Document:

Exhibit 10.1

Exhibit 10.1

OCEAN POWER TECHNOLOGIES, INC.

2006 STOCK INCENTIVE PLAN, AS AMENDED

1 Purpose

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”).

2 Eligibility

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.

5 Stock Options

.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 Option will not be
reduced until the number of shares as to which the related Option has been exercised or has
terminated exceeds the number of shares not covered by the Stock Appreciation Right; (iii) the
Option will terminate and no longer be exercisable upon the exercise of the related Stock
Appreciation Right; and (iv) the Stock Appreciation Right will be transferable only with the
related Option.

.2 Independent SARs. A Stock Appreciation Right not expressly granted in tandem with
an Option will become exercisable at such time or times, and on such conditions, as the Board may
specify in the SAR Award.

.3 Grant Price. The Board shall establish the grant price or exercise price of each
SAR and specify such price in the applicable Award agreement; provided, however, that the grant
price or exercise price of an SAR shall not be less than 100% of the Fair Market Value per share of
Common Stock on the date of grant of the SAR.

.4 Term. Each SAR shall be exercisable at such times and subject to such terms and
conditions as the Board may specify in the applicable Award agreement.

.5 Exercise. Stock Appreciation Rights 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 any other documents required by the Board.

 

 

 

7 Restricted Stock; Restricted Stock Units.

.1 General. The Board may grant Awards entitling recipients to acquire shares of
Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price (or to require forfeiture of such shares
if issued at no cost) from the recipient in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award. Instead of granting Awards for Restricted Stock, the
Board may grant Awards entitling the recipient to receive shares of Common Stock to be delivered at
the time such shares of Common Stock vest (“Restricted Stock Units”) (Restricted Stock and
Restricted Stock Units are each referred to herein as a “Restricted Stock Award”).

.2 Terms and Conditions for all Restricted Stock Awards. The Board shall determine
the terms and conditions of a Restricted Stock Award, including the conditions for vesting and
repurchase (or forfeiture) and the issue price, if any.

.3 Additional Provisions Relating to Restricted Stock.

.1 Dividends. Participants holding shares of Restricted Stock will be entitled to all
ordinary cash dividends paid with respect to such shares, unless otherwise provided by the Board.
If any such dividends or distributions are paid in shares, or consist of a dividend or distribution
to holders of Common Stock other than an ordinary cash dividend, the shares, cash or other property
will be subject to the same restrictions on transferability and forfeitability as the shares of
Restricted Stock with respect to which they were paid. Each dividend payment will be made no
later than the end of the calendar year in which the dividends are paid to shareholders of that
class of stock or, if later, the 15th day of the third month following the date the dividends are
paid to shareholders of that class of stock.

.2 Stock Certificates. The Company may require that any stock certificates issued in
respect of shares of Restricted Stock shall be deposited in escrow by the Participant, together
with a stock power endorsed in blank, with the Company (or its designee). At the expiration of
the applicable restriction periods, the Company (or such designee) shall deliver the certificates
no longer subject to such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts
due or exercise rights of the Participant in the event of the Participant’s death (the “Designated
Beneficiary”). In the absence of an effective designation by a Participant, “Designated
Beneficiary” shall mean the Participant’s estate.

.4 Additional Provisions Relating to Restricted Stock Units.

.1 Settlement. Upon the vesting of and/or lapsing of any other restrictions (i.e.,
settlement) with respect to each Restricted Stock Unit, the Participant shall be entitled to
receive from the Company one share of Common Stock or an amount of cash equal to the Fair Market
Value of one share of Common Stock, as provided in the applicable Award agreement. The Board may,
in its discretion, provide that settlement of Restricted Stock Units shall be deferred, on a
mandatory basis or at the election of the Participant.

.2 Voting Rights. A Participant shall have no voting rights with respect to any
Restricted Stock Units.

.3 Dividend Equivalents. To the extent provided by the Board, in its sole discretion,
a grant of Restricted Stock Units may provide Participants with the right to receive an amount
equal to any dividends or other distributions declared and paid on an equal number of outstanding
shares of Common Stock (“Dividend Equivalents”). Dividend Equivalents may be paid currently or
credited to an account for the Participants, may be settled in cash and/or shares of Common Stock
and may be subject to the same restrictions on transfer and forfeitability as the Restricted Stock
Units with respect to which paid, as determined by the Board in its sole discretion, subject in each case to such
terms and conditions as the Board shall establish, in each case to be set forth in the applicable
Award agreement.

