NEAH POWER SYSTEMS, INC.
LONG TERM INCENTIVE COMPENSATION PLAN
STOCK OPTION AGREEMENT
(INCENTIVE AND NONSTATUTORY STOCK OPTIONS)
Pursuant to your Stock Option Grant Notice ("Grant Notice") and this Stock Option Agreement, Neah Power
Systems, Inc., a Nevada corporation, ("Company") has granted you an option under its Long Term Incentive
Compensation Plan (the "Plan") to purchase the number of shares of the Company's common stock indicated in
your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined in this
Stock Option Agreement but defined in the Plan shall have the same definitions as in the Plan.
The details of your option are as follows:
1. VESTING. Subject to the limitations contained herein, your option will vest as provided in your Grant Notice,
provided that vesting will cease upon the termination of your Service unless such termination is on account of your
death or Disability, in which case the Committee may, in its sole discretion, provide that the option will become
2. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of common stock subject to your
option and your exercise price per share referenced in your Grant Notice may be adjusted from time to time as
provided in Sections 16 and 17 of the Plan.
3. EXERCISE PRIOR TO VESTING ("EARLY EXERCISE"). If permitted in your Grant Notice (I.E., the
"Exercise Schedule" indicates that "Early Exercise" of your option is permitted) and subject to the provisions of
your option, you may elect at any time that is both (i) during the period of your Service and (ii) during the term of
your option, to exercise all or part of your option, including the nonvested portion of your option; provided,
(A) a partial exercise of your option shall be deemed to cover first vested shares of common stock and then the
earliest vesting installment of unvested shares of common stock;
(B) any shares of common stock so purchased from installments tha