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EXHIBIT 10.5
OCEAN POWER TECHNOLOGIES, INC.
1994 STOCK OPTION PLAN
1.
STATEMENT OF PURPOSE. The purpose of this Stock Option Plan (the
"Plan")
is to benefit Ocean Power Technologies, Inc., a New Jersey
corporation (the
"Company"), through the maintenance and development of its business
by offering
certain present and future key employees, directors and consultants
of the
Company an opportunity to become holders of stock in the Company
over a period
of years, thereby providing them a permanent stake in the growth
and prosperity
of the Company and encouraging the continuance of their involvement
with the
Company.
2.
ADMINISTRATION. The Plan shall be administered by the
Compensation
Committee (the "Committee"), appointed by the Board of Directors
(the "Board"),
which shall also designate the Chairman of the Committee. The
Committee shall
hold its meetings at such times and places as it may determine. A
majority of
its members shall constitute a quorum, and all determinations of
the committee
shall be made by not less than a majority of its members. Any
action may be
taken by a written instrument signed by a majority of the members
of the
Committee and action so taken shall be as fully effective as if it
had been made
by a majority vote of its members at a meeting duly called and
held. The
Committee may designate the Secretary or other Company employees to
assist the
Committee in the administration of the Plan, and may grant
authority to such
persons to execute award agreements or other documents on behalf of
the
Committee and the Company. Any duly constituted committee of the
Board meeting
the qualifications of this Section 2 may be appointed as the
Committee. The
Committee's interpretation of the terms and provisions of the Plan
shall be
final and conclusive. The selection of specific employees,
directors and
consultants for participation in the Plan and all decisions
concerning the
timing, pricing, amount, and any and all other terms and conditions
of any grant
or award under the Plan shall be made solely by the Committee.
3.
ELIGIBILITY. Options shall be granted only to key employees of
the
Company (including officers of the Company), directors of the
Company and
consultants of the Company selected initially and from time to time
by the
Committee on the basis of their importance to the business of the
Company.
Options may be granted to members of the Committee only with the
approval of a
majority of the disinterested members of the Board.
4.
STOCK RESERVED FOR THE PLAN. The Committee may grant options under
which
a total not in excess of 500,000 shares of the no par value common
stock of the
Company ("Common Stock") may be purchased from the Company, subject
to
adjustment as provided in Section 13; provided that the Committee
may not grant
to any individual, options to purchase more than 100,000 shares of
Common Stock
or more than 40% of the total number of options to purchase shares
of Common
Stock granted under the Plan. Options granted under the Plan are
intended not to
be treated as incentive stock options as defined in Section 422 of
the Internal
Revenue Code of 1986, as amended (the "Code").
In
the event that an option expires or is terminated or cancelled
unexercised as to any shares, such released shares may again be
optioned
(including a grant in substitution for a cancelled option). With
respect to any
individual, however, in the case of an option that is
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terminated or cancelled unexercised as to any shares, such released
shares shall
continue to count against the maximum number of shares that may be
offered to
such individual under the Plan. Shares subject to options shall be
made
available from authorized but unissued, or reacquired shares of
Common Stock.
Nothing contained in the Plan or in any option granted pursuant
thereto
shall confer upon any optionee any right to be continued as an
employee,
director, or consultant of the Company, or interfere in any way
with the right
of the Company to terminate the optionee's position as employee,
director or
consultant at any time.
5.
GRANT OF OPTIONS. The Committee shall have discretionary authority
(i)
to determine, authorize, and designate those key employees,
directors, and
consultants of the Company or any parent or subsidiary thereof who
are to
receive options under the Plan, and (ii) to determine the number of
shares to be
covered by such options and the terms thereof. The Committee shall
thereupon
grant options in accordance with such determination as evidenced by
a written
option agreement. Subject to the express provisions of the Plan,
the Committee
shall have discretionary authority to prescribe, amend and rescind
rules and
regulations relating to the Plan, to interpret the Plan, to
prescribe and amend
the terms of the option agreements (which need not be identical)
and to make all
other determinations deemed necessary or advisable for the
administration of the
Plan. Any option granted under this plan shall be granted within
ten (10) years
from the date set forth in Section 19.
6.
OPTION PRICE. The option price per share shall be determined by
the
Committee and, subject to the provisions of Section 10 hereof, the
purchase
price may be less than the fair market value, at the time the
option is granted,
of the shares of Common Stock subject to the option, but not less
than the par
value of such shares, if any.
7.
DURATION OF OPTIONS. Subject to the provisions of Section 10
hereof,
each option shall be for such term of not more than ten years, as
shall be
determined by the Committee. The Committee may in its descretion at
any time
prior to the expiration or termination of any option previously
granted, extend
the term of any option (including such options held by officers)
for such
additional period as the Committee in its discretion shall
determine. In no
event, however, shall the aggregate option period with respect to
any option,
including the original term of the option and any extensions
thereof, exceed ten
years.
8.
EXERCISE OF OPTION. An option shall be exercised by giving
written
notice to the Company, attention of the Secretary, specifying the
number of
shares to be purchased, accompanied by a cashier's check, bank
draft, or postal
or express money order payable to the order of the Company, or
shall be preceded
by a bank wire transfer, for an amount equal to the option price of
such shares,
and shall specify the address to which the certificates for such
shares are to
be mailed. An optionee shall be deemed to be a stockholder with
respect to
shares covered by an option on the date the Company receives such
written notice
and payment of such option price. As promptly as practicable after
receipt of
such written notification and payment, the Company shall deliver to
the optionee
certificates for the number of shares with respect to which such
option has been
so exercised, issued in the optionee's name; provided, however,
that such
delivery shall be deemed effected for all purposes when a stock
transfer agent
of the Company
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shall have deposited such certificates in the United States mail,
addressed to
the optionee at the address specified pursuant to this Section.
At
the time of the exercise of any option, the Company may, if it
shall
determine it necessary or desirable for any reason, require the
optionee (or his
heirs, legatees, or legal representative, as the case may be) as a
condition
upon the exercise thereof, to