 

 

 

8 Other Stock-Unit Awards

Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part
by reference to, or are otherwise based on, shares of Common Stock or other property, may be
granted hereunder to Participants (“Other Stock Unit Awards”), including without limitation Awards
entitling recipients to receive shares of Common Stock to be delivered in the future. Such Other
Stock Unit Awards shall also be available as a form of payment in the settlement of other Awards
granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise
entitled. Other Stock Unit Awards may be paid in shares of Common Stock or cash, as the Board
shall determine. Subject to the provisions of the Plan, the Board shall determine the conditions
of each Other Stock Unit Award, including any purchase price applicable thereto.

9 Adjustments for Changes in Common Stock and Certain Other Events.

.1 Changes in Capitalization. In the event of any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any distribution to holders of Common Stock
other than an ordinary cash dividend, (i) the number and class of securities available under this
Plan, (ii) the per-Participant limit set forth in Section 4(b), (iii) the number and class of
securities and exercise price per share of each outstanding Option, (iv) the share- and per-share
provisions of each Stock Appreciation Right, (v) the repurchase price per share subject to each
outstanding Restricted Stock Award, and (vi) the share- and per-share-related provisions of each
outstanding Other Stock Unit Award, shall be equitably adjusted by the Company (or substituted
Awards may be made, if applicable) in the manner determined by the Board.

.2 Reorganization Events

.1 Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation
of the Company with or into another entity as a result of which all of the Common Stock of the
Company is converted into or exchanged for the right to receive cash, securities or other property
or is cancelled, (b) any exchange of all of the Common Stock of the Company for cash, securities or
other property pursuant to a share exchange transaction or (c) any liquidation or dissolution of
the Company.

.2 Consequences of a Reorganization Event on Awards Other than Restricted Stock
Awards. In connection with a Reorganization Event, the Board shall take any one or more of the
following actions as to all or any outstanding Awards, other than Restricted Stock Awards, on such
terms as the Board determines: (i) provide that Awards shall be assumed, or substantially
equivalent Awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), (ii) upon written notice to a Participant, provide that the Participant’s unexercised
Options or other unexercised Awards will terminate immediately prior to the consummation of such
Reorganization Event unless exercised by the Participant within a specified period following the
date of such notice, (iii) provide that outstanding Awards shall become exercisable, realizable or
deliverable, or restrictions applicable to an Award shall lapse, in whole or in part prior to or
upon such Reorganization Event, (iv) in the event of a Reorganization Event under the terms of
which holders of Common Stock will receive upon consummation thereof a cash payment for each share
surrendered in the Reorganization Event (the “Acquisition Price”), make or provide for a cash
payment to a Participant equal to the excess, if any, of (A) the Acquisition Price times the number
of shares of Common Stock subject to the Participant’s Options or other Awards (to the extent the
exercise price does not exceed the Acquisition Price) over (B) the aggregate exercise price of all
such outstanding Options or other Awards and any applicable tax witholdings, in exchange for the
termination of such Options or other Awards, (v) provide that, in connection with a liquidation or dissolution of
the Company, Awards shall convert into the right to receive liquidation proceeds (if applicable,
net of the exercise price thereof) and (vi) any combination of the foregoing.

 

 

 

For purposes of clause (i) above, an Option shall be considered assumed if, following
consummation of the Reorganization Event, the Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately prior to the consummation of the Reorganization
Event, the consideration (whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock held immediately
prior to the consummation of the Reorganization Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if the consideration received as a result of the
Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an
affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation,
provide for the consideration to be received upon the exercise of Options to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in
value (as determined by the Board) to the per share consideration received by holders of
outstanding shares of Common Stock as a result of the Reorganization Event.

.3 Consequences of a Reorganization Event on Restricted Stock Awards. Upon the
occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the
repurchase and other rights of the Company under each outstanding Restricted Stock Award shall
inure to the benefit of the Company’s successor and shall, unless the Board determines otherwise,
apply to the cash, securities or other property which the Common Stock was converted into or
exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as
they applied to the Common Stock subject to such Restricted Stock Award. Upon the occurrence of a
Reorganization Event involving the liquidation or dissolution of the Company, except to the extent
specifically provided to the contrary in the instrument evidencing any Restricted Stock Award or
any other agreement between a Participant and the Company, all restrictions and conditions on all
Restricted Stock Awards then outstanding shall automatically be deemed terminated or satisfied.

