Document:

EXHIBIT 10.1.3

 

BEACON POWER CORPORATION

 

INCENTIVE STOCK OPTION AGREEMENT

Granted Under Third Amended And Restated 1998 Stock Incentive Plan

 

This Agreement, dated as of [DATE] (the “Grant Date”), is between Beacon Power Corporation and [NAME] (the “Optionee”), an employee of the Company.

 

1.             Grant of Option.  This agreement evidences the grant by Beacon Power Corporation, a Delaware corporation (the "Company") to the Optionee, of an option to purchase, as a whole or in part, on the terms provided herein and in the Company's Third Amended and Restated 1998 Stock Incentive Plan (the "Plan"), the shares (the "Shares") of common stock, par value $0.01 per share, of the Company ("Common Stock") at an exercise price per share, as set forth below:

 

	
            Shares:
 	
            Exercise Price:
 
	
             
 	
            $
 
			

 

Unless earlier terminated, this option shall expire one day before its 10th anniversary (the "Final Exercise Date".)  It is intended that the option evidenced by this agreement shall be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended and any regulations promulgated thereunder (the "Code".)  Except as otherwise indicated by the context, the term "Optionee", as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.

 

2.             Vesting Schedule.  Subject to the other terms of this Agreement regarding the exercisability of this option, the Shares shall become vest and become exercisable, as follows; provided, however, that as of each relevant vesting date, the Optionee’s employment with the Company has not terminated:

 

	
            Number of Shares

 
 	
             

Date
 
	
            Newly vested on the indicated date
 	
            Cumulative Vested
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 

 

The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, as a whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under this Agreement or the Plan.

 

	
            3.
 	
            Exercise of Option .
 

 

(a)            Form of Exercise.  Each election to exercise this option shall be in writing, signed by the Optionee, and received by the Company at its principal office, accompanied by a copy of this agreement and by payment in full as provided below.  The Optionee may purchase less than the number of Shares covered hereby, provided that no partial exercise of this option may be for any fractional share or for fewer than 100 whole shares.  Payment shall be as follows:

 

	
            (i)
 	
            in cash or by check, payable to the order of the Company;
 

 

 (ii)           in the sole discretion of the authorized administrator of the Plan, (A) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price or (B) delivery by the Optionee to the Company of a copy of irrevocable and 

 

 

unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price;

 

(iii)           delivery of shares of Common Stock owned by the Optionee valued at fair market value, as determined in the sole discretion of the board of directors, which Common Stock was owned by the Optionee at least six months prior to such delivery;

 

(iv)           to the extent permitted by the authorized administrator of the Plan, in its sole discretion, by payment of such other lawful consideration as the authorized administrator of the Plan may determine; or

 

	
            (v)
 	
            any combination of the above permitted forms of payment.
 

 

A certificate or certificates for the Shares purchased shall be issued by the Company after the exercise of the option and payment therefor, including the provision for any federal and state withholding taxes, and other applicable employment taxes.

 

(b)           Continuous Relationship with the Company Required.  Except as otherwise provided in this Section 3, this option may not be exercised unless the Optionee, at the time he or she exercises this option, is, and has been at all times since the date of grant of this option, an employee of the Company or any parent or subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an "Eligible Optionee".)

 

	
            (c)  
 	
            Termination of Option upon Termination of Employment, Death or Disability.  
 

 

 (i)            For Reasons other than Breach of Conduct, death or disability.  Upon the termination of Optionee’s employment with the Company for any reason other than a Breach of Conduct (as defined in subparagraph (iii) below), death or disability, any portion of this option that is not vested as described in Section 2 hereof shall immediately terminate, and any portion that vested before the employment termination date shall continue to be exercisable for three months following such termination date.  At the expiration of this three-month period, any portion of this option that has not been exercised shall immediately terminate.  However, no portion of the option is exercisable after the Final Exercise Date. 

 

 (ii)           Death or Disability.  If termination of employment is by reason of death or disability, any portion of this option which is not vested before such termination of employment shall immediately terminate, and any remaining portion of this option shall terminate if not exercised within one year following the date of death or commencement of disability. At the expiration of this one-year period, any portion of this option that has not been exercised shall immediately terminate.  However, no portion of the option is exercisable after the Final Exercise Date.

