Exhibit 10.5
INCENTIVE STOCK OPTION
AGREEMENT
BROADWIND ENERGY,
INC.
2007 EQUITY INCENTIVE
PLAN
THIS AGREEMENT is entered into and
effective as of the day of
,
20 , by and between Broadwind
Energy, Inc., a Delaware 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. Shares granted in
excess of the 422(d) limit will be treated as a nonqualified
stock option.
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”). In no event shall
this Option be exercisable after the Expiration Date.
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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 . 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.
ARTICLE III. 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
2
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 Shares to be purchased solely in cash (including a
personal check or a certified or bank cashier’s check,
payable to the order of the Company) or by transfer from
Participant to the Company of previously-owned shares of Common
Stock of the Company with a then current aggregate Fair Market
Value equal to such total purchase price, or by a combination of
cash and such previously-owned shares of Common Stock. The
Administrator may reject Participant’s election to pay all or
part of the purchase price under this Option with previously-owned
shares of common stock and may require such purchase price to be
paid entirely in cash if, in the sole discretion of the
Administrator, payment in previously-owned shares would cause the
Company to be required to recognize a charge to earnings in
connection therewith. For purposes of this Agreement,
(a) “previously-owned shares” shall mean shares of
Common Stock of the Company that Participant has owned for at least
six months prior to the time of exercise, and (b) “Fair
Market Value” will be determined as set forth in the
Plan.
C.
Investment Purpose . The Company shall not be required
to issue or deliver any shares of Common Stock under this Option
unless (a)(1) such shares are covered by an effective and
current registration statement under the Securities Act of 1933 and
applicable state securities laws or (2) if the Administrator
has determined not to so register such shares, exemptions from
registration under the Securities Act of 1933 and applicable state
securities laws are available for such issuance (as determined by
counsel to the Company) and the Company has received from
Participant (or Participant’s heirs(s) or legal
representative(s), in the event of death or Disability) any
representations or agreements requested by the Company in order to
permit such issuance to be made pursuant to such exemptions, and
(b) the Company has obtained any other consent, approval or
permit from any state or federal governmental agency which the
Administrator shall, in its sole discretion upon the advice of
counsel, deem necessary or advisable. Unless a registration
statement under the Securities Act of 1933 is in effect with
respect to the i
