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Exhibit 4.2
H POWER CORP.
STOCK OPTION AGREEMENT
AGREEMENT, made as of the __ day of __________, by and between H Power
Corp., a Delaware corporation (the "Company"), and _______ (the "Optionee").
WITNESSETH:
WHEREAS, the Company desires to grant to the Optionee an option
to purchase shares of common stock, $.001 par value, of the Company (the
"Common Stock") upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. GRANT
The Company hereby grants to the Optionee an option to purchase
_____ shares of Common Stock, at a purchase price per share equal to the
initial public offering price of the Common Stock (the "Option").
This Option is intended qualify as an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. VESTING
Except as specifically provided herein, during the Optionee's
continuous employment with the Company or any Parent or Subsidiary, the
Option shall become exercisable, in cumulative increments, on the following
vesting dates:
Incremental Cumulative
Percentage Percentage
Vesting Date Exercisable Exercisable
Unless sooner terminated, the Option will expire if and to the extent it is
not exercised within ten (10) years from the date hereof.
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3. METHODS OF EXERCISE.
The Option may be exercised form time to time by delivering to the
Secretary of the Company: (a) a written notice specifying the number of shares
to be purchased, and (b) payment in full of the exercise price together with the
amount, if any, deemed necessary by the Company to enable it to satisfy any
income tax withholding obligations with respect to the exercise (unless other
arrangements acceptable to the Company are made for the satisfaction of such
withholding obligations). The exercise price shall be payable in cash or by
personal or certified check or in shares of Common Stock (which have been owned
by the Optionee (free and clear of any liens or encumbrances) for at
least six (6) months) with a fair market value equal to the exercise price for
each Option share to be purchased or pursuant to such other methods approved
by the Committee from time to time or a combination of the foregoing methods.
4. TERMINATION OF EMPLOYMENT.
(a) If the Optionee's employment with the Company and its Parents and
Subsidiaries terminates by reason of death or "permanent and total disability"
(as defined In section 22(e)(3) of the Code), then: (i) that portion of the
Option which is not vested on the date of termination shall thereupon terminate,
and (ii) that portion of the Option which is vested on the date of termination
shall remain exercisable by the Optionee (or the deceased Optionee's
beneficiary) for the twelve (12) month period following such termination or, if
sooner, until the expiration of the stated term of the Option, and, to the
extent it is not exercised within such period, shall thereupon terminate.
(b) Notwithstanding anything herein to the contrary, if the Optionee's
employment is terminated by the Company or its Parents or Subsidiaries for Cause
(as defined in the Plan) or if, at the time of the Optionee's termination,
grounds for termination for Cause exist, then the Option (whether or not then
vested or exercisable ) shall immediately terminate and cease to be exercisable.
(c) If the Optionee's employment with the Company and its Parents
and Subsidiaries terminates for any reason (other than death, "permanent and
total disability" or Cause or at a time when Cause exists) or no reason,
then: (i) that portion of the Option that is not vested on the date of
termination shall thereupon terminate, and (ii) that portion of the Option
that is vested on the date of termination shall remain exercisable during the
three (3) month period (or, if the Optionee shall die during the three-month
period ,the twelve (12) month period) following such termination or, if
sooner, until the expiration of the stated term of the Option and, to the
extent not exercised within such period, shall thereupon terminate.
5. ADJUSTMENTS
The provisions of section 9 of the Plan shall apply.
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6. NON-TRANSFERABILITY.
The Option is not assignable or transferable by the Optionee, either
voluntarily or by operation of law, otherwise than by will or by the laws of
descent and distribution, and is exercisable, during the Optionee's lifetime,
only by the Optionee.
7. RIGHTS AS A STOCKHOLDER.
The Optionee (or other person entitled to exercise the Option) shall
have no rights as a stockholder of the Company with respect to any shares
subject to the Option until the Optionee (or such person) has become the holder
of record of such shares and no adjustment shall be made for dividends or
distributions of rights in respect of such shares for which the record date is
prior to the date which the Optionee (or such person) becomes the holder of
record.
8. LOCK-UP.
The Optionee hereby agrees that the Optionee shall not, without the
prior written consent of the managing underwriter for the Company's initial
public offering, during the period commencing on the date of the final
prospectus relating to the Company's initial public offering and ending on the
date specified by the Company and the managing underwriter (such period not to
exceed one hundred eighty (180) days) (a) lend, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
(whether such shares or any such securities are then owned by the Optionee or
are thereafter acquired), or (b) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (a) or (b) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing provisions of this
Section shall apply only to the Company's initial public offering of equity
securities and shall not apply to the sale of any shares to an underwriter
pursuant to an underwriting agreement. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to
the securities of the Optionee (and the shares or securities or every other
person subject to the foregoing restriction) until the end of such period.
9. MISCELLANEOUS.
(a) This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
(b) The Company may affix to certificates representing shares issued
pursuant to this Agreement any legend that the Company determines to be
necessary or advisable to reflect any restrictions to which the shares may be
subject, whether by agreement or otherwise. The Company may advise the transfer
agent to place a stop order against any legended shares.
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(c) Nothing in this Agreement shall give the Optionee a right to
continue in the employment of the Company or its Parents or Subsidiaries or
interfere in any way with the right of the Company or its Parents or
Subsidiaries to terminate the employment of the Optionee.
(d) This Agreement is subject to all the terms, conditions and
provisions of the Plan and to such rules, regulations and interpretations as may
be established or made by the Committee acting within the scope of its authority
and responsibility under the Plan. The Optionee acknowledges receipt of a copy
of the Plan prior to execution of this Agreement. Capitalized terms that are not
otherwise defined herein shall have the meanings ascribed thereto in the Plan.
(e) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to its principles of
conflicts of law. This Agreement and the Plan constitute the entire agreement
between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
H. POWER CORP.
By:
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H. Frank Gibbard
Chief Executive Officer
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Optionee
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