Exhibit 10.3

 

Grantee:                         

Shares:                         

 

GLOBAL POWER EQUIPMENT GROUP INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

UNDER THE 2004 STOCK INCENTIVE PLAN

 

Agreement made as of                         , 200_, between Global Power
Equipment Group Inc., a Delaware corporation (the “Company”), and
                                     (“Grantee”). Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Plan (as
defined below).

 

1. Grant of Option. Pursuant to the Global Power Equipment Group Inc. 2004 Stock
Incentive Plan (the “Plan”), the Company hereby grants to Grantee, as of the
date hereof, an option (the “Option”) to purchase up to      shares (the
“Covered Shares”) of the common stock, par value $0.01 per share, of the Company
(the “Stock”), at the exercise price per share of $     (the “Exercise Price”),
subject to the terms and conditions set forth herein and in the Plan. The Option
shall not be treated as an “incentive stock option,” as defined in Section 422
of the Code. Upon certain events, the number of shares of Stock and/or the
Exercise Price may be adjusted as provided in the Plan.

 

2. Grantee Bound by Plan. Attached hereto as Annex A is a copy of the Plan which
is incorporated herein by reference and made a part hereof. Grantee hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all the
terms and provisions thereof. The Plan should be carefully reviewed before any
decision is made to exercise the Option.

 

3. Exercise of Option. Subject to the terms and conditions contained herein,
including Sections 4 and 5, and in the Plan, the Option, to the extent vested,
may be exercised, in whole or in part, by written notice to the Company at any
time and from time to time after the date of grant. The Option shall not be
exercisable in any event after the tenth anniversary of the date hereof. Options
are subject to cancellation as provided in the Plan. Any part of the Option that
Grantee has not exercised as of the date Grantee no longer serves as director of
the Company (“Grantee Termination Date”) shall expire and be forfeited to the
extent not exercised on or before the 90th day following the Grantee Termination
Date (180 days if the Grantee Termination Date occurs as a result of the death
of Grantee), but in no event after the tenth anniversary of the date hereof.

 

4. Vesting. Subject to the limitations herein, the Option shall vest and be
exercisable in installments according to the following schedule, with respect to
each installment set forth in the schedule below on and after the vesting date
applicable to such installment:

 

Installment

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Applicable Vesting Date

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    % of Covered Shares

    

    % of Covered Shares

    

    % of Covered Shares

    

 

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An installment shall not become exercisable on the otherwise applicable vesting
date, if the Grantee Termination Date occurs on or before such vesting date.
Notwithstanding the foregoing provisions of this Section 4, the Option shall
vest and become exercisable as provided in the Plan upon a Change in Control, if
the Grantee Termination Date does not occur before the Change in Control.

 

5. Conditions to Exercise. The Option may not be exercised by Grantee unless the
following conditions are met:

 

(a) Grantee shall have given written notice to the Company (to the attention of
the Company’s Secretary) as to the number of shares of Stock Grantee intends to
purchase;

 

(b) Legal counsel for the Company must be satisfied at the time of exercise that
the issuance of the shares of Stock upon exercise will be in compliance with the
Securities Act and applicable United States Federal, state, local and foreign
laws; and

 

(c) Grantee must pay to the Company at the time of exercise the full purchase
price for the shares of Stock being acquired hereunder: (i) in cash (including
check, bank draft, money order or wire transfer of immediately available funds);
(ii) if permitted by applicable law and approved by the Committee, by delivery
of shares of Stock, previously acquired and currently owned by Grantee (or by
Grantee and his or her spouse jointly) and purchased or held for the requisite
period of time as necessary to avoid a charge to the Company’s earnings for
financial reporting purposes, having an aggregate Fair Market Value on the date
of exercise of the Option equal to such purchase price; (iii) if the Stock is
traded on a national securities exchange, the Nasdaq Stock Market, Inc. or
quoted on a national quotation system by the National Association of Securities
Dealers, and, in any case, if permitted by applicable law, through a “cashless
exercise” procedure approved by the Committee whereby Grantee may deliver
irrevocable instructions to a broker to deliver promptly to the Company cash in
an amount equal to such purchase price and any taxes required as a result of
such exercise; or (iv) by a combination of the consideration provided for in the
foregoing clauses (i) through (iii), including any withholding tax required in
connection with such exercise, in each case, in accordance with the terms of the
Plan.

