Document:

Exhibit 10.4

 

EXECUTIVE
INCENTIVE STOCK OPTION AGREEMENT

 

BROADWIND
ENERGY, INC.

2007
EQUITY INCENTIVE PLAN

 

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

 

RECITALS

 

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

 

                B.            The Company wishes to grant
incentive stock options to Participant pursuant to this Agreement and the 2007
Equity Incentive Plan (the “Plan”); and

 

                C.            The Administrator has authorized the
grant of an incentive stock option to Participant to give Participant an
inducement to acquire a proprietary interest in the Company and an added
incentive to advance the interests of the Company 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 (the “Option Shares”) of the Company’s Common Stock, according to the
terms and subject to the conditions hereinafter set forth and as set forth in
the Plan.  [The per
share price to be paid by Participant in the event of an exercise of the Option
shall be
                  
Dollars ($                )
OR: Because Participant owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or its
Parent or any Subsidiary, the per share price to be paid by Participant in the
event of an exercise of the Option shall be
                
Dollars ($            ),
which is not less than one hundred ten percent (110%) of the fair market value
of the Company’s Common Stock at the date of grant of this Option.]  The Option is intended to be an “incentive
stock option,” as defined in Section 422 of the Internal Revenue Code as
amended (the “Code”), to the extent permitted by Section 422(d) of
the Code.  Shares granted in excess of
the 422(d) limit will be treated as a nonqualified stock option.

 

 

ARTICLE
II.  DURATION OF OPTION AND
EXERCISABILITY

 

                A.            Initial Period of Exercisability.  Except as provided in Articles II.B., II.C.
and III below, the Option shall become exercisable according to the following
schedule.  Once the Option becomes fully
exercisable Participant may continue to exercise this Option under the terms
and conditions of this Agreement until the first of the termination of this
Option as provided herein or the Expiration Date (as defined below).  If Participant does not purchase upon an
exercise of this Option the full number of shares which Participant is then
entitled to purchase, Participant may purchase upon any subsequent exercise
prior to this Option’s termination or Expiration Date such previously
unpurchased shares in addition to those Participant is otherwise entitled to
purchase.  Except as otherwise provided
in Articles II.B., II.C and III. below, the term during which this Option
may be exercised will continue until 5:00 p.m. (Central time) on [the date that is no more than ten (10) years following the date
of grant of this Option OR: for greater than ten percent (10%) holders insert
the date that is no more than five (5) years following the date of grant
of this Option]  (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. 
Except as provided in Article III below, in the event Participant
ceases to be a key employee or officer
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 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.  CHANGE OF CONTROL

 

                A.            Acceleration. 
Notwithstanding anything in the Plan or this Agreement to the contrary,
if, upon or within one year of a Change of Control (as defined below), the
Company or a succeeding entity terminates Participant’s employment
relationship, except in the event of a termination for Cause (as 

 

2

 

defined
in the Participant’s Employment Agreement, executed contemporaneously with this
Agreement), this Option shall become immediately and fully exercisable upon
such Change of Control and shall remain exercisable until the earlier of (i) the
Expiration Date, and (ii) the date determined by the Administrator in
connection with the terms of the Plan (including, without limitation, upon
consummation of the Change of Control, if so determined by the
Administrator).   If Participant does not
exercise this Option, as the case may be, within the time specified in this Article III.A.,
all rights of Participant under this Option shall be forfeited. If Participant
exercises this Option on a date that is after the three-month anniversary of
the date of his termination of employment, this Option shall be treated as a
nonqualified stock option and shall no longer qualify as an incentive stock
option under Code Section 422.

 

                B.            Change of Control Defined.  For purposes of this Article III, a “Change
of Control” means:

 

                                i.  The consummation of any merger,
consolidation, exchange, or reorganization to which the Company is a party if
the individuals and entities who were stockholders of the Company immediately
prior to the effective date of such transaction have, immediately following the
effective date of such transaction, beneficial ownership (as defined in Rule 13d-3
under the Securities Exchange Act of 1934) of less than fifty percent (50%) of
the total combined voting power of all classes of securities issued by the
surviving corporation;

 

                                ii.  The stockholders of the Company approve any
plan or proposal for the liquidation of the Company;

 

                                iii.  A sale, lease or other transfer of all or
substantially all of the assets of the Company to any person or entity which is
not an Affiliate of the Company; or

