**Exhibit 10.6**

 

**PERFORMANCE AWARD AGREEMENT**

**BROADWIND ENERGY, INC.**

**2007 EQUITY INCENTIVE PLAN**

 

THIS AGREEMENT, is enteredinto and effective as of this      day of                          ,20    , by and between Broadwind Energy, Inc., a Delawarecorporation (the “**Company**”), and                                                  (“**Participant**”).

 

**RECITALS**

 

A.            The Participant on the date hereof is a key employee,officer or director of, or consultant or advisor to, the Company or one of itsAffiliates; and

 

B.            The Company wishes to grant a performance share award toParticipant pursuant to the Company’s 2007 Equity Incentive Plan (the “**Plan**”) to entitle the Participant to shares of the Company’sCommon Stock upon the achievement of certain specified performance criteria;and

 

C.                The Administrator has authorized the grant of suchperformance share award to Participant.

 

**AGREEMENTS**

 

In consideration of thepremises and of the mutual covenants herein contained, the parties hereto agreeas follows:

 

**ARTICLE I.  GRANTOF PERFORMANCE AWARDS**

 

A.            Grantof Performance Share Award.  The Company hereby grants to Participanton the date set forth above (the “**Date ofGrant**”) the right to receive up to                                (                              )Performance Shares payable in shares of Common Stock on the terms andconditions set forth herein (the “**PerformanceShare Award**”).

 

B.            Grantof Performance Unit Award.  The Company hereby grants to Participanton the Date of Grant the right to receive up to                           (                          )Performance Units having a value of$                          per Unit (the “**Per Unit Value**”)payable in cash or the terms and conditions set forth herein (the “**Performance Unit Award**” and, together withthe Performance Share Award, the “**PerformanceAward**”).

 

**ARTICLE II.  PERFORMANCEPERIOD**

 

The Performance Period shallbe the period beginning                          ,20    , and ending                           ,20    .

 

**ARTICLE III.  PERFORMANCEOBJECTIVES AND VESTING OFPERFORMANCE AWARD**

 

A.            General. Except as otherwise provided herein, the Performance Shares or PerformanceUnits subject to this Performance Award shall vest only upon the achievement ofall or a portion of certain Performance Objectives, defined below, which mustbe achieved within the Performance Period.

 

The Performance Objectivesand the extent to which achievement of all or a portion of the Performance 

 

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Objectives will result inthe vesting of the Performance Shares or Performance Units are as follows:

 
| **Performance  Objective(s)** | ** ** | **Achievement** | ** ** | **Percentage or Number of********Shares or Units Vested** | ** ** |
|-------------------------------|------------|-----------------|------------|-----------------------------------------------------------|------------|
| ** **                    | ** ** | ** **      | ** ** | ** **                                                | ** ** |
| ** **                    | ** ** | ** **      | ** ** | ** **                                                | ** ** |
| ** **                    | ** ** | ** **      | ** ** | ** **                                                | ** ** |

 

Notwithstanding theforegoing schedule, the Administrator may delay the vesting of all or anyportion of the Performance Awards pursuant to **Article****XI.J**herein; provided, however, thatsuch delay shall not extend the Performance Period during which the abovePerformance Objectives must be achieved.  Subject to such other terms andconditions set forth in this Agreement, the Participant shall not be entitledto the issuance of any portion of the Performance Shares or Performance Unitssubject to this Performance Award until the Administrator determines the numberof Performance Shares or Performance Units, if any, which have vested.

 

B.            Terminationof Employment Prior to Vesting.  If, prior to the vesting of anyPerformance Shares or Performance Units, Participant ceases to be**[a key employee or officer] [a consultant or advisor][a director]**  of the Companyor any Affiliate for any reason, the Participant shall forfeit all unvestedPerformance Shares or Performance Units, and this Performance Award shallterminate; provided, however, that if the Administrator delays the vesting andissuance of any Performance Shares or Performance Units pursuant to **Article****XI.J**,the Participant shall not forfeit any such Performance Shares or PerformanceUnits that otherwise would have vested prior to the termination of Participant’srelationship had such vesting not been so delayed, and, upon the issuance ofsuch delayed vested Performance Shares or Performance Units, this PerformanceAward shall terminate.

