OCEAN POWER TECHNOLOGIES, INC.
2006 STOCK INCENTIVE PLAN, AS AMENDED
The purpose of this 2006 Stock Incentive Plan
(the “Plan”) of Ocean Power Technologies, Inc., a New
Jersey corporation (including any successor corporations, the
“Company”), is to advance the interests of the
Company’s stockholders by enhancing the Company’s
ability to attract, retain and motivate persons who are expected to
make important contributions to the Company and by providing such
persons with equity ownership opportunities and performance-based
incentives that are intended to align their interests with those of
the Company’s stockholders. Except where the context
otherwise requires, the term “Company” shall include
any of the Company’s present or future parent or subsidiary
corporations as defined in Sections 424(e) or (f) of the
Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”) and any other
business venture (including, without limitation, joint venture or
limited liability company) in which the Company has a controlling
interest, as determined by the Board of Directors of the Company
(the “Board”).
All of the Company’s employees, officers,
directors, consultants and advisors are eligible to be granted
options, stock appreciation rights, restricted stock, restricted
stock units and other stock-unit awards (each, an
“Award”) under the Plan. Each person who receives an
Award under the Plan is deemed a
“Participant”.
3
Administration and Delegation
.1 Administration by Board of Directors .
The Plan will be administered by the Board. The Board shall have
authority to grant Awards and to adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan
as it shall deem advisable. The Board may construe and interpret
the terms of the Plan and any Award agreements entered into under
the Plan. The Board may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into
effect and it shall be the sole and final judge of such expediency.
All decisions by the Board shall be made in the Board’s sole
discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Award. No director or
person acting pursuant to the authority delegated by the Board
shall be liable for any action or determination relating to or
under the Plan made in good faith.
.2 Appointment of Committees . To the
extent permitted by applicable law, the Board may delegate any or
all of its powers under the Plan to one or more committees or
subcommittees of the Board (a “Committee”). All
references in the Plan to the “Board” shall mean the
Board or a Committee of the Board or the officers referred to in
Section 3(c) to the extent that the Board’s powers or
authority under the Plan have been delegated to such Committee or
officers.
.3 Delegation to Officers . To the extent
permitted by applicable law, the Board may delegate to one or more
officers of the Company the power to grant Awards to employees or
officers of the Company or any of its present or future subsidiary
corporations and to exercise such other powers under the Plan as
the Board may determine, provided that the Board shall fix the
terms of the Awards to be granted by such officers (including the
exercise price of such Awards, which may include a formula by which
the exercise price will be determined) and the maximum number of
shares subject to Awards that the officers may grant; provided
further, however, that no officer shall be authorized to grant
Awards to any “executive officer” of the Company (as
defined by Rule 3b-7 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) or to any
“officer” of the Company (as defined by Rule 16a-1
under the Exchange Act).
4 Stock
Available for Awards
.1 Number of Shares . Subject to
adjustment under Section 10, Awards may be made under the Plan
for up to the number of shares of common stock, $0.001 par value
per share, of the Company (the “Common Stock”) that is
equal to 1,653,215 shares of Common Stock.
If any Award expires or is terminated,
surrendered or canceled without having been fully exercised, is
forfeited in whole or in part (including as the result of shares of
Common Stock subject to such Award being repurchased by the Company
at the original issuance price pursuant to a contractual repurchase
right) is settled in cash or otherwise results in any Common Stock
not being issued, the unused Common Stock covered by such Award
shall again be available for the grant of Awards under the Plan.
Further, shares of Common Stock tendered to the Company by a
Participant to exercise an Award or to satisfy a tax withholding
obligation (including shares retained from an Award creating the
tax obligation) shall be added to the number of shares of Common
Stock available for the grant of Awards under the Plan. However, in
the case of Incentive Stock Options (as hereinafter defined), the
foregoing provisions shall be subject to any limitations under the
Code. Shares issued under the Plan may consist in whole or in part
of authorized but unissued shares or treasury shares.
.2 Per-Participant Limit . Subject to
adjustment under Section 10, for Awards granted after the
Common Stock is registered under the Securities Exchange Act of
1934 (the “Exchange Act”), the maximum number of shares
of Common Stock with respect to which Awards may be granted to any
Participant under the Plan shall be 2,000,000 per fiscal year. For
purposes of the foregoing limit, the combination of an Option in
tandem with an SAR (as each is hereafter defined) shall be treated
as a single Award. The per-Participant limit described in this
Section 4(b) shall be construed and applied consistently with
Section 162(m) of the Code or any successor provision thereto, and
the regulations thereunder
(“Section 162(m)”).
.3 Substitute Awards . In connection with
a merger or consolidation of an entity with the Company or the
acquisition by the Company of property or stock of an entity, the
Board may grant Awards in substitution for any options or other
stock or stock-based awards granted by such entity or an affiliate
thereof. Substitute Awards may be granted on such terms as the
Board deems appropriate in the circumstances, notwithstanding any
limitations on Awards contained in the Plan. Substitute Awards
shall not count against the overall share limit set forth in
Section 4(a), except as may be required by reason of
Section 422 and related provisions of the Code.
