WindTamer Corporation Stock Option Award Agreement (Non-Employee Directors)
Exhibit
10.5
WindTamer
Corporation
(Non-Employee
Directors)
This
award agreement (this “Award
Agreement”)
sets
forth the terms and conditions of an award (this “Award”)
of
stock options (“Options”)
to
purchase with respect to shares (“Shares”)
of
Common Stock (“Common
Stock”)
granted to you (the "Optionee")
by
WindTamer Corporation (the “Company”)
under
the WindTamer Corporation 2008 Equity Incentive Plan (the “Plan”).
A. The
Company is a developer of wind turbine power generator technology and is in
its
development phase.
B. The
Optionee is a non-employee director of the Company.
In
consideration of the covenants set forth in this Agreement, the parties agree
as
follows:
1.
Option
Information
(a)
Date
of Option: ___________, 2008
(b)
Optionee: ___________
(c)
Number of Shares: ________________
(d)
Exercise Price: $1.00 per share
2.
Acknowledgments
(a)
Optionee is a Non-Employee Director of the Company.
(b)
The
Board has authorized the granting to Optionee of a Nonstatutory Option
(“Option“)
to
purchase Shares of Common Stock upon the terms and conditions hereinafter stated
and pursuant to an exemption from registration under the Securities Act of
1933,
as amended (the “Securities
Act“)
provided by Rule 701 thereunder.
3.
Shares;
Price
The
Company hereby grants to Optionee the right to purchase, upon and subject to
the
terms and conditions herein stated, the number of Shares of Common Stock set
forth in Section 1(c) above at the price per Share set forth in Section 1(d)
above (the “Exercise
Price“),
the
fair market value per share of the Shares covered by this Option as of the
date
of this Option.
4.
Term
of Option
This
Option shall expire, and all rights under it to purchase the Shares, shall
terminate ten (10) years from the date of this Award Agreement, unless
terminated earlier pursuant to the terms hereof. Nothing contained in this
Award
Agreement shall be construed to interfere in any way with the right of the
Company to terminate Optionee as a director of the Company, or to increase
or
decrease the compensation paid to Optionee from the rate in effect as of the
date of this Agreement.
5.
Vesting
of Option
Except
as
provided in Paragraph 7, you shall become vested in the Options, and the Options
shall become exercisable, in the following installments on the following dates
(each, a “Vesting
Date”):
(a)
You
shall become vested in 100% of the Options on the first anniversary of the
Date
of Grant.
6.
Exercise
(a)
This
Option shall be exercised by delivery to the Company of (a) written notice
of
exercise stating the number of Shares being purchased (in whole shares only)
and
such other information set forth on the form of Notice of Exercise attached
to
this Agreement as Appendix
A,
(b) a
check or cash in the amount of the Exercise Price of the Shares covered by
the
notice (or such other consideration as has been approved by the Board consistent
with the Plan) and (c) a written investment representation as provided for
in
Section 13 of this Agreement.
(b)
Pursuant to Section 13 of the Plan, this Option shall not be assignable or
transferable, except by will or by the laws of descent and distribution, or
by
gift or domestic relations orders to the Optionee’s Family Members who agree to
be bound by the terms of this Agreement. "Family Member" for purposes of this
Agreement, includes any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, any person sharing the employee's household
(other than a tenant or employee), a trust in which these persons have more
than
fifty percent of the beneficial interest, a foundation in which these persons
(or the employee) control the management of assets, and any other entity in
which these persons (or the employee) own more than fifty percent of the voting
interests.
7.
Termination of Service
If
Optionee's service as a Non-Employee Director to the Company terminates for
any
reason, no further installments shall vest pursuant to Section 5, and Optionee
shall have the right at any time within 120 days following such termination
of
services or the remaining term of this Option, whichever is the lesser, to
exercise in whole or in part this Option to the extent, but only to the extent,
that this Option was exercisable as of the date Optionee ceased to be a
Non-Employee Director of the Company; provided, however, if Optionee is
terminated for reasons that would justify a termination “for cause” or if
Optionee violates any provision of Paragraph 15 of this Award Agreement, the
foregoing right to exercise shall automatically terminate on such date as to
all
Shares covered by this Option not exercised prior to such termination or
violation, as the case might be. Unless earlier terminated, all rights under
this Award Agreement shall terminate in any event on the expiration date of
this
Option as defined in Section 4 of this Agreement.
2
8.
