Exhibit 4.1
Grant No.
2009- ______
TITAN ENERGY WORLD WIDE,
INC.
2009 OMNIBUS STOCK INCENTIVE
PLAN
STOCK OPTION
AGREEMENT
This Stock Option Agreement (the " Option
Agreement ") is made and entered into as of the date of grant
set forth below (the " Date of Grant ") by and between Titan
Energy Worldwide, Inc., a Nevada corporation (the " Company
"), and the Optionee named below (the " Optionee
"). Capitalized terms not defined herein shall have the
meaning ascribed to them in the Company's 2009 Omnibus Stock
Incentive Plan (the " Plan ").
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Name of
Optionee:
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_________________________________
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Social
Security No.:
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_________________________________
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Address:
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_________________________________
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_________________________________
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_________________________________
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Shares
Subject to Option:
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_________________________________
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Exercise
Price Per Share:
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_________________________________
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Date of
Grant:
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_________________________________
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Vesting
Commencement
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Date:
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_________________________________
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Expiration
Date:
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_________________________________
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Type of
Stock Option
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(Check
one):
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¨
Incentive
Stock Option
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x
Non-Qualified
Stock Option
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1.
Number of Shares . The Company hereby grants to
Optionee an option (this " Option ") to purchase the total
number of shares of Common Stock set forth above as Shares Subject
to Option (the " Option Shares ") at the Exercise Price Per
Share set forth above (the " Exercise Price "), subject to
all of the terms and conditions of this Option Agreement and the
Plan. In the event the Option exceeds the $100,000 rule
of Section 422(d), the portion of this Option in excess of $100,000
shall be treated as a Non-Qualified Stock Option.
2.
Option Term . The term of the Option and of this
Option Agreement (the " Option Term ") shall commence on the
Date of Grant set forth above and, unless the Option is previously
terminated pursuant to Section 5 below, shall terminate upon the
Expiration Date set forth above. As of the Expiration
Date, all rights of the Optionee hereunder shall
terminate.
3.
Conditions of Exercise .
(a) Subject
to Section 5 below, the Option shall vest as to twenty-five (25%)
of the Option Shares on the anniversary of the Vesting Commencement
Date, and as to an additional 1/48 of the Option Shares on the last
day of each of the next thirty-six (36) months following such
anniversary; provided, however, that in the event Optionee's
employment is terminated by the Company without Cause (as defined
in Section 5 hereof) or by Optionee for Good Reason (as defined
below) within twelve (12) months following a Change in Control of
the Company, 100% of the Option Shares shall immediately vest and
become fully exercisable.
For purposes of this Option Agreement, " Good
Reason " shall mean the occurrence of any of the following
events without Optionee's prior written consent: (i) a termination
without Cause by the Company or any Parent or Subsidiary or
successor thereof, as appropriate; (ii) a material reduction in
Optionee's job responsibilities, provided that neither a mere
change in title alone nor reassignment following a Change of
Control to a position that is substantially similar to the position
held prior to the Change in Control shall constitute a material
reduction in job responsibilities; (iii) a reduction in Optionee's
then-current base salary, provided that an across-the-board
reduction in the salary level of all other employees or consultants
in positions similar to Optionee's by the same percentage amount as
part of a general salary level reduction shall not constitute such
a salary reduction; (iv) requiring Optionee to relocate to a
facility or location more than 50 miles from the Company's location
at the time of the Change in Control, provided that required travel
on corporate business to an extent consistent with the Optionee's
job responsibilities shall not constitute a forced
relocation.
For purposes of this Option Agreement, a "Change
in Control" of the Company shall be deemed to occur as of such time
of " Change in Control " means the first to occur of any one
of the events set forth in the following paragraphs,
provided that a Public Offering shall not constitute a
Change in Control:
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any Person is
or becomes the "Beneficial Owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Company (not including in the securities Beneficially Owned by such
Person any securities acquired directly from the Company)
representing 50% or more of the Company's then outstanding
securities, excluding any Person who becomes such a Beneficial
Owner in connection with a transaction described in clause (A) of
paragraph (iii) hereof; or
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the following
individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the effective
date of a Public Offering, constitute the Board of Directors of the
Company and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company)
whose appointment or election by the Board of Directors or
nomination for election by the Company's stockholders was approved
or recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the
Effective Date or whose appointment, election or nomination for
election was previously so approved or recommended; or
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there is
consummated a merger or consolidation of the Company with any other
corporation other than (A) merger or consolidation which results in
the directors of the Company immediately prior to such merger or
consolidation continuing to constitute at least a majority of the
board of directors of the Company, the surviving entity or any
parent thereof, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including
in the securities Beneficially Owned by such Person any securities
acquired directly from the Company) representing 50% or more of the
combined voting power of the Company's then outstanding securities;
or
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the
stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially
all of the Company's assets, other than a sale or disposition by
the Company of all or substantially all of the Company's assets to
an entity at least a majority of the board of directors of which
comprises individuals who were directors of the Company immediately
prior to such sale or disposition.
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For the purposes of this Option Agreement, the
term "Person" shall have the meaning given in Section 3(a)(9) of
the Securities Exchange Act of 1934 (as amended), as modified and
used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (i) the Company or any of its subsidiaries, (ii)
a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering
of such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the
Company.
(b) Notwithstanding
anything to the contrary herein, this Option may not be exercised
for vested Option Shares until the earlier of (i) January 1,
2011 or (ii) the date the Company consummates an initial
underwritten public offering of its equity securities pursuant to
an effective registration statement filed under the Securities Act
of 1933, as amended (the " Securities Act ") (either,
hereinafter referred to as the " First Exercise Date "), at
which time the right of the Optionee to purchase Option Shares with
respect to which this Option has become vested may be exercised in
whole or in part at any time or from time to time prior to
expiration of the Option Term; provided , however ,
that the Option may not be exercised for a fraction of a
Share.
