Exhibit 10.3
INCENTIVE STOCK OPTION
AGREEMENT
TOWER TECH HOLDINGS
INC.
2007 EQUITY INCENTIVE
PLAN
THIS AGREEMENT is entered into and effective as
of the day of
,
20 , by and between Tower Tech Holdings
Inc., a Nevada corporation (the “Company”) and
(“Participant”).
RECITALS
A.
Participant on the date hereof is a key employee or officer of the
Company or one of its Affiliates; and
B.
The Company wishes to grant incentive stock options to Participant
pursuant to this Agreement and the 2007 Equity Incentive Plan (the
“Plan”); and
C.
The Administrator has authorized the grant of an incentive stock
option to Participant to give Participant an inducement to acquire
a proprietary interest in the Company and an added incentive to
advance the interests of the Company and has determined that, as of
the effective date of this Agreement, the fair market value of the
Company’s common stock is
Dollars
($ )
per share.
AGREEMENTS
In
consideration of the premises and of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I. GRANT OF
OPTION
The
Company hereby grants to Participant the right, privilege, and
option (the “Option”) to purchase up to
( )
shares (the “Option Shares”) of the Company’s
Common Stock, according to the terms and subject to the conditions
hereinafter set forth and as set forth in the Plan. [The per
share price to be paid by Participant in the event of an exercise
of the Option shall be
Dollars ($
) OR: Because Participant owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of
stock of the Company or its Parent or any Subsidiary, the per share
price to be paid by Participant in the event of an exercise of the
Option shall be
Dollars
($ ),
which is not less than one hundred ten percent (110%) of the fair
market value of the Company’s Common Stock at the date of
grant of this Option.] The Option is intended to be an
“incentive stock option,” as defined in Section 422 of
the Internal Revenue Code as amended (the “Code”), to
the extent permitted by Section 422(d) of the Code.
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ARTICLE II. DURATION OF
OPTION AND EXERCISABILITY
A.
Initial Period of Exercisability . Except as provided in
Articles II.B. and II.C. below, the Option shall become exercisable
according to the following schedule. Once the Option becomes fully
exercisable Participant may continue to exercise this Option under
the terms and conditions of this Agreement until the first of the
termination of this Option as provided herein or the Expiration
Date (as defined below). If Participant does not purchase upon an
exercise of this Option the full number of shares which Participant
is then entitled to purchase, Participant may purchase upon any
subsequent exercise prior to this Option’s termination or
Expiration Date such previously unpurchased shares in addition to
those Participant is otherwise entitled to purchase. Except as
otherwise provided in Articles II.B. and II.C. below, the term
during which this Option may be exercised will continue until 5:00
p.m. (Central time) on [the date that is no more than ten (10)
years following the date of grant of this Option OR: for greater
than ten percent (10%) holders insert the date that is no more than
five (5) years following the date of grant of this Option]
(the “Expiration Date”), unless extension of the
term is permissible under Code Section 424(a). In no event shall
this Option be exercisable after the Expiration Date.
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Number of
Option Shares
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Vesting Date
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Available for Exercise
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B.
Termination of Employment for Reasons Other Than Death or
Disability . Except as provided in Article III below, in the
event Participant ceases to be a key employee or officer of the
Company or any Affiliate for any reason other than death or an
event that constitutes permanent and total disability within the
meaning of Section 22(e)(3) of the Code (“Disability”),
any unexercised portion of this Option which was exercisable as of
the date of such termination may be exercised, in whole or in part,
by Participant before the earlier of (i) the close of business on
the three-month anniversary date of such termination of employment,
and (ii) the Expiration Date. To the extent this Option was not
exercisable upon such termination of employment, or if Participant
does not exercise the unexercised portion of the Option that was
exercisable within the time specified in this Article II.B., all
rights of Participant under this Option shall terminate, and the
Option shall thereafter be void.
C.
Termination of Employment Due to Death or Disability . In
the event Participant ceases to be a key employee or officer of the
Company or any Affiliate by reason of death or Disability, any
unexercised portion of this Option which was exercisable as of the
date of such termination may be exercised, in whole or in part, by
Participant (or by Participant’s heirs or legal
representative(s) in the event of death or Disability) before the
earlier of (i) the close of business on the twelve-month
anniversary date of such termination of employment and (ii) the
Expiration Date. To the extent this Option was not exercisable upon
such termination of employment, or if Participant does not exercise
the unexercised portion of the Option that was exercisable within
the time specified in this Article II.C., all rights of Participant
under this Option shall terminate, and the Option shall thereafter
be void.
