Document:

Exhibit 4.1

 

	
  

  

  THIS CERTIFICATE IS
  TRANSFERABLE

  IN SOUTH SAINT PAUL, MN.

  	
  

   

  INCORPORATED
  UNDER THE LAWS OF THE STATE OF DELAWARE

  	
  

  

  SEE REVERSE SIDE

  FOR CERTAIN
  DEFINITIONS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP 11161T 10 8

  

 

	
  THIS
  CERTIFIES THAT

  
	
   

  
	
   

  
	
  is the
  owner of

  

 

FULLY
PAID AND NON-ASSESSABLE COMMON SHARES, $0.001 PAR VALUE, OF

 

BROADWIND ENERGY, INC.

 

transferable
on the books of the Corporation by the holder hereof in person or by Attorney
upon surrender of this certificate properly endorsed. This certificate is not
valid until countersigned and registered by the Transfer Agent and Registrar.

 

IN WITNESS
WHEREOF, the said Corporation has caused this certificate to be signed by
facsimile signatures of its duly authorized officers.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

   

  	
   

  	
  

   

  
	
  SECRETARY

  	
   

  	
  CHIEF
  EXECUTIVE OFFICER

  

 

	
  COUNTERSIGNED AND
  REGISTERED:

  	
   

  	
   

  
	
  WELLS FARGO BANK, N.A.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BY

  	
  

  	
   

  	
  TRANSFER AGENT

  AND REGISTRAR

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  AUTHORIZED SIGNATURE

  

 

AMERICAN FINANCIAL PRINTING INCORPORATED – MINNEAPOLIS

 

 

The following abbreviations,
when used in the inscription on the face of this certificate, shall be
construed as though they were  written out in full according to applicable laws or regulations:

 

	
  TEN COM

  	
  –

  	
  as tenants in common

  	
  UTMA  –

  	
   

  	
  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  
	
  TEN ENT

  	
  –

  	
  as tenants by entireties

  	
   

  	
  under Uniform Transfers to
  Minors

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JT TEN

  	
  –

  	
  as joint tenants with right of survivorship 

  	
   

  	
  Act

  	
   

  
	
   

  	
   

  	
  and not as tenants in common

  	
   

  	
   

  	
  (State)

  
								

 

Additional
abbreviations may also be used though not in above list.

 

For value received                                                                           
hereby sell, assign, and transfer unto

 

	
  PLEASE INSERT SOCIAL
  SECURITY OR OTHER

  	
   

  
	
  IDENTIFYING NUMBER OF
  ASSIGNEE

  	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
   

  
	
  (PLEASE PRINT OR TYPEWRITE
  NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE)

  
	
   

  
	
   

  
	
   

  

 

	
   

  	
  Shares

  
	
  of the capital stock represented by the within
  Certificate,  and do hereby irrevocably
  constitute and appoint  

  	
   

  
	
   

  	
  Attorney to transfer the said stock on the books of
  the within-named Corporation with full power

  
	
  of substitution in the premises.

  
				

 

	
  Dated

  	
   

  	
   

  	
  X

  
	
   

  	
   

  
	
   

  	
  X

  
	
   

  	
  NOTICE: THE SIGNATURE TO THIS ASSIGNMENT
  MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN
  EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNATURE GUARANTEED

  	
   

  
	
   

  	
   

  
	
  ALL GUARANTEES MUST
  BE MADE BY A FINANCIAL INSTITUTION (SUCH AS A BANK OR BROKER) WHICH IS A PARTICIPANT IN THE SECURITIES TRANSFER AGENTS MEDALLION
  PROGRAM (“STAMP”), THE NEW YORK STOCK EXCHANGE, INC. MEDALLION SIGNATURE PROGRAM (“MSP”), OR THE STOCK EXCHANGES
  MEDALLION PROGRAM (“SEMP”) AND MUST NOT BE DATED. GUARANTEES BY A NOTARY PUBLIC ARE NOT ACCEPTABLE.Exhibit 10.3

 

BROADWIND
ENERGY, INC.

2007
EQUITY INCENTIVE PLAN

(AS AMENDED
THROUGH AUGUST 8, 2008)

 

SECTION 1.

DEFINITIONS

 

As used herein, the following terms shall
have the meanings indicated below:

 

(a)                                  “Administrator”  shall mean the Board of Directors of the
Company (herein after referred to as the “Board”), or one or more Committees
appointed by the Board, as the case may be.

 

(b)                                 “Affiliate(s)” shall
mean a Parent or Subsidiary of the Company.

 

(c)                                  “Award” shall mean
any grant of an Option, Restricted Stock or Restricted Stock Unit Award, Stock
Appreciation Right or Performance Award.

 

(d)                                 “Committee” shall mean
a Committee of two or more directors who shall be appointed by and serve at the
pleasure of the Board. To the extent necessary for compliance with Rule 16b-3,
or any successor provision, each of the members of the Committee shall be a “non-employee
director.”  Solely for purposes of this Section 1(d),
“non-employee director” shall have the same meaning as set forth in Rule 16b-3,
or any successor provision, as then in effect, of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended.

 

(e)                                  The “Company” shall
mean Broadwind Energy, Inc., a Delaware corporation.

