained in the of the 2000 Plan, except as otherwise provided for
herein;

     NOW, THEREFORE, in consideration of these premises, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties do hereby agree to the
following terms and conditions regarding the Option covered hereby:

I. NOTICE OF STOCK OPTION GRANT

Notice is hereby given of the grant of the Option, subject to the following terms.
References in this Agreement to certain terms of the Option shall be as defined in this
Article I:

	 	 	 	 	 
	Date of Grant:

	 	July 11, 2005

	 
	 	 	 	 
	Exercise Price:

	 	$1.63 per Share

	 
	 	 	 	 
	Total Number of Shares:

	 	500,000	 
	 
	 	 	 	 
	Total Exercise Price:

	 	$815,000	 
	 
	 	 	 	 
	Type of Option:

	 	Non-Qualified Stock Option

	 
	 	 	 	 
	Term:

	 	10 years commencing on Date of Grant

 

 

     Exercise and Vesting Schedule:

     This Option shall vest and become exerciseable on the dates and as described in this
paragraph, subject to the Optionee continuing to be either an Employee or a Consultant to the
Company on such vesting dates. On July 11, 2006, Optionee shall be vested in and have the right to
exercise the Option with respect to 125,000 Shares. Thereafter, Optionee shall become vested in and
have the right to exercise this Option with respect to 1/48th of the number of Shares
subject to the Option on the day of each month corresponding to the Date of Grant, so that the
Option shall be fully vested and exercisable on the fourth anniversary of the Date of Grant.
However, if Optionee is terminated by the Company other than for Cause prior to the one-year
anniversary of the Date of Grant, Optionee shall become vested in and have the right to exercise
this Option with respect to 1/48th of the number of Shares subject to the Option for
each full month of employment following the Date of Grant, based on the day of the month
corresponding to the Date of Grant, through the date of such termination.

     Option Termination:

     The Option shall terminate on July 11, 2015; provided, however, that if Optionee ceases to be
either an Employee or a Consultant prior thereto, then the Option shall terminate earlier pursuant
to the terms of Sections 10(d), 10(e), and 10(f) of the Plan.

II. AGREEMENT

     1. Grant of Option. The Option to purchase the Shares of Common Stock is subject to
the terms set forth in Article I of this Agreement. Except as expressly provided for herein, this
Option is also subject to the terms, definitions and provisions of the 2000 Plan, which are
incorporated herein by reference. All capitalized terms used in this Agreement shall have the
meanings ascribed to such terms in the 2000 Plan, except as may be otherwise defined herein.

     2. Exercise of Option. The Option shall be exercisable cumulatively according to the
vesting schedule set forth in Article I of this Agreement, based on Optionee’s continued status as
an Employee or a Consultant, and subject to the procedures and methods for payment set forth in the
2000 Plan. Any portion of the exercisable portion of the Option may be exercised at any time by the
Optionee until the Option has terminated.

     3. Lock-Up Period. Optionee hereby agrees that if so requested by the Company or any
representative of the underwriters (the “Managing Underwriter”) in connection with any registration
of the offering of any securities of the Company under the Securities Act or any applicable state
laws, Optionee shall not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period (or such longer period as may be requested in writing by the Managing
Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the
effective date of a registration statement of the Company filed under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.

     4. Non-Transferability of Option. The Option may not be transferred in any manner
except by will or by the laws of descent or distribution. It may be exercised during the lifetime
of

 

 

Optionee only by Optionee. The terms of the Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

     This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original and all of which shall constitute one document.

	 	 	 	 	 
	 	CAPSTONE TURBINE CORPORATION

 	 
	 	By:  	     /s/ JOHN R. TUCKER
 	 
	 	 	Name:  	John R. Tucker 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION HEREOF IS EARNED ONLY BY CONTINUING EMPLOYMENT OR CONSULTANCY AT THE WILL
OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING
IN THIS STOCK OPTION AGREEMENT, NOR IN THE CAPSTONE TURBINE CORPORATION 2000
EQUITY INCENTIVE PLAN, WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER
UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY
BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE OPTIONEE’S EMPLOYMENT OR CONSULTANCY AT ANY TIME,
WITH OR WITHOUT CAUSE.

