EX-10.26






Exhibit 10.26




O.P.T.




Ocean Power Technologies, Inc.

1590 Reed Road

Pennington, NJ 08534 USA

609-730-0400, Fax: 609 730-0404




December 21,
2007




Mr. Herbert T. Nock




Dear Herb:



Ocean Power Technologies, Inc. (“OPT” or the “Company”) hereby offers to you the position of Vice
President, Business Development and Marketing of Ocean Power Technologies, Inc., reporting to me.
As such, you will be an Executive Officer of the Company, and your duties and responsibilities will
be those duties and responsibilities consistent with your position as may from time to time be
assigned by me, including your focus on the Company’s business development, sales and marketing
activities.



OPT may add to or alter your position and responsibilities as deemed appropriate in the future. The
following responsibilities are part of your duties: (a) devote attention, labor, skill and energy
to the business of OPT and diligently, and to the best of your ability, perform all duties incident
to your employment as described in this letter, and (b) use your best efforts to promote the
interests, goodwill and welfare of OPT.



Compensation for your services, subject to the terms of this letter, shall be a salary of
$17,500.00 per monthly pay period (the “Base Salary”), which is equivalent to $210,000.00 on an
annual basis, for as long as you are employed or until a change is made by OPT to your Base Salary.
In addition to this Base Salary, you will be eligible to receive a bonus of up to 40% of your Base
Salary. To be eligible to receive the bonus, you must be employed by the Company as of the day that
the Company pays the bonus. You shall be expected to work during OPT’s normal operating hours, as
well as any additional hours needed in order to complete your assigned tasks. Payments to you shall
be less all amounts required to be withheld by Federal, State and all applicable income tax laws,
regulations and rulings. You will receive reviews of your job performance in accordance with OPT’s
policies. Adjustments to your compensation, as well consideration for bonus and stock option
awards, if any, will be considered on an annual basis. In addition, subject to approval by the
Board of Directors, subsequent to the commencement of your employment with the Company you will be
granted options to purchase 25,000 shares of the common stock of OPT(the “Option Grant”) under and
subject to the terms of the Company’s 2006 Stock Incentive Plan (the “2006 Plan”) and the Company’s
standard option agreement. Of the option grant, 10,000 shares will be immediately vested at the
time of the grant, and 15,000 shares will be vested over five years, i.e. 3,000 shares vested at
each anniversary of the date of grant, assuming you remain employed by the Company on such dates.
The term of these options will be for a period of ten (10) years from the date of grant, in accord
with the Company’s standard form of stock option agreement. If OPT terminates your employment
without “Cause” (as defined below) or if you terminate your employment for “Good Reason” (as
defined below), all the unvested portions of the 15,000 share grant shall vest immediately upon
such termination and shall thereafter expire in accordance with the Option Grant and the terms of
the 2006 Plan. Except as otherwise set forth herein, options granted to you shall cease to vest on
the actual date of termination for any reason.




 









 







Your position with the Company requires you to relocate to New Jersey. In recognition of such
relocation, the Company will, during 2008, reimburse you for up to (i) $45,000 for costs incurred
by you in 2008 in purchasing a house in New Jersey, selling your house in Connecticut, and moving
from Connecticut to New Jersey; and (ii) $6,600 for costs incurred by you in 2008 in temporarily
residing in New Jersey. All reimbursement requests must be supported by documentation evidencing
the costs incurred by you. If you resign without Good Reason or the Company terminates your
employment for Cause:





(a) prior to the one-year anniversary of your start date, you shall repay to the Company
any amount received by you pursuant to (i) above;




(b) after the one-year anniversary of your start date but before the two-year anniversary
of your start date, you shall repay to the Company two-thirds (2/3) of any amount
received by you pursuant to (i) above;




(c) after the two-year anniversary of your start date but prior to the three-year
anniversary of your start date, you shall repay to the Company one-third (1/3) of any
amount received by you pursuant to (i) above;




(d) following the three-year anniversary of your start date, you shall not be required to
repay to the Company any amount received by you pursuant to (i) above.


In addition to the compensation stated in this offer, during your employment you will be entitled
to participate in all employee benefit plans and programs now or in the future maintained by OPT
and offered to all employees of the Company, as well as those offered to key employees of the
Company, so long as you meet any applicable eligibility requirements. You also will receive
vacation time to be accrued and administered in accordance with OPT’s policies, of four weeks’
annual paid vacation. In addition, you will be permitted to use up to five paid sick days. You will
also receive a total of ten holidays with pay, each year.



By accepting this offer, you recognize and acknowledge that you may have access to certain ideas,
processes, strategies, trade secrets, methods of operation or other non-public information
(“Confidential Information”) of OPT and that all such information constitutes valuable, special and
unique property of OPT. You agree that you will not, without the prior written consent of OPT,
disclose or authorize or permit anyone under your direction to disclose to anyone not properly
entitled thereto any such Confidential Information relative to the business, technology,
operations, financial condition or services of OPT or any subsidiary. Accordingly, as part of your
acceptance of this offer, you agree to execute and be bound by the attached Proprietary
Information, Restrictive Covenant and Inventions Agreement (“Agreement”).



By accepting this offer, you further represent that you are not bound by any employment contract,
restrictive covenant or other restriction preventing you from entering into employment with OPT
and carrying out your responsibilities to the Company or which in any way otherwise interferes
with or is in conflict with such employment.