4.
Method of Exercise of Option .
(a) The
Option may be exercised by delivering to the Company an executed
stock option exercise agreement in the form attached hereto as
Exhibit A , or in such other form as may be approved by the
Administrator from time to time (the " Exercise Agreement
"), which shall set forth, inter alia , (i)
Optionee's election to exercise the Option, (ii) the number of
shares of Common Stock being purchased and (iii) any
representations, warranties and agreements regarding Optionee's
investment intent and access to information as may be required by
the Company to comply with applicable securities laws, and payment
in full of the aggregate Exercise Price of the shares being
purchased. If someone other than the Optionee exercises
the Option, then such person must submit documentation reasonably
acceptable to the Company verifying that such person has the legal
right to exercise the Option.
(b) The
Option may not be exercised unless the stockholders of the Company
have approved the Plan and such exercise is in compliance with all
applicable federal and state securities law, as they are in effect
on the date of exercise.
(c) Payment
of the aggregate Exercise Price for Option Shares being purchased
and any applicable withholding taxes may be made (i) in cash or by
check, (ii) by means of a cashless exercise procedure either
through a broker or, at the discretion of the Administrator,
through withholding of shares of Common Stock otherwise issuable
upon exercise of the Option in an amount sufficient to pay the
aggregate Option Exercise Price and/or any applicable withholding
taxes, (iii) in the form of unrestricted Shares already owned by
the Optionee which, (x) in the case of unrestricted Shares acquired
upon exercise of an option, have been owned by the Optionee for
more than six months on the date of surrender, and (y) have an
aggregate Fair Market Value on the date of surrender equal to the
aggregate Exercise Price of the Shares as to which such Option
shall be exercised, or (iv) by any other means of exercise
authorized from time to time in the Plan and/or by the
Board.
5.
Effect of Termination of Employment or Service
. Upon the termination of Optionee's employment or
service with the Company or any Parent or Subsidiary under any
circumstances, the Option shall immediately terminate as to any
Option Shares that have not previously vested as of the date of
such termination (the " Termination Date ").
(a) In
the event of Optionee's termination of employment or service with
the Company or any Parent or Subsidiary for " Cause " (as
defined below), the Option shall immediately terminate in full as
of the Termination Date. For purposes of this Agreement,
Cause shall mean the occurrence of any of the following events, as
determined by the Committee in its sole and absolute discretion and
which determination shall be final: (i) Optionee's
conviction of or plea of guilty or nolo contendere to the
commission of an act or acts constituting a felony under the laws
of the United States or any state thereof, (ii) action by Optionee
toward the Company or any Parent or Subsidiary involving personal
dishonesty, theft or fraud in connection with Optionee's duties as
an employee of or consultant to the Company or any Parent or
Subsidiary, (iii) Optionee's willful failure to abide by
or follow lawful directions of the Company or any Parent or
Subsidiary or (iv) breach by Optionee of Section 6 of this Option
Agreement.
(b) In
the event of Optionee's termination of employment or service with
the Company or any Parent or Subsidiary for any reason other for
Cause or as a result of Optionee's death or Disability, any portion
of the Option that has vested as of the Termination Date shall be
exercisable in whole or in part until the later of (i) ninety (90)
days following the Termination Date or (ii) ninety (90) days
following the First Exercise Date; provided , however
, that in no event may the Option be exercised after the Expiration
Date. Upon expiration of such 90-day period, any
unexercised portion of the Option shall terminate in
full.
(c) In
the event of Optionee's termination of employment or service with
the Company or any Parent or Subsidiary as a result of Optionee's
death or Disability, any portion of the Option that has vested as
of the Termination Date shall be exercisable in whole or in part
any portion until the later of (i) one (1) year following the
Termination Date or (ii) one (1) year following the First Exercise
Date; provided , however , that in no event may the
Option be exercised after the Expiration Date. Upon
expiration of such one-year period, any unexercised portion of the
Option shall terminate in full.
6.
Noncompetition . Optionee acknowledges that, in
the course and as a result of employment with the Company or any
Parent or Subsidiary, Optionee will obtain special training and
knowledge and will come in contact with the Company's customers and
potential customers, which training, knowledge, and contacts would
provide invaluable benefits to competitors of the
Company. Accordingly, and in consideration of the
Company's granting this Option to Optionee, which Optionee
acknowledges is conditioned on the covenants contained herein,
Optionee agrees that the Company will be entitled to terminate all
rights to exercise the Option and to exercise the rights specified
in Section 7 below in the event that, during the time Optionee is
employed by the Company or any Parent or Subsidiary or within two
years thereafter, except with the prior written consent of the
Company, Optionee, either directly or indirectly, whether as an
employee, employer, consultant, agent, principal, partner, owner,
shareholder (other than as a holder of less than 5% of a
publicly-traded class of securities), officer, director, or in any
other individual or representative capacity, does any of the
following:
(a) competes
with, or engages in any business that is competitive with the
Company or any Parent or Subsidiary, as applicable, within 250
miles of any location at which Optionee was employed by or provided
services to the Company or any Parent or Subsidiary;
(b) solicits
or accepts any business or employment from any person or entity
that is, or any time within the preceding two years was solicited
to become, a customer of the Company or any Parent or Subsidiary,
as applicable;
(c) recruits,
solicit