Death
of Optionee
If
the
Optionee shall die while serving as a Non-Employee Director of the Company,
Optionee's personal representative or the person entitled to Optionee's rights
hereunder may at any time within 120 days after the date of Optionee's death,
or
during the remaining term of this Option, whichever is the lesser, exercise
this
Option and purchase Shares to the extent, but only to the extent, that Optionee
could have exercised this Option as of the date of Optionee's death; provided,
in any case, that this Option may be so exercised only to the extent that this
Option has not previously been exercised by Optionee.
9.
No
Rights as Shareholder
Optionee
shall have no rights as a shareholder with respect to the Shares covered by
any
installment of this Option until the effective date of the issuance of shares
following exercise of this to Option, and no adjustment will be made for
dividends or other rights for which the record date is prior to the date such
stock certificate or certificates are issued except as provided in Section
10 of
this Agreement.
10.
Recapitalization;
Dissolution or Change in Control
(a)
Subject to any required action by the shareholders of the Company, the number
of
Shares covered by this Award Agreement, and the Exercise Price thereof, shall
be
proportionately adjusted as provided in Section 14(a) of the Plan.
(b)
In
the event of a proposed dissolution or liquidation of the Company, this Award
Agreement shall be governed by Section 14(b) of the Plan.
(c)
In
the event of a Change in Control of the Company, this Award Agreement shall
be
governed by Section 14(c) of the Plan.
(d)
The
grant of this Award Agreement shall not affect in any way the right or power
of
the Company to make adjustments, reclassifications, reorganizations or changes
in its capital or business structure or to merge, consolidate, dissolve or
liquidate or to sell or transfer all or any part of its business or
assets.
11.
Taxation
Upon Exercise of Option
Optionee
understands that, upon exercise of this Option, Optionee will recognize income,
for Federal and state income tax purposes, in an amount equal to the amount
by
which the fair market value of the Shares, determined as of the date of
exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee
shall constitute an agreement by Optionee to report such income in accordance
with then applicable law and to cooperate with Company in establishing the
amount of such income and corresponding deduction to the Company for its income
tax purposes. Withholding for federal or state income and employment tax
purposes will be made, if and as required by law, from Optionee's then current
compensation, or, if such current compensation is insufficient to satisfy
withholding tax liability, the Company may require Optionee to make a cash
payment to cover the liability as a condition of the exercise of this
Option.
3
12.
Modification,
Extension and Renewal of Options
The
Board
or a Committee thereof may modify, extend or renew this Option or accept its
surrender (to the extent not yet exercised) and authorize the granting of a
new
option in substitution for it (to the extent not yet exercised), subject at
all
times to the Code and New York law. Notwithstanding the provisions of this
Section 12, no modification shall, without the consent of the Optionee, alter
to
the Optionee's detriment or impair any rights of Optionee hereunder, except
for
the Board’ authority to make adjustments as provided in Section 10.
13.
Investment
Intent; Restrictions on Transfer
(a)
Optionee represents and agrees that if Optionee exercises this Option in whole
or in part, Optionee will in each case acquire the Shares upon such exercise
for
the purpose of investment and not with a view to, or for resale in connection
with, any distribution thereof; and that upon the exercise of this Option in
whole or in part, Optionee (or any person or persons entitled to exercise this
Option under the provisions of Sections 7 and 8 of this Award Agreement) shall
furnish to the Company a written statement to such effect, satisfactory to
the
Company in form and substance.
(b)
Optionee further represents that Optionee has had access to the financial
statements or books and records of the Company, has had the opportunity to
ask
questions of the Company concerning its business, operations and financial
condition. Optionee further represents to obtain additional information
reasonably necessary to verify the accuracy of such information, and further
represents that Optionee (either alone or in conjunction with his or her
professional advisers) has such experience in and knowledge of investment,
financial and business matters with respect to investments similar to the stock
of the Company that Optionee is capable of evaluating the merits and risks
thereof and has the capacity to protect his or her own interest in connection
therewith.
(c)
Unless and until the Shares represented by this Option are registered under
the
Securities Act, all certificates representing the Shares and any certificates
subsequently issued in substitution therefore and any certificate for any
securities issued pursuant to any stock split, share reclassification, stock
dividend or other similar capital event shall bear legends in substantially
the
following form:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES
ACT OF 1933 (THE “SECURITIES
ACT“)
OR
UNDER THE APPLICABLE SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES
NOR
ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
OF
IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS
THEREFROM.”
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN
NONSTATUTORY STOCK OPTION AGREEMENT DATED [~ date ~] BETWEEN THE COMPANY AND
THE
ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO
REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.”
4
The
certificates shall bear such other legend or legends as the Company and its
counsel deem necessary or appropriate. Appropriate stop transfer instructions
with respect to the Shares have been placed with the Company's transfer
agent.