 

(f)                                    “Fair Market Value”
as of any date shall mean (i) if such stock is listed on the Nasdaq Global
Market, Nasdaq Capital Market, or an established stock exchange, the price of
such stock at the close of the regular trading session of such market or
exchange on such date, as reported by The Wall Street Journal or a
comparable reporting service, or, if no sale of such stock shall have occurred
on such date, on the next date on which there was a sale of stock; (ii) if
such stock is not so listed on the Nasdaq Global Market, Nasdaq Capital Market,
or an established stock exchange, the average of the closing “bid” and “asked”
prices quoted by the OTC Bulletin Board, the National Quotation Bureau, or any
comparable reporting service on such date or, if there are no quoted “bid” and “asked”
prices on such date, on the next date for which there are such quotes; or (iii) if
such stock is not publicly traded as of such date, the per share value as
determined by the Board, or the Committee, in its sole discretion by applying
principles of valuation with respect to the Company’s Common Stock.

 

(g)                                 The “Internal Revenue
Code” or “Code” is the Internal Revenue Code of 1986, as amended from time to
time.

 

(h)                                 “Option” means an
incentive stock option or nonqualified stock option granted pursuant to the
Plan.

 

 

(i)                                     “Parent” shall
mean any corporation which owns, directly or indirectly in an unbroken chain,
fifty percent (50%) or more of the total voting power of the Company’s
outstanding stock.

 

(j)                                     The “Participant”
means (i) a key employee or officer of the Company or any Affiliate to
whom an incentive stock option has been granted pursuant to Section 9; (ii) a
consultant or advisor to, or director, key employee or officer, of the Company
or any Affiliate to whom a nonqualified stock option has been granted pursuant
to Section 10; (iii) a consultant or advisor to, or director, key
employee or officer, of the Company or any Affiliate to whom a Restricted Stock
or Restricted Stock Unit Award has been granted pursuant to Section 11; (iv) a
consultant or advisor to, or director, key employee or officer, of the Company
or any Affiliate to whom a Performance Award has been granted pursuant to Section 12;
or (v) a consultant or advisor to, or director, key employee or officer,
of the Company or any Affiliate to whom a Stock Appreciation Right has been
granted pursuant to Section 13.

 

(k)                                  “Performance Award”
shall mean any Performance Shares or Performance Units granted pursuant to Section 12
hereof.

 

(l)                                     “Performance
Objective(s)” shall mean one or more performance objectives established by the
Administrator, in its sole discretion, for Awards granted under this Plan. Performance
Objectives may include, but shall not be limited to, any one, or a combination
of, (i) revenue, (ii) net income, (iii) earnings per share, (iv) return
on equity, (v) return on assets, (vi) increase in revenue, (vii) increase
in share price or earnings, (viii) return on investment, or (ix) increase
in market share, in all cases including, if selected by the Administrator,
threshold, target and maximum levels.

 

(m)                               “Performance Period”
shall mean the period, established at the time any Performance Award is granted
or at any time thereafter, during which any Performance Objectives specified by
the Administrator with respect to such Performance Award are to be measured.

 

(n)                                 “Performance Share”
shall mean any grant pursuant to Section 12 hereof of an Award, which
value, if any, shall be paid to a Participant by delivery of shares of Common
Stock of the Company upon achievement of such Performance Objectives during the
Performance Period as the Administrator shall establish at the time of such
grant or thereafter.

 

(o)                                 “Performance Unit”
shall mean any grant pursuant to Section 12 hereof of an Award, which
value, if any, shall be paid to a Participant by delivery of cash upon
achievement of such Performance Objectives during the Performance Period as the
Administrator shall establish at the time of such grant or thereafter.

 

(p)                                 The “Plan” means the
Broadwind Energy, Inc. 2007 Equity Incentive Plan, as amended hereafter
from time to time, including the form of Agreements as they may be modified by
the Administrator from time to time.

 

2

 

(q)                                 “Restricted Stock
Award” shall mean any grant of restricted shares of Stock of the Company
pursuant to Section 11 hereof.

 

(r)                                    “Restricted Stock
Unit Award” shall mean any grant of restricted stock units pursuant to Section 11
hereof.

 

(s)                                  “Stock,” “Option
Stock” or “Common Stock” shall mean the common stock, $0.001 par value of the Company
reserved for Options and Awards pursuant to this Plan.

 

(t)                                    “Stock Appreciation
Right” shall mean a grant pursuant to Section 13 hereof.

 

(u)                                 A “Subsidiary” shall
mean any corporation of which fifty percent (50%) or more of the total voting
power of the Company’s outstanding Stock is owned, directly or indirectly in an
unbroken chain, by the Company.

 

SECTION 2.

PURPOSE

 

The purpose of the Plan is to promote the
success of the Company and its Affiliates by facilitating the employment and
retention of competent personnel and by furnishing incentive to officers,
directors, employees, consultants, and advisors upon whose efforts the success
of the Company and its Affiliates will depend to a large degree.

 

It is the intention of the Company to carry
out the Plan through the granting of Options which will qualify as “incentive
stock options” under the provisions of Section 422 of the Internal Revenue
Code, or any successor provision, pursuant to Section 9 of this Plan;
through the granting of “nonqualified stock options” pursuant to Section 10
of this Plan; through the granting of Restricted Stock or Restricted Stock Unit
Awards pursuant to Section 11 of this Plan; through the granting of
Performance Awards pursuant to Section 12 of this Plan; and through the
granting of Stock Appreciation Rights pursuant to Section 13 of this Plan.
Adoption of this Plan shall be and is expressly subject to the condition of
approval by the stockholders of the Company within twelve (12) months before or
after the adoption of the Plan by the Board. Any incentive stock options
granted after adoption of the Plan by the Board shall be treated as
nonqualified stock options if stockholder approval is not obtained within such
twelve-month period.

 

SECTION 3.

