Exhibit 10.3

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is effective as of June 30, 2008, by
and between BROADWIND ENERGY, INC. (the “Company”), and J.D. Rubin
(“Executive”).

 

WHEREAS, the Company is engaged in the business of manufacturing wind turbine
tower structures, gearing and gear sets for wind gearboxes, specialized
heavy-haul transportation services for the wind industry, service and
maintenance of wind turbines, and wind turbine construction labor support (the
“Company Business”);

 

WHEREAS, the Company desires to employ Executive and Executive desires to be
employed by the Company; and

 

WHEREAS, the Company and Executive desire to enter into this Agreement to set
forth the rights, duties, benefits and obligations with respect to the
employment of Executive by the Company under the terms and conditions herein
provided.

 

NOW, THEREFORE, in consideration of Executive’s employment with the Company, and
the mutual and respective covenants and agreements of the parties herein
contained, and other good and valuable consideration present but not
specifically set forth, the parties hereto agree as follows:

 

1.                                       Employment.  The Company hereby agrees
to employ Executive as Vice President and General Counsel for the Company, and
Executive hereby agrees to be employed by the Company, on the terms and
conditions set forth herein.  This Agreement and Executive’s employment
hereunder shall commence on June 30, 2008 (the “Start Date”), and shall continue
for a period of two years, unless sooner terminated in accordance with the
provisions of Section 6 hereof (the “Term”).  The Term will thereafter
automatically extend for successive one-year periods, but Executive’s employment
may at any time be terminated in accordance with the provisions of Section 6
hereof.

 

2.                                       Duties and Responsibilities.  Executive
shall serve as General Counsel for the Company and shall report to the Chief
Executive Officer, the Company’s Board of Directors  (the “Board”), and
his/their designees.  Executive shall have the duties and responsibilities that
are commensurate with that position, as well as such other duties as may be
assigned to Executive by the Chief Executive Officer or the Board from time to
time.  Executive shall devote all of his working time and best efforts to the
business and affairs of the Company except for such time as shall reasonably be
required to serve in connection with civic or charitable activities, or manage
Executive’s financial matters, provided that such activities, in the aggregate,
do not interfere with Executive’s ability to perform the duties and
responsibilities of his employment hereunder.  Executive shall follow the
direction of the Chief Executive Officer, the Board and his/their designees, and
shall perform all duties and responsibilities of the position that he holds, as
those duties and responsibilities may change from time to time.  Executive shall
comply with the Company’s standards, policies and procedures in effect on the
date of this Agreement and as they may change from time to time.

 

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3.                                       Compensation and Related Matters.

 

(a)                                  Base Salary.  Executive shall receive an
initial annual base salary of Two Hundred Fifteen Thousand US Dollars
($215,000), less required and authorized withholding and deductions. 
Executive’s salary shall be subject to review and adjustment by the Company at
least annually, and paid in accordance with the Company’s regular payroll
schedule as it applies to salaried employees (“Base Salary”).

 

(b)                                 Bonus.  Executive has received a one-time
signing bonus of $25,000, less required and authorized withholding and
deductions.  For 2008, Executive will be eligible for an annual bonus of up to
100% of his Base Salary in accordance with goals as mutually agreed upon in
advance between Executive and the Company.  For 2009 and thereafter, Executive
will be eligible for an annual bonus in an amount, and pursuant to such terms,
as set forth in a written plan or other written arrangement adopted by the
Company.

 

(c)                                  Stock.  Executive shall be eligible to
participate in the Company’s common stock incentive plan as in effect from time
to time.  The Company has granted Executive 75,000 stock options on his first
day of employment with a five-year vesting schedule under the Company’s 2007
Equity Incentive Plan.  The Company has granted Executive, on October 17, 2008,
restricted stock units under the Company’s 2007 Equity Incentive Plan covering
25,000 shares of Company stock.  The Company may grant Executive additional
stock options, restricted stock units or other awards under the Company’s 2007
Equity Incentive Plan based on individual and Company performance criteria to be
established by the Board.