10 General Provisions Applicable to Awards

.1 Transferability of Awards. Except as the Board may otherwise determine or provide
in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by
the person to whom they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution or, other than in the case of an Incentive Stock Option,
pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.

.2 Documentation. Each Award shall be evidenced in such form (written, electronic or
otherwise), as the Board shall determine. Each Award may contain terms and conditions in addition
to those set forth in the Plan.

.3 Board Discretion. Except as otherwise provided by the Plan, each Award may be made
alone or in addition or in relation to any other Award. The terms of each Award need not be
identical, and the Board need not treat Participants uniformly.

.4 Termination of Status. The Board shall determine the effect on an Award of the
disability, death, retirement, authorized leave of absence or other change in the employment or
other status of a Participant and the extent to which, and the period during which, the
Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights
under the Award.

 

 

 

.5 Withholding. Each Participant shall pay to the Company, or make provision
satisfactory to the Company for payment of, any taxes required by law to be withheld in connection
with an Award to such Participant; provided, however that Participant shall not be required to make
any payment until such time as the Company is obligated to make the applicable withholding payment.
Except as the Board may otherwise provide in an Award, for so long as the Common Stock is
registered under the Exchange Act, Participants may satisfy such tax obligations in whole or in
part by delivery of shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their Fair Market Value; provided, however, except as otherwise provided
by the Board, that the total tax withholding where stock is being used to satisfy such tax
obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum
statutory withholding rates for federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income). Shares surrendered to satisfy tax withholding
requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements. The Company may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to a Participant.

.6 Amendment of Award. The Board may amend, modify or terminate any outstanding
Award, including but not limited to, substituting therefor another Award of the same or a different
type, changing the date of exercise or realization, and converting an Incentive Stock Option to a
Nonstatutory Stock Option, provided that the Participant’s consent to such action shall be required
unless the Board determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.

.7 Conditions on Delivery of Stock. The Company will not be obligated to deliver any
shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously
delivered under the Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock market rules and regulations,
and (iii) the Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.

.8 Acceleration. The Board may at any time provide that any Award shall become
immediately exercisable in full or in part, free of some or all restrictions or conditions, or
otherwise realizable in full or in part, as the case may be.

11 Miscellaneous

.1 No Right To Employment or Other Status. No person shall have any claim or right to
be granted an Award, and the grant of an Award shall not be construed as giving a Participant the
right to continued employment or any other relationship with the Company. The Company expressly
reserves the right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

.2 No Rights As Stockholder. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any
shares of Common Stock to be distributed with respect to an Award until becoming the record holder
of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the number of shares
subject to such Option are adjusted as of the date of the distribution of the dividend (rather than
as of the record date for such dividend), then an optionee who exercises an Option between the record date and the
distribution date for such stock dividend shall be entitled to receive, on the distribution date,
the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise,
notwithstanding the fact that such shares were not outstanding as of the close of business on the
record date for such stock dividend.

 

 

 

.3 Effective Date and Term of Plan. The Plan shall become effective on the date on
which the Securities and Exchange Commission declares the registration statement on Form S-1 for
the initial public offering of the Company’s common stock effective (the “Effective Date”). No
Awards shall be granted under the Plan after the completion of 10 years from the earlier of (i) the
date on which the Plan was adopted by the Board or (ii) the date the Plan was approved by the
Company’s stockholders, but Awards previously granted may extend beyond that date.

.4 Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time; provided, however that, to the extent determined by the Board, no
amendment requiring stockholder approval under any applicable legal, regulatory or listing
requirement shall become effective until such stockholder approval is obtained.

.5 Provisions for Foreign Participants. The Board may modify Awards or Options
granted to Participants who are foreign nationals or employed outside the United States or
establish subplans or procedures under the Plan to recognize differences in laws, rules,
regulations or customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.

.6 Compliance with Code Section 409A. No Award shall provide for deferral of
compensation that does not comply with Section 409A of the Code, unless the Board, at the time of
grant, specifically provides that the Award is not intended to comply with Section 409A of the
Code. The Company shall have no liability to a Participant, or any other party, if an Award that
is intended to be exempt from, or compliant with, Section 409A is not so exempt or compliant or for
any action taken by the Board.