 

C.            Terminationof Employment After Vesting But Prior to Issuance.  If Participantceases to be**[a key employee or officer] [aconsultant or advisor] [a director]** of the Company or any Affiliate for any reason after Performance Sharesor Performance Units have vested but prior to the date such Shares are issuedor cash is distributed (as described in **ArticleIII**hereof), then Participant (or Participant’s estate in the eventof his death) shall be entitled to receive such vested Performance Shares orPerformance Units as if such termination of employment had not occurred. Upon the issuance of the vested Performance Shares or Performance Units, thisPerformance Award shall terminate.

 

**ARTICLE IV.  FORM,TIME OF ISSUANCE**

 

The Administrator shall,within                (    ) days after the end of the Performance Period or atsuch earlier times as described in **Article III**above,determine the number of Performance Shares and Performance Units that havevested pursuant to **Article III**above and shall calculate the amount of cash, if any, payable to Participant bymultiplying the Per Unit Value by such number of vested Performance Units.  Unless the Administrator delays the vestingand issuance of such Performance Shares or Performance Units pursuant to **Article XI.J** such Performance Shares or cash shall be issuedin the calendar year in which the date such Performance Shares or PerformanceUnits become vested; provided, however, that the Participant shall receive cashequal to the Fair Market Value of any fractional shares.

 

**ARTICLE V.  NONTRANSFERABILITY**

 

This Performance Award shallnot be transferable, in whole or in part, by Participant, other than by will orby the laws of descent and distribution, prior to the date the risks offorfeiture described in this Agreement have lapsed.  If Participant shall attempt any transfer ofthis Performance Award prior to such date, such transfer shall be void and thisPerformance Award shall terminate.

 

**ARTICLE VI.  WITHHOLDINGTAXES**

 

To permit the Company tocomply with all applicable federal and state income tax laws or regulations,the Company may take such action as it deems appropriate to ensure that, ifnecessary, all applicable federal and

 

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state payroll, income orother taxes are withheld from any amounts payable by the Company toParticipant.  If the Company is unable towithhold such federal and state taxes, for whatever reason, Participant herebyagrees to pay to the Company an amount equal to the amount the Company wouldotherwise be required to withhold under federal or state law.  Subject to such rules as theAdministrator may adopt, the Administrator may, in its sole discretion, permitParticipant to satisfy such withholding tax obligations, in whole or in part(i) by delivering shares of common stock, or (ii) by electing to have theCompany withhold shares of Common Stock otherwise issuable to Participant as aresult of the grant of Performance Shares, in either case having a Fair MarketValue, as of the date the amount of tax to be withheld is determined underapplicable tax law, equal to the minimum amount required to be withheld for taxpurposes based on the minimum statutory withholding rates for federal and statetax purposes, including payroll taxes, that are applicable to the supplementalincome resulting from such exercise.  Participant’s request to delivershares or to have shares withheld for purposes of such withholding taxobligations shall be made on or before the date that triggers such obligationsor, if later, the date that the amount of tax to be withheld is determinedunder applicable tax law.  Participant’s request shall be approved by theAdministrator and otherwise comply with such rules as the Administratormay adopt to assure compliance with Rule 16b-3 or any successor provision, asthen in effect, of the General Rules and Regulations under the Securitiesand Exchange Act of 1934, if applicable.

 

**ARTICLE VII.  CAPITALADJUSTMENTS**

 

Except as otherwisespecifically provided in any employment, change of control, severance orsimilar agreement executed by Participant and the Company, pursuant and subjectto Section 14 of the Plan, certain changes in the number or character ofthe Common Stock of the Company (through sale, merger, consolidation, exchange,reorganization, divestiture (including a spin-off), liquidation,recapitalization, stock split, stock dividend or otherwise) may result in anadjustment, reduction or enlargement, as appropriate, in the number of sharessubject to this Performance Award.  Any additional shares that arecredited pursuant to such adjustment shall be subject to the same restrictionsas are applicable to the shares with respect to which the adjustment relates.

 

**ARTICLE VIII.  BINDINGEFFECT**

 

This Agreement shall bebinding upon the heirs, executors, administrators and successors of the partieshereto.

 

**ARTICLE IX.  2007EQUITY INCENTIVE PLAN**

 

The Performance Awardrepresented by this Agreement has been granted under, and is subject to theterms of, the Plan.  The terms of thePlan are hereby incorporated by reference herein in their entirety andParticipant, by execution hereof, acknowledges having received a copy of thePlan.  Capitalized terms not definedherein shall have the meaning set forth in the Plan.  The provisions of this Agreement shall beinterpreted as to be consistent with the Plan and any ambiguities herein shallbe interpreted by reference to the Plan. In the event that any provision hereof is inconsistent with the terms ofthe Plan, the latter shall prevail.