EFFECTIVE
DATE OF PLAN

 

The Plan shall be effective as of the date of
adoption by the Board, subject to approval by the stockholders of the Company
as required in Section 2.

 

3

 

SECTION 4.

ADMINISTRATION

 

The Plan shall be administered by the Board
or by a Committee which may be appointed by the Board from time to time to
administer the Plan (hereinafter collectively referred to as the “Administrator”).
Except as otherwise provided herein, the Administrator shall have all of the
powers vested in it under the provisions of the Plan, including but not limited
to exclusive authority to determine, in its sole discretion, whether an Award
shall be granted; the individuals to whom, and the time or times at which,
Awards shall be granted; the number of shares subject to each Award; the option
price, if any; and the performance criteria, if any, and any other terms and
conditions of each Award. The Administrator shall have full power and authority
to administer and interpret the Plan, to make and amend rules, regulations and
guidelines for administering the Plan, to prescribe the form and conditions of
the respective agreements evidencing each Award (which may vary from
Participant to Participant), and to make all other determinations necessary or
advisable for the administration of the Plan. The Administrator’s
interpretation of the Plan, and all actions taken and determinations made by
the Administrator pursuant to the power vested in it hereunder, shall be
conclusive and binding on all parties concerned.

 

No member of the Board or the Committee shall
be liable for any action taken or determination made in good faith in
connection with the administration of the Plan. In the event the Board appoints
a Committee as provided hereunder, any action of the Committee with respect to
the administration of the Plan shall be taken pursuant to a majority vote of
the Committee members or pursuant to the written resolution of all Committee
members.

 

SECTION 5.

PARTICIPANTS

 

The Administrator shall from time to time, at
its discretion and without approval of the stockholders, designate those
employees, officers, directors, consultants, and advisors of the Company or of
any Affiliate to whom Awards shall be granted under this Plan; provided,
however, that consultants or advisors shall not be eligible to receive Awards
hereunder unless such consultant or advisor renders bona fide services to the
Company or any Affiliate and such services are not in connection with the offer
or sale of securities in a capital raising transaction and do not directly or
indirectly promote or maintain a market for the Company’s securities. The
Administrator may grant additional Awards under this Plan to some or all
Participants then holding Awards, or may grant Awards solely or partially to
new Participants. In designating Participants, the Administrator shall also
determine the number of shares to be optioned or awarded to each such
Participant and the performance criteria applicable to each Performance Award.
The Administrator may from time to time designate individuals as being
ineligible to participate in the Plan.

 

4

 

SECTION 6.

STOCK

 

The Stock to be issued under this Plan shall
consist of authorized but unissued shares of Common Stock. Three million five
hundred thousand (3,500,000) shares of Common Stock shall be reserved and
available for Awards under the Plan; provided, however, that the total number
of shares reserved for Awards under this Plan shall be subject to adjustment as
provided in Section 14 of the Plan; and provided, further, that all shares
reserved and available under the Plan shall constitute the maximum aggregate
number of shares of Stock that may be issued through incentive stock options. The
following shares of Stock shall continue to be reserved and available for
Awards granted pursuant to the Plan: (i) any outstanding Award that
expires for any reason, (ii) any portion of an outstanding Option or Stock
Appreciation Right that is terminated prior to exercise, (iii) any portion
of an Award that is terminated prior to the lapsing of the risks of forfeiture
on such Award, (iv) shares of Common Stock used to pay the exercise price
under any Award, (v) shares of Common Stock used to satisfy any tax
withholding obligation attributable to any Award, whether such shares are
withheld by the Company or tendered by the Participant, and (vi) shares of
Stock covered by an Award to the extent the Award is settled in cash.

 

SECTION 7.

DURATION
OF PLAN

 

Incentive stock options may be granted
pursuant to the Plan from time to time during a period of ten (10) years
from the effective date as defined in Section 3. Other Awards may be
granted pursuant to the Plan from time to time after the effective date of the
Plan and until the Plan is discontinued or terminated by the Administrator.

 

SECTION 8.

PAYMENT

 

Participants may pay for shares upon exercise
of Options granted pursuant to this Plan with cash, personal check, certified
check or, if approved by the Administrator in its sole discretion,
previously-owned shares of the Company’s Common Stock, or any combination
thereof. Any stock so tendered as part of such payment shall be valued at such
stock’s then Fair Market Value, or such other form of payment as may be
authorized by the Administrator. The Administrator may, in its sole discretion,
limit the forms of payment available to the Participant and may exercise such
discretion any time prior to the termination of the Option granted to the
Participant or upon any exercise of the Option by the Participant. “Previously-owned
shares” means shares of the Company’s Common Stock which the Participant has
owned for at least six (6) months prior to the exercise of the Option, or
for such other period of time as may be required by generally accepted
accounting principles.

 

With respect to payment in the form of Common
Stock of the Company, the Administrator may require advance approval or adopt
such rules as it deems necessary to assure

 

5

 

compliance with Rule 16b-3,
or any successor provision, as then in effect, of the General Rules and
Regulations under the Securities Exchange Act of 1934, if applicable.

 

SECTION 9.

