Document:

Form of Non-Qualified Stock Option Agreement

 Exhibit 10.3 

 

					
		  	Name:	 	  

					
		  	Total No. of Shares Covered by Option:	 	  

HQ SUSTAINABLE MARITIME INDUSTRIES, INC. 
 NON-QUALIFIED STOCK OPTION 
 HQ SUSTAINABLE MARITIME INDUSTRIES, INC. (the
“Company”) is pleased to grant to the person signing below (“you” or “Participant”) the non-qualified stock option described below under the HQ Sustainable Maritime Industries, Inc. 2010 Stock Incentive Plan (the
“Plan”). For tax law purposes, this Option shall be treated as a Non-Qualified Stock Option. This Option is not intended to be and shall not be treated as an Incentive Stock Option for tax law purposes. 

 

							
	Grant Date:	 	  
	  	
				
	Exercise Price per Share:	 	$	 	  
	  	
			
	Option Expiration Date:	 	  
	  	
			
	Number of Shares of Common Stock Covered by Option	 	  
	  	(the “Shares”)

 Vesting Schedule:
Subject to the Plan and this Agreement, this Option may be exercised in whole or in part in accordance with the following schedule, provided you remain continuously employed with the Company from the Grant Date until such time(s): 

 

			
	Date	 	Number of Shares

 The Additional
Terms and Conditions and the Plan described below are incorporated in this Agreement by reference and contain important information about your Option. Copies of all of the documents set forth below are being provided to you concurrently with this
Agreement. Please review them carefully and contact HQ Sustainable Maritime Industries, Inc. Human Resources if you have any questions. 

Additional Terms and Conditions describes how to exercise your Option, what happens if you cease to remain employed with the Company before you
exercise your Option, and where to send notices; 
 The Plan contains the detailed terms that govern your Option. If anything in this
Agreement or the other attachments is inconsistent with the Plan, the terms of the Plan, as amended from time to time, will control; all terms used herein that are not defined herein but that are defined in the Plan have the same meaning given them
in the Plan; 
 Plan Prospectus; and 
 2009 Annual Report on Form 10-K of HQ Sustainable Maritime Industries, Inc. for the Year Ended December 31, 2009. 
 Please sign in the space provided below to show that you accept the Option on these terms, keep a copy of this Agreement for your records, and return both originals to HQ Sustainable Maritime
Industries, Inc. Human Resources. 
  

									
	Participant:	 		  		  	HQ SUSTAINABLE MARITIME INDUSTRIES, INC.
				
	  
	  		  	By:	  	  

	 Print Your Name:
	 	  
	  		  	Name:	  	  

	 Your Residence Address:
	  		  	Its:	  	  

	  
	  		  		  	
	  
	  		  		  	

 ADDITIONAL TERMS AND CONDITIONS 

HOW TO EXERCISE YOUR OPTION. 
  

	•	 	 This Option must be exercised for whole shares only and in increments of at least [100] shares per exercise or, if less, all of the remaining
shares to which the Option is subject. 

  

	•	 	 The Plan is administered on behalf of the Committee by Human Resources. Human Resources is responsible for assisting you in the exercise of your Option
and maintaining the records of the Plan. If you have questions about your Option, how you go about exercising the vested portion of your Option or how the Plan works, please contact Human Resources at
                    . 

  

	•	 	 The exercise date of your Option is the date of delivery to Human Resources of your notice of exercise. The notice must be accompanied by payment of
the Option price and any applicable tax withholding in full. You may pay the Option price and any applicable tax withholding (i) in cash, (ii) by certified or bank cashier’s check, or (iii) by such other medium of payment as the
Committee in its sole discretion may permit. You will need to contact Human Resources before you exercise your Option to determine the amount of any required tax withholding. 

 

	•	 	 Except as provided herein and in the Plan, this Option is non-transferable. This Option may be transferred by will or the laws of descent and
distribution and, notwithstanding the foregoing, during the Participant’s lifetime may be transferred by the Participant to any of the Participant’s “family members” (as such term is defined in the general instructions to the
Form S-8 Registration Statement under the Securities Act of 1933). Any such transfer will be permitted only if (i) the Participant does not receive any consideration for the transfer and (ii) the Committee expressly approves the transfer.
Any transferee to whom this Option is transferred shall be bound by the same terms and conditions, including with respect to vesting, that govern the Option in the hands of the Participant; provided, however, that the transferee may not transfer
this Option except by will or the laws of descent and distribution. No right or interest of the Participant or any transferee in this Option shall be subject to any lien, obligation or liability of the Participant or any transferee.

