Exhibit 10.6


 


NONQUALIFIED STOCK OPTION
AGREEMENT


 


BROADWIND ENERGY, INC.


2007 EQUITY INCENTIVE PLAN


 


THIS
AGREEMENT is entered into effective as of the        day of
                      ,
20    , by and between Broadwind Energy, Inc., a
Delaware corporation (the “Company”), and
                                  
(“Participant”).


 


RECITALS


 


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


 


B.                                     The Company wishes to grant a nonqualified
stock option to Participant to purchase shares of the Company’s Common Stock
pursuant to this Agreement and the Company’s 2007 Equity Incentive Plan (the “Plan”);
and


 


C.                                     The Administrator has authorized the grant of
a nonqualified stock option 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.


 


AGREEMENTS


 


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


 


ARTICLE I.  GRANT OF OPTION


 


The
Company hereby grants to Participant the right, privilege, and option (the “Option”)
to purchase up to
                                                      
(                ) shares of Common Stock
at a per share price of
                        
Dollars ($                    )
subject to the terms and conditions set forth herein, and set forth in the
Plan.  The Option is a nonqualified stock
option and will not be treated as an incentive stock option, as defined under Section 422
of the Internal Revenue Code of 1986, as amended (the “Code”), and the
regulations thereunder.


 


ARTICLE II.  DURATION OF OPTION AND EXERCISABILITY


 


A.                                   General.  Except as provided in Articles
II.B. and II.C. below, the Option shall become exercisable according to the
following schedule.  Once the Option
becomes fully exercisable, Participant may continue to exercise the Option
under the terms and conditions of this Agreement until the termination of the
Option as provided herein.  If
Participant does not exercise the Option with respect to the full number of
shares which Participant is then entitled, Participant may purchase upon any subsequent
exercise prior to the Option’s termination such previously unpurchased shares
in addition to those Participant is otherwise entitled to purchase.  Except as provided in Articles II.B. and
II.C. below, the term during which this Option may be exercised will continue
until 5:00 p.m. (Central Time) on
                          
        ,
20       (the “Expiration Date”).  In no event shall this Option be exercisable
after the Expiration Date.


 

















 


	
   

  	
   

  	
  Number of Option Shares

  	
   

  
	
  Vesting Date

  	
   

  	
  Available for Exercise

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


B.                                     Termination of Employment for Reasons Other
Than 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 for any reason other
than death or an event that constitutes permanent and total disability within
the meaning of Section 22(e)(3) of the Code (“Disability”), any
unexercised portion of this Option which was exercisable as of the date of such
termination may be exercised, in whole or in part, by Participant before the
earlier of (i) the close of business on the three-month anniversary date
of such termination of employment, and (ii) the Expiration Date.  To the extent this Option was not exercisable
upon such termination of employment, or if Participant does not exercise the
unexercised portion of the Option that was exercisable within the time
specified in this Article II.B., all rights of Participant under this
Option shall terminate, and the Option shall thereafter be void.


 


C.                                     Termination of Employment Due to Death or
Disability.  In the event Participant ceases to be [a key employee or officer] [a consultant or advisor]
[a director] of the Company or any Affiliate by reason of death or
Disability, any unexercised portion of this Option which was exercisable as of
the date of such termination may be exercised, in whole or in part, by
Participant (or by Participant’s heirs or legal representative(s) in the
event of death or Disability) before the earlier of (i) the close of
business on the twelve-month anniversary date of such termination of employment
and (ii) the Expiration Date.  To
the extent this Option was not exercisable upon such termination of employment,
or if Participant does not exercise the unexercised portion of the Option that
was exercisable within the time specified in this Article II.C., all
rights of Participant under this Option shall terminate, and the Option shall
thereafter be void.


 


ARTICLE III.  MANNER OF OPTION EXERCISE


 


A.                                   Notice.  This Option may be exercised
by Participant in whole or in part from time to time, subject to the conditions
contained in the Plan and herein, by delivery, in person or by registered mail,
to the Company at its principal executive office, of a written notice of
exercise.  Such notice shall be in a form
satisfactory to the Administrator, shall identify the Option, shall specify the
number of Option Shares with respect to which the Option is being exercised,
and shall be signed by the person or persons so exercising the Option.  Such notice shall be accompanied by payment
in full of the total purchase price of the Option Shares purchased; the
exercise of the Option shall be deemed effective upon receipt of such notice by
the Company and upon payment that complies with the terms of the Plan and this
Agreement.  In the event that the Option
is being exercised, as provided by the Plan and Article II.B., above, by
Participant’s heirs or legal representative(s), the notice shall be accompanied
by appropriate proof of right of such person or persons to exercise the Option.  As soon as practicable after the effective
exercise of the Option, Participant (or Participant’s heirs or legal
representative(s) in the event of death or Disability) shall be recorded
on the stock transfer books of the Company as the owner of the Option Shares
purchased, and the Company may deliver to Participant (or Participant’s heirs
or legal representative(s)) one or more duly issued stock certificates
evidencing such ownership.  All requisite
original issue or transfer documentary stamp taxes shall be paid by the
Company.


