Document:

ex10-3.htm

Exhibit 10.3

 

 

 

August 25, 2016

 

 

Via Hand Delivery

 

Mark A. Featherstone

c/o Ocean Power Technologies, Inc.

1590 Reed Road

Pennington, NJ 08534

 

Dear Mark:

 

The terms of your employment relationship with Ocean Power Technologies, Inc. (OPT or the “Company”) are set forth in that certain letter (signed by both OPT and yourself) dated November 26, 2013. Therein, the terms of your severance provisions upon the end of your employment are set forth in the twelfth and thirteenth unnumbered paragraphs. Of particular relevance to this letter, those severance provisions (assuming you execute, and do not thereafter revoke, a severance and release agreement) require the Company to provide you with twelve (12) months of severance pay (including medical and dental benefits) if you are terminated by the Company (other than for cause or mental or physical incapacitation), and further require that such severance will be paid to you by the Company as salary continuation.

 

This past week the Company has been discussing with you the end of your employment, which is scheduled to occur at the end of the business day on Friday, September 16, 2016. Based upon those discussions, the Company and you have agreed to make two changes to the severance provisions of your employment letter dated November 26, 2013. First, you have requested, and the Company has agreed, that in lieu of a Company termination of your employment that you instead would agree to resign from the Company provided that your severance provisions (as summarized above and as modified below) will continue to apply. Second, the Company has requested, and you have agreed, that lieu of 12 months of salary continuance that your severance will consist of 10 months of salary continuance and the vesting of your currently awarded but unvested restricted stock units representing 11,500 shares of the Company’s common stock prior to the end of your employment with the Company.

 

The Company and you have also agreed that you will continue to perform the duties and responsibilities of Chief Financial Officer (CFO) and Treasurer until September 7, 2016 when the new CFO is hired. The Company and you have further agreed that you will thereafter and until September 16, 2016 continue your employment with the Company as Principal Accounting Officer, which shall include those duties and responsibilities typically associated with that position, and further agree that this change in title will not and does not trigger the “Good Reason” provisions in the employment letter of November 26, 2013.

 

 

 

 

 

M.A. Featherstone

August 25, 2016

Page 2

 

 

 

Accordingly, OPT and you hereby agree to amend your employment letter dated November 26, 2016 consistent with the foregoing changes. Specifically, OPT and you hereby agree that the entirety of the twelfth and thirteenth paragraphs of that letter are hereby revised, in their entirety, to read as follows:

 

“In the event you terminate your employment with the Company for Good Reason or if you resign 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) your outstanding but unvested restricted stock units, totaling no more than 11,500 shares of the Company’s stock, shall be vested before your date of termination or resignation; and (b) for a period of 10 months following your date of termination or resignation the Company will continue to pay to you your Base Salary, and will pay medical and dental benefits under the Company’s medical and dental plans then in effect.”

 

“Any cash severance will be paid by the Company as salary continuation in accordance with its regular payment 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 other any other deductions required by law.”

 

The remaining provisions of your employment letter dated November 26, 2013 remain unchanged by this letter agreement.

 

Please evidence your agreement with these changes to your employment letter dated November 26, 2013 by signing and dating in the space provided below, and then return to me this fully signed letter no later than 5 pm EDT tomorrow, Friday, August 26, 2016.

 

 

Sincerely,

 

/s/ George H. Kirby 

George H. Kirby

OPT President & CEO

 

 

AGREED TO:          __/s/ Mark A. Featherstone________          ___August 25, 2016___

                                          Mark. A. Featherstone                                            DateBlueprint

 

Exhibit 10.17

 

AEHR TEST SYSTEMS, INC.

 

2006 EQUITY INCENTIVE PLAN

 

           STOCK OPTION AWARD AGREEMENT

 

 

Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement.

 

 

I.