 

 (iii)         Breach of Conduct.  In the event of a Breach of Conduct by Optionee at any time while employed by the Company or within two years after termination of employment, any portion of this option which then remains outstanding but has not been exercised by the time of such Breach of Conduct, whether or not vested under Section 2, shall immediately terminate upon written declaration by the authorized administrator of the Plan.  Such declaration shall be communicated in writing to the Optionee.  In addition, the Company may, in its sole discretion, by written notice demand that any or all stock certificates for Shares acquired pursuant to the exercise of this option, or any profit realized from the sale or transfer of such Shares, be returned to the Company within five days of receipt of such notice,
and any exercise price paid by the Optionee shall be returned to Optionee by the Company immediately thereafter, without interest.  The Company shall be entitled to reimbursement of reasonable attorney fees and expenses incurred in seeking to enforce its rights under this paragraph.

 

 “Breach of Conduct” shall mean activities which constitute a serious breach of conduct as determined by the authorized administrator of the Plan in its sole discretion, including, but not limited to: (i) the disclosure or misuse of confidential information, trade secrets or other intellectual property of the Company or third parties who have disclosed such information, secrets or intellectual property to the Company or a company that controls, is controlled by or is under common control with the Company (collectively, an “Affiliate”), (ii) activities in violation of the policies of the Company or any Affiliate, including without limitation, the Company’s insider trading policy; (iii) the violation or breach of any material provision in any applicable contract or
agreement between the Optionee and the Company (or an Affiliate), including, for example, a violation or breach which is grounds for discharge for cause; (iv) engaging in conduct relating to the Optionee’s employment for which either criminal or civil penalties 

 

	
            - 2 -
 

 

 

have been sought; (v) engaging in activities which adversely affect or which are contrary or harmful to the interests of the Company or Affiliate, or (vi) in the event that the Optionee and Company have not signed a noncompetition agreement (which therefore otherwise would govern issues of noncompetition), engaging in competition with the Company or any Affiliate or soliciting their respective employees or customers on behalf of some other entity during employment or within one year following termination of employment with the Company or Affiliate.  The determination of Breach of Conduct shall be determined by the authorized administrator of the Plan in good faith and in its sole discretion.

 

4.             Withholding.  No Shares will be issued pursuant to the exercise of this option unless and until the Optionee pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.

 

5.             Nontransferability of Option.  This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Optionee, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Optionee, this option shall be exercisable only by the Optionee.

 

6.             Disqualifying Disposition.  This option shall not qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, if the Shares acquired pursuant to the exercise of the option are transferred, other than by will or by the laws of descent and distribution, within two years of the Grant Date or within one year after the transfer of the Shares to the Optionee pursuant to such exercise.  If the Optionee disposes of such Shares, the Optionee shall notify the Company in writing of such disposition.

 

7.             Provisions of the Plan.  This option is subject to the provisions of the Plan, a copy of which Optionee hereby acknowledges receiving with this option.

 

8.             No Right to Continued Employment.  This option shall not confer upon the Optionee any right with respect to continuance of employment by the Company, nor shall it interfere in any way with the right of the Company to terminate the Optionee’s employment at any time.

 

9.             Compliance with Law and Regulations.  This option and the obligation of the Company to sell and deliver shares hereunder shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.  The Company shall not be required to issue or deliver any certificates for Shares prior to (a) the listing of such Shares on any stock exchange on which the Shares may then be listed, and (b) the completion of any registration or qualification of such Shares under any federal or state law, or any rule or regulation of any government body which the Company shall, in its sole discretion, determine to be necessary or advisable.  Moreover, this option may not be exercised if
its exercise, or the receipt of Shares pursuant thereto, would be contrary to applicable law.

 

10.          Notices.  Any notice hereunder to the Company shall be addressed to Beacon Power Corporation, Attn: Compensation Committee), 234 Ballardvale Street, Wilmington, MA 01887, and any notice hereunder to the Optionee shall be sent to the address reflected on the payroll records of the Company, subject to the right of either party to designate at any time hereafter in writing some other address.

 

11.           Delaware Law to Govern.  This Agreement shall be construed and administered in accordance with and governed by the laws of Delaware.

