Exhibit 10.4
NONQUALIFIED STOCK OPTION
AGREEMENT
TOWER
TECH HOLDINGS INC.
2007
EQUITY INCENTIVE PLAN
THIS AGREEMENT is entered into 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, officer, or
director of, or consultant or advisor to, the Company or one of its
Affiliates; and
B.
The Company wishes to grant a nonqualified stock option to
Participant to purchase shares of the Company’s Common Stock
pursuant to this Agreement and the Company’s 2007 Equity
Incentive Plan (the “Plan”); and
C.
The Administrator has authorized the grant of a nonqualified stock
option to Participant 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
I n 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 of Common Stock at a per share price of
Dollars
($ )
subject to the terms and conditions set forth herein, and set forth
in the Plan. The Option is a nonqualified stock option and will not
be treated as an incentive stock option, as defined under Section
422 of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations thereunder.
ARTICLE II.
DURATION OF OPTION AND
EXERCISABILITY
A.
General . 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 the Option under the terms and
conditions of this Agreement until the termination of the Option as
provided herein. If Participant does not exercise the Option with
respect to the full number of shares which Participant is then
entitled, Participant may purchase upon any subsequent exercise
prior to the Option’s termination such previously unpurchased
shares in addition to those Participant is otherwise entitled to
purchase.
Except as 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
,
20 (the “Expiration
Date”). In no event shall this Option be exercisable after
the Expiration Date.
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Vesting Date
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Number of Option Shares
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] [a
consultant or advisor] [a director] 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]
[a consultant or advisor] [a director] 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.
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 relationship with the Company, 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,
2
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 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
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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.B., 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
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