NOTICE OF STOCK OPTION GRANT

 

	
 Name (“Participant”): 
	
  «Name»

	
 Address: 
	
 «Address»

You have been granted an option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

 

	
 Grant Number
	
 «GrantNumber»

	
 Date of Grant
	
  «GrantDate»

	
 Vesting Commencement Date

	
 «VCD»

	
 Exercise Price per Share
	
 «SharePrice»

	
 Total Number of Shares Granted
	
 «Shares»

	
 Total Exercise Price

	
 «TotalExercisePrice»

	
 Type of Option:
	
 [ ] Incentive Stock Option

	
   
	
 [ ] Nonstatutory Stock Option

	
 Term/Expiration Date:  
	
 «Term» or «ExpiationDate»

 

Vesting Schedule:

 

             [INSERT VESTING SCHEDULE]

 

Termination Period:

 

This Option may be exercised for three months after Optionee ceases to be a Service Provider. Upon the death or Disability of the Optionee, this Option may be exercised for [one year] after Optionee ceases to be a Service Provider. In no event shall this Option be exercised later than the Term/Expiration Date as provided above.

 

II.

AGREEMENT

 

1. Grant of Option. The Plan Administrator of the Company hereby grants to the Optionee named in the Notice of Grant attached as Part I of this Agreement (the "Optionee'') an option (the "Option") to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice
of Grant (the "Exercise Price"), subject to the terms arid conditions of the Plan, which is incorporated herein by reference. Subject to Section 15(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Option Agreement, the terms and conditions of the Plan shall prevail.

 

    If designated in the Notice of Grant as an Incentive Stock Option ("ISO"), this Option is intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule of Code Section422(d) it shall be treated as a Nonstatutory Stock
Option (''NSO").

 

 

 

 

                   2. Exercise of Option.

 

(1)    Right to Exercise. This Option is exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and the applicable provisions of the Plan and this Option Agreement.

 

(2)    Method of Exercise. This Option is exercisable by delivery of an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"), which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the "Exercised Shares"), and such
other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be completed by the Optionee and delivered to [Secretary] of the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price.

 

No Shares shall be issued pursuant to the exercise of this Option unless such issuance and exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such Exercised Shares.

 

3. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee:

 

(1) cash;

 

(2) check;

 

(3) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan; or

 

(4) surrender of other Shares which (i) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six (6) months on the date of surrender, and (ii)
have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares.

 

4. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by the Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.

 

5. Term of Option. This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option Agreement.

 

6. Tax Consequences. Some of the federal tax consequences relating to this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

 

(1) Exercising the Option.

 

(a) Nonstatutory Stock Option. The Optionee may incur regular federal income tax liability upon exercise of a NSO. The Optionee will be treated as having received compensation income (taxable
at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If the Optionee is an Employee or a former Employee, the Company will be required to withhold from his or her compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver
Shares if such Withholding amounts are not delivered at the time of exercise.

 

(b) Incentive Stock Option. If this Option qualifies as an ISO, the Optionee will have no regular federal income tax liability upon its exercise, although the excess,
if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal tax purposes and may subject the Optionee to alternative minimum tax in the year of exercise. In the event that the Optionee ceases to be an Employee but remains a Service Provider, 

 

 

 

any Incentive Stock Option of the Optionee that remains unexercised shall cease to qualify as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option on the date three (3) months and one (1) day following such change of status.

 

(2) Disposition of Shares.

 

(a) NSO. If the Optionee holds NSO Shares for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes.

 

(b) ISO. If the Optionee holds ISO Shares for at least one year after exercise and two years after the grant date, any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes. If the Optionee disposes of ISO Shares within one year after exercise or two years after the grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the lesser of (A) the difference between the Fair Market Value of the Shares acquired on the date of exercise and the aggregate Exercise Price, or (B) the difference between the sale price of such Shares and the
aggregate Exercise Price. Any additional gain will be taxed as capital gain, short-term or long-term depending on the period that the ISO Shares were held.