 

                                iv.  The acquisition, without prior approval by
resolution adopted by the Board, of direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of
securities of the Company representing, in the aggregate, fifty percent (50%)
or more of the total combined voting power of all classes of the Company’s
then-issued and outstanding securities by any person or entity or by a group of
associated persons or entities acting in concert; provided, however, that a
Change of Control will not be deemed to occur if such acquisition is initiated
by Participant or an entity in which Participant owns fifty percent (50%) or
more of the total combined voting power of all classes of such entity’s securities,
or if Participant or such entity is a member of the group of associated persons
or entities acting in concert.  In all
cases, the determination of whether a Change of Control has occurred shall be
made in accordance with Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), and the regulations, notices and other guidance of
general applicability issued thereunder.

 

                C.  Limitation on Change of Control Payments.  Participant shall not be entitled to receive
any Change of Control Payment, as defined below, which would constitute a “parachute
payment” for purposes of Code Section 280G, or any successor provision,
and the regulations thereunder.  In the
event any Change of Control Payment payable to Participant would constitute a “parachute
payment,” Participant shall have the right to designate those Change of Control
Payments which would be reduced or eliminated so that Participant will not
receive a “parachute payment.”  For
purposes of this Article III.C., a “Change of Control Payment” shall mean
any payment, benefit or transfer of property in the nature of compensation paid
to or for the benefit of Participant under any arrangement which is considered
contingent on a Change of Control for purposes of Code Section 280G,
including, without limitation, any and all of the Company’s salary, bonus,
incentive, restricted stock, stock option, equity-based compensation or benefit
plans, programs or other arrangements, and shall include the acceleration of
this Option.

 

3

 

ARTICLE
IV.  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.C., 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
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.

 

4

 

ARTICLE
V.  NONTRANSFERABILITY

 

                This
Option shall not be transferable by Participant, either voluntarily or
involuntarily, or subject to any lien, directly or indirectly, by operation of
law or otherwise, except as provided in the Plan.  Any attempt to transfer or encumber this
Option other than in accordance with the Plan shall void this Option and this
Option, to the extent not fully exercised, shall terminate.

 

ARTICLE
VI.  DISPOSITIONS AND WITHHOLDING
TAXES

 

                A.            Notification of Disqualifying
Disposition.  Prior to making a
disposition (as defined in Section 424(c) of the Code) of any shares
of Common Stock acquired pursuant to the exercise of this Option before the
expiration of two years after the date hereof or before the expiration of one
year after the date on which such shares of Common Stock were transferred to
Participant pursuant to exercise of this Option, Participant shall send written
notice to the Company of the proposed date of such disposition, the number of
shares to be disposed of, the amount of proceeds to be received from such
disposition and any other information relating to such disposition that the
Company may reasonably request.  The
right of Participant to make such a disposition shall be conditioned on the
receipt by the Company of all amounts necessary to satisfy any federal, state
or local withholding tax requirements attributable to such disposition.  The Administrator shall have the right, in
its sole discretion, to endorse any certificates representing the Option Shares
with a legend restricting transfer and to cause a stop transfer order to be
entered with the Company’s transfer agent until such time as the Company
receives the amounts necessary to satisfy such withholding requirements or
until the later of the expiration of two years from the date hereof or one year
from the date on which such shares were transferred to Participant pursuant to
the exercise of this Option.

 

                B.            General Obligation.  The Company is entitled to (a) withhold
and deduct from future payments to Participant, or make other arrangements for
the collection of, all legally required amounts necessary to satisfy any
federal, state or local withholding tax requirements attributable to
Participant’s exercise of this Option, including, without limitation, a
disposition of shares of Common Stock described in Article VI.A. above,
that causes this Option to cease to qualify as an “incentive stock option”
within the meaning of Section 422 of the Code and the regulations
thereunder, or (b) require Participant promptly to remit the amount of
such withholding to the Company before acting on any such disposition of shares
of Common Stock.  In the event that the
Company is unable to withhold such amounts, 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, state or local law.