 

(d)                                 Benefits.  Executive shall be entitled to
all rights and benefits for which he is eligible under the terms and conditions
of the Company’s standard benefits and compensation practices that may be in
effect from time to time and provided by the Company to its employees
generally.  In addition to, and not in limitation of, the foregoing, during the
Term, Executive shall be eligible to accrue up to four weeks (20 business days)
of paid time off (PTO) per anniversary year exclusive of any business day with
respect to which the Company is closed for business due to any federal, state or
local holiday or any day off generally granted by the Company to its employees,
subject to the Company’s then-current paid time off policy (which shall not have
the effect of reducing said four weeks (20 business days) of paid vacation).  In
addition to, and not in limitation of the foregoing, during the Term, Executive
shall receive any additional benefits generally provided by the Company to
executive employees of the Company, including group health insurance for
Executive and dependants, life insurance, and long term disability insurance,
and participation in the Company’s 401(k) plan, all in accordance with
applicable plan documents.

 

(e)                                  Expense Reimbursement.  The Company will
reimburse Executive for reasonable business expenses in accordance with the
Company’s standard expense account and reimbursement policies.

 

4.                                       Representations and Warranties of
Executive.  In order to induce the Company to employ Executive, Executive hereby
represents and warrants to the Company as follows:

 

(a)                                  Binding Agreement.  This Agreement has been
duly executed and delivered by Executive and constitutes a legal, valid and
binding obligation of Executive and is enforceable against Executive in
accordance with its terms.

 

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(b)                                 No Violations of Law.  The execution and
delivery of this Agreement and the other agreements contemplated hereby by
Executive do not, and the performance by Executive of his obligations under this
Agreement and the other agreements contemplated hereby will not, violate any
term or provision of any law, or any writ, judgment, decree, injunction, or
similar order applicable to Executive.

 

(c)                                  Litigation.  Executive is not involved in
any proceeding, claim, lawsuit, or investigation alleging wrongdoing by
Executive before any court or public or private arbitration board or panel or
governmental department, commission, board, bureau, agency or instrumentality.

 

(d)                                 No Conflicting Obligations.  Executive is
not under, or bound to be under in the future, any obligation to any person or
entity that is or would be inconsistent or in conflict with this Agreement or
would prevent, limit, or impair in any way the performance by him of his
obligations hereunder, including but not limited to any duties owed to any
former employers not to compete or use or disclose confidential information. 
Executive represents and agrees that he will not disclose to the Company or use
on behalf of the Company any confidential information or trade secrets belonging
to a third party, including any former employer.  Executive further represents
and agrees that he has returned, or will return before his last day of
employment with his current employer, all property belonging to Executive’s
current and previous employers, including but not limited to any and all
confidential information.

 

5.                                       Restrictive Covenants.

 

(a)                                  Confidentiality Critical.  The parties
agree that the business in which the Company is engaged is highly sales-oriented
and the goodwill established between Executive and the Company’s customers and
potential customers is a valuable and legitimate business interest worthy of
protection under this Agreement.  Executive acknowledges and agrees that
developing and maintaining business relationships is an important and essential
business interest of the Company.  Executive further recognizes that, by virtue
of his employment by the Company, he will be granted otherwise prohibited access
to confidential and proprietary data of the Company which is not known to its
competitors and which has independent economic value to the Company and that he
will gain an intimate knowledge of the Company’s business and its policies,
customers, employees and trade secrets, and of other confidential, proprietary,
privileged, or secret information of the Company and its customers (“Customers”)
(collectively, all such nonpublic information is referred to as “Confidential
Information”).

 

This Confidential Information includes, but is not limited to data relating to
the Company’s marketing and servicing programs, procedures and techniques;
business, management and personnel strategies; the criteria and formulae used by
the Company in pricing its products, loss control and information management
services; the Company’s products and services; the Company’s computer system and
software; lists of prospects; customer lists; the identity, authority and
responsibilities of key contacts at accounts of Customers; and the composition
and organization of Customers’ business.  Executive recognizes and admits that
this Confidential Information constitutes valuable property of the Company,
developed over a long period of time and at substantial expense, and worthy of
protection.  Executive acknowledges and agrees that only through his employment
with the Company could he have the opportunity to

 

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learn this Confidential Information.  The Company acknowledges and agrees that
Executive has substantial knowledge of the wind industry.

