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CLEAR
SKIES HOLDINGS, INC.
2007
EQUITY INCENTIVE PLAN
FORM
OF INCENTIVE STOCK OPTION AGREEMENT
This
INCENTIVE STOCK OPTION AGREEMENT (the “Option
Agreement”), dated as of the __ day of ___________, 20__
(the “Grant Date”), is between Clear Skies
Holdings, Inc., a Delaware corporation (the
“Company”), and _______ (the
“Optionee”), a key employee of the Company or of a
Subsidiary of the Company (a “Related
Corporation”), pursuant to the Clear Skies Holdings,
Inc. 2007 Equity Incentive Plan (the
“Plan”).
WHEREAS,
the Company desires to give the Optionee the opportunity to
purchase shares of common stock of the Company, par value
$0.001 (“Common Shares”) in accordance with the
provisions of the Plan, a copy of which is attached
hereto;
NOW
THEREFORE, in consideration of the mutual covenants
hereinafter set forth and for other good and valuable
consideration, the parties hereto, intending to be legally
bound hereby, agree as follows:
1.
Grant of Option .
The Company hereby grants to the Optionee the right and option (the
“Option”) to purchase all or any part of an aggregate
of
[________] (______) Common
Shares. The Option is in all respects limited and conditioned as
hereinafter provided, and is subject in all respects to the terms
and conditions of the Plan now in effect and as it may be amended
from time to time (but only to the extent that such amendments
apply to outstanding options). Such terms and conditions are
incorporated herein by reference, made a part hereof, and shall
control in the event of any conflict with any other terms of this
Option Agreement. The Option granted hereunder is intended to be an
incentive stock option (“ISO”) meeting the requirements
of the Plan and section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”), and
not a
nonqualified stock option (“NQSO”).
2.
Exercise Price .
The exercise price of the Common Shares covered by this Option
shall be $_________ per share. It is the determination of the
committee administering the Plan (the “Committee”) that
on the Grant Date the exercise price was not less than the greater
of (i) 100% (110% for an Optionee who owns more than 10% of the
total combined voting power of all shares of stock of the Company
or of a Related Corporation - a “More-Than-10% Owner”)
of the “Fair Market Value” (as defined in the Plan) of
a Common Share, or (ii) the par value of a Common
Share.
3.
Term .
Unless earlier terminated pursuant to any provision of the Plan or
of this Option Agreement, this Option shall expire on _________ __,
20__ (the “Expiration Date”), which date is not more
than 10 years (five years in the case of a More-Than-10% Owner)
from the Grant Date. This Option shall not be exercisable on or
after the Expiration Date.
4.
Exercise of Option .
The Option shall vest according to the following schedule, provided
that Optionee remains continuously employed as a key employee of
the Company or a Related Corporation from the date hereof through
the applicable vesting date:
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Date Installment Becomes Exercisable
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Number of Shares
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______ Shares
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an additional ______ Shares
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an additional ______ Shares
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an additional ______ Shares
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The
Committee may accelerate any vesting date of the Option, in
its discretion, if it deems such acceleration to be desirable.
Once the Option becomes exercisable, it will remain
exercisable until it is exercised or until it
terminates.
5.
Method of Exercising Option .
Subject to the terms and conditions of this Option Agreement and
the Plan, the Option may be exercised by written notice to the
Company at its principal office. The form of such notice is
attached hereto and shall state the election to exercise the Option
and the number of whole shares with respect to which it is being
exercised; shall be signed by the person or persons so exercising
the Option; and shall be accompanied by payment of the full
exercise price of such shares. Only full shares will be
issued.
The
exercise price shall be paid to the Company:
(a)
in
cash, or by certified check, bank draft, or postal or express
money order;
(b)
through
the delivery of Common Shares previously acquired by the
Optionee;
(c)
by
delivering a properly executed notice of exercise of the
Option to the Company and a broker, with irrevocable
instructions to the broker promptly to deliver to the Company
the amount necessary to pay the exercise price of the
Option;
(d)
in
Common Shares newly acquired by the Optionee upon exercise of
the Option (which shall constitute a disqualifying disposition
with respect to this ISO); or
(e)
in
any combination of (a), (b), (c) or (d) above.
In
the event the exercise price is paid, in whole or in part,
with Common Shares, the portion of the exercise price so paid
shall be equal to the Fair Market Value of the Common Shares
surrendered on the date of exercise.
Upon
receipt of notice of exercise and payment, the Company shall
deliver a certificate or certificates representing the Common
Shares with respect to which the Option is so exercised. The
Optionee shall obtain the rights of a shareholder upon receipt
of a certificate(s) representing such Common
Shares.
Such
certificate(s) shall be registered in the name of the person
so exercising the Option (or, if the Option is exercised by
the Optionee and if the Optionee so requests in the notice
exercising the Option, shall be registered in the name of the
Optionee and the Optionee’s spouse, jointly, with right
of survivorship), and shall be delivered as provided above to,
or upon the written order of, the person exercising the
Option. In the event the Option is exercised by any person
after the death or disability (as determined in accordance
with Section 22(e)(3) of the Code) of the Optionee, the notice
shall be accompanied by appropriate proof of the right of such
person to exercise the Option. All Common Shares that are
purchased upon exercise of the Option as provided herein shall
be fully paid and non-assessable.
Upon
exercise of the Option, Optionee shall be responsible for all
employment and income taxes then or thereafter due (whether
Federal, State or local), and if the Optionee does not remit
to the Company sufficient cash (or, with the consent of
the
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