Exhibit 10.7


 


STOCK
APPRECIATION RIGHTS AGREEMENT


 


TOWER TECH
HOLDINGS INC.


2007
EQUITY INCENTIVE PLAN


 


THIS AGREEMENT, made effective as of this         
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 stock appreciation right to Participant to pursuant
to the Company’s 2007 Equity Incentive Plan (the “Plan”); and


 


C.            The
Administrator of the Plan has authorized the grant of a stock appreciation
right 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 (the “Exercise
Price”).


 


AGREEMENTS


 


In consideration of the premises and of the
mutual covenants herein contained, the parties hereto agree as follows:


 


ARTICLE
I. GRANT OF SAR


 


The Company hereby grants to Participant on
the date set forth above (the “Date of Grant”), stock appreciation rights (the “SAR”)
with respect to an aggregate of                                           
(                )
shares of Common Stock at the Exercise Price on the terms and conditions set
forth herein, and subject to adjustment pursuant to Section 14 of the Plan.


 


ARTICLE
II. DURATION AND EXERCISABILITY


 


A.            General.
The term during which the SAR may be exercised shall terminate on                                       ,
                ,  except as otherwise provided in Articles II.B. and II.C.
below. The SAR shall vest and become exercisable according to the following
schedule:


 

















 


	
  Vesting Date

  	
   

  	
  Cumulative Percentage

  of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


Once the SAR becomes fully exercisable, Participant may continue to
exercise the SAR under the terms and conditions of this Agreement until the
termination of the SAR as provided herein. If Participant does not exercise the
SAR with respect to the full number of shares for which Participant is then
entitled, Participant may, upon any subsequent exercise prior to the SAR’s
termination, exercise the SAR for such previously unexercised portion.


 


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 SAR 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 SAR was not
exercisable upon such termination of employment, or if Participant does not
exercise the unexercised portion of the SAR that was exercisable within the
time specified in this Article II.B., all rights of Participant under this SAR
shall terminate, and the SAR 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 SAR 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 SAR was not exercisable upon
such termination of employment, or if Participant does not exercise the unexercised
portion of the SAR that was exercisable within the time specified in this
Article II.C., all rights of Participant under this SAR shall terminate, and
the SAR shall thereafter be void.


 


ARTICLE
III. CHANGE OF CONTROL


 


A.            Acceleration.
In the event of a “Change of Control,” the risks of forfeiture on all shares of
Stock subject to this SAR shall immediately lapse.


 


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 


 


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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.


 


ARTICLE
IV. MANNER OF EXERCISE AND
PAYMENT


 


A.            General. The SAR may be exercised only
by Participant (or other proper party in the event of death or incapacity),
subject to the conditions of the Plan and subject to such other administrative
rules as the Administrator may deem advisable, by delivering written notice of
exercise to the Company at its principal office. The notice shall state the
number of shares as to which the SAR is being exercised. The exercise of the
SAR shall be deemed effective upon receipt of such notice by the Company, and
the date of such receipt shall be the “date of exercise” for all purposes under
this Agreement. The SAR may be exercised with respect to some or all of the
exercisable shares and, if partially exercised, may be so exercised as to the
unexercised shares any number of times during the term of the SAR as provided
herein.


 


B.            Form
of Payment. Upon the exercise of all or a portion of the SAR, Participant
shall be entitled to (1) that number of shares of Stock having an aggregate
Fair Market Value equal to (i) the excess of (A) the per share Fair Market
Value of the Company’s Common Stock as of the date of exercise over (B) the per
share exercise price specified in Article I above, multiplied by (ii) the
number of shares specified in the Participant’s notice of exercise; (2) a cash
payment equal to (i) the excess of (A) the per share Fair Market Value of the
Company’s Common Stock as of the date of exercise over (B) the per share
exercise price specified in Article I above, multiplied by (ii) the number of
shares specified in the Participant’s notice of exercise; OR (3) a
combination of cash and shares of stock having a value equal to (i) the excess
of (A) the per share Fair Market Value of the Company’s Common Stock as of the
date of exercise over (B) the per share exercise price specified in Article I
above, multiplied by (ii) the number of shares specified in the Participant’s
notice of exercise. Participant may indicate his or her preference for the form
of settlement of the SAR, however the Administrator shall make the final
determination of whether the SAR is settled in Common Stock, cash, or a
combination thereof.