     Optionee hereby acknowledges receipt of the 2000 Plan and a current prospectus for the
offering represented by the grant of this Option. Optionee represents that he is familiar with the
terms and provisions of the 2000 Plan and this Agreement and does hereby accept the Option subject
to all of its terms. Optionee has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of this Agreement and the Option
granted hereunder. Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Committee upon any questions arising under the 2000 Plan or this
Agreement. Optionee further agrees to notify the Company upon any change in the residence address
indicated below.

	 	 	 	 	 
	Dated: August 5, 2005	 	/s/ WALTER J. McBRIDE
	 	 	 
	 	 	Walter J. McBride, Optionee
	 
	 	 	Residence Address:
	 

	 	 	 	 
	 
	 
	 

	 	 

 

 

	 	 	 	 	 

EXHIBIT A

CAPSTONE TURBINE CORPORATION

NOTICE OF EXERCISE

Capstone Turbine Corporation

21211 Nordhoff Street

Chatsworth, CA 91311

Attention: Corporate Secretary

     1. Exercise of Option. Effective as of today,                     , 2___, the undersigned
(“Optionee”) hereby elects to exercise the right to purchase                                 shares of the Common Stock
(the “Shares”) of Capstone Turbine Corporation (the “Company”) under and pursuant to the terms of
that certain option granted on July 11, 2005, as evidenced in an agreement dated August ___, 2005
(the “Agreement”).

     2. Representations of Optionee. Optionee acknowledges that he/she has received, read
and understands the Agreement, the Capstone Turbine Corporation 2000 Equity Incentive Plan (the
“2000 Plan”) and all materials constituting the prospectus for the option described in the
Agreement. Optionee has had opportunity to consult with legal and tax counsel prior to this
exercise.

     3. Rights as Stockholder. Optionee understands that (i) the Company shall promptly
issue (or cause to be issued) Shares to be acquired upon the exercise signified in this notice,
(ii) Optionee has no right to vote or receive dividends or any other rights as a stockholder with
respect to Shares covered hereby 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, (iii) 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 15 of the 2000 Plan.

     4. Tax Consultation. Optionee acknowledges that adverse tax consequences can result
from the purchase or disposition of the Shares. Optionee represents that Optionee has consulted
with any tax advisors that Optionee deems appropriate in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for any tax advice.

     5. Successors and Assigns. The Company may assign any of its rights under this notice
to single or multiple assignees, and this notice shall inure to the benefit of the successors and
assigns of the Company. This notice shall be binding upon Optionee and his heirs, executors,
administrators, successors and assigns.

     6. Interpretation. Any dispute regarding the interpretation of this notice shall be
submitted by Optionee or by the Company forthwith to the Company’s Board of Directors or the
committee thereof that administers the 2000 Plan (the “Committee”), which shall review such dispute
at its next regular meeting. The resolution of such a dispute by the Committee shall be final and
binding on the Company and on Optionee.

 

 

     7. Governing Law; Severability. This notice shall be governed by and construed in
accordance with the laws of the State of Delaware excluding that body of law pertaining to
conflicts of law. Should any provision of this notice be determined by a court of law to be illegal
or unenforceable, the other provisions shall nevertheless remain effective and shall remain
enforceable.

     8. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the United States mail
by certified mail, with postage and fees prepaid, addressed to the other party at its address as
shown below beneath its signature, or to such other address as such party may designate in writing
from time to time to the other party.

     9. Further Instruments. The parties agree to execute such further instruments and to
take such further action as may be reasonably necessary to carry out the purposes and intent of
this notice.

     10. Delivery of Payment. Optionee herewith delivers to the Company the full Exercise
Price for the Shares, as well as any applicable withholding tax.

     11. Entire Agreement. The 2000 Plan and the Agreement are incorporated herein by
reference. This notice, the 2000 Plan and the 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: Walter J. McBride
	 	 

	 	 	 	 	 
	Accepted by:	 	 
	 
	CAPSTONE TURBINE CORPORATION	 	 
	 
	 
	By:
	 	 	 	 
	 

	 
	 
	Name:
	 	 	 	 
	 

	 
	 
	Titleexv10w2

 

Exhibit
10.2

CAPSTONE TURBINE CORPORATION

2000 EQUITY INCENTIVE PLAN

Stock Option Agreement

     NOTICE OF STOCK OPTION GRANT

     [Employee Name & Address]