 

(b)                                 Confidential Information.  Executive shall
not at any time (for any reason), directly or indirectly, for himself or on
behalf of any other person or entity, (A) disclose to any person or entity
(except to employees or other representatives of the Company who need to know
such Confidential Information to the extent reasonably necessary for Executive
to perform his duties under this Agreement or such employees or representatives
to perform their duties on behalf of the Company, and except as required by law)
any Confidential Information, including, without limitation, business or trade
secrets of, or products or methods or techniques used by, the Company, or any
Confidential Information whatsoever concerning the Customers, (B) use, directly
or indirectly, for his own benefit or for the benefit of another (other than a
Customer) any of such Confidential Information, or (C) assist any other person
or entity in connection with any action described in either of the foregoing
clauses (A) and (B).   The Confidentiality obligations of this Section 5 are in
addition to and do not detract from Executive’s professional responsibilities as
General Counsel to the Company.

 

(c)                                  Noninterference with Employees.  Executive
further agrees that the Company has expended considerable time, energy and
resources into training its other employees (“Co-Workers”).  As a result, during
his employment with the Company and for a period of eighteen (18) months
thereafter, Executive shall not, for any reason, directly or indirectly, for
himself or on behalf of any other person or entity, (A) induce or attempt to
induce any Co-Worker to terminate employment with the Company, (B) interfere
with or disrupt the Company’s relationship with any of the Co-Workers,
(C) solicit, entice, hire, cause to hire, or take away any person employed by
the Company at that time or during the 18-month period preceding Executive’s
last day of employment with the Company, or (D) assist any other person or
entity in connection with any action described in any of the foregoing clauses
(A) through (C).

 

(d)                                 Non-competition.  Executive further agrees
with the Company to the following provisions, all of which Executive
acknowledges and agrees are necessary to protect the Company’s legitimate
business interests.  Executive covenants and agrees with the Company that:

 

(i)                                     Unless otherwise agreed between the
parties, Executive shall not, during his employment with the Company and for a
period of eighteen (18) months thereafter, either directly or indirectly,
(except as set forth  in Section 5(f)(iii) below) engage in, render service or
other assistance to, or sell products or services, or provide resources of any
kind, whether as an owner, partner, shareholder, officer, director, employee,
consultant or in any other capacity, whether or not for consideration, to any
person, corporation, or any entity, whatsoever, that owns, operates or conducts
a business that competes, in any way, with the Company Business (as defined at
the start of this Agreement), other than the ownership of 5% or less of the
shares of a public company where Executive is not active in the day-to-day
management of such company.  With respect to the post employment application of
this Section 5(d)(i), the restrictions shall extend only to those specific
countries or provinces where the Company conducts business on the day that
Executive’s employment with the Company terminates.

 

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(ii)                                  Executive shall not, during his employment
with the Company and for a period of eighteen (18) months thereafter, either
directly or indirectly, (A) solicit, call on or contact any Customer of the
Company with whom Executive has had material contact during his employment with
the Company for the purpose or with the effect of offering any products or
services of any kind offered by the Company at that time or during his
employment with the Company, (B) request or advise any present or future vendors
or suppliers to the Company to cancel any contracts, or curtail their dealings,
with the Company, or (C) assist any other person or entity in connection with
any action described in any of the foregoing clauses (A) through (B).

 

(iii)                               During his employment with the Company,
Executive shall not own, or permit ownership by Executive’s spouse or any minor
children under the parental control of Executive, directly or indirectly, an
amount in excess of five percent (5%) of the outstanding shares of stock of a
corporation, or five percent (5%) of any business venture of any kind, which
operates or conducts a business that competes, in any way, with the Company.

 

(e)                                  Non-disparagement.  At any time during or
after Executive’s employment with the Company, Executive shall not disparage the
Company or any shareholders, directors, officers, employees, or agents of the
Company.  During and after Executive’s employment with the Company, neither the
Company nor its directors or officers shall disparage Executive to third
parties.

 

(f)                                    Understandings.

 

(i)                                     The provisions of this Section 5 shall
be construed as an agreement independent of any other claim.  The existence of
any claim or cause of action of Executive against the Company, whether
predicated on Executive’s employment or otherwise, shall not constitute a
defense to the enforcement by the Company of the terms of Section 5 of this
Agreement.  Executive waives any right to a jury trial in any litigation
relating to or arising from this Agreement.

 

(ii)                                  Executive acknowledges and agrees that the
covenants and agreements contained herein are necessary for the protection of
the Company’s legitimate business interests and are reasonable in scope and
content.  Executive agrees that the restrictions contained in this Section 5 are
reasonable and will not unduly restrict him in securing other employment or
income in the event his employment with the Company ends.  Executive
acknowledges and agrees that he executed this Agreement on or before his first
day of employment with the Company.