 


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C.            Stock Transfer Records. As soon as
practicable after the effective exercise of all or any part of the SAR,
Participant shall be recorded on the stock transfer books of the Company as the
owner of the shares purchased, and the Company may deliver to Participant 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.


 


ARTICLE
V. NONTRANSFERABILITY


 


This SAR shall not be transferable, in whole
or in part, by Participant, other than by will or by the laws of descent and
distribution, prior to the date the risks of forfeiture described in this
Agreement have lapsed. If Participant shall attempt any transfer of this SAR
prior to such date, such transfer shall be void and this SAR shall terminate.


 


ARTICLE VI.
LIMITATION OF LIABILITY


 


Nothing in this Agreement shall be construed
to (a) limit in any way the right of the Company or any Affiliate to terminate
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, that the
Company or any Affiliate will employ Participant in any particular position, at
any particular rate of compensation or for any particular period of time.


 


ARTICLE
VII. WITHHOLDING TAXES


 


To permit the Company to comply with all
applicable federal and state income tax laws or regulations, the Company may
take such action as it deems appropriate to ensure that, if necessary, all
applicable federal and state payroll, income or other taxes are withheld from
any amounts payable by the Company to Participant. If the Company is unable to
withhold such federal and state taxes, for whatever reason, Participant hereby
agrees to pay to the Company an amount equal to the amount the Company would
otherwise be required to withhold under federal or state law. Subject to such rules as the Administrator
may adopt, the Administrator may, in its sole discretion, permit Participant to
satisfy such withholding tax obligations, in whole or in part (i) by delivering
shares of common stock, or (ii) by electing to have the Company withhold shares
of Common Stock otherwise issuable to Participant as a result of the exercise
of this SAR, in either case having a Fair Market Value, as of the date
the amount of tax to be withheld is determined under applicable tax law, equal to the minimum amount required to be
withheld for tax purposes based on the minimum statutory withholding rates for
federal and state tax purposes, including payroll taxes, that are applicable to
the supplemental income resulting from such exercise. Participant’s request to
deliver shares or to have shares withheld for purposes of such withholding tax
obligations shall be made on or before the date that triggers such obligations
or, if later, the date that the amount of tax to be withheld is determined
under applicable tax law. Participant’s request shall be approved by the
Administrator and otherwise comply with such rules as the Administrator may
adopt to assure compliance with Rule 16b-3 or any successor provision, as then
in effect, of the General Rules and Regulations under the Securities and
Exchange Act of 1934, if applicable.


 


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ARTICLE
VIII. CAPITAL ADJUSTMENTS


 


Except as otherwise specifically provided in
any employment, change of control, severance or similar agreement executed by
Participant and the Company, pursuant and subject to Section 14 of the Plan,
certain changes in the number or character of the 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 an adjustment, reduction or enlargement, as
appropriate, in the number of shares subject to this SAR. Any additional shares
that are credited pursuant to such adjustment shall be subject to the same
restrictions as are applicable to the shares with respect to which the
adjustment relates.


 


ARTICLE IX.
BINDING EFFECT


 


This Agreement shall be binding upon the
heirs, executors, administrators and successors of the parties hereto.


 


ARTICLE X.
2007 EQUITY INCENTIVE PLAN 


 


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


 


ARTICLE
XI. MISCELLANEOUS


 


A.            Employment or Other Relationship; Rights as a
Stockholder. This Agreement shall not confer on Participant any right
with respect to the continuance of employment by the Company or any of its
Affiliates, nor will it interfere in any way with the right of the Company to
terminate such employment. Participant shall have no rights as a stockholder
with respect to shares issued under this Agreement until 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 date such shares are
issued, except as provided in Section 14 of the Plan.


 


B.            Securities Law Compliance. Participant
shall not transfer or otherwise dispose of the shares of Stock received
pursuant to this Agreement until such time as counsel to the Company shall have
determined that such transfer or other disposition will not violate any state
or federal securities laws. Participant may be required by the Company, as a
condition of the effectiveness of this SAR, to agree in writing that all Stock
subject to this Agreement shall be held, until such time that such Stock is
registered and freely tradable under applicable state and federal securities
laws, for Participant’s own account without a view to any further distribution
thereof, that the certificates for such shares shall bear an appropriate legend
to that effect and that such shares will be not transferred or disposed of
except in compliance with applicable state and federal securities laws.