 EFFECT OF TERMINATION OF EMPLOYMENT. All of your unvested Options will terminate immediately upon the
termination of your employment for any reason. 
  

	1.	Termination of Employment Due to Death or Disability. If your employment with the Company terminates by reason of your death or Disability (see below for
definition), you (or your estate) may exercise the vested portion of your Option at any time within the earlier of (a) the one-year anniversary of the date of termination of your employment by reason of your death or Disability or (b) the
Option Expiration Date. After such earlier date, any remaining unexercised portion of your vested Option shall terminate. 

  

	2.	Termination of Employment Due to Retirement. If your employment with the Company terminates by reason of your Retirement (see below for definition), you may
exercise the vested portion of your Option at any time within the earlier of (a) the one-year anniversary of the date of termination of your employment by reason of your Retirement or (b) the Option Expiration Date. After such earlier
date, any remaining unexercised portion of your vested Option shall terminate. 

  

	3.	Other Termination of Employment. If your employment with the Company terminates for any reason other than your death, Disability or Retirement, unless your
employment is terminated for Cause (as defined below), you will have the right, within the earlier of (a) the 90th day after the date of termination of your employment or (b) the Option Expiration Date, to exercise any vested portion of
your Option. After such earlier date, any remaining unexercised portion of your vested Option shall terminate. If your employment is terminated for Cause, both the vested and unvested portion of your Option will terminate on notice of termination of
your employment for Cause. 

  
 2 

  

	4.	Employment. For purposes of this Agreement, employment with the Company or any Affiliate of the Company will be considered employment with the other.

 [CHANGE IN CONTROL. Upon a “Change in Control,” as such term is defined in the Plan, all of your unvested
Options shall immediately vest and become exercisable, provided you have remained in continuous employment with Company from the Grant Date until the time of the Change in Control.] 
 NOTICES. All notices pursuant to this Agreement will be in writing and either (i) delivered by hand, (ii) mailed by United States certified mail, return receipt requested, postage
prepaid, or (iii) sent by an internationally recognized courier which maintains evidence of delivery and receipt. All notices or other communications will be directed to the following addresses (or to such other addresses as either of us may
designate by notice to the other): 
  

			
	To Company:	  	HQ Sustainable Maritime Industries, Inc.
		  	1511 3rd Avenue
		  	Suite 788
		  	Seattle, Washington 98101
		
	To you:	  	The address set forth on page 1

MISCELLANEOUS. The Participant has received a copy of the Plan, has read and understands the terms of the Plan and this Agreement, and
agrees to be bound by their terms and conditions. Failure by you or the Company at any time or times to require performance by the other of any provisions in this Agreement will not affect the right to enforce those provisions. Any waiver by you or
the Company of any condition or the breach of any term or provision in this Agreement, whether by conduct or otherwise, in any one or more instances, shall apply only to that instance and will not be deemed to waive conditions or breaches in the
future. If any court of competent jurisdiction holds that any term or provision of this Agreement is invalid or unenforceable, the remaining terms and provisions will continue in full force and effect, and this Agreement shall be deemed to be
amended automatically to exclude the offending provision. This Agreement may be executed in multiple copies and each executed copy shall be an original of this Agreement. This Agreement shall be subject to and governed by the laws of the State of
Delaware. No change or modification of this Agreement shall be valid unless it is in writing and signed by the party against which enforcement is sought. This Agreement shall be binding upon, and inure to the benefit of, the permitted successors,
assigns, heirs, executors and legal representatives of the parties hereto. The headings of each Section of this Agreement are for convenience only. This Agreement contains the entire Agreement of the parties hereto and no representation, inducement,
promise, or agreement or otherwise between the parties not embodied herein shall be of any force or effect, and no party will be liable or bound in any manner for any warranty, representation, or covenant except as specifically set forth herein.

