ENVIRONMENTAL POWER CORPORATION
Amended and Restated Nonstatutory Stock Option Agreement
Granted Under the Restated 2001 Stock Incentive Plan
1. Grant of Option .
This agreement, entered into as of June 29, 2005, amends and restates in its entirety that certain Nonstatutory Stock Option
Agreement, dated March 16, 2005 (the “Original Option Agreement”), evidencing the grant by Environmental Power
Corporation, a Delaware corporation (the “Company”), on March 16, 2005 (the “Grant Date”) to Steven Kessner, a consultant to
the Company (the “Participant”), of an option to purchase shares of the Company’s common stock, $0.01 par value per share
(“Common Stock”), pursuant to the Company’s Restated 2001 Stock Incentive Plan (the “Plan”).
The option evidenced by this Agreement shall be exercisable for up to a total of 42,751 shares (the “Shares”) of Common
Stock at an exercise price of $7.25 per share, on the terms and conditions set forth herein and in the Plan. Unless earlier
terminated, this option shall expire at 5:00 p.m., Eastern time, on September 14, 2010 (the “Final Exercise Date”). The option to
purchase any Shares represented by the Original Option Agreement in excess of the number of Shares referred to in this
paragraph is hereby cancelled and shall be of no further force or effect.
It is intended that the option evidenced by this agreement shall not 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 “Participant”, 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 .
This option shall be fully vested as to all of the Shares as of the date hereof, but may not be exercised prior to
September 14, 2005. However, the right to exercise this option shall terminate immediately upon any breac