 

**ARTICLE X.  NON-SOLICITATION**

 

A.            RestrictiveCovenant.  During the period beginning on the date of this Performance Award and endingon the later of (i) one year following the termination of Participant’semployment with, or service to, the Company or an Affiliate or (ii) theexpiration of this Performance Award pursuant to **Article****II**,Participant shall not, except with the express prior written consent of theCompany:  (i) directly or indirectly,either for Participant, or on behalf of any of the Company’s or any Affiliate’scompetitors (“**Competitors**”): (1)induce or attempt to induce any employee, independent contractor or consultant ofthe Company or any Affiliate to leave the employ of, or terminate itsengagement with, the Company or any Affiliate; or (2) in any way interfere withthe relationship between the Company or any Affiliate and any employee,independent contractor or consultant

 

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of the Company or any affiliate; or (ii)directly or indirectly, either for Participant, or on behalf of any of theCompetitors, solicit the business of any person or entity known to Participantto be a customer of the Company or any of its Affiliates, where Participant, orany person reporting to Participant, had an ongoing business relationship orhad made substantial efforts with respect to such customer during Participant’semployment with, or service to, the Company or an Affiliate.

 

B.            Violationof Restrictive Covenant. Participant, by accepting this Performance Award, agrees that theforegoing covenants are reasonable with respect to their duration andscope.  Participant further acknowledgesthat the restrictions are reasonable and necessary for the protection of thelegitimate business interests of the Company and its Affiliates, that theycreate no undue hardships, that any violation of these restrictions would causesubstantial injury to the Company and its Affiliates, and that suchrestrictions were a material inducement to the Company to grant thisPerformance Award.  In the event of anyviolation or threatened violation of these restrictions, any and all rights ofParticipant under this Performance Award, whether unvested or vested, shall beforfeited and shall immediately terminate and shall thereafter be void.

 

**ARTICLE XI.  MISCELLANEOUS**

 

A.            Employmentor Other Relationship; Rights as a Stockholder.  Nothing in this Agreement shall be construedto (a) limit in any way the right of the Company or any Affiliate toterminate the status of Participant as an employee of the Company at any time,or (b) be evidence of any agreement or understanding, express or implied, thatthe Company or any Affiliate will employ Participant in any particularposition, at any particular rate of compensation or for any particular periodof time.  Participant shall have norights as a stockholder with respect to shares issued under this Agreementuntil such shares have been issued to Participant.  No adjustment shall be made for dividends(ordinary or extraordinary, whether in cash, securities or other property),distributions or other rights for which the record date is prior to the datesuch shares are issued, except as provided in Section 14 of the Plan.

 

B.            SecuritiesLaw Compliance.  Participant shallnot transfer or otherwise dispose of the shares of Stock received pursuant tothis Agreement until such time as counsel to the Company shall have determinedthat such transfer or other disposition will not violate any state or federalsecurities laws.  Participant may berequired by the Company, as a condition of the effectiveness of thisPerformance Award, to agree in writing that all Stock subject to this Agreementshall be held, until such time that such Stock is registered and freelytradable under applicable state and federal securities laws, for Participant’sown account without a view to any further distribution thereof, that thecertificates for such shares shall bear an appropriate legend to that effectand that such shares will be not transferred or disposed of except incompliance with applicable state and federal securities laws.

 

C.            LockupPeriod Limitation.  Participantagrees that in the event the Company advises Participant that it plans anunderwritten public offering of its Common Stock in compliance with theSecurities Act of 1933, as amended, and that the underwriter(s) seek to imposerestrictions under which certain stockholders may not sell or contract to sellor grant any option to buy or otherwise dispose of part or all of their stockpurchase rights of the underlying Common Stock, Participant hereby agrees thatfor a period not to exceed 180 days from the prospectus, Participant will not sellor contract to sell or grant an option to buy or otherwise dispose of thisPerformance Award or any of the underlying shares of Common Stock without theprior written consent of the of the underwriter(s) or itsrepresentative(s).

 

D.            BlueSky Limitation.  Notwithstandinganything in this Agreement to the contrary, in the event the Company makes anypublic offering of its securities and determines, in its sole discretion, thatit is necessary to reduce the number of issued but unexercised stock purchase rightsso as to comply with any state securities or Blue Sky law limitations withrespect thereto, the Administrator of the Company shall accelerate

 

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thevesting of this restricted stock award, provided that the Company givesParticipant 15 days’ prior written notice of such acceleration.  Noticeshall be deemed given when delivered personally or when deposited in the UnitedStates mail, first class postage prepaid and addressed to Participant at theaddress of Participant on file with the Company.