 

6. Transferability. The Option (including the right to receive the shares of
Stock) may not be sold, transferred, pledged, assigned, encumbered or otherwise
alienated or

 

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hypothecated by Grantee, other than by will or the laws of descent and
distribution and, during the lifetime of Grantee, the Option may be exercised
only by Grantee (or, if Grantee is incapacitated, by Grantee’s legal guardian or
legal representative). In the event of the death of Grantee, the exercise of
Options may be made only by the executor or administrator of Grantee’s estate or
the Person or Persons to whom Grantee’s rights under the Option pass by will or
the laws of descent and distribution. If Grantee or anyone claiming under or
through Grantee attempts to violate this Section 6, such attempted violation
shall be null and void and without effect, and all of the Company’s obligations
hereunder shall terminate. Any shares of Stock received upon exercise of this
Option are subject to the restrictions on transfer, if any, and other rights and
obligations set forth in the Plan.

 

7. Administration. Any action reasonably taken or decision reasonably made by
the Committee arising out of or in connection with the construction,
administration, interpretation or effect of the Plan or this Agreement shall lie
within its sole and absolute discretion and shall be final, conclusive and
binding on Grantee and all persons claiming under or through Grantee. By
accepting this grant or other benefit under the Plan, Grantee and each person
claiming under or through Grantee shall be conclusively deemed to have indicated
acceptance and ratification of, and consent to, any action taken under the Plan
by the Committee.

 

8. Status of Stock. Notwithstanding any other provision of this Agreement, in
the absence of an effective registration statement for issuance under the
Securities Act of the Covered Shares acquirable upon exercise of this Option, or
an available exemption from registration under the Securities Act, the issuance
of shares of Stock acquirable upon exercise of this Option will be delayed until
registration of such shares is effective or an exemption from registration under
the Securities Act is available. The Company intends to use its best efforts to
ensure that no such delay will occur. In the event an exemption from
registration under the Securities Act is available upon an exercise of this
Option, Grantee (or the person permitted to exercise this Option in the event of
Grantee’s death or incapacity), if requested by the Company to do so, will
execute and deliver to the Company in writing an agreement containing such
provisions as the Company may require to assure compliance with applicable
securities laws.

 

Grantee agrees that Stock which Grantee may acquire by exercising the Option
will not be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable Federal or state securities laws. Grantee also
agrees (i) that the certificates representing the Covered Shares purchased under
this Option may bear such legend or legends as the Company deems appropriate in
order to assure compliance with applicable securities laws, (ii) that the
Company may refuse to register the transfer of Covered Shares purchased under
this Option on the stock transfer records of the Company if such proposed
transfer would in the opinion of counsel satisfactory to the Company constitute
a violation of any applicable securities law and (iii) that the Company may give
related instructions to its transfer agent, if any, to stop registration of the
transfer of the Covered Shares purchased under this Option.

 

9. Notices. Any notice hereunder to the Company shall be addressed to the
Company’s principal executive office, Attention: Compensation Committee of the
Board of Directors, and any notice hereunder to Grantee shall be addressed to
Grantee at Grantee’s last address on the records of the Company, subject to the
right of either party to designate at any

 

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time hereafter in writing some other address. Any notice shall be deemed to have
been duly given when delivered personally, one day following dispatch if sent by
reputable overnight courier, fees prepaid, or three days following mailing if
sent by registered mail, return receipt requested, postage prepaid and addressed
as set forth above.

 

10. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successors and assigns to the Company and all persons lawfully
claiming under Grantee.

 

11. Governing Law. The validity, construction, interpretation, administration
and effect of the Plan, and of its rules and regulations, and rights relating to
the Plan and to this Agreement, shall be governed by the substantive laws, but
not the choice of law rules, of Delaware.

 

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IN WITNESS WHEREOF, the Company and Grantee have executed this Agreement as of
the date first above written.

 

GLOBAL POWER EQUIPMENT GROUP INC.

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Name:         Title:         GRANTEE:        

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ANNEX A

 

Global Power Equipment Group Inc.

 

2004 Stock Incentive Plan