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ARTICLE III. CHANGE OF
CONTROL
A.
Acceleration . Notwithstanding anything in the Plan or this
Agreement to the contrary, if, upon or within one year of a Change
of Control (as defined below), the Company or a succeeding entity
terminates Participant’s employment relationship, this Option
shall become immediately and fully exercisable upon such Change of
Control and shall remain exercisable until the earlier of (i) the
Expiration Date, and (ii) the date determined by the Administrator
in connection with the terms of the Plan (including, without
limitation, upon consummation of the Change of Control, if so
determined by the Administrator). If Participant does not exercise
this Option, as the case may be, within the time specified in this
Article III.A., all rights of Participant under this Option shall
be forfeited. If Participant exercises this Option on a date that
is after the three-month anniversary of the date of his termination
of employment, this Option shall be treated as a nonqualified stock
option and shall no longer qualify as an incentive stock option
under Code Section 422.
B.
Change of Control Defined . For purposes of this Article
III, a “Change of Control” means:
i.
The consummation of any merger, consolidation, exchange, or
reorganization to which the Company is a party if the individuals
and entities who were stockholders of the Company immediately prior
to the effective date of such transaction have, immediately
following the effective date of such transaction, beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934) of less than fifty percent (50%) of the total combined
voting power of all classes of securities issued by the surviving
corporation;
ii.
The stockholders of the Company approve any plan or proposal for
the liquidation of the Company;
iii. A sale, lease or other transfer of all or
substantially all of the assets of the Company to any person or
entity which is not an Affiliate of the Company; or
iv.
The acquisition, without prior approval by resolution adopted by
the Board, of direct or indirect beneficial ownership (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934) of
securities of the Company representing, in the aggregate, more than
fifty percent (50%) or more of the total combined voting power of
all classes of the Company’s then-issued and outstanding
securities by any person or entity or by a group of associated
persons or entities acting in concert; provided, however, that a
Change of Control will not be deemed to occur if such acquisition
is initiated by Participant or an entity in which Participant owns
fifty percent (50%) or more of the total combined voting power of
all classes of such entity’s securities, or if Participant or
such entity is a member of the group of associated persons or
entities acting in concert.
C.
Limitation on Change of Control Payments . Participant shall
not be entitled to receive any Change of Control Payment, as
defined below, which would constitute a “parachute
payment” for purposes of Code Section 280G, or any successor
provision, and the regulations thereunder. In the event any Change
of Control Payment payable to Participant would
constitute
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a
“parachute payment,” Participant shall have the right
to designate those Change of Control Payments which would be
reduced or eliminated so that Participant will not receive a
“parachute payment.” For purposes of this Article
III.C., a “Change of Control Payment” shall mean any
payment, benefit or transfer of property in the nature of
compensation paid to or for the benefit of Participant under any
arrangement which is considered contingent on a Change of Control
for purposes of Code Section 280G, including, without limitation,
any and all of the Company’s salary, bonus, incentive,
restricted stock, stock option, equity-based compensation or
benefit plans, programs or other arrangements, and shall include
the acceleration of this Option.
ARTICLE IV. MANNER OF
OPTION EXERCISE
A.
Notice . This Option may be exercised by Participant in
whole or in part from time to time, subject to the conditions
contained in the Plan and herein, by delivery, in person or by
registered mail, to the Company at its principal executive office,
of a written notice of exercise. Such notice shall be in a form
satisfactory to the Administrator, shall identify the Option, shall
specify the number of Option Shares with respect to which the
Option is being exercised, and shall be signed by the person or
persons so exercising the Option. Such notice shall be accompanied
by payment in full of the total purchase price of the Option Shares
purchased; the exercise of the Option shall be deemed effective
upon receipt of such notice by the Company and upon payment that
complies with the terms of the Plan and this Agreement. In the
event that the Option is being exercised, as provided by the Plan
and Article II.C., above, by Participant’s heirs or legal
representative(s), the notice shall be accompanied by appropriate
proof of right of such person or persons to exercise the Option. As
soon as practicable after the effective exercise of the Option,
Participant (or Participant’s heirs or legal
representative(s) in the event of death or Disability) shall be
recorded on the stock transfer books of the Company as the owner of
the Option Shares purchased, and the Company may deliver to
Participant (or Participant’s heirs or legal
representative(s)) one or more duly issued stock certificates
evidencing such ownership. All requisite original issue or transfer
documentary stamp taxes shall be paid by the Company.
B.
Payment . At the time of exercise of this Option,
Participant may determine whether to pay the total purchase price
of the Option Shar
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