 

E.             AccountingCompliance.  Participant agrees that,if a “transaction” (as defined in Section 14 of the Plan) occurs, andParticipant is an “affiliate” of the Company or any Affiliate (as defined inapplicable legal and accounting principles) at the time of such transaction,Participant will comply with all requirements of Rule 145 of the Securities Actof 1933, as amended, and the requirements of such other legal or accountingprinciples, and will execute any documents necessary to ensure such compliance.

 

F.             StockLegend.  The Administrator mayrequire that the certificates for any shares of Common Stock issued toParticipant (or, in the case of death, Participant’s successors) under thisAgreement shall bear an appropriate legend to reflect the restrictions of thisArticle; provided, however, that failure to so endorse any of such certificatesshall not render invalid or inapplicable this **ArticleX**.

 

G.            SharesReserved.  The Company shall at alltimes during the term of this Performance Award reserve and keep available suchnumber of shares as will be sufficient to satisfy the requirements of thisAgreement.

 

H.            Arbitration.  Any dispute arising out of or relating tothis Agreement or the alleged breach of it, or the making of this Agreement,including claims of fraud and inducement, shall be discussed between thedisputing parties in a good faith effort to arrive at a mutual settlement ofany such controversy.  If, notwithstanding,such dispute cannot be resolved, such dispute shall be settled by bindingarbitration.  Judgment upon the award rendered by the arbitrator may beentered in any court having jurisdiction thereof.  The arbitrator shall bea retired state or federal judge or an attorney who has practiced securities orbusiness litigation for at least ten (10) years.  If the partiescannot agree on an arbitrator within twenty (20) days, any party may requestthat a judge of the Circuit Court of Cook County, Illinois select anarbitrator.  Arbitration will be conducted pursuant to the provisions ofthis Agreement and the commercial arbitration rules of the AmericanArbitration Association, unless such rules are inconsistent with theprovisions of this Agreement.  Limited civil discovery shall be permittedfor the production of documents and taking of depositions.  Unresolveddiscovery disputes may be brought to the attention of the arbitrator who maydispose of such disputes.  The arbitrator shall have the authority toaward any remedy or relief that a court of this state could order or grant;provided, however, that punitive or exemplary damages shall not beawarded.  The arbitrator may award to the prevailing party, if any, asdetermined by the arbitrator, all of its costs and fees, including the arbitrator’sfee, administrative fees, travel expenses, out-of-pocket expenses andreasonable attorney’s fees.  Unless otherwise agreed by the parties, theplace of any arbitration proceedings shall be Chicago, Illinois.

 

I.              Rightto Amend.  The Company herebyreserves the right to amend this Agreement without Participant’s consent to theextent necessary or desirable to comply with the requirements of Code Section409A and the regulations, notices and other guidance of general applicationissued thereunder.

 

J.             Delayin Payment for Specified Employee. Notwithstanding anything herein to the contrary, if any payments to bemade to Participant hereunder are subject to the requirements of Code Section409A and the Company determines that Participant is a “specified employee” asdefined in Code Section 409A as of the date of the termination, such paymentsshall not be paid or commence earlier than the date that is six months afterthe termination.  Any payment not made during the six month period shallbe paid on the first day of the seventh month following termination.

 

**ARTICLE XII.  GOVERNINGLAW**

 

This Agreement and allrights and obligations hereunder shall be construed in accordance with the Plan

 

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and governed by the laws ofthe State of Delaware.

 

*[Signature page follows]*

 

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IN WITNESS WHEREOF, theparties hereto have executed this Agreement effective the day and year firstabove written.

 
| ** **                                                                              | **BROADWIND ENERGY INC.** |
|-----------------------------------------------------------------------------------------|---------------------------|
| ** **                                                                              | ** **                |
| ** **                                                                              | ** **                |
| ** **                                                                              | ** **                |
| ** **                                                                              | By:                       |
| ** **                                                                              | Its:                      |
| ** **                                                                              |                      |
| ** **                                                                              |                      |
| By execution hereof, the Participant  acknowledges having received a copy of the  Plan. | **PARTICIPANT**           |
|                                                                                    | ** **                |

 

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