14.
Stand-Off
Agreement
Optionee
agrees that, in connection with any registration of the Company's securities
under the Securities Act, and upon the request of the Company or any underwriter
managing an underwritten offering of the Company's securities, Optionee shall
not sell, short any sale of, loan, grant an option for, or otherwise dispose
of
any of the Shares (other than Shares included in the offering) without the
prior
written consent of the Company or such managing underwriter, as applicable,
for
a period of up to two years following the effective date of registration of
such
offering.
15.
Confidentiality;
Non-Solicitation; Intellectual Property.
As a
material inducement to the Company to grant this Option and to enter into this
Agreement, the Optionee hereby expressly agrees to be bound by the following
covenants, terms and conditions:
(a)
During the course of the Optionee's relationship with the Company or any of
its
affiliates, the Optionee has had, and will have, access to Confidential
Information relating to the Company and its affiliates and their respective
suppliers, partners and customers. The Optionee agrees to keep secret and retain
in strictest confidence all of such Confidential Information, and will not
disclose, disseminate or use such information for the Optionee's own advantage
or for the advantage of any other person or entity other than the Company in
accordance with the terms of the Optionee's employment or relationship with
the
Company. In the event disclosure of any such Confidential Information is
required or purportedly required by law, the Optionee will provide the Company
with prompt notice of any such requirement so that the Company may seek an
appropriate protective order prior to disclosure.
(b)
In
the event that the Optionee as part of his activities on behalf of the Company
generates, creates, authors or contributes to any invention, design, new
development, device, product, method or process (whether or not patentable
or
reduced to practice or constituting Confidential Information), any copyrightable
work (whether or not constituting Confidential Information) or any other form
of
Confidential Information relating directly or indirectly to the Company's
business (including anything that has occurred since the first date Optionee
provided services to the Company), the Optionee acknowledges that such
Intellectual Property is the exclusive property of the Company and hereby
assigns all right, title and interest in and to such Intellectual Property
to
the Company. Any copyrightable work prepared in whole or in part by the Optionee
is and will be deemed "a work made for hire" under Section 201(b) of the 1976
Copyright Act, and the Company shall own all of the rights comprised by the
copyright therein. The Optionee shall promptly and fully disclose all
Intellectual Property to the Company and shall cooperate with the Company to
protect the Company's interests in and rights to such Intellectual Property
(including, without limitation, providing reasonable assistance in securing
patent protection and copyright registrations and executing all documents as
reasonably requested by the Company, whether such requests occur prior to or
after termination of the Optionee's employment with the Company).
Notwithstanding the Date of Option or anything else herein to the contrary,
the
provisions of this Section 15(b) shall be deemed to be effective as of and
apply
to all matters occurring since the first date Optionee provided services to
the
Company.
5
(c)
As
requested by the Company from time to time for any reason, the Optionee shall
promptly deliver to the Company all copies and embodiments, in whatever form,
of
all Confidential Information and Intellectual Property in the Optionee's
possession or within his control (including, but not limited to, written
records, notes, photographs, manuals, notebooks, documentation, program
listings, flow charts, magnetic media, disks, diskettes, tapes and all other
materials containing any Confidential Information or Intellectual Property)
irrespective of the location or form of such material and, if requested by
the
Company, shall provide the Company with written confirmation that all such
materials have been delivered to the Company.
(d)
The
Optionee acknowledges that in the event the Optionee violates any provisions
of
this Section 15, in addition to its other rights and remedies, the Company
shall
be entitled to injunctive relief without the necessity of proving actual
damages. The Optionee further acknowledges that if any provision of this Section
15 is held to be unenforceable, the court making such holding shall have the
power to modify such provision and in its modified form such provision shall
be
enforced.
(e)
Without in any way limiting the provisions of this Section 15, the Optionee
further acknowledges and agrees that the provisions of this Section 15 shall
remain applicable in accordance with their terms after the termination or
cessation of services to the Company or exercise or termination of the Option.
(f)
"Confidential Information" means information or material proprietary to the
Company or designated as Confidential Information by Company and not generally
known by non-Company personnel, which the Optionee develops, or of which
Optionee obtains knowledge, or to which the Optionee may obtain access, through
or as a result of, the Optionee's relationship with the Company (including
information conceived, originated, discovered or developed in whole or in part
by the Optionee). Confidential Information includes, but is not limited to,
the
following types of information and other information of a similar nature
(whether or not reduced to writing): discoveries, ideas, concepts, software
in
various stages of development, designs, drawings, specifications, techniques,
models, data, source code, object code, data structures, instruction sets,
documentation, diagrams, flow charts, research, development, training methods,
training manuals, processes, procedures, "know-how," marketing techniques and
materials, marketing and development plans, customer names and other information
related to customers, price lists, pricing policies and financial information.