.7 Governing Law. The provisions of the Plan and all Awards made hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware, excluding
choice-of-law principles of the law of such state that would require the application of the laws of
a jurisdiction other than such state.exv10w1

Exhibit 10.1

	 	 	 
	 

	 	P.O. Box 537012
	 

	 	Sacramento, California 95853-7012
	 
	 	 
	Bryan P. Ramsey

	 	Tel: ###-##-####
	Vice President

	 	Fax: 916-355-3522
	Human Resources
	 	 

July 2, 2009

John Joy

XXXXXXX

XXXXXXX, XX XXXXX

Dear John,

We are very excited by the prospect of your joining our team and believe you will make a
significant contribution to the success of our business. On behalf of GenCorp Inc. (“the
Company”), I am delighted to offer you the position of Vice President and Treasurer. In this
position, you will report directly to Kathy Redd, our Vice President and Chief Financial Officer.

The details of your offer include:

	 	–	 	Start Date: Your employment date with the Company will be
determined upon completion of our post-offer, pre-employment screening process. The
post-offer, pre-employment screening process should be completed as soon as
possible. The desired start date is Monday, July 27, 2009.
	 
	 	–	 	Salary: Your monthly base salary will be $17,500 per month
($210,000 per annum).
	 
	 	–	 	Annual Bonus: As part of your annual total cash compensation, you
will be eligible to participate in the GenCorp/Aerojet Incentive Plan. Your target
annual incentive is 40% of your base salary. Incentive plan payments are contingent
upon the financial performance of Aerojet and GenCorp, and your incentive may vary
above or below the target level. Your eligibility to participate in the program is
at the discretion of management. The Company may modify, change or cancel any of
the Annual Incentive Plan, and may adjust any individual payment during the
performance period or at any time prior to the payment date. Payment of the annual
incentive amounts, even if performance goals are met, is at the discretion of the
CEO and the Board of Directors. Annual incentive payments are payable in the
quarter following the end of the fiscal year and in accordance with the Company’s
regular pay practices. All bonus payments require you to be employed by the Company
on the date of payment. It is agreed that 50% of the earnable bonus is guaranteed
to be paid by March 2010.
	 
	 	–	 	Stock Appreciation Rights: You will be eligible to participate
in the Stock Appreciation Rights (SARs) or similar programs applicable to corporate
executives under the GenCorp 1999 Equity and Performance Incentive Plan. Grants
typically are made on an annual basis, although the frequency of grants is subject
to the

 

 

John Joy

July 2, 2009

Page 2 of 4

	 	 	 	discretion of the CEO and the Board of Directors. The number of SARs granted is based on
competitive norms associated with base salary, subject to management’s judgment of the
individual’s performance and potential.
	 
	 	 	 	You will be granted 10,000 SARs effective the date your employment begins. SARs will
vest in two equal increments: the first, twelve (12) months after your date of hire;
and the second, twenty-four (24) months after your date of hire.
	 
	 	–	 	Long-Term Incentive Program: You will be eligible to participate
in the long-term incentive program under the 1999 Equity and Performance Incentive
Plan or the 2009 Equity and Performance Incentive Plan as approved by the Board of
Directors. Such grants are normally made during GenCorp’s first fiscal quarter.
For 2009, the grants are expected to occur no later than September 2009.
	 
	 	–	 	Benefit Restoration Plan: For eligible employees, the Company
has a non-qualified, unfunded, benefits restoration plan that is designed to restore
401(k) contributions that cannot be provided under the normal qualified plan due to
certain Internal Revenue Code limitations.
	 
	 	–	 	Relocation: To assist you with your relocation to the Sacramento
area, we are offering you the benefits outlined in the enclosed relocation summary.
While the summary indicates a relocation allowance amount of $6,000, your relocation
allowance will be $10,000 to be paid in a lump sum payment. Following your written
acceptance of our offer, a Brookfield Global Relocation Services representative will
contact you to initiate your move. All relocation activities must be completed
within twelve (12) months from your start date. You should be aware that all
payments for any and all costs associated with relocation shall be repaid to GenCorp
should you resign or be terminated for cause within eighteen (18) months after hire.
	 
	 	–	 	Vacation: You will be eligible for three (3) weeks of paid
vacation. Vacation accrues by pay period.
	 
	 	–	 	Benefits: The Company offers a comprehensive benefits program
that provides a number of benefit levels and options from which to choose.
Additional benefits information is enclosed with this letter.

The Company offers a drug-free work environment. It is the policy of the Company that all offers
of employment are contingent upon successfully passing a post-offer substance abuse screening. The
Company will not hire individuals who test positive for use of illegal drugs or improperly used
legal drugs. Additionally, you must demonstrate your ability to satisfy all job-related physical
requirements.