  
 3Form of Restricted Stock Award Agreement

 Exhibit 10.4 

 

					
		  	 Name:	 	  

					
		  	Total No. of Shares Covered by Restricted Stock Award 	 	  

HQ SUSTAINABLE MARITIME INDUSTRIES, INC. 
 RESTRICTED STOCK AWARD 
 HQ SUSTAINABLE MARITIME INDUSTRIES, INC. (the
“Company”) is pleased to grant to the person signing below (“you” or “Participant”) the Restricted Stock Award described below under the HQ Sustainable Maritime Industries, Inc. 2010 Stock Incentive Plan (the
“Plan”). 
  

							
	Grant Date:	 	  
	  	
			
	Number of Shares of Common Stock Covered by Restricted Stock Award:	 	  
	  	(the “Shares”)

 Vesting:
Subject to the Plan and this Agreement, the Restricted Stock Award will become vested and non-forfeitable in accordance with the following schedule, provided you remain employed with the Company from the Grant Date until such time(s): 

 

			
	Date	 	Number of Shares

 Dividend and
Voting Rights: Before the Restricted Stock Award becomes vested, you will have all of the rights of a shareholder of Common Stock with respect to the Shares covered by the Restricted Stock Award, including without limitation, the right to vote
the Shares and to receive dividends and distributions thereon. 
 The Additional Terms and Conditions and the Plan described below are
incorporated in this Agreement by reference and contain important information about your Restricted Stock Award. Copies of all of the documents set forth below are being provided to you concurrently with this Agreement. Please review them carefully
and contact HQ Sustainable Maritime Industries, Inc. Human Resources if you have any questions. 
 Additional Terms and Conditions
describes the restrictions on your Restricted Stock Award, what happens if you cease to remain employed with the Company before your Restricted Stock Award becomes vested and where to send notices; 

The Plan contains the detailed terms that govern your Restricted Stock Award. If anything in this Agreement or the other attachments is
inconsistent with the Plan, the terms of the Plan, as amended from time to time, will control; all terms used herein that are not defined herein but that are defined in the Plan have the same meaning given them in the Plan; 

Plan Prospectus; and 
 2009 Annual
Report on Form 10-K of the Company for the Year Ended December 31, 2009. 
 Please sign in the space provided below, keep a copy of
this Agreement for your records, and return both originals to                     . 

 

									
	Participant:	 		  		  	HQ SUSTAINABLE MARITIME INDUSTRIES, INC.
				
	  
	  		  	By:	  	  

	 Print Your Name:
	 	  
	  		  	Name:	  	  

	 Your Residence Address:
	 	  
	  		  	Its:	  	  

	  
	  		  		  	

 ADDITIONAL TERMS AND CONDITIONS 

ADMINISTRATION. 
  

	 	•	 	 The Plan is administered on behalf of the Committee by Human Resources. Human Resources is responsible for assisting you with respect to your
Restricted Stock Award and maintaining the records of the Plan. If you have questions about your Restricted Stock Award or how the Plan works, please contact Human Resources at
                    . 

  

	 	•	 	 Except as provided herein and in the Plan, the Restricted Stock Award is non-transferable. The Restricted Stock Award may be transferred by will or the
laws of descent and distribution and, notwithstanding the foregoing, during the Participant’s lifetime may be transferred by the Participant to any of the Participant’s “family members” (as such term is defined in the general
instruction to the Form S-8 Registration Statement under the Securities Act of 1933). Any such transfer will be permitted only if (i) the Participant does not receive any consideration for the transfer and (ii) the Committee expressly
approves the transfer. Any transferee to whom the Restricted Stock Award is transferred shall be bound by the same terms and conditions, including with respect to vesting, that govern the Restricted Stock Award in the hands of the Participant;
provided, however, that the transferee may not transfer the Restricted Stock Award except by will or the laws of descent and distribution. No right or interest of the Participant or any transferee in the Restricted Stock Award shall be subject to
any lien, obligation or liability of the Participant or any transferee. 