 

12.           Certain Special Rules.  Optionee is aware (a) that special rules will apply to Optionee if Optionee owns equity securities of the Company and its Affiliates possessing more than 10% of the total combined voting power of all classes of outstanding stock of the Company or any Affiliate, and (b) that an option which is designated as an incentive stock option will be recharacterized as a nonqualified option, if and to the extent that the fair market value of Shares (determined as of the date of grant of the option covering such Shares) that become exercisable by Optionee for the first time during a single calendar year exceeds US$100,000.  To the extent that this Agreement and the grant of the option hereunder becomes subject to the
provisions of Section 409A of the Code, the Company and Optionee agree that the option granted hereunder may be amended, modified, rescinded or substituted by the Company with an award of comparable economic value as required to maintain compliance with the provisions of Section 409A of the Code.

 

 

	
            - 3 -
 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed instrument, as of the date first set forth above.

 

	
            Optionee:

 

_______________________________

Signature

 

_______________________________

Address
 	
            BEACON POWER CORPORATION

 

 

By: _______________________________

Signature

__________________________________

Print name, title
 

 

 

 

 

	
            - 4 -EXHIBIT 10.1.4

 

BEACON POWER CORPORATION

 

NON-QUALIFIED STOCK OPTION AGREEMENT

Granted Under Third Amended And Restated 1998 Stock Incentive Plan

 

This Agreement, dated _______ (the "Grant Date"), is between Beacon Power Corporation (the “Company”) and ________ (the “Optionee”) a _________ of the Company.  Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed to them in the Plan (as defined below). 

 

1.             Grant of Option.  This Agreement evidences the grant by the Company to the Optionee, of an option to purchase, in whole or in part, on the terms provided herein and in the Company's Third Amended and Restated 1998 Stock Incentive Plan (the "Plan"), the shares (the "Shares") of common stock, $0.01 par value per share, of the Company ("Common Stock") at an exercise price per share, as set forth below:

 

	
            Shares:
 	
            Exercise Price:
 
	
             
 	
            $
 
			

 

Unless earlier terminated, this option shall expire one day before the 10th anniversary of the Grant Date (the "Final Exercise Date").  It is intended that the option evidenced by this Agreement shall be a non-qualified stock option and not an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.  Except as otherwise indicated by the context, the term "Optionee", as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.

 

2.             Vesting Schedule.  Subject to the other terms of this Agreement regarding the exercisability of this option, the Shares covered by this option shall vest and become exercisable as follows:

 

	
            Number of Shares

 
 	
            Date
  
	
            Newly vested on the indicated date
 	
            Cumulative Vested
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 

 

The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under this Agreement or the Plan.

 

	
            3.
 	
            Exercise of Option .
 

 

(a)            Form of Exercise.  Each election to exercise this option shall be in writing, signed by the Optionee, and received by the Company at its principal office, accompanied by a copy of this agreement and by payment in full as provided below.  The Optionee may purchase less than the number of shares covered hereby, provided that no partial exercise of this option may be for any fractional share or for fewer than 100 whole shares.  Payment shall be as follows:

 

	
            (i)
 	
            in cash or by check, payable to the order of the Company;
 

 

 (ii)           in the sole discretion of the authorized administrator of the Plan, (A) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price or (B) delivery by the Optionee to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price;

 

 

 

 

(iii)           at such time as the Common Stock is registered under the Exchange Act, delivery of shares of Common Stock owned by the Optionee valued at Fair Market Value, which Common Stock was owned by the Optionee at least six months prior to such delivery;

 

(iv)           to the extent permitted by the authorized administrator of the Plan, in its sole discretion, by payment of such other lawful consideration as the authorized administrator of the Plan may determine; or

 

	
            (v)
 	
            any combination of the above permitted forms of payment.
 

 

A certificate or certificates for the Common Shares purchased shall be issued by the Company after the exercise of the option and payment therefor, including the provision for any federal and state withholding taxes, and other applicable employment taxes.

 

	
            (b)  
 	
            Termination of Option upon Termination of Service Provision, Death or Disability.  
 

 

 (i)           For Reasons other than Breach of Conduct, death or disability.  Upon the termination of Optionee’s service provision to the Company for any reason other than a Breach of Conduct (as defined in subparagraph (iii) below) or death or disability, any portion of this option that is not vested as described in Section 2 hereof shall immediately terminate, and any portion that vested before the service provision termination date shall continue to be exercisable until the Final Exercise Date.