 


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C.            Lockup Period
Limitation. Participant agrees that in the event the Company advises
Participant that it plans an underwritten public offering of its Common Stock
in compliance with the Securities Act of 1933, as amended, and that the
underwriter(s) seek to impose restrictions under which certain stockholders may
not sell or contract to sell or grant any option to buy or otherwise dispose of
part or all of their stock purchase rights of the underlying Common Stock,
Participant hereby agrees that for a period not to exceed 180 days from the
prospectus, Participant will not sell or contract to sell or grant an option to
buy or otherwise dispose of this SAR or any of the underlying shares of Common
Stock without the prior written consent of the of the underwriter(s) or its
representative(s).


 


D.            Blue
Sky Limitation. Notwithstanding anything in this Agreement to the contrary,
in the event the Company makes any public offering of its securities and
determines, in its sole discretion, that it is necessary to reduce the number
of issued but unexercised stock purchase rights so as to comply with any state
securities or Blue Sky law limitations with respect thereto, the Administrator
of the Company shall accelerate the vesting of this restricted stock award, provided
that the Company gives Participant 15 days’ prior written notice of such
acceleration. Notice shall be deemed given when delivered personally or when
deposited in the United States mail, first class postage prepaid and addressed
to Participant at the address of Participant on file with the Company.


 


E.             Accounting
Compliance. Participant agrees that, if a merger, reorganization,
liquidation or other “transaction” (as defined in Article V.B. of this
Agreement) occurs, and Participant is an “affiliate” of the Company or any
Affiliate (as defined in applicable legal and accounting principles) at the
time of such transaction, Participant will comply with all requirements of Rule
145 of the Securities Act of 1933, as amended, and the requirements of such other
legal or accounting principles, and will execute any documents necessary to
ensure such compliance.


 


F.             Stock
Legend. The Administrator may require that the certificates for any shares
of Common Stock issued to Participant (or, in the case of death, Participant’s
successors)  under this Agreement shall
bear an appropriate legend to reflect the restrictions of this Article;
provided, however, that failure to so endorse any of such certificates shall
not render invalid or inapplicable this Article X.


 


G.            Shares Reserved. The Company shall
at all times during the term of this SAR reserve and keep available such number
of shares as will be sufficient to satisfy the requirements of this Agreement.


 


H.            Arbitration.
Any dispute arising out of or relating to this Agreement or the alleged breach
of it, or the making of this Agreement, including claims of fraud and
inducement, shall be discussed between the disputing parties in a good faith
effort to arrive at a mutual settlement of any such controversy. If, notwithstanding,
such dispute cannot be resolved, such dispute shall be settled by binding
arbitration. Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. The arbitrator shall be a retired
state or federal judge or an attorney who has practiced securities or business
litigation for at least ten (10) years. If the parties cannot agree on an
arbitrator within twenty (20) days, any party may request that a judge of the
Circuit Court of Manitowoc County, Wisconsin select an arbitrator. Arbitration
will be conducted pursuant to the provisions of this Agreement and the
commercial arbitration rules of the American Arbitration Association, unless
such rules are inconsistent with the provisions of this Agreement. Limited
civil discovery shall be permitted for the production of documents and taking
of 


 


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depositions. Unresolved discovery disputes may be brought to the
attention of the arbitrator who may dispose of such disputes. The arbitrator
shall have the authority to award any remedy or relief that a court of this
state could order or grant; provided, however, that punitive or exemplary
damages shall not be awarded. The arbitrator may award to the prevailing party,
if any, as determined by the arbitrator, all of its costs and fees, including
the arbitrator’s fee, administrative fees, travel expenses, out-of-pocket
expenses and reasonable attorney’s fees. Unless otherwise agreed by the
parties, the place of any arbitration proceedings shall be Green Bay,
Wisconsin.


 


I.              Right
to Amend. The Company hereby reserves the right to amend this Agreement
without Participant’s consent to the extent necessary or desirable to comply
with the requirements of Code Section 409A and the regulations, notices and
other guidance of general application issued thereunder.


 


ARTICLE
XII. GOVERNING LAW


 


This Agreement and all rights and obligations
hereunder shall be construed in accordance with the Plan and governed by the
laws of the State of Wisconsin.


 


[Signature
page  follows.]


 


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                IN WITNESS
WHEREOF, the parties hereto have executed this Agreement effective the day and
year first above written.


 


 


	
  

  	
  TOWER TECH HOLDINGS INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARTICIPANT

  	
   

  
	
  By execution hereof, the

  	
   

  	
   

  
	
  Participant acknowledges having

  	
   

  	
   

  
	
  received a copy of the Plan.

  	
   

  	
   

  



 


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