Confidential information also includes any information described above which
the
Company obtains from other entities and which the Company treats as proprietary
or designates as Confidential Information, whether or not owned or developed
by
the Company. Notwithstanding the foregoing, information publicly known that
is
generally employed by the trade at or after the time Optionee first learns
of
such information, or generic information or knowledge which associate would
have
learned in the course of similar employment or work elsewhere in the trade,
shall not be deemed part of the confidential information.
(g)
"Intellectual Property" shall mean those forms of authorship (as understood
from
Title 17 of the United States Code), invention (as understood by Title 35 of
the
United States Code) and identification (as understood from Title 15 of the
United States Code Section 1051 et seq., trademarks and service marks) and
such
other forms of property rights in ideas, "know how", inventions, discoveries,
or
in their physical embodiments as shall related to or involve the Company's
business or any of its products, services or strategies.
6
16.
Notices
Any
notice required to be given pursuant to this Option or the Plan shall be in
writing and shall be deemed to be delivered upon receipt or, in the case of
notices by the Company, [~ number ~] days after deposit in the U.S. mail,
postage prepaid, addressed to Optionee at the address last provided by Optionee
for use in Company records related to Optionee.
17.
Applicable
Law
This
Option has been granted, executed and delivered in the State of New York, and
the interpretation and enforcement shall be governed by the laws thereof and
subject to the exclusive jurisdiction of the courts therein.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Option as of the date first above
written.
|
WindTamer
Corporation
|
||||
|
|
||||
|
By:
Xxxxxx Xxxxx
|
||||
|
Title:
President
|
||||
|
Optionee
|
||||
|
|
||||
|
Name:
|
|
|||
7
APPENDIX
A
NOTICE
OF EXERCISE OF STOCK OPTION
To: Future
Energy Solutions, Inc.
The
undersigned is a holder of a stock option (the "Option")
to
purchase shares of WindTamer Corporation (the "Company")
Common
Stock, $.001 par value (the "Common
Stock"),
issued pursuant to a WindTamer Corporation Stock Option Award Agreement dated
as
of ________________ (the "Agreement").
A
copy of the Agreement evidencing such Option is annexed hereto.
The
undersigned hereby elects to purchase ____________ shares of Common Stock
pursuant to the terms of such Option (the "Option
Shares"),
and
tenders herewith payment in full in the amount of $________ per share, for
a
total purchase price of $_______________, with the payment of the purchase
price
being made in the form of _____________________, pursuant to Section 6 of the
Agreement. The undersigned wishes to consummate the purchase of the Option
Shares by or before ________________.
In
exercising his Option, the undersigned hereby confirms and acknowledges that
he
is acquiring Option Shares for his own account for investment and not with
a
view to, or for sale in connection with, the resale or distribution of any
such
shares. The undersigned also confirms and acknowledges that he will not sell
or
transfer any Option Shares acquired pursuant to the exercise of the Option
until
he requests and receives an opinion of the Company's counsel to the effect
that
such proposed sale or transfer will not result in a violation of the Securities
Act of 1933, as amended, or any applicable state securities law, or a
registration statement covering the sale or transfer of the Option Shares has
been declared effective by the Securities and Exchange Commission or appropriate
state governmental authority, or he obtains a no-action letter from the
Securities and Exchange Commission or appropriate state governmental authority
with respect to the proposed transfer.
The
undersigned acknowledges and agrees that this purported exercise of the Option
is conditioned on, and subject to, (a) any compliance with requirements of
applicable federal and state securities laws deemed necessary by the Company,
(b) to the undersigned's satisfaction of all federal, state or local income
and
employment tax withholding requirements applicable to this exercise, and (c)
if
the exercise is made in connection with a Change of Control transaction, the
vesting of the Option Shares may be conditioned upon the consummation of the
Change of Control if the Committee has provided for this condition in its
acceleration of the Option.
Please
issue a certificate or certificates representing said Option Shares in the
name
of the undersigned or in such other name as is specified below. If the Option
Shares are being issued to any person other than the Optionee, evidence of
the
right of such person to exercise the Option has been presented to the Company
and has been deemed satisfactory:
|
|
||
|
Name
|
||
|
Address:
|
|
|
|
|
||
|
|
||
|
Social
Security Number
|
||
|
Date:
|
|
8