 

(iii)                               This Section 5 is meant to comply with
Rule 5.6 and other applicable provisions of the Illinois Rules of Professional
Conduct.  Nothing in this Section 5 shall prevent or restrict Executive from
engaging in the practice of law after resignation or termination of employment.

 

(g)                                 Injunctive Relief.  Executive acknowledges
and agrees that any breach by him of any of the covenants or agreements
contained in this Section 5 would give rise to

 

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irreparable injury and would not be adequately compensable in damages. 
Accordingly, Executive agrees that the Company may seek and obtain injunctive
relief against the breach or threatened breach of any of the provisions of this
Agreement in addition to any other legal or equitable remedies available.

 

(h)                                 Reformation and Survival.  The Company and
Executive agree and stipulate that the agreements and covenants contained in
this Agreement and specifically of this Section 5 are fair and reasonable in
light of all of the facts and circumstances of the relationship between them. 
The Company and Executive agree and stipulate that Executive has hereby agreed
to be bound to the obligations, restrictions and covenants of this Section 5 as
a condition to his employment and in consideration of his compensation, stock
option grant, restricted stock unit grant, severance terms, and all other terms
and provisions of this Agreement.  The Company and Executive acknowledge their
awareness, however, that in certain circumstances courts have refused to enforce
certain agreements not to compete.  The Company and Executive agree that, if any
term, clause, subpart, or provision of this Agreement is for any reason adjudged
by a Court of competent jurisdiction to be invalid, unreasonable, unenforceable
or void, the same will be treated as severable, and shall be modified to the
extent necessary to be legally enforceable to the fullest extent permitted by
applicable law, and that such modification will not impair or invalidate any of
the other provisions of this Agreement, all of which will be performed in
accordance with their respective terms.  Thus, in furtherance of, and not in
derogation of, the provisions of this Section 5, the Company and Executive agree
that in such event, this Section 5 shall be deemed to be modified or reformed to
restrict Executive’s conduct to the maximum extent (in terms of time, geography,
and business scope) that the court shall determine to be enforceable.  The
provisions of this Section 5 shall survive the termination of this Agreement and
Executive’s resignation or termination of employment, regardless of the reason
and whether voluntary or involuntary.

 

6.                                       Termination.

 

(a)                                  Termination By The Company With Cause.  The
Company has the right, in its reasonable determination at any time during the
Term, to terminate Executive’s employment with the Company for Cause (as defined
below) by giving written notice to Executive as described in this Section 6(a). 
Prior to the effectiveness of termination for Cause under subclause (i), (ii),
(iii) or (iv) below, Executive shall be given thirty (30) calendar days’ prior
written notice from the Company, specifically identifying the reasons which are
alleged to constitute Cause for any termination pursuant to the aforementioned
subclauses, and an opportunity to cure in the event Executive disputes such
allegations; provided, however, that the Company shall have no obligation to
continue to employ Executive following such thirty (30) calendar day notice
period unless Executive has cured the condition giving rise to the Cause.  The
Company’s termination of Executive’s employment for Cause under subclause (v) or
(vi) below shall be effective immediately upon the Company’s written notice to
Executive.  If the Company terminates Executive’s employment for Cause, the
Company’s obligation to Executive shall be limited solely to the payment of
unpaid Base Salary accrued up to the effective date of termination plus any
accrued but unpaid benefits to the effective date of termination, and any unpaid
bonus earned in accordance with the then applicable bonus plan or program to the
effective date of termination.

 

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As used in this Agreement, the term “Cause” shall mean and include
(i) Executive’s abuse of alcohol that affects Executive’s performance of
Executive’s duties under this Agreement, or use of any controlled substance;
(ii) a willful act of fraud, dishonesty or breach of fiduciary duty on the part
of Executive with respect to the business or affairs of the Company;
(iii) material failure by Executive to comply with applicable laws and
regulations or professional standards relating to the business of the Company;
(iv) material failure by Executive to satisfactorily perform his duties
hereunder, a material breach by Executive of this Agreement, or Executive
engaging in conduct that materially conflicts with the best interests of the
Company or that may materially harm the Company’s reputation; (v) Executive
being subject to an inquiry or investigation by a governmental authority or
self-regulatory organization such that the existence of such inquiry or
investigation may result in damage to the Company’s business interests,
licenses, reputation or prospects; or (vi) conviction of a felony or a
misdemeanor involving moral turpitude.