 


B.                                     Payment.  At the time of exercise of
this Option, Participant may determine whether to pay the total purchase price
of the Option Shares to be purchased solely in cash (including a personal check
or a


 


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certified
or bank cashier’s check, payable to the order of the Company) or by transfer
from Participant to the Company of previously-owned shares of Common Stock of
the Company with a then current aggregate Fair Market Value equal to such total
purchase price, or by a combination of cash and such previously-owned shares of
Common Stock.  The Administrator may
reject Participant’s election to pay all or part of the purchase price under
this Option with previously-owned shares of common stock and may require such
purchase price to be paid entirely in cash if, in the sole discretion of the
Administrator, payment in previously-owned shares would cause the Company to be
required to recognize a charge to earnings in connection therewith.  For purposes of this Agreement, (a) “previously-owned
shares” shall mean shares of Common Stock of the Company that Participant has
owned for at least six months prior to the time of exercise, and (b) “Fair
Market Value” will be determined as set forth in the Plan.


 


C.                                     Investment Purpose.  The
Company shall not be required to issue or deliver any shares of Common Stock
under this Option unless (a)(1) such shares are covered by an effective
and current registration statement under the Securities Act of 1933 and
applicable state securities laws or (2) if the Administrator has
determined not to so register such shares, exemptions from registration under
the Securities Act of 1933 and applicable state securities laws are available
for such issuance (as determined by counsel to the Company) and the Company has
received from Participant (or Participant’s heirs(s) or legal
representative(s), in the event of death or Disability) any representations or
agreements requested by the Company in order to permit such issuance to be made
pursuant to such exemptions, and (b) the Company has obtained any other
consent, approval or permit from any state or federal governmental agency which
the Administrator shall, in its sole discretion upon the advice of counsel,
deem necessary or advisable.  Unless a
registration statement under the Securities Act of 1933 is in effect with
respect to the issuance or transfer of Option Shares, transfer of such shares
shall be restricted unless the Company receives an opinion of counsel satisfactory
to the Company to the effect that registration under the Securities Act of 1933
and applicable state securities laws is not required with respect to such
transfer.


 


ARTICLE IV.  TRANSFERABILITY


 


This
Option shall be transferable, in whole or in part, by the Participant by will
or by the laws of descent and distribution. 
In addition, the Administrator may, in its sole discretion, permit
Participant to transfer this Option to any member of Participant’s “immediate
family” as such term is defined in Rule 16a-1(e) promulgated under
the Securities Exchange Act of 1934, or any successor provision, or to one or
more trusts whose beneficiaries are members of such Participant’s “immediate
family” or partnerships in which such family members are the only partners;
provided, however, that Participant cannot receive any consideration for the
transfer and such transferred Option shall continue to be subject to the same
terms and conditions as were applicable to the Option immediately prior to its
transfer.


 


ARTICLE V. 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


 


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result of the exercise of the Option, 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.


 


ARTICLE VI.  CAPITAL ADJUSTMENTS


 


Pursuant
and subject to Section 14 of the Plan, in the event of an increase or
decrease in the number of shares of common stock resulting from a stock split,
reverse stock split, stock dividend, combination of shares, rights offering,
reclassification of the common stock, or any other change in the corporate
structure or shares of the Company, the Administrator, in order to prevent
dilution or enlargement of the rights of Participant, may make appropriate
adjustment as to the number and kind of securities subject to this Option.  Any such adjustment affecting this Option
shall be made without change in the aggregate purchase price applicable to the
unexercised portion of the Option but with an appropriate adjustment in the price
for each share or other unit of any security subject to the Option.


 


ARTICLE VII.  BINDING EFFECT


 


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


 


ARTICLE VIII.  2007 EQUITY INCENTIVE PLAN


 


The
Option 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 IX.  MISCELLANEOUS


 


A.                                   Employment or Other
Relationship; Rights as
Stockholder.  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.  Participant shall have no
rights as a stockholder with respect to shares subject to the Option until such
shares have been issued to Participant upon exercise of the Option.  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.


 


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B.                                     Securities Law Compliance.  The
exercise of all or any parts of this Option shall only be effective at such
time as counsel to the Company shall have determined that the issuance and
delivery of Common Stock pursuant to such exercise will not violate any state
or federal securities or other laws. 
Participant may be required by the Company, as a condition of the
effectiveness of any exercise of this Option, to agree in writing that all
Common Stock to be acquired pursuant to such exercise shall be held, until such
time that such Common 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.


 


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 the Option or any of the underlying shares of Common Stock
without the prior written consent 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 Board of Directors of the
Company shall have the right (i) to accelerate the exercisability of this
Option and the date on which this Option must be exercised, provided that the
Company gives Participant 15 days’ prior written notice of such acceleration,
and (ii) to cancel any portion of this Option or any other option granted
to Participant pursuant to this Agreement which is not exercised prior to or
contemporaneously with such public offering. 
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 “transaction” (as defined in Section 14
of the Plan) occurs, and Participant is an “affiliate” of the Company or any
Subsidiary (as defined in applicable legal and accounting principles) at the
time of such Change of Control, 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
purchased by Participant (or, in the case of death, Participant’s successors)
shall bear an appropriate legend to reflect the restrictions of this Article IX;
provided, however, that failure to so endorse any of such certificates shall
not render invalid or inapplicable this Article IX.


 


G.                                     Shares Reserved.  The
Company shall at all times during the term of the option period 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.


 


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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 Cook County, Illinois 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 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 Chicago, Illinois.


 


ARTICLE X.  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 Delaware.


 


[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.


 


	
   

  	
   

  	
  BROADWIND
  ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  Its:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARTICIPANT

  
	
  By
  execution hereof, the Participant acknowledges having received a copy of the
  Plan.

  	
   

  	
   

  



 


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