 

                C.            Use of Shares.  The Administrator may, in its sole discretion
and subject to such rules as the Administrator may adopt, permit
Participant to satisfy, in whole or in part, any withholding tax obligation
which may arise in connection with the exercise of this Option either by
electing to have the Company withhold from the shares of Common Stock to be
issued upon the exercise of this Option that number of shares of common stock,
or by electing to deliver to the Company previously-owned shares of common
stock, in either case having a Fair Market Value (determined as set forth in
the Plan) on the date such tax is determined under the Code (the “Tax Date”)
equal to the amount necessary to satisfy the minimum required tax withholding
amount 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 option.  In no
event may the Company withhold shares having a Fair Market Value in excess of
such statutory minimum required tax withholding.  Participant’s election to have the company
withhold shares of Common Stock or to deliver previously-owned shares of Common
Stock upon exercise is irrevocable and is subject to the consent of the
Administrator and shall otherwise comply with such rules as the
Administrator may adopt 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 and Exchange Act of 1934, if applicable.  To the extent that shares of Common Stock may
be issued prior to the Tax Date to the electing Participant, Participant hereby
agrees to surrender that number of shares on the Tax Date having an aggregate
Fair Market Value (determined as set forth in the Plan) equal to the
withholding tax due.

 

ARTICLE
VII.  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.
Without the consent of Participant, however, no such change shall be made in
the terms of the Option if such change would disqualify the Option from
treatment as an “incentive stock option” within the meaning of Code Section 422,
or any successor provision, or would be considered a modification, extension or
renewal of an option under Code Section 424(h), or any successor
provision.

 

ARTICLE
VIII.  BINDING EFFECT

 

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

 

ARTICLE
IX.  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
X.  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.

 

6

 

                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 this 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, in the event a
Change of Control 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.  For purposes of this Agreement, the term “Change
of Control” shall have the meaning set forth in Article III above.

 

                F.             Stock Legend.  The certificates for any shares of Common
Stock purchased by Participant (or, in the case of death, Participant’s heirs
or legal representative(s)) shall bear an appropriate legend to reflect the
restrictions of this Article and Article IV.C., provided, however,
that failure to so endorse any of such certificates shall not render invalid or
inapplicable this Article X.

 

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

 

7

 

disputing parties in a good faith effort to arrive
at a mutual settlement of any such controversy. 
If, notwithstanding, such dispute cannot be resolved, such dispute shall
be settled by binding arbitration. 
Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.  The
arbitrator shall be a retired state or federal judge or an attorney who has
practiced securities or business litigation for at least ten (10) years.  If the parties cannot agree on an arbitrator
within twenty (20) days, any party may request that a judge of the Circuit
Court of 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]

 

8

 

                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.

  	
   

  

 

9Exhibit 10.5

 

INCENTIVE STOCK OPTION AGREEMENT

 

BROADWIND ENERGY, INC.

2007 EQUITY INCENTIVE PLAN

 

THIS AGREEMENT is entered into and 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 or officer of the Company or one of its
Affiliates; and

 

B.            The Company wishes
to grant incentive stock options to Participant pursuant to this Agreement and
the 2007 Equity Incentive Plan (the “Plan”); and

 

C.            The Administrator
has authorized the grant of an incentive stock option to Participant to give
Participant an inducement to acquire a proprietary interest in the Company and
an added incentive to advance the interests of the Company 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 (the “Option Shares”) of the Company’s Common Stock, according to the
terms and subject to the conditions hereinafter set forth and as set forth in
the Plan.  [The per
share price to be paid by Participant in the event of an exercise of the Option
shall be
                  
Dollars ($                )
OR: Because Participant owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or its
Parent or any Subsidiary, the per share price to be paid by Participant in the
event of an exercise of the Option shall be
                
Dollars ($            ),
which is not less than one hundred ten percent (110%) of the fair market value of
the Company’s Common Stock at the date of grant of this Option.]  The Option is intended to be an “incentive
stock option,” as defined in Section 422 of the Internal Revenue Code as
amended (the “Code”), to the extent permitted by Section 422(d) of
the Code.  Shares granted in excess of
the 422(d) limit will be treated as a nonqualified stock option.