.1 General . The Board may grant options
to purchase Common Stock (each, an “Option”) and
determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions
and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state
securities laws, as it considers necessary or advisable. An Option
which is not intended to be an Incentive Stock Option (as
hereinafter defined) shall be designated a “Nonstatutory
Stock Option”.
.2 Incentive Stock Options . An Option
that the Board intends to be an “incentive stock
option” as defined in Section 422 of the Code (an
“Incentive Stock Option”) shall only be granted to
employees of Ocean Power Technologies, Inc., any of Ocean Power
Technologies, Inc.’s present or future parent or subsidiary
corporations as defined in Sections 424(e) or (f) of the Code,
and any other entities the employees of which are eligible to
receive Incentive Stock Options under the Code, and shall be
subject to and shall be construed consistently with the
requirements of Section 422 of the Code. The Company shall
have no liability to a Participant, or any other party, if an
Option (or any part thereof) that is intended to be an Incentive
Stock Option is not an Incentive Stock Option or for any action
taken by the Board including without limitation the conversion of
an Incentive Stock Option to a Nonstatutory Stock
Option.
.3 Exercise Price . The Board shall
establish the exercise price of each Option and specify such
exercise price in the applicable option agreement; provided,
however, that the exercise price shall not be less than 100% of the
Fair Market Value (as defined below) on the date the Option is
granted.
.4 Duration of Options . Each Option
shall be exercisable at such times and subject to such terms and
conditions as the Board may specify in the applicable option
agreement.
.5 Exercise of Option . Options may be
exercised by delivery to the Company of a written notice of
exercise signed by the proper person or by any other form of notice
(including electronic notice) approved by the Board together with
payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised. Shares of Common Stock
subject to the Option will be delivered by the Company following
exercise either as soon as practicable or, subject to such
conditions as the Board shall specify, on a deferred basis (with
the Company’s obligation to be evidenced by an instrument
providing for future delivery of the deferred shares at the time or
times specified by the Board).
.6 Payment Upon Exercise. Common Stock
purchased upon the exercise of an Option granted under the Plan
shall be paid for as follows:
.1 in cash or
by check, payable to the order of the Company;
.2 except as may otherwise be provided in the
applicable option agreement, by (i) delivery of an irrevocable
and unconditional undertaking by a creditworthy broker to deliver
promptly to the Company sufficient funds to pay the exercise price
and any required tax withholding or (ii) delivery by the
Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver
promptly to the Company cash or a check sufficient to pay the
exercise price and any required tax withholding;
.3 to the extent provided for in the applicable
option agreement or approved by the Board, in its sole discretion,
by delivery of shares of Common Stock owned by the Participant
valued at their fair market value as determined by (or in a manner
approved by) the Board (“Fair Market Value”), provided
(i) such method of payment is then permitted under applicable
law, (ii) such Common Stock, if acquired directly from the
Company, was owned by the Participant for such minimum period of
time, if any, as may be established by the Board in its discretion
and (iii) such Common Stock is not subject to any repurchase,
forfeiture, unfulfilled vesting or other similar
requirements;
.4 to the extent permitted by applicable law and
provided for in the applicable option agreement or approved by the
Board, in its sole discretion, by (i) delivery of a promissory
note of the Participant to the Company on terms determined by the
Board, or (ii) payment of such other lawful consideration as
the Board may determine; or
.5 by any
combination of the above permitted forms of payment.
.7 Repricing of Options . The Board may,
without stockholder approval, amend any outstanding Option granted
under the Plan to provide an exercise price per share that is lower
than the then-current exercise price per share of such outstanding
Option. The Board may also, without stockholder approval, cancel
any outstanding option (whether or not granted under the Plan) and
grant in substitution therefor new Awards under the Plan covering
the same or a different number of shares of Common Stock and having
an exercise price per share lower than the then-current exercise
price per share of the cancelled option.
6 Stock
Appreciation Rights .
.1 General . The Board may grant Awards
consisting of a Stock Appreciation Right, or SAR, is an Award
entitling the holder, upon exercise, to receive an amount in cash,
Common Stock or a combination thereof (such form to be determined
by the Board) determined by reference to appreciation, from and
after the date of grant, in the fair market value of a share of
Common Stock. SARs may be based solely on appreciation in the fair
market value of Common Stock or on a comparison of such
appreciation with some other measure of market growth such as (but
not limited to) appreciation in a recognized market index. The date
as of which such appreciation or other measure is determined shall
be the exercise date.
.2 Grants . Stock Appreciation Rights may
be granted in tandem with, or independently of, Options granted
under the Plan.
.1 Tandem Awards . When Stock
Appreciation Rights are expressly granted in tandem with Options,
(i) the Stock Appreciation Right will be exercisable only at
such time or times, and to the extent, that the related Option is
exercisable (except to the extent designated by the Board in
connection with a Reorganization Event [or a Change in Control
Event]) and will be exercisable in accordance with the procedure
required for exercise of the related Option; (ii) the Stock
Appreciation Right will terminate and no longer be exercisable upon
the termination or exercise of the related Option, except to the
extent designated by the Board in connection with a Reorganization
Event [or a Change in Control Event] and except that a Stock
Appreciation Right granted with respect to less than the full
number of shares covered by an O
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