This letter shall not be construed as an agreement, either express or implied, to employ you for
any stated term, and shall in no way alter OPT’s policy of employment at-will, under which both
you and OPT remain free to terminate the employment relationship at any time, with or without
notice and with or without Cause (as defined below). Notwithstanding the above, the Company shall
provide you with two (2) weeks’ notice prior to terminating your employment; provided, however,
that the Company may, in its sole discretion, pay to you in lieu of such notice an amount equal to
the Base Salary that would otherwise be payable to you for such two-week




 









 







period, in which case the termination of your employment shall occur effective immediately
upon the date of such payment



In the event you terminate your employment with the Company for Good Reason or the Company
terminates your employment for any reason other than (i) for Cause or (ii) because you cannot
perform your services as a result of physical or mental incapacitation, you will receive the
following severance: (a) if such termination occurs within the first 12 months of employment,
for a period of 3 months following your date of termination the Company will continue to pay
to you your Base Salary; (b) if such termination occurs after the first 12 months of
employment but before the three-year anniversary of your start date, for a period of 6 months
following your date of termination the Company will continue to pay to you your Base Salary;
(c) if such termination occurs after the three-year anniversary of your start date, for a
period of 12 months following your date of termination the Company will continue to pay to you
your Base Salary. Any such severance will be paid by the Company as salary continuation in
accordance with its regular payroll practices, and will be conditioned upon the execution and
nonrevocation by you of a severance and release agreement provided by the Company and
releasing all claims against it and its affiliates (to the extent permitted by applicable
law). All payments to you hereunder shall be less taxes and any other deductions required by
law.



For purposes of this Agreement:



“Cause” means a termination of your employment by the Company because you have done any of the
following: (a) materially breached or materially failed to perform your duties under
applicable law, (b) failed to follow lawful and reasonable directives of the Board, or any
executive officer to whom you report, (c) failed to follow the Company’s policies and
procedures in effect from time to time, (d) committed an act of dishonesty in the performance
of your duties or engaged in willful misconduct detrimental to the business of the Company,
(e) been indicted on felony charges, (f) been convicted of misdemeanor charges involving any
crime of moral turpitude, (g) breached in any material respect or failed to perform in any
material respect your obligations and duties or any Agreement between you and the Company, or
(h) violated your restrictive covenants with the Company (including, without limit, your
noncompete, nonsolicit, nonhire, confidentiality obligations, and intellectual property
transfer obligations regarding the ownership of intellectual property created or developed, in
whole or in part, by you while an employee of the Company.





“Good Reason” means a material diminution of your duties or responsibilities or a
material change in the position to which you report. A termination by you for Good Reason
can only occur if (i) within sixty (60) days after the initial occurrence of the
condition giving rise to Good Reason, you have given a written notice of such to the
Company, (ii) the Company has not cured the condition within thirty (30) days after
receipt of such notice, and (iii) you actually cease employment within thirty (30) days
after the period set forth in clause (ii).


This letter agreement is intended to comply with the provisions of Section 409A of the U.S.
Internal Revenue Code of 1986 and shall, to the extent practicable, be construed in accordance
therewith. Terms defined in this letter agreement shall have the meanings given such terms under
Section 409A if and to the extent required to comply with Section 409A. If and to the extent any
portion of any payment, compensation or other benefit provided to you in connection with your
separation from service (as defined in Section 409A) is determined to constitute “nonqualified
deferred compensation” within the meaning of Section 409A and you are a specified employee as
defined in Section 409A(a)(2)(B)(i), as determined by the Company in accordance with its
procedures, by which determination you hereby agree that you are bound, such portion of the
payment, compensation or other benefit shall not be paid before the day that is six months plus one
day after the date of separation from service (as determined under Section 409A (the “New Payment
Date”), except as Section 409A may then permit. The




 









 







aggregate of any payments that otherwise would have been paid to you during the period between
the date of separation from service and the New Payment Date shall be paid to you in a lump sum
on such New Payment Date, and any remaining payments will be paid on their original schedule.
Neither the Company nor you shall have the right to accelerate or defer the delivery of any
such payments or benefits except to the extent specifically permitted or required by Section
409A. Notwithstanding the foregoing, to the extent that this letter agreement or any payment or
benefit hereunder shall be deemed not to comply with Section 409A, then neither the Company,
the Board of Directors of the Company, nor its or their designees or agents shall be liable to
you or any other person for any actions, decisions or determinations made in good faith.



This letter and the Agreement attached constitute the entire offer to you and, if you accept,
they shall constitute the entire agreement and shall be governed by the laws of the state of
New Jersey. If you agree to the terms of this offer, please sign and date below, as well as on
the attached Agreement, on both the originals provided, returning one of each original to me.



Should you have any questions concerning this offer, or any other question about the Company
and this position, please contact me. I look forward to hearing from you.




Sincerely,




	 	 	 
	/s/ George W. Taylor
	 	 
	 
	 	 
	Dr. George W. Taylor

	 	 
	Chief Executive Officer
	 	 





I have read and understand this letter. The foregoing correctly sets forth the terms of my
employment with OPT




	 	 	 	 	 	 	 
	/s/ Herbert T. Nock

	 	 	 	DATE:
	 	December 22, 2007
	 

	 	 	 	 	 	 
	 Herbert T. Nock