  

	 	•	 	 You may pay any applicable tax withholding (i) in cash, (ii) by certified or bank cashier’s check, or (iii) by such other medium of
payment as the Committee in its sole discretion may permit. Human Resources will determine the amount of any required tax withholding. 

  

	 	•	 	 Until the Restricted Stock Award becomes vested, in lieu of issuing certificates for such Shares, the Company may reflect in its books and records the
issuance of the Restricted Stock Award. If stock certificates evidencing the Shares covered by the Restricted Stock Award are issued before the Restricted Stock Award becomes vested, the Company shall retain custody of such stock certificates until
the Shares covered by the Restricted Stock Award become vested. As soon as administratively practicable (and within 30 days) after the Shares covered by the Restricted Stock Award become vested, the Company will deliver to the Participant or make
available to the Participant’s broker the Shares covered by the Restricted Stock Award that have become vested. 

EFFECT OF TERMINATION OF EMPLOYMENT. 
  

	•	 	 Termination of Employment. If your employment with the Company terminates for any reason prior to the Restricted Stock Award becoming vested,
any Shares covered by the Restricted Stock Award that are not then vested will be forfeited immediately upon the termination of your employment for any reason. 

 

	•	 	 [Change of Control. Upon the occurrence of a Change of Control, as such term is defined in the Plan, one-hundred percent (100%) of the
Shares covered by the Restricted Stock Award shall become vested and non-forfeitable if you have remained in the continuous employ of the Company from the Grant Date until the time of the Change of Control. Accordingly, subsequent termination of
your employment for any reason after the Change of Control will not result in forfeiture of your Common Stock Award.] 

  

	•	 	 Employment. For purposes of this Agreement, employment with the Company or any Affiliate of Company will be considered employment with the
other. 

 NOTICES. All notices pursuant to this Agreement will be in writing and either (i) delivered by
hand, (ii) mailed by United States certified mail, return receipt requested, postage prepaid, or (iii) sent by an internationally recognized courier which maintains evidence of delivery and receipt. All notices or other communications will
be directed to the following addresses (or to such other addresses as either of us may designate by notice to the other): 
  

			
	To the Company:	  	HQ Sustainable Maritime Industries, Inc.
		  	1511 3rd Avenue
		  	Suite 788
		  	Seattle, Washington 98101
		
	To you:	  	The address set forth on page 1

  
 - 2 -

 MISCELLANEOUS.  

 

	•	 	 The Participant has received a copy of the Plan, has read and understands the terms of the Plan and this Agreement, and agrees to be bound by their
terms and conditions. Failure by you or the Company at any time or times to require performance by the other of any provisions in this Agreement will not affect the right to enforce those provisions. Any waiver by you or the Company of any condition
or the breach of any term or provision in this Agreement, whether by conduct or otherwise, in any one or more instances, shall apply only to that instance and will not be deemed to waive conditions or breaches in the future. If any court of
competent jurisdiction holds that any term or provision of this Agreement is invalid or unenforceable, the remaining terms and provisions will continue in full force and effect, and this Agreement shall be deemed to be amended automatically to
exclude the offending provision. This Agreement may be executed in multiple copies and each executed copy shall be an original of this Agreement. This Agreement shall be subject to and governed by the laws of the State of Delaware. No
change or modification of this Agreement shall be valid unless it is in writing and signed by the party against which enforcement is sought. This Agreement shall be binding upon, and inure to the benefit of, the permitted successors, assigns,
heirs, executors and legal representatives of the parties hereto. The headings of each Section of this Agreement are for convenience only. This Agreement and the Plan contain the entire agreement of the parties hereto and no
representation, inducement, promise, or agreement or otherwise between the parties not embodied herein shall be of any force or effect, and no party will be liable or bound in any manner for any warranty, representation, or covenant except as
specifically set forth herein. 

  

	•	 	 With respect to any Shares covered by the Restricted Stock Award forfeited under this Agreement, the Participant does hereby irrevocably constitute and
appoint the Secretary of the Company or any successor Secretary of the Company (the “Secretary”) as his or her attorney to transfer the forfeited Shares on the books of the Company with full power of substitution in the premises. The
Secretary shall use such authority to cancel any Shares covered by the Restricted Stock Award that are forfeited under this Agreement. 

  
 - 3 -

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