 

(b)           Termination By The Company Without Cause.  The Company shall have
the right, at any time during the Term, to terminate Executive’s employment with
the Company without Cause by giving written notice to Executive, which
termination shall be effective thirty (30) calendar days from the date of such
written notice.  The Company may provide thirty (30) days pay in lieu of
notice.  If the Company terminates Executive’s employment without Cause, the
Company’s obligation to Executive shall be limited solely to (i) unpaid Base
Salary plus any accrued but unpaid benefits to the effective date of
termination, and any unpaid bonus earned in accordance with the then applicable
bonus plan or program to the effective date of termination; (ii) severance in an
amount equal to Executive’s then-current Base Salary for a period of eighteen
(18) months; and (iii) if Executive is eligible for and timely elects COBRA
coverage for health insurance coverage, payment of Executive’s COBRA premiums
for the health insurance coverage for a period of up to eighteen (18) months,
payments to be made on a monthly basis when the premiums are due.  Executive’s
rights with regard to equity incentive awards, including stock options and
restricted stock units, shall be governed by separate applicable agreements
entered into between Executive and the Company.  As a condition to his receipt
of the post-employment payments and benefits under this Section 6(b), Executive
must be in compliance with Section 5 of this Agreement, and must execute,
return, not rescind and comply with a general release of claims agreement in
favor of the Company and related entities and individuals, within the timeframe
and in a form to be prescribed by the Company.  The severance shall be paid in
equal installments according to the normal payroll schedule, the first payment
to Executive to be made on the next scheduled payroll date that occurs within
ninety (90) days after the date of Executive’s termination of employment,
provided that the Company has received the signed general release of claims
agreement and Executive has not rescinded such agreement within the rescission
period set forth in such agreement.  Executive shall have no duty to mitigate
damages under this Section 6(b) during the applicable severance period and, in
the event Executive shall subsequently receive income from providing Executive’s
services to any person or entity, including self employment income, or
otherwise, then no such income shall in any manner offset or otherwise reduce
the payment obligations of the Company hereunder.

 

Notwithstanding anything herein to the contrary, this Section 6(b) shall not
apply if Executive’s employment is terminated by the Company or a succeeding
entity without Cause

 

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upon or within  one year of a Change of Control at any time during the Term as
described in Section 7 hereof.  In such case, Section 7 of this Agreement shall
control.

 

(c)           Termination By Executive for Good Reason.  Executive has the
right, in his reasonable determination at any time during the Term, to terminate
his employment with the Company for Good Reason (as defined in this
Section 6(c) below) by giving written notice to the Company as described in this
Section 6(c) below.  Prior to the effectiveness of termination for Good Reason,
the Company shall be given thirty (30) calendar days’ prior written notice from
Executive, specifically identifying the reasons which are alleged to constitute
Good Reason, and an opportunity to cure; provided, however, that Executive shall
have no obligation to continue his employment with the Company following such
thirty (30) calendar day notice period unless the Company cures the
event(s) giving rise to Executive’s Good Reason notice.  As used in this
Section 6(c), the term “Good Reason” shall mean and include (i) assignment to
Executive of duties materially inconsistent with Executive’s position,
(ii) requiring Executive to move his place of employment more than 50 miles from
his place of employment prior to such move, or (iii) a material breach by the
Company of this Agreement; provided that in any such case Executive has not
consented thereto.

 