 

(3) Notice of Disqualifying Disposition of ISO Shares. If the Optionee sells or otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later of (i) two years
after the grant date, or (ii) one year after the exercise date, the Optionee shall immediately notify the Company in writing of such disposition. The Optionee agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized from such early disposition of ISO Shares by payment in cash or out of the current earnings paid to the Optionee.

 

7. Entire Agreement Governing Law. The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject
matter hereof, and may not be modified adversely to the Optionee's interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal substantive laws, but not the choice of law rules, of California.

 

 

8.NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COM:PANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

 

 

By your signature and the signature of the Company's representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan an Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Option Agreement. Optionee further agrees to notify the Company upon any change in the residence address indicated below.

 

 

 

 

 

OPTIONEE:                                  AEHR TEST SYSTEMS

 

 

 ------------------------------------- -------------------------------------

    Signature                                    By

 

 

------------------------------------- -------------------------------------

   Print Name                                 Title

 

------------------------------------- -------------------------------------

    Residence Address

 

-------------------------------------

 

 

CONSENT OF SPOUSE

 

The undersigned spouse of Optionee has read and hereby approves the terms and conditions of the Plan and this Option Agreement. In consideration of the Company’s granting his or her spouse the right to purchase Shares as set forth in the Plan and this Option Agreement, the undersigned hereby agrees to be irrevocably bound by the terms and conditions of the Plan and
this Option Agreement and further agrees that any community property interest shall be similarly bound. The undersigned hereby appoints the undersigned’s spouse as attorney-in-fact for the undersigned with respect to any amendment or exercise of rights under the Plan or this Option Agreement.

 

 

 

-------------------------------------

 Spouse of Optionee

 

 

EXHIBIT A

 

2006 EQUITY INCENTIVE PLAN EXERCISE NOTICE

 

EXERCISE NOTICE

Aehr Test Systems

400 Kato Terrace

Fremont, CA 94539

 

Attention: [Secretary]

 

1. Exercise of Option. Effective as of today,             , 20_, the undersigned ("Purchaser") hereby elects
to purchase shares (the "Shares") of the common stock of Aehr Test Systems (the "Company") under and pursuant to the 1996 Stock Option Plan (the "Plan") and the Stock Option Agreement dated              , 20_ (the "Option Agreement"). The purchase price for the Shares shall be $             ,
as required by the Option Agreement.

 

2. Delivery of Payment. Purchaser herewith delivers to the Company the full purchase price for the Shares.

 

3. Representations of Purchaser. Purchaser acknowledges that Purchaser has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 

 

4. Rights as Shareholder. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends
or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 13 of the Plan.

 

5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with
any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

 

 

 

 

6. Entire Agreement; Governing Law. The Plan and Option Agreement are incorporated herein by reference. This Agreement, the Plan and the Option Agreement constitute the entire agreement of the parties with respect to
the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser’s interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the internal substantive laws, but not the choice of law rules, of California.

 

 

	Submitted by:
	
 
	
 
	
Accepted by: 
	
 

	
PURCHASER:

	
 
	
 
	
AEHR TEST SYSTEMS

	
 

	
 

	
 
	
 
	
 

	
 

	
Signature
	
 
	
 
	
By
	
 

	
  
	
 
	
 
	
  
	
 

	
  
	
 
	
 
	
  
	
 

	
Print Name

	
 
	
 
	
Title
	
 

	
  
	
 
	
 
	
  
	
 

	
Address:
	
 
	
 
	
Address:
	
 

	
  
	
 
	
 
	
  
	
 

	
  
	
 
	
 
	
400 Kato Terrace

	
 

	
  
	
 
	
 
	
Freemont, CA 94539

	
 

	
  
	
 
	
 
	
  
	
 

	
  
	
 
	
 
	
  
	
 

	
  
	
 
	
 
	
  
	
 

	
  
	
 
	
 
	
Date Received

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