     You (the “Optionee”) have been granted a Stock Option (the “Option”) to purchase Common Stock
of the Company, subject to the terms and conditions of the Capstone Turbine Corporation 2000 Equity
Incentive Plan (the “Plan”) and this Stock Option Agreement. The terms of your grant are set forth
below:

I. NOTICE OF STOCK OPTION GRANT

Notice is hereby given of the grant of the Option, subject to the following terms.
References in this Agreement to certain terms of the Option shall be as defined in this
Article I:

	 	 	 
	Date of Grant:

	 	                    , 20        
	 
	 	 
	Exercise Price:

	 	$                     per Share
	 
	 	 
	Total Number of Shares:
	 	 
	 
	 	 
	Total Exercise Price:

	 	$
	 
	 	 
	Type of Option:

	 	            Non-Qualified Stock Option
	 
	 	 
	 

	 	            Incentive Stock Option
	 
	 	 
	Term:

	 	10 years commencing on Date of Grant

     Exercise and Vesting Schedule:

     This Option shall vest and become exerciseable on the dates and as described in this
paragraph, subject to the Optionee continuing to be either an Employee or a Consultant to the
Company on such vesting dates. On the first anniversary of the Date of Grant, Optionee shall be
vested in and have the right to exercise the Option with respect to one-fourth of the Shares
subject to this Option. Thereafter, Optionee shall become vested in and have the right to exercise
this Option with respect to 1/48th of the number of Shares subject to the Option on the
day of each month corresponding to the Date of Grant, so that the Option shall be fully vested and
exercisable on the fourth anniversary of the Date of Grant.

 

 

     Option Termination:

     The Option shall terminate on the tenth anniversary of the Date of Grant; provided, however,
that if Optionee ceases to be either an Employee or a Consultant prior thereto, the Option shall
terminate earlier pursuant to the terms of Sections 10(d), 10(e), and 10(f) of the Plan.

II. AGREEMENT

     1. Grant of Option. The Option to purchase the Shares of Common Stock is subject to
the terms set forth in Article I of this Agreement. Except as expressly provided for herein, this
Option is also subject to the terms, definitions and provisions of the Plan, which are incorporated
herein by reference. All capitalized terms used in this Agreement shall have the meanings ascribed
to such terms in the Plan, except as may be otherwise defined herein.

     If designated in the Notice of Stock Option Grant as an Incentive Stock Option, the Option is
intended to qualify as an incentive stock option as defined in Section 422 of the Internal Revenue
Code; provided, however, that to the extent that the aggregate Fair Market Value of stock with
respect to which incentive stock options (within the meaning of Code Section 422, but without
regard to Code Section 422(d)), including the Option, are exercisable for the first time by the
Optionee during any calendar year (under the Plan and all other incentive stock option plans of the
Company or any Subsidiary) exceeds $100,000, such options shall be treated as not qualifying under
Code Section 422, but rather shall be treated as Non-Qualified Stock Options to the extent required
by Code Section 422. The rule set forth in the preceding sentence shall be applied by taking
options into account in the order in which they were granted. For purposes of these rules, the
Fair Market Value of stock shall be determined as of the time the Option with respect to such stock
is granted.

     2. Exercise of Option. The Option shall be exercisable cumulatively according to the
vesting schedule set forth in Article I of this Agreement, based on Optionee’s continued status as
an Employee or a Consultant, and subject to the procedures and methods for payment set forth in the
Plan. Any portion of the exercisable portion of the Option may be exercised at any time by the
Optionee until the Option has terminated.

     3. Lock-Up Period. Optionee hereby agrees that if so requested by the Company or any
representative of the underwriters (the “Managing Underwriter”) in connection with any registration
of the offering of any securities of the Company under the Securities Act or any applicable state
laws, Optionee shall not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period (or such longer period as may be requested in writing by the Managing
Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the
effective date of a registration statement of the Company filed under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.

     4. Non-Transferability of Option. The Option may not be transferred in any manner
except by will or by the laws of descent or distribution. It may be exercised during the lifetime
of

 

 

Optionee only by Optionee. The terms of the Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

     This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original and all of which shall constitute one document.