If Executive terminates his employment for Good Reason, the Company’s obligation
to Executive shall be limited solely to (i) unpaid Base Salary plus any accrued
but unpaid benefits to the effective date of termination, and any unpaid bonus
earned in accordance with the then applicable bonus plan or program to the
effective date of termination; (ii) severance in an amount equal to Executive’s
then-current Base Salary for a period of eighteen (18) months; and (iii) if
Executive is eligible for and timely elects COBRA coverage for health insurance
coverage, payment of Executive’s COBRA premiums for the health insurance
coverage for a period of up to eighteen (18) months, payments to be made on a
monthly basis when the premiums are due.  Executive’s rights with regard to
equity incentive awards, including stock options and restricted stock units,
shall be governed by separate applicable agreements entered into between
Executive and the Company.  As a condition to his receipt of the post-employment
payments and benefits under this Section 6(c), Executive must be in compliance
with Section 5 of this Agreement, and must execute, return, not rescind and
comply with a general release of claims agreement in favor of the Company and
related entities and individuals, within the timeframe and in a form to be
prescribed by the Company.  The severance shall be paid in equal installments
according to the normal payroll schedule, the first payment to Executive to be
made on the next scheduled payroll date that occurs within ninety (90) days
after the date of Executive’s termination of employment, provided that the
Company has received the signed general release of claims agreement and
Executive has not rescinded such agreement within the rescission period set
forth in such agreement.  Executive shall have no duty to mitigate damages under
this Section 6(c) during the applicable severance period and, in the event
Executive shall subsequently receive income from providing Executive’s services
to any person or entity, including self employment income, or otherwise, then no
such income shall in any manner offset or otherwise reduce the payment
obligations of the Company hereunder.

 

Notwithstanding anything herein to the contrary, this Section 6(c) shall not
apply if Executive terminates his employment with the Company or a succeeding
entity for Good Reason upon or within one year of a Change of Control at any
time during the Term as described in Section 7 hereof.  In such case, Section 7
of this Agreement shall control.

 

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Executive has the right, at any time during the Term, to terminate his
employment with the Company without Good Reason (as defined above) by giving
written notice to the Company, which termination shall be effective sixty (60)
calendar days from the date of such written notice.  If Executive terminates his
employment without Good Reason, the Company’s obligation to Executive shall be
limited solely to the payment of unpaid Base Salary accrued up to the effective
date of termination plus any accrued but unpaid bonus and benefits.

 

(d)           Termination Upon Disability.  The Company shall have the right, at
any time during the Term, to terminate Executive’s employment if, during the
term hereof, Executive becomes physically or mentally disabled, whether totally
or partially, as evidenced by the written statement of a competent physician
licensed to practice medicine in the United States who is mutually acceptable to
the Company and Executive, so that Executive is unable to perform the essential
functions of his job duties hereunder, with or without reasonable accommodation,
for (i) a period of three (3) consecutive months, or (ii) for shorter periods
aggregating ninety (90) calendar days during any twelve-month period.  If the
Company terminates Executive’s employment under this Section 6(d), the Company’s
obligation to Executive shall be limited solely to the payment of unpaid Base
Salary to the effective date of termination, plus any accrued but unpaid
benefits to the effective date of termination, and any unpaid bonus earned in
accordance with the then applicable bonus plan or program to the effective date
of termination.

 

(e)           Termination upon Death.  If Executive dies during the Term, this
Agreement shall terminate, except that Executive’s legal representatives shall
be entitled to receive the Base Salary and other accrued benefits earned up to
the date of Executive’s death.

 

7.             Change of Control.

 

 (a)          Anything in this Agreement to the contrary notwithstanding, if,
upon or within one year of a Change of Control (as defined below) occurring at
any time during the Term, the Company or a succeeding entity terminates
Executive without Cause (as defined above) or the Executive terminates his
employment for Good Reason (as defined in Section 6(c) above), the Company or
the succeeding entity’s obligation to Executive shall be (i) unpaid Base Salary,
bonus and benefits accrued up to the effective date of termination, (ii) a lump
sum payment equal to Executive’s then-current Base Salary for a period of
twenty-four (24) months, and (iii) if Executive is eligible for and timely
elects COBRA coverage for health insurance coverage, payment of Executive’s
COBRA premiums for health insurance coverage for a period of up to eighteen (18)
months, payments to be made on a monthly basis when the premiums are due.  In
the event of a without Cause Change of Control termination as described herein,
these payments shall be in lieu of, and not in addition to, any severance pay or
benefits set forth in Section 6(b) of this Agreement.  Notwithstanding anything
to the contrary contained herein or in any award agreement between Executive and
the Company, in the event of a Change of Control (as defined below), (i) all
unvested awards held by the Executive under the Company’s 2007 Equity Incentive
Plan, including stock options and restricted stock units described in
Section 3(c) and any other subsequent awards, shall become fully vested upon the
Change of Control and, if applicable, immediately exercisable, (ii) each such
award, and each already vested award described in Section 3(c), which is a stock
option shall continue to be exercisable for the remainder of its term, and
(iii) with respect to any award under the Company’s 2007 Equity Incentive Plan
that is subject to the attainment of performance objectives or specified