TERMS AND
CONDITIONS OF INCENTIVE STOCK OPTIONS

 

Each incentive stock option granted pursuant
to this Section 9 shall be evidenced by a written incentive stock option
agreement (the “Option Agreement”). The Option Agreement shall be in such form
as may be approved from time to time by the Administrator and may vary from
Participant to Participant; provided, however, that each Participant and each
Option Agreement shall comply with and be subject to the following terms and
conditions:

 

(a)                                  Number of Shares
and Option Price. The Option Agreement shall state the total number of
shares covered by the incentive stock option. Except as permitted by Code Section 424(a),
or any successor provision, the option price per share shall not be less than
one hundred percent (100%) of the per share Fair Market Value of the Common
Stock on the date the Administrator grants the Option; provided, however, that
if a Participant owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of its Parent
or any Subsidiary, the option price per share of an incentive stock option
granted to such Participant shall not be less than one hundred ten percent
(110%) of the per share Fair Market Value of the Company’s Common Stock on the
date of the grant of the Option. The Administrator shall have full authority
and discretion in establishing the option price and shall be fully protected in
so doing.

 

(b)                                 Term and
Exercisability of Incentive Stock Option. The term during which any
incentive stock option granted under the Plan may be exercised shall be
established in each case by the Administrator. Except as permitted by Code Section 424(a),
in no event shall any incentive stock option be exercisable during a term of
more than ten (10) years after the date on which it is granted; provided,
however, that if a Participant owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of its Parent or any Subsidiary, the incentive stock option granted to such
Participant shall be exercisable during a term of not more than five (5) years
after the date on which it is granted.

 

The Option Agreement shall state when the
incentive stock option becomes exercisable and shall also state the maximum
term during which the Option may be exercised. In the event an incentive stock
option is exercisable immediately, the manner of exercise of the Option in the
event it is not exercised in full immediately shall be specified in the Option
Agreement. The Administrator may accelerate the exercisability of any incentive
stock option granted hereunder which is not immediately exercisable as of the
date of grant.

 

(c)                                  Nontransferability.
No incentive stock option shall be transferable, in whole or in part, by the
Participant other than by will or by the laws of descent and distribution. During
the Participant’s lifetime, the incentive stock option may be exercised only by
the Participant. If the Participant shall attempt any transfer of any incentive
stock option granted under the Plan during

 

6

 

the Participant’s lifetime,
such transfer shall be void and the incentive stock option, to the extent not
fully exercised, shall terminate.

 

(d)                                 No Rights as
Stockholder. A Participant (or the Participant’s successor or successors)
shall have no rights as a stockholder with respect to any shares covered by an
incentive stock option until the date the Participant is recorded on the stock
transfer books of the Company as the owner of the Stock. 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 transfer is actually recorded (except as otherwise
provided in Section 14 of the Plan).

 

(e)                                  Withholding. The
Company or its Affiliate shall be entitled to withhold and deduct from future
wages of the Participant all legally required amounts necessary to satisfy any
and all withholding and employment-related taxes attributable to the
Participant’s exercise of an incentive stock option or a “disqualifying
disposition” of shares acquired through the exercise of an incentive stock
option as defined in Code Section 421(b). In the event the Participant is
required under the Option Agreement to pay the Company, or make arrangements
satisfactory to the Company respecting payment of, such withholding and
employment-related taxes, the Administrator may, in its discretion and pursuant
to such rules as it may adopt, require the Participant to satisfy such
obligation, in whole or in part, by delivering shares of the Company’s Common
Stock or by electing to have the Company withhold Common Stock otherwise
issuable to the Participant as a result of the exercise of the incentive stock
option. Such shares shall have a Fair Market Value equal to the minimum
required tax withholding, 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. In no event may the
Company or any Affiliate withhold shares having a Fair Market Value in excess
of such statutory minimum required tax withholding. The Participant’s election
to deliver shares or to have shares withheld for this purpose shall be made on
or before the date the incentive stock option is exercised or, if later, the
date that the amount of tax to be withheld is determined under applicable tax
law. Such election 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 Exchange Act of 1934, if applicable.

 

(f)                                    Other Provisions.
The Option Agreement authorized under this Section 9 shall contain such
other provisions as the Administrator shall deem advisable. Any such Option
Agreement shall contain such limitations and restrictions upon the exercise of
the Option as shall be necessary to ensure that such Option will be considered
an “incentive stock option” as defined in Section 422 of the Internal
Revenue Code or to conform to any change therein.

 

SECTION 10.

TERMS AND
CONDITIONS OF NONQUALIFIED STOCK OPTIONS

 

Each nonqualified stock option granted
pursuant to this Section 10 shall be evidenced by a written nonqualified
stock option agreement (the “Option Agreement”). The Option

 

7

 

Agreement shall be in such form
as may be approved from time to time by the Administrator and may vary from
Participant to Participant; provided, however, that each Participant and each
Option Agreement shall comply with and be subject to the following terms and
conditions:

 

(a)                                  Number of Shares
and Option Price. The Option Agreement shall state the total number of
shares covered by the nonqualified stock option. Unless otherwise determined by
the Administrator, the option price per share shall be one hundred percent
(100%) of the per share Fair Market Value of the Common Stock on the date the
Administrator grants the Option.

 

(b)                                 Term and
Exercisability of Nonqualified Stock Option. The term during which any
nonqualified stock option granted under the Plan may be exercised shall be
established in each case by the Administrator. The Option Agreement shall state
when the nonqualified stock option becomes exercisable and shall also state the
maximum term during which the Option may be exercised. In the event a
nonqualified stock option is exercisable immediately, the manner of exercise of
the Option in the event it is not exercised in full immediately shall be
specified in the Option Agreement. The Administrator may accelerate the
exercisability of any nonqualified stock option granted hereunder which is not
immediately exercisable as of the date of grant.

 

(c)                                  Transferability.
A nonqualified stock 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 the Participant to transfer
any or all nonqualified stock options to any member of the 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 the Participant cannot receive any consideration for
the transfer and such transferred nonqualified stock option shall continue to
be subject to the same terms and conditions as were applicable to such
nonqualified stock option immediately prior to its transfer.