 

 (ii)          Death or disability.  If termination of service provision is by reason of death or disability, any portion of this option which is not vested before such termination of service provision shall immediately terminate.  However, no portion of the option is exercisable after the Final Exercise Date.

 

 (iii)         Breach of Conduct.  In the event of a Breach of Conduct by Optionee at any time while providing service to the Company or within two years after termination of service provision, any portion of this option which has not been exercised by the time of such Breach, whether or not vested under Section 2, shall immediately terminate upon written declaration by the authorized administrator of the Plan.  Such declaration shall be communicated in writing to the Optionee.  In addition, upon a Breach of Conduct, the Company may, in its sole discretion, by written notice demand that any or all stock certificates for Common Shares acquired pursuant to the exercise of this option, or any profit realized from the sale or transfer of such Common Shares, be returned to the Company within five (5) days of
receipt of such notice, and any exercise price paid by the Optionee shall be returned to Optionee by the Company immediately thereafter, without interest.  The Company shall be entitled to reimbursement of reasonable attorney fees and expenses incurred in seeking to enforce its rights under this paragraph.

 

 “Breach of Conduct” shall mean activities which constitute a serious breach of conduct as determined by the authorized administrator of the Plan in its sole discretion, including, but not limited to: (i) the disclosure or misuse of confidential information, trade secrets or other intellectual property of the Company or third parties who have disclosed such information, secrets or intellectual property to the Company or a company that controls, is controlled by or is under common control with the Company (collectively, an “Affiliate”); (ii) activities in violation of the policies of the Company or any Affiliate, including without limitation, the Company’s insider trading policy; (iii) the violation or breach of any material provision in any applicable contract or
agreement between the Optionee and the Company (or an Affiliate), including, for example, a violation or breach which is grounds for discharge for cause; (iv) engaging in conduct relating to the Optionee’s service provision for which either criminal or civil penalties have been sought; (v) engaging in activities which adversely affect or which are contrary or harmful to the interests of the Company or Affiliate, or (vi) in the event that the Optionee and Company have not signed a noncompetition agreement (which therefore otherwise would govern issues of noncompetition), engaging in competition with the Company or any Affiliate during service provision or within one (1) year following termination of service provision to the Company or Affiliate.  The determination of Breach of Conduct shall be determined by the authorized administrator of the Plan in good faith and in its sole discretion.

 

 

 

 

 

4.             Withholding.  No Shares will be issued pursuant to the exercise of this option unless and until the Optionee pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.

 

5.             Nontransferability of Option.  This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Optionee, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Optionee, this option shall be exercisable only by the Optionee.  

 

6.             Provisions of the Plan.  This option is subject to the provisions of the Plan, a copy of which Optionee hereby acknowledges receiving with this option.

 

7.             No Right to Continued Board Membership, Etc.  This option shall not confer upon the Optionee any right with respect to continuance on the Board of Directors, nor shall it interfere in any way with the right of the Company to terminate the Optionee’s service on the Board at any time.

 

8.             Compliance with Law and Regulations.  This option and the obligation of the Company to sell and deliver shares hereunder shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.  The Company shall not be required to issue or deliver any certificates for shares of Common Stock prior to (a) the listing of such Common Stock on any stock exchange on which the Common Stock may then be listed, and (b) the completion of any registration or qualification of such Common Stock under any federal or state law, or any rule or regulation of any government body which the Company shall, in its sole discretion, determine to be necessary or advisable.  Moreover,
this option may not be exercised if its exercise, or the receipt of Common Stock pursuant thereto, would be contrary to applicable law.

 

9.             Notices.  Any notice hereunder to the Company shall be addressed to it at its principal business office, 234 Ballardvale Street, Wilmington, MA 01887 and any notice hereunder to the Optionee shall be sent to the address reflected on the payroll records of the Company, subject to the right of either party to designate at any time hereafter in writing some other address.

 

10.           Delaware Law to Govern.  This Agreement shall be construed and administered in accordance with and governed by the laws of Delaware.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed instrument, as of the date first set forth above.

 

	
            Optionee:  

 

_______________________________

Signature

 

_______________________________

Address
 	
            BEACON POWER CORPORATION

 

 

By: _______________________________

Signature

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