	 	 	 	 	 
	 	 	CAPSTONE TURBINE CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Walter J. McBride
	 

	 	Title:
	 	Chief Financial Officer

OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION HEREOF IS EARNED ONLY BY CONTINUING EMPLOYMENT OR CONSULTANCY AT THE WILL
OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING
IN THIS STOCK OPTION AGREEMENT, NOR IN THE CAPSTONE TURBINE CORPORATION 2000
EQUITY INCENTIVE PLAN, WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER
UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY
BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE OPTIONEE’S EMPLOYMENT OR CONSULTANCY AT ANY TIME,
WITH OR WITHOUT CAUSE.

     Optionee hereby acknowledges receipt of the Plan and a current prospectus for the offering
represented by the grant of this Option. Optionee represents that he is familiar with the terms and
provisions of the Plan and this Agreement and does hereby accept the Option subject to all of its
terms. Optionee has had an opportunity to obtain the advice of counsel prior to executing this
Agreement and fully understands all provisions of this Agreement and the Option granted hereunder.
Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations
of the Committee upon any questions arising under the Plan or this Agreement. Optionee further
agrees to notify the Company upon any change in the residence address indicated below.

	 	 	 	 	 	 	 
	Dated:                    , 20        
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	[name of optionee]
	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Residence Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

 

 

EXHIBIT A

CAPSTONE TURBINE CORPORATION

NOTICE OF EXERCISE

Capstone Turbine Corporation

21211 Nordhoff Street

Chatsworth, CA 91311

Attention: Corporate Secretary

     1. Exercise of Option. Effective as of today,                     , 20___, the undersigned
(“Optionee”) hereby elects to exercise the right to
purchase                      shares of the Common Stock
(the “Shares”) of Capstone Turbine Corporation (the “Company”) under and pursuant to the terms of
that certain option granted on [grant date], as evidenced in an agreement dated                     , 20___
(the “Agreement”).

     2. Representations of Optionee. Optionee acknowledges that he/she has received, read
and understands the Agreement, the Capstone Turbine Corporation 2000 Equity Incentive Plan (the
“Plan”) and all materials constituting the prospectus for the option described in the Agreement.
Optionee has had opportunity to consult with legal and tax counsel prior to this exercise.

     3. Rights as Stockholder. Optionee understands that (i) the Company shall promptly
issue (or cause to be issued) Shares to be acquired upon the exercise signified in this notice,
(ii) Optionee has no right to vote or receive dividends or any other rights as a stockholder with
respect to Shares covered hereby 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, (iii) 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 15 of the Plan.

     4. Tax Consultation. Optionee acknowledges that adverse tax consequences can result
from the purchase or disposition of the Shares. Optionee represents that Optionee has consulted
with any tax advisors that Optionee deems appropriate in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for any tax advice.

     5. Successors and Assigns. The Company may assign any of its rights under this notice
to single or multiple assignees, and this notice shall inure to the benefit of the successors and
assigns of the Company. This notice shall be binding upon Optionee and his heirs, executors,
administrators, successors and assigns.

     6. Interpretation. Any dispute regarding the interpretation of this notice shall be
submitted by Optionee or by the Company forthwith to the Company’s Board of Directors or the
committee thereof that administers the Plan (the “Committee”), which shall review such dispute at
its next regular meeting. The resolution of such a dispute by the Committee shall be final and
binding on the Company and on Optionee.

 

 

     7. Governing Law; Severability. This notice shall be governed by and construed in
accordance with the laws of the State of Delaware excluding that body of law pertaining to
conflicts of law. Should any provision of this notice be determined by a court of law to be illegal
or unenforceable, the other provisions shall nevertheless remain effective and shall remain
enforceable.

     8. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the United States mail
by certified mail, with postage and fees prepaid, addressed to the other party at its address as
shown below beneath its signature, or to such other address as such party may designate in writing
from time to time to the other party.

     9. Further Instruments. The parties agree to execute such further instruments and to
take such further action as may be reasonably necessary to carry out the purposes and intent of
this notice.

     10. Delivery of Payment. Optionee herewith delivers to the Company the full Exercise
Price for the Shares, as well as any applicable withholding tax.

     11. Entire Agreement. The Plan and the Agreement are incorporated herein by reference.
This notice, the Plan and the 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:	 	 	 	Accepted by:
	 
	 	 	 	 	 	 
	 	 	 	 	CAPSTONE TURBINE CORPORATION
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	OPTIONEE:

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Title

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