This employment offer is contingent upon reference checks and a background investigation as well as
upon your receiving appropriate security clearances, if applicable. The first steps in our
post-offer process are the completion of reference checks and the background investigation. We do
not require any medical information from you at this time. After you have successfully completed
these two screenings, we will notify you that you have made it to the final stage of

 

 

John Joy

July 2, 2009

Page 3 of 4

our post-offer process. You will then be asked to submit to the post-offer medical evaluation (if
required), drug test, and to demonstrate that you can satisfy the physical requirements of the job.
A representative from the Company’s Human Resources or Health Services department will phone
and/or email you regarding the specific date, time, and other details of your drug test and medical
evaluation which will be scheduled with a doctor or occupational health clinic in your area.

Upon completion of all of our post-offer screening processes, we will mutually agree to your start
date. The desired start date is July 27, 2009. On your first day, you will be asked to report to
our Visitor Center located at the Company’s offices in Rancho Cordova, California, at 7:30 a.m. for
a day of orientation activities. You will participate in an alternative work schedule that
generally permits you to have every other Friday as a day “off”. Please note that eligibility for
the 9/80 schedule is subject to change based upon business requirements.

We also require you to sign the enclosed copy of our mutual agreement to arbitrate claims, which
provides an expedited, impartial dispute resolution procedure for any claims that may arise during
or following your employment with GenCorp. By signing this offer and the mutual agreement to
arbitrate claims, you are agreeing to have your claims ruled on by an impartial arbitrator and are
waiving the right to a civil trial before a judge or jury.

Our offer is contingent upon your completing, signing and returning all of the enclosed documents.
A checklist and a return envelope are included for your convenience.

Because the position you are being offered requires eligibility for a U.S. security clearance, you
will be required to provide proof of U.S. citizenship on your first day of work. You may provide
this proof in one of the following required forms (please bring your documents with you on your
start date):

	 	–	 	An original or certified copy of a birth certificate;
	 
	 	–	 	A certificate of naturalization;
	 
	 	–	 	A Certificate of Citizenship issued by the Immigration and Naturalization Service (INS);
	 
	 	–	 	A Report of Birth Abroad of a Citizen of the United States of America (Form FS-240);
	 
	 	–	 	A Certificate of Birth (Form FS-545 or DS-1350);
	 
	 	–	 	A passport, current or expired; or
	 
	 	–	 	A Record of Military Processing-Armed Forces of the United States (DD
Form 1966), provided it reflects U.S. citizenship.

Additionally, the Company is required by Federal law to verify all new employees’ legal right to
work in the United States. Our offer is conditioned upon your providing this proof. It is not
necessary to provide proof now, but you must provide proof of your legal right to work in the
United States on your first day of work. The documents described in the enclosed list are
acceptable for this purpose. If you will have any difficulty providing this documentation on your
start date, please notify us immediately.

The term of your employment will be indefinite in duration and therefore, subject to termination at
will by notice from you or the Company. You acknowledge, by signing this letter, that your

 

 

John Joy

July 2, 2009

Page 4 of 4

employment with the Company is at-will. Nothing in this offer letter, including the relocation
program, should be construed as a modification of this employment at-will policy. This means your
employment can be terminated, with or without cause, and with or without notice, at any time, at
your option or at the Company’s option. Although other terms and conditions of employment may
change, this at-will employment will remain in effect throughout your employment with the Company,
unless it is modified by an express written employment contract for a specified term which is
signed by you and an officer of GenCorp.

Lastly, this letter incorporates all of the elements of our employment offer, subject to the more
definitive terms of the GenCorp Human Resources policies and employee benefits plans. Summary
descriptions of the GenCorp employee benefit plans are available upon request. There are no other
terms or conditions of employment, and your acceptance of this offer acknowledges that no one
provided additional promises or incentives for you to accept employment with GenCorp.

Scott, Kathy and I are pleased to welcome you to the GenCorp team. If you have any questions,
please feel free to contact me at 916-355-2072. To indicate your agreement with the above terms of
your employment offer, please sign below and return one copy of this letter to me in the enclosed
return envelope.

Sincerely,

/s/ Bryan P. Ramsey

Bryan P. Ramsey

Vice President

Human Resources

Enclosures

Accepted this 2nd day of July, 2009

	 	 	 	 	 
	Signature:

	 	/s/ John Joy
	 	 
	 

	 	 	 	 
	 

	 	John Joy

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