 

(d)                                 No Rights as
Stockholder. A Participant (or the Participant’s successor or successors)
shall have no rights as a stockholder with respect to any shares covered by a
nonqualified stock option until the date the Participant is recorded on the
stock transfer books of the Company as the owner of the Stock. 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 transfer is actually recorded (except as
otherwise provided in Section 14 of the Plan).

 

(e)                                  Withholding. The
Company or its Affiliate shall be entitled to withhold and deduct from future
wages of the Participant all legally required amounts necessary to satisfy any
and all withholding and employment-related taxes attributable to the
Participant’s exercise of a nonqualified stock option. In the event the
Participant is required under the Option Agreement to pay the Company, or make
arrangements satisfactory to the Company respecting payment of, such
withholding and employment-related taxes, the Administrator may, in its
discretion and pursuant to such rules as it may adopt, require the
Participant to satisfy such obligation, in whole or in part, by delivering
shares of the Company’s Common Stock or by electing to have the Company
withhold Common Stock otherwise issuable to the Participant as a result of the

 

8

 

exercise of the nonqualified
stock option. Such shares shall have a Fair Market Value equal to the minimum
required tax withholding, 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. In no event may the
Company or any Affiliate withhold shares having a Fair Market Value in excess
of such statutory minimum required tax withholding. The Participant’s election
to deliver shares or to have shares withheld for this purpose shall be made on
or before the date the nonqualified stock option is exercised or, if later, the
date that the amount of tax to be withheld is determined under applicable tax
law. Such election 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 Exchange Act of 1934, if applicable.

 

(f)                                    Other Provisions.
The Option Agreement authorized under this Section 10 shall contain such
other provisions as the Administrator shall deem advisable.

 

SECTION 11.

RESTRICTED
STOCK AND RESTRICTED STOCK UNIT AWARDS

 

Each Restricted Stock Award or Restricted
Stock Unit Award granted pursuant to the Plan shall be evidenced by a written
restricted stock/restricted stock unit agreement (the “Restricted Stock
Agreement” or “Restricted Stock Unit Agreement,” as the case may be). The
Restricted Stock Agreement or Restricted Stock Unit Agreement shall be in such
form as may be approved from time to time by the Administrator and may vary from
Participant to Participant; provided, however, that each Participant and each
Restricted Stock Agreement or Restricted Stock Unit Agreement shall comply with
and be subject to the following terms and conditions:

 

(a)                                  Number of Shares.
The Restricted Stock Agreement or Restricted Stock Unit Agreement shall state
the total number of shares of Stock covered by the Restricted Stock/Restricted
Stock Unit Award.

 

(b)                                 Risks of Forfeiture.
The Restricted Stock Agreement or Restricted Stock Unit Agreement shall set
forth the risks of forfeiture or vesting conditions, if any, including risks of
forfeiture or vesting conditions based on Performance Objectives, which shall
apply to the shares of Stock covered by the Restricted Stock/Restricted Stock
Unit Award, and shall specify the manner in which such risks of forfeiture
shall lapse or vesting conditions shall vest. The Administrator may, in its
sole discretion and to the extent permitted by applicable tax and securities
laws and regulations, accelerate the date on which the risks of forfeiture
shall lapse or vesting conditions shall vest, but only with respect to those
shares of Stock which are restricted as of the effective date of the
acceleration.

 

(c)                                  Issuance of
Shares; Rights as Stockholder.

 

(i)                                     With
respect to a Restricted Stock Award, the Company shall cause to be issued a
stock certificate representing such shares of Stock in the

 

9

 

Participant’s name, and shall deliver such
certificate to the Participant; provided, however, that the Company shall place
a legend on such certificate describing the risks of forfeiture and other
transfer restrictions set forth in the Participant’s Restricted Stock Agreement
and providing for the cancellation and return of such certificate if the shares
of Stock subject to the Restricted Stock Award are forfeited. Until the risks
of forfeiture have lapsed or the shares subject to such Restricted Stock Award
have been forfeited, the Participant shall be entitled to vote the shares of
Stock represented by such stock certificate and shall receive all dividends
attributable to such shares, but the Participant shall not have any other
rights as a stockholder with respect to such shares.

 

(ii)                                  With
respect to a Restricted Stock Unit Award, as the vesting conditions on the
Restricted Stock Units are satisfied, the Administrator shall cause to be
issued one or more stock certificates in the Participant’s name and shall
deliver such certificates to the Participant in satisfaction of such Restricted
Stock Units. Until the vesting conditions on the Restricted Stock Units are
satisfied, the Participant shall not be entitled to vote any shares of stock
which may be acquired through the Restricted Stock Units, shall not receive any
dividends attributable to such shares, and shall not have any other rights as a
stockholder with respect to such shares.

 

(d)                                 Withholding Taxes.
The Company or its Affiliate shall be entitled to withhold and deduct from
future wages of the Participant all legally required amounts necessary to
satisfy any and all withholding and employment-related taxes attributable to
the Participant’s Restricted Stock/Restricted Stock Unit Award. In the event
the Participant is required under the Restricted Stock Agreement or Restricted
Stock Unit Agreement to pay the Company or its Affiliate, or make arrangements
satisfactory to the Company or its Affiliate respecting payment of, such
withholding and employment-related taxes, the Administrator may, in its
discretion and pursuant to such rules as it may adopt, permit the
Participant to satisfy such obligations, in whole or in part, by delivering
shares of Common Stock, including shares of Stock received pursuant to the
Restricted Stock/Restricted Stock Unit Award on which the risks of forfeiture
have lapsed. Such shares shall have a Fair Market Value equal to the minimum
required tax withholding, 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 the lapsing of the risks of forfeiture
on such Restricted Stock/Restricted Stock Unit. In no event may the Participant
deliver shares having a Fair Market Value in excess of such statutory minimum
required tax withholding. The Participant’s election to deliver shares of
Common Stock for this purpose shall be made on or before the date that the
amount of tax to be withheld is determined under applicable tax law. Such
election 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 Exchange Act of 1934, if applicable.