 

 

ARTICLE II.  DURATION OF OPTION AND EXERCISABILITY

 

A.            Initial Period of
Exercisability.  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 this Option under the terms and conditions of this Agreement until the
first of the termination of this Option as provided herein or the Expiration
Date (as defined below).  If Participant
does not purchase upon an exercise of this Option the full number of shares
which Participant is then entitled to purchase, Participant may purchase upon
any subsequent exercise prior to this Option’s termination or Expiration Date
such previously unpurchased shares in addition to those Participant is
otherwise entitled to purchase.  Except
as otherwise 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 [the date that is no more than ten (10) years
following the date of grant of this Option OR: for greater than ten percent
(10%) holders insert the date that is no more than five (5) years following
the date of grant of this Option] 
(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 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 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 

 

2

 

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.C., 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
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.  NONTRANSFERABILITY

 

This Option shall not be transferable by Participant, either
voluntarily or involuntarily, or subject to any lien, directly or indirectly,
by operation of law or otherwise, except as provided in the Plan.  Any attempt to transfer or encumber this
Option other than in accordance with the Plan shall void this Option and this
Option, to the extent not fully exercised, shall terminate.

 

3

 

ARTICLE V.  DISPOSITIONS AND WITHHOLDING TAXES

 

A.            Notification of
Disqualifying Disposition.  Prior to
making a disposition (as defined in Section 424(c) of the Code) of
any shares of Common Stock acquired pursuant to the exercise of this Option
before the expiration of two years after the date hereof or before the
expiration of one year after the date on which such shares of Common Stock were
transferred to Participant pursuant to exercise of this Option, Participant
shall send written notice to the Company of the proposed date of such
disposition, the number of shares to be disposed of, the amount of proceeds to
be received from such disposition and any other information relating to such
disposition that the Company may reasonably request.  The right of Participant to make such a
disposition shall be conditioned on the receipt by the Company of all amounts
necessary to satisfy any federal, state or local withholding tax requirements
attributable to such disposition.  The
Administrator shall have the right, in its sole discretion, to endorse any
certificates representing the Option Shares with a legend restricting transfer
and to cause a stop transfer order to be entered with the Company’s transfer
agent until such time as the Company receives the amounts necessary to satisfy
such withholding requirements or until the later of the expiration of two years
from the date hereof or one year from the date on which such shares were
transferred to Participant pursuant to the exercise of this Option.

 

B.            General
Obligation.  The Company is entitled
to (a) withhold and deduct from future payments to Participant, or make
other arrangements for the collection of, all legally required amounts
necessary to satisfy any federal, state or local withholding tax requirements
attributable to Participant’s exercise of this Option, including, without
limitation, a disposition of shares of Common Stock described in Article V.A.
above, that causes this Option to cease to qualify as an “incentive stock option”
within the meaning of Section 422 of the Code and the regulations
thereunder, or (b) require Participant promptly to remit the amount of
such withholding to the Company before acting on any such disposition of shares
of Common Stock.  In the event that the
Company is unable to withhold such amounts, 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, state or local law.

 

C.            Use of Shares.  The Administrator may, in its sole discretion
and subject to such rules as the Administrator may adopt, permit
Participant to satisfy, in whole or in part, any withholding tax obligation
which may arise in connection with the exercise of this Option either by
electing to have the Company withhold from the shares of Common Stock to be
issued upon the exercise of this Option that number of shares of common stock,
or by electing to deliver to the Company previously-owned shares of common
stock, in either case having a Fair Market Value (determined as set forth in
the Plan) on the date such tax is determined under the Code (the “Tax Date”)
equal to the amount necessary to satisfy the minimum required tax withholding
amount 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 option.  In no
event may the Company withhold shares having a Fair Market Value in excess of
such statutory minimum required tax withholding.  Participant’s election to have the company
withhold shares of Common Stock or to deliver previously-owned shares of Common
Stock upon exercise is irrevocable and is subject to the consent of the
Administrator and shall 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.  To the extent that shares of Common Stock may
be issued prior to the Tax Date to the electing Participant, Participant hereby
agrees to surrender that number of shares on the Tax Date having an aggregate
Fair Market Value (determined as set forth in the Plan) equal to the withholding
tax due.

 

4

 

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. Without the consent of Participant, however, no such change shall
be made in the terms of the Option if such change would disqualify the Option
from treatment as an “incentive stock option” within the meaning of Code Section 422,
or any successor provision, or would be considered a modification, extension or
renewal of an option under Code Section 424(h), or any successor
provision.

 

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.

 

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 

 

5

 

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 this 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 certificates for any shares of Common
Stock purchased by Participant (or, in the case of death, Participant’s heirs
or legal representative(s)) shall bear an appropriate legend to reflect the
restrictions of this Article and Article III.C., 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.  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.

 

6

 

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]

 

7

 

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.

  	
   

  	
   

  

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]