Restricted Stock Unit and Option Agreement

This Restricted Stock Unit and Option Agreement (this “ Agreement ” ) , dated as of April 3, 2009 (the “ Effective Date ”), is by and between Beacon Power Corporation (the “ Company ”) and F. William Capp (“ Executive ”), an executive officer of the Company.

WHEREAS, this Agreement is intended to provide Executive compensation in the form of restricted stock units (or “ RSUs ”) that convert into shares of the Company’s common stock, $.01 par value per share (the “ Common Stock ”);

WHEREAS, this Agreement is also intended to provide Executive with a non-qualified stock option to purchase shares of the Common Stock pursuant to the terms and conditions set forth herein;

NOW THEREFORE, it is agreed as follows:

1.1             Restricted Stock Unit Award .   Subject to the terms and conditions of this Agreement and pursuant to the Company’s Third Amended and Restated 1998 Stock Incentive Plan (the “ Plan ”), the Company hereafter will grant RSUs to Executive in accordance with the vesting table set forth below.  On each vesting date set forth below (each a “ Vesting Date ”), the Company shall be considered to have awarded RSUs in the indicated amount to the Executive.

1.2             Conversion to Common Stock .  Each vested RSU shall convert into one (1) share of Common Stock on the applicable Vesting Date; provided, that, if the applicable Vesting Date occurs during a period in which Executive is (a) subject to a lock-up agreement restricting Executive’s ability to sell Common Stock in the open market, (b) restricted from selling Common Stock in the open market because a trading window is not available, in the opinion of Company, or (c) trading is otherwise not appropriate, in the reasonable and good faith opinion of Company, such conversion of vested RSUs into shares of Common Stock shall be delayed until the date immediately following the expiration of the lock-up agreement or the opening of a trading window or confirmation by Company that trading is appropriate, as the case may be, provided, however, that in no event shall conversion be delayed beyond March 15 of the year following the Vesting Date year.

2.1            Grant of Option .   The Company hereby grants Executive an option (the “ Option ”) to purchase, as a whole or in part, on the terms provided herein and in the Plan the shares (the “ Shares ”) of Common Stock at an exercise price per share, as set forth below:

Unless earlier terminated, the Option shall expire one day before its 10th anniversary (the “ Final Exercise Date ”).  It is intended that the Option shall be a non-qualified stock option.

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

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 the Option under this Agreement or the Plan.

2.3           Exercise of Option .

(a)           Form of Exercise .  Each election to exercise the Option shall be in writing, signed by Executive, and received by the Company at its principal office, accompanied by a copy of this Agreement and by payment   in full as provided below.  Executive may purchase less than the number of Shares covered by the Option, provided that no partial exercise of the Option may be for any fractional share or for fewer than 100 whole shares of Common Stock.  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 Executive 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 Executive valued at fair market value, as determined in the sole discretion of the board of directors of the Company, which Common Stock was owned by Executive 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 Article III, the Option may not be exercised unless Executive, at the time he exercises the Option, is, and has been at all times since the Effective Date, an employee of the Company or any parent or subsidiary of the Company as defined in Section 424(e) or (f) of the Internal Revenue Code of 1986, as amended (the “ Code ”).

3.1             Termination of Employment .  

(a)            General.   Except as indicated below in (b), if Executive terminates his employment for any reason, including by resignation, or if the Company terminates his employment with or without a Breach of Conduct (as defined below), Executive may retain all RSUs and Shares underlying the Option that have vested before the Termination Notice Date (as defined below).  However, he will not be entitled to receive and shall forfeit any interest in RSUs and Shares underlying the Option that are scheduled to be vested after the Termination Notice Date.

The “ Termination Notice Date ” means the date on which Executive resigns (or if earlier, the date on which Executive notifies Company that Executive will resign), or the date on which Company terminates the employment for or without a Breach of Conduct (or if earlier, the date on which the Company notifies Executive that employment will be so terminated).

(b)            Special Rules for Options .  In the case of termination of employment by reason of death, disability (as defined under the Executive's employment agreement), resignation or without Breach of Conduct, the vested Shares underlying the Option will expire if not exercised within 365 days after the Termination Notice Date.  In the case of termination of employment for Breach of Conduct, all vested Shares underlying the Option will expire immediately on the written declaration of the authorized administrator of the Plan.

Such declaration shall be communicated in writing to Executive.  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 the 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 Executive shall be returned to Executive 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 that, only if possible to cure as determined by the authorized administrator of the Plan in its sole discretion, is not cured within 30 days after receipt of written notice to Executive, 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