 

(e)                                  Nontransferability.
No Restricted Stock/Restricted Stock Unit Award shall be transferable, in whole
or in part, by the Participant, other than by will or by the laws of descent
and distribution, prior to the date the risks of forfeiture described in the
Restricted Stock

 

10

 

Agreement or Restricted Stock
Unit Agreement have lapsed. If the Participant shall attempt any transfer of
any Restricted Stock/Restricted Stock Unit Award granted under the Plan prior
to such date, such transfer shall be void and the Restricted Stock/Restricted
Stock Unit Award shall terminate.

 

(f)                                    Other Provisions.
The Restricted Stock Agreement or Restricted Stock Unit Agreement authorized
under this Section 11 shall contain such other provisions as the Administrator
shall deem advisable.

 

SECTION 12.

PERFORMANCE
AWARDS

 

Each Performance Award granted pursuant to
this Section 12 shall be evidenced by a written performance award
agreement (the “Performance Award Agreement”). The Performance Award Agreement
shall be in such form as may be approved from time to time by the Administrator
and may vary from Participant to Participant; provided, however, that each
Participant and each Performance Award Agreement shall comply with and be
subject to the following terms and conditions:

 

(a)                                  Awards. Performance
Awards in the form of Performance Units or Performance Shares may be granted to
any Participant in the Plan. Performance Units shall consist of monetary awards
which may be earned or become vested in whole or in part if the Company or the
Participant achieves certain Performance Objectives established by the
Administrator over a specified Performance Period. Performance Shares shall
consist of shares of Stock or other Awards denominated in shares of Stock that
may be earned or become vested in whole or in part if the Company or the
Participant achieves certain Performance Objectives established by the
Administrator over a specified Performance Period.

 

(b)                                 Performance
Objectives, Performance Period and Payment. The Performance Award Agreement
shall set forth:

 

(i)                                     the number of
Performance Units or Performance Shares subject to the Performance Award, and
the dollar value of each Performance Unit;

 

(ii)                                  one or more
Performance Objectives established by the Administrator;

 

(iii)                               the Performance Period
over which Performance Units or Performance Shares may be earned or may become
vested;

 

(iv)                              the extent to which
partial achievement of the Performance Objectives may result in a payment or
vesting of the Performance Award, as determined by the Administrator; and

 

11

 

(v)                                 the date upon which
payment of Performance Units will be made or Performance Shares will be issued,
as the case may be, and the extent to which such payment or the receipt of such
Performance Shares may be deferred.

 

(c)                                  Withholding Taxes.
The Company or its Affiliates shall be entitled to withhold and deduct from
future wages of the Participant all legally required amounts necessary to
satisfy any and all withholding and employment-related taxes attributable to
the Participant’s Performance Award. In the event the Participant is required
under the Performance Award Agreement to pay the Company or its Affiliates, or
make arrangements satisfactory to the Company or its Affiliates respecting
payment of, such withholding and employment-related taxes, the Administrator
may, in its discretion and pursuant to such rules as it may adopt, require
the Participant to satisfy such obligations, in whole or in part, by delivering
shares of the Company’s Common Stock or by electing to have the Company
withhold shares of Common Stock otherwise issuable to Participant as a result
of the grant of Performance Shares. Such shares shall have a Fair Market Value
equal to the minimum required tax withholding, based on the minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes. In
no event may the Participant deliver shares having a Fair Market Value in
excess of such statutory minimum required tax withholding. The Participant’s
election to deliver shares or to have shares withheld for this purpose shall be
made on or before the date that the amount of tax to be withheld is determined
under applicable tax law. Such election 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 Exchange
Act of 1934, if applicable.

 

(d)                                 Nontransferability.
No Performance Award shall be transferable, in whole or in part, by the
Participant, other than by will or by the laws of descent and distribution. If
the Participant shall attempt any transfer of any Performance Award granted
under the Plan, such transfer shall be void and the Performance Award shall
terminate.

 

(e)                                  No Rights as
Stockholder. A Participant (or the Participant’s successor or successors)
shall have no rights as a stockholder with respect to any shares covered by a
Performance Award until the date Participant is recorded on the stock transfer
books of the Company as the owners of the shares. 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 transfer is actually recorded (except as otherwise provided in Section 14
of the Plan).

 

(f)                                    Other Provisions.
The Performance Award Agreement authorized under this Section 12 shall
contain such other provisions as the Administrator shall deem advisable.

 

SECTION 13.

STOCK
APPRECIATION RIGHTS

 

Each Stock Appreciation Right granted
pursuant to this Section 13 shall be evidenced by a written stock
appreciation right agreement (the “Stock Appreciation Right Agreement”). The

 

12

 

Stock Appreciation Right
Agreement shall be in such form as may be approved from time to time by the
Administrator and may vary from Participant to Participant; provided, however,
that each Participant and each Stock Appreciation Right Agreement shall comply
with and be subject to the following terms and conditions:

 

(a)                                  Awards. A
Stock Appreciation Right shall entitle the Participant to receive, upon
exercise, cash, shares of Stock, or any combination thereof, having a value
equal to the excess of (i) the Fair Market Value of a specified number of
shares of Stock on the date of such exercise, over (ii) a specified
exercise price. Unless otherwise determined by the Administrator, the specified
exercise price shall not be less than 100% of the Fair Market Value of such
shares of Stock on the date of grant of the Stock Appreciation Right. A Stock
Appreciation Right may be granted independent of or in tandem with a previously
or contemporaneously granted Option.

