Exhibit
10.1

     

    STOCKERYALE,
INC.

     

    SUMMARY
OF 2009 STOCK OPTION AND CASH INCENTIVE COMPENSATION PLAN

     

    On
January 16, 2009, the Governance, Nominating and Compensation Committee of the
Board of Directors of StockerYale, Inc. (the “Corporation”) established a
performance-based stock option and cash incentive compensation plan pursuant to
which (i) grants of performance-based stock options to purchase shares of the
Corporation’s common stock at the closing price of the Corporation’s common
stock on the Nasdaq Capital Market on January 16, 2009 and (ii) cash bonuses to
each of the Corporation’s executive officers and other senior executives were
approved.

     

    The stock
options granted under this plan only vest and become exercisable if the
Corporation is cash flow neutral for fiscal 2009 and will vest and become
exercisable or terminate on the day the Corporation publicly releases its
financial results for the fiscal year ending December 31, 2009, provided the
recipient continues to remain employed by the Corporation, or a subsidiary of
the Corporation, until such date.

     

    The stock
options granted to the executive officers of the Corporation (as defined by
Section 16 of the Securities Exchange Act of 1934, as amended) under this
plan are as follows:

     

    
      
        	
                
                  Name

                

              	
                  

              	
                Number
      of Stock Options

              
	
                Mark
      W. Blodgett

              	
                  

              	
                600,000

              
	
                Timothy
      P. Losik

              	
                  

              	
                350,000

              


      

    

    


    The cash
bonuses approved under this plan will only be earned by the executive officers
upon the Corporation (i) being cash flow neutral for fiscal 2009 and (ii)
generating operating income of at least $99,000 for fiscal 2009 (before
disbursement of cash bonuses).  Should the operating income of the
Corporation for fiscal 2009 be between $99,000 and $299,000, such amount (up to
$200,000) will be allocated to a pool (the “Pool”).  In addition, 25%
of any operating income of the Corporation for fiscal 2009 in excess of $299,000
(before disbursement of cash bonuses) will also be allocated to the
Pool.  Cash bonuses will only be distributed from the Pool according
to the percentage allocated to each executive officer, if at all, on the day the
Corporation publicly releases its financial results for the fiscal year ending
December 31, 2009, provided the recipient continues to remain employed by the
Corporation, or a subsidiary of the Corporation, until such
date.  Should the Corporation only generate operating income of
$99,000 in fiscal 2009, no cash bonuses will be distributed as the Pool will not
have been funded.

    


    The cash
bonuses the executive officers of the Corporation are eligible to receive under
this plan are as follows:

    


    
      
        
          
            	
                    Name

                  	
                    Bonus
      Target as a Percentage of Base Salary*

                  
	
                    Blodgett,
      Mark

                  	
                    30%**

                  
	
                    Losik,
      Tim

                  	
                    25%

                  


          

        

      

    

    *The
amounts in this column assume the Corporation will be cash flow neutral for
fiscal 2009 and will generate an operating income of $299,000 in fiscal 2009.
The amount to be paid to each executive officer is subject to upwards and
downward adjustment based on the Corporation’s operating income, and, thereby,
the amount which is allocated to the Pool.

    ** Based
on Mr. Blodgett’s base salary prior to the 10% voluntary reduction for
2009.