 

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performance criteria, such performance objectives and criteria shall be deemed
satisfied at the target level and any performance period shall be deemed to end
as of the date of the Change of Control.  As a condition to his receipt of the
post-employment payments and benefits under this Section 7(a), other than the
vesting of awards described in the preceding sentence, Executive must be in
compliance with Section 5 of this Agreement, and must execute, return, not
rescind and comply with a release of claims agreement in favor of the Company,
related entities and individuals and the succeeding entity, within the timeframe
and in a form to be prescribed by the Company or a succeeding entity.  The
severance shall be paid in a lump sum within ninety (90) calendar days after the
date of Executive’s termination of employment, provided that the Company has
received the signed general release of claims agreement and Executive has not
rescinded such agreement within the rescission period set forth in such
agreement.

 

(b)           Change of Control Defined.  For purposes of this Agreement, a
“Change of Control” shall mean the occurrence of a “change in the ownership,” a
“change in the effective control” or a “change in the ownership of a substantial
portion of the assets” of the Company during the Term, as determined in
accordance with this Section 7(b).  In determining whether an event shall be
considered a “change in the ownership,” a “change in the effective control” or a
“change in the ownership of a substantial portion of the assets” of the Company,
the following provisions shall apply:

 

(i)            A “change in the ownership” of the Company shall occur on the
date on which any one person, or more than one person acting as a group (other
than Tontine Capital Partners, L.P. and its affiliates), acquires ownership of
stock of the Company that, together with stock held by such person or group,
constitutes more than 50% of the total fair market value or total voting power
of the stock of the Company, as determined in accordance with Treasury
Regulation § 1.409A-3(i)(5)(v).  If a person or group is considered either to
own more than 50% of the total fair market value or total voting power of the
stock of the Company, or to have effective control of the Company within the
meaning of clause (ii) of this Section 7(b), and such person or group acquires
additional stock of the Company, the acquisition of additional stock by such
person or group shall not be considered to cause a “change in the ownership” of
the Company.

 

(ii)           A “change in the effective control” of the Company shall occur on
either of the following dates:

 

(A)          The date on which any one person, or more than one person acting as
a group (other than Tontine Capital Partners, L.P. and its affiliates), acquires
(or has acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) ownership of stock of the Company
possessing 40% or more of the total voting power of the stock of the Company, as
determined in accordance with Treasury Regulation § 1.409A-3(i)(5)(vi).  If a
person or group is considered to possess 40% or more of the total voting power
of the stock of the Company, and such person or group acquires additional stock
of the Company, the acquisition of additional stock by such person or group
shall not be considered to cause a “change in the effective control” of the
Company; or

 

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(B)           The date on which a majority of the members of the Board is
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of the Board before the date of the
appointment or election, as determined in accordance with Treasury Regulation §
1.409A-3(i)(5)(vi).

 

(iii)          A “change in the ownership of a substantial portion of the
assets” of the Company shall occur on the date on which any one person, or more
than one person acting as a group (other than Tontine Capital Partners, L.P. and
its affiliates), acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such person or persons) assets from
the Company that have a total gross fair market value equal to or more than 40%
of the total gross fair market value of all of the assets of the Company
immediately before such acquisition or acquisitions, as determined in accordance
with Treasury Regulation § 1.409A-3(i)(5)(vii).  A transfer of assets shall not
be treated as a “change in the ownership of a substantial portion of the assets”
when such transfer is made to an entity that is controlled by the shareholders
of the Company, as determined in accordance with Treasury Regulation §
1.409A-3(i)(5)(vii)(B).

 

In all cases, the determination of whether a Change of Control has occurred
shall be made in accordance with Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), and the regulations, notices and other guidance
of general applicability issued thereunder.

 

8.             Code Section 409A. Notwithstanding anything herein to the
contrary, if any payments to be made, or benefits to be provided, to Executive
hereunder are subject to the requirements of Code Section 409A and the Company
determines that Executive is a “specified employee” as defined in Code
Section 409A as of the date of the termination, then, to the extent such
payments or benefits do not satisfy the separation pay exemption described in
Treasury Regulation § 1.409A-1(b)(9)(iii) or any other exemption available under
Section 409A of the Code (the “Non-Exempt Payments”), the amount of such
Non-Exempt Payments shall not be paid or commence earlier than the date that is
six months after the termination.  Any Non-Exempt Payment not made during the
six month period shall be paid in a lump sum payment on the first day of the
seventh month following termination.