 

(b)                                 Term and
Exercisability. The term during which any Stock Appreciation Right granted
under the Plan may be exercised shall be established in each case by the
Administrator. The Stock Appreciation Right Agreement shall state when the
Stock Appreciation Right becomes exercisable and shall also state the maximum
term during which such Stock Appreciation Right may be exercised. In the event
a Stock Appreciation Right is exercisable immediately, the manner of exercise
of such Stock Appreciation Right in the event it is not exercised in full
immediately shall be specified in the Stock Appreciation Right Agreement. The
Administrator may accelerate the exercisability of any Stock Appreciation Right
granted hereunder which is not immediately exercisable as of the date of grant.

 

(c)                                  Withholding Taxes.
The Company or its Affiliate shall be entitled to withhold and deduct from
future wages of the Participant all legally required amounts necessary to
satisfy any and all withholding and employment-related taxes attributable to
the Participant’s Stock Appreciation Right. In the event the Participant is
required under the Stock Appreciation Right to pay the Company or its
Affiliate, or make arrangements satisfactory to the Company or its Affiliate
respecting payment of, such withholding and employment-related taxes, the
Administrator may, in its discretion and pursuant to such rules as it may
adopt, permit the Participant to satisfy such obligations, in whole or in part,
by delivering shares of Common Stock or by electing to have the Company
withhold Common Stock issuable to Participant as a result of the exercise of
the Stock Appreciation Right. Such shares shall have a Fair Market Value equal
to the minimum required tax withholding, based on the minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes. In
no event may the Participant deliver shares having a Fair Market Value in
excess of such statutory minimum required tax withholding. The Participant’s
election to deliver shares of Common Stock for this purpose shall be made on or
before the date that the amount of tax to be withheld is determined under
applicable tax law. Such election 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 Exchange Act of
1934, if applicable.

 

(d)                                 Nontransferability.
No Stock Appreciation Right shall be transferable, in whole or in part, by the
Participant, other than by will or by the laws of descent and distribution. If
the

 

13

 

Participant shall attempt any
transfer of any Stock Appreciation Right granted under the Plan, such transfer
shall be void and the Stock Appreciation Right shall terminate.

 

(e)                                  No Rights as
Stockholder. A Participant (or the Participant’s successor or successors)
shall have no rights as a stockholder with respect to any shares covered by a
Stock Appreciation Right until the date of the issuance of a stock certificate
evidencing such shares. 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 stock
certificate is actually issued (except as otherwise provided in Section 14
of the Plan).

 

(f)                                    Other Provisions.
The Stock Appreciation Right Agreement authorized under this Section 13
shall contain such other provisions as the Administrator shall deem advisable,
including but not limited to any restrictions on the exercise of the Stock
Appreciation Right which may be necessary to comply with Rule 16b-3 of the
Securities Exchange Act of 1934, as amended.

 

SECTION 14.

RECAPITALIZATION,
SALE, MERGER, EXCHANGE

OR
LIQUIDATION

 

In the event of an increase or decrease in
the number of shares of Common Stock resulting from a stock dividend, stock
split, reverse split, combination or reclassification of the Common Stock, or
any other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company, the Administrator
may, in its sole discretion, adjust the number of shares of Stock reserved
under Section 6 hereof, the number of shares of Stock covered by each
outstanding Award, and, if applicable, the price per share thereof to reflect
such change. Additional shares which may become covered by the Award pursuant
to such adjustment shall be subject to the same restrictions as are applicable
to the shares with respect to which the adjustment relates.

 

Unless otherwise provided in the agreement
evidencing an Award, in the event of an acquisition of the Company through: the
sale of substantially all of the Company’s assets and the consequent
discontinuance of its business; an acquisition of 50% or more of the total
combined voting power of all classes of securities of the Company; or a merger,
consolidation, exchange, reorganization, reclassification, extraordinary
dividend, divestiture (including a spin-off), liquidation, recapitalization,
stock split, stock dividend or otherwise (collectively referred to as a “transaction”),
the Administrator may provide for one or more of the following:

 

(a)                                  the equitable
acceleration of the exercisability of any outstanding Options or Stock
Appreciation Rights, the vesting and payment of any Performance Awards, or the
lapsing of the risks of forfeiture on any Restricted Stock Awards;

 

(b)                                 the complete
termination of this Plan, the cancellation of outstanding Options or Stock
Appreciation Rights not exercised prior to a date specified by the Board (which
date shall give Participants a reasonable period of time in which to exercise such
Option or Stock

 

14

 

Appreciation Right prior to the
effectiveness of such transaction), the cancellation of any Performance Award
and the cancellation of any Restricted Stock Awards for which the risks of
forfeiture have not lapsed;

 

(c)                                  that Participants
holding outstanding Options and Stock Appreciation Rights shall receive, with
respect to each share of Stock subject to such Option or Stock Appreciation
Right, as of the effective date of any such transaction, cash in an amount
equal to the excess of the Fair Market Value of such Stock on the date
immediately preceding the effective date of such transaction over the price per
share of such Options or Stock Appreciation Rights; provided that the Board may,
in lieu of such cash payment, distribute to such Participants shares of Common
Stock of the Company or shares of stock of any corporation succeeding the
Company by reason of such transaction, such shares having a value equal to the
cash payment herein;