 

9.             Successors; Assignment, Etc.; Third Party Beneficiaries.

 

(a)           Executive consents to and the Company shall have the right to
assign this Agreement to its successors or assigns.  All covenants or agreements
hereunder shall inure to the benefit of and be enforceable by or against its
successors or assigns.   The terms “successors” and “assigns” shall include, but
not be limited to, any succeeding entity upon a Change of Control.

 

(b)           Neither this Agreement nor any of the rights or obligations of
Executive under this Agreement may be assigned or delegated except as provided
in the last sentence of this Section 9(b).  This Agreement and all rights of
Executive hereunder shall inure to the benefit of and be enforceable by, and
shall be binding upon, Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees.

 

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If Executive should die while any amounts would still be payable to him
hereunder had he continued to live, then all such amounts (unless otherwise
provided herein) shall be paid in accordance with the terms of this Agreement to
the devisee, legatee, or other designee under Executive’s testamentary will or,
if there be no such will, to Executive’s estate.

 

10.           Notice.  For purposes of this Agreement, all notices and other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered in person or when mailed by United
States registered or certified mail, return receipt requested, first-class
postage prepaid, addressed as follows:

 

If to Executive :

If to the Company :

 

Mr. J.D. Rubin
4140 N. Bell St.
Chicago, IL 60618

 

Broadwind Energy, Inc.
47 E. Chicago Avenue, Suite 332
Naperville, IL 60540
Attn: Chief Executive Officer

 

or to such other address as any party may have furnished to the other in writing
in accordance with this Section 10, except that notices of any change of address
shall be effective only upon actual receipt.

 

11.           Miscellaneous.  No provision of this Agreement may be modified,
waived, or discharged unless such waiver, modification, or discharge is agreed
to in writing signed by Executive and such officers as may be specifically
designated by the Board.  No waiver by either party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of any similar or dissimilar condition or
provision at the same or any other time.  No agreements or representations
(whether oral or otherwise, express or implied) with respect to the subject
matter of this Agreement have been made by either party which are not set forth
expressly in this Agreement or which are not specifically referred to in this
Agreement.  If any term, clause, subpart, or provision of this Agreement is for
any reason adjudged to be invalid, unreasonable, unenforceable or void, the same
will be treated as severable, shall be modified to the extent necessary to be
legally enforceable to the fullest extent permitted by applicable law, and will
not impair or invalidate any of the other provisions of this Agreement, all of
which will be performed in accordance with their respective terms.  The
validity, interpretation, construction, and performance of this Agreement shall
be governed by the laws of the State of Illinois.

 

12.           Validity.  If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under any present or future law or court
decision, and if the rights or obligations of the Company and Executive will not
be materially and adversely affected thereby, (a) such provision shall be fully
severable from this Agreement, (b) this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part hereof, (c) the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom, and (d) in
lieu of such illegal, invalid, or unenforceable provision, there shall be added
automatically as a part of this Agreement a legal, valid, and enforceable
provision as similar to the terms and intent of such illegal, invalid, or
unenforceable provision as may be possible.

 

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13.           Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

 

14.           Litigation.  The parties agree that the exclusive venue for any
litigation commenced by the Company or Executive relating to this Agreement
shall be the state courts located in DuPage County, Illinois and the United
States District Court, Northern District of Illinois.  The parties waive any
rights to object to venue as set forth herein, including any argument of
inconvenience for any reason.

 

15.           Entire Agreement.  This Agreement constitutes (i) the binding
agreement between the parties and (ii) represents the entire agreement between
the parties and supersedes all prior agreements relating to the subject matter
contained herein. All prior negotiations concerning Executive’s employment with
the Company have been merged into this Agreement and are reflected in the terms
herein.

 

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IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement
on November 12, 2008, effective as of the date first above written.

 

 

EXECUTIVE:

 

 

 

By:

/s/ J.D. Rubin

 

Name:

J.D. Rubin

 

 

 

COMPANY:

 

 

 

BROADWIND ENERGY, INC.

 

 

 

By:

/s/ J. Cameron Drecoll

 

Name:

 J. Cameron Drecoll

 

Title:

Chief Executive Officer

 

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