 

(d)                                 that Participants
holding outstanding Restricted Stock Awards and Performance Share Awards shall
receive, with respect to each share of Stock subject to such Awards, as of the
effective date of any such transaction, cash in an amount equal to the Fair Market
Value of such Stock on the date immediately preceding the effective date of
such transaction; provided that the Board may, in lieu of such cash payment,
distribute to such Participants shares of Common Stock of the Company or shares
of stock of any corporation succeeding the Company by reason of such
transaction, such shares having a value equal to the cash payment herein;

 

(e)                                  the continuance of
the Plan with respect to the exercise of Options or Stock Appreciation Rights
which were outstanding as of the date of adoption by the Board of such plan for
such transaction and the right to exercise such Options and Stock Appreciation
Rights as to an equivalent number of shares of stock of the corporation
succeeding the Company by reason of such transaction;

 

(f)                                    the continuance of
the Plan with respect to Restricted Stock Awards for which the risks of
forfeiture have not lapsed as of the date of adoption by the Board of such plan
for such transaction and the right to receive an equivalent number of shares of
stock of the corporation succeeding the Company by reason of such transaction;
and

 

(g)                                 the continuance of the
Plan with respect to Performance Awards and, to the extent applicable, the
right to receive an equivalent number of shares of stock of the corporation
succeeding the Company by reason for such transaction.

 

The Administrator may condition any acceleration of exercisability or
other right to which Participant is not entitled upon any additional agreements
from Participant, including, without limitation, a Participant agreeing to
additional restrictive covenants (e.g., confidentiality, noncompetition,
non-solicitation, non-circumvention, etc.) and Participant agreeing to continue
to perform services for the Company, a successor or purchaser of all or any
portion of the Company’s business or related assets for substantially the same
base salary for a period of up to six months.

 

The Administrator may restrict the rights of or the applicability of
this Section 14 to the extent necessary to comply with Section 16(b) of
the Securities Exchange Act of 1934, the Internal

 

15

 

Revenue Code or any other applicable law or regulation. The grant of an
Award pursuant to the Plan shall not limit in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge, exchange or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or
assets.

 

SECTION 15.

INVESTMENT
PURPOSE

 

No shares of Stock shall be issued pursuant
to the Plan unless and until there has been compliance, in the opinion of
Company’s counsel, with all applicable legal requirements, including without
limitation, those relating to securities laws and stock exchange listing
requirements. As a condition to the issuance of Stock to Participant, the
Administrator may require Participant to (a) represent that the shares of
Stock are being acquired for investment and not resale and to make such other
representations as the Administrator shall deem necessary or appropriate to
qualify the issuance of the shares as exempt from the Securities Act of 1933
and any other applicable securities laws, and (b) represent that
Participant shall not dispose of the shares of Stock in violation of the
Securities Act of 1933 or any other applicable securities laws.

 

As a further condition to the grant of any
Option or the issuance of Stock to Participant, Participant agrees to the
following:

 

(a)                                  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
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 Common
Stock underlying Awards, Participant will not, for a period not to exceed 180
days from the prospectus, sell or contract to sell or grant an option to buy or
otherwise dispose of any Option granted to Participant pursuant to the Plan or
any of the underlying shares of Common Stock without the prior written consent
of the underwriter(s) or its representative(s).

 

(b)                                 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’s 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 any Option
and the date on which such Option must be exercised, provided that the Company
gives Participant prior written notice of such acceleration, and (ii) to
cancel any Options or portions thereof which Participant does not exercise
prior to or contemporaneously with such public offering.

 

(c)                                  In the event of a
transaction (as defined in Section 14 of the Plan), Participant will
comply with Rule 145 of the Securities Act of 1933 and any other
restrictions imposed under other applicable legal or accounting principles if
Participant is an “affiliate” (as defined in such

 

16

 

applicable legal and accounting
principles) at the time of the transaction, and Participant will execute any
documents necessary to ensure compliance with such rules.

 

The Company reserves the right to place a
legend on any stock certificate issued in connection with an Award pursuant to
the Plan to assure compliance with this Section 15.

 

SECTION 16.

AMENDMENT
OF THE PLAN

 

The Administrator may from time to time,
insofar as permitted by law, suspend or discontinue the Plan or revise or amend
it in any respect; provided, however, that no such revision or amendment,
except as is authorized in Section 14, shall impair the terms and
conditions of any Award which is outstanding on the date of such revision or
amendment to the material detriment of the Participant without the consent of
the Participant. Notwithstanding the foregoing, no such revision or amendment
shall (i) materially increase the number of shares subject to the Plan
except as provided in Section 14 hereof, (ii) change the designation
of the class of employees eligible to receive Awards, (iii) decrease the
price at which Options may be granted, or (iv) materially increase the
benefits accruing to Participants under the Plan without the approval of the
stockholders of the Company if such approval is required for compliance with
the requirements of any applicable law or regulation. Furthermore, the Plan may
not, without the approval of the stockholders, be amended in any manner that
will cause incentive stock options to fail to meet the requirements of Section 422
of the Internal Revenue Code.

 

SECTION 17.

NO
OBLIGATION TO EXERCISE OPTION

 

The granting of an Option shall impose no
obligation upon the Participant to exercise such Option. Further, the granting
of an Award hereunder shall not impose upon the Company or any Affiliate any
obligation to retain the Participant in its employ for any period.

 

17

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