Analysis Report on Executive Equity Incentive Plan of Kopin Corporation (KOPN)

Based on the collected data, I now provide you with a comprehensive analysis report:

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Kopin Corporation granted a new round of equity incentives to its core executives on January 3, 2025[1], which was implemented based on the company’s 2020 Equity Incentive Plan. This plan aims to closely link executive compensation to the company’s performance, thereby promoting the alignment of interests between management and shareholders.

Executive Position	Restricted Stock Units (RSU)	Stock Options	Exercise Price	Premium Rate
Michael Murray (CEO & Chairman)	408,634 shares	591,366 shares	$1.76	34% Premium
Paul Baker (Chief Operating Officer)	146,350 shares	-	-	-
Richard Sneider (Chief Financial Officer)	136,360 shares	-	-	-

[1] InvestingPro, [0] Jinling API Market Data

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The design of this equity incentive plan reflects Kopin’s clear strategic direction:

RSU grants are directly tied to specific revenue targets for FY2025. According to the latest financial report, Q3 FY2025 revenue reached $11.96 million, slightly below the market expectation of $13.08 million[0], but the incentive plan clearly identifies revenue growth as the core assessment indicator.

Operating profit targets are included in the incentive assessment scope. The company achieved operating profit of $0.24 million in Q3 FY2025, a significant improvement from the previous quarter[0]. This indicates that management is committed to transitioning the company from the R&D investment phase to the profitability phase.

In December 2025, the company announced two key executive appointments[2]: Bill Maffucci was promoted to Senior Vice President of Product Development and Strategy, and Iwan Dodd was appointed Senior Vice President of Business Development. These appointments form a synergistic effect with the equity incentive plan, aiming to accelerate the company’s market expansion in the micro-display and optical solutions sectors.

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The equity incentive plan uses a “Double Trigger” mechanism to accelerate the vesting of unexercised options in the event of a change in control[3], which has multiple strategic implications:

• Talent Retention
  : Ensures core management does not leave during critical strategic periods
• Strategic Consistency
  : Supports long-term R&D and business expansion plans without interference from short-term M&A activities
• Value Creation Orientation
  : Directly links management wealth to the company’s long-term value growth

After the implementation of the equity incentive plan, analysts fine-tuned Kopin’s valuation model[4]:

• Fair value adjusted from $4.85 to $4.69
• Discount rate slightly increased from 10.44% to 10.52%
• Revenue growth expectation adjusted from 31.04% to 26.40%

These adjustments reflect the market’s cautious attitude towards Kopin regarding government budget flows and order timing, but the overall rating remains positive.

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After the announcement of the equity incentive plan, Kopin’s stock showed significant volatility and growth momentum[0]:

Time Period	Return Rate	Remarks
Past 6 Months	+69.85%	Strong Growth
Past 1 Year	+129.64%	Significantly Outperforms the Market
Past 3 Years	+86.40%	Stable Long-Term Performance
YTD	+15.28%	Strong Start to 2026

[0] Jinling API Market Data

Currently, analysts hold a

consensus on Kopin[5]:

Rating Category	Number of Analysts	Average Target Price
Buy	5	-
Hold	2	-
Consensus Rating	Buy	$5.50

$3.00 - $6.00, with compared to the current stock price of $2.87[0]

CEO Michael Murray received 591,366 stock options with an exercise price of $1.76, representing a 34% premium over the grant date stock price of $1.31. This design sends a strong signal of management’s confidence in the company’s future stock price growth — management can only benefit from the options if the stock price exceeds the exercise price.

In Q4 2024, the company completed a $41 million private placement, introducing new shareholders including Theon International (strategic investor), Honda Holdings, and Unusual Machines[5]. This financing activity aligns with the equity incentive plan, indicating industrial capital’s recognition of Kopin’s technical roadmap and growth prospects.

The company maintains a current ratio of 1.47, with a sound financial position[0]. Good liquidity provides the necessary support for management to implement long-term strategies, reducing investors’ concerns about the company’s financial risks.

Despite the positive signals from the equity incentive plan, investors still need to pay attention to the following risks:

• High Stock Price Volatility
  : 36-month beta ranges from 2.92 to 2.69, with stock price volatility significantly higher than the market average[5]
• Short-Term Performance Pressure
  : Q3 FY2025 revenue was slightly below expectations, creating challenges for meeting performance targets
• Market Competition
  : The augmented reality and micro-display markets are highly competitive, with rapid technological iteration
• Dependence on Government Budget
  : Defense business accounts for as much as 83.1%[0], making it vulnerable to changes in government defense budgets

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Dimension	Impact Assessment	Rating
Strategic Alignment	High alignment between executive interests and the company’s long-term growth targets	★★★★★
Incentive Effectiveness	Exercise price premium design ensures benefits only from value creation	★★★★☆
Talent Retention Capability	“Double Trigger” mechanism ensures management stability	★★★★☆
Investor Signal	Clearly conveys management’s confidence in the company’s future	★★★★☆
Performance Linkage	Three-dimensional assessment of revenue, profit, and individual performance	★★★★☆

Kopin Corporation’s 2020 Equity Incentive Plan effectively binds the personal wealth of core executives to the company’s long-term development through a well-designed grant structure and performance-linked mechanism. This plan embodies the following key features:

1. Long-Term Orientation
   : Through phased vesting (RSUs) and exercise periods (stock options), management is encouraged to focus on the company’s long-term value rather than short-term stock price fluctuations

2. Performance Linkage
   : Directly links equity incentives to revenue, operating profit, and individual performance targets, avoiding the issue of “free stock grants”

3. Market Confidence Support
   : The equity incentive plan resonates with strategic investor financing and management share purchases, enhancing investors’ confidence in the company’s development prospects

4. Risk Control
   : Although the company is still in a loss-making state (net profit margin of -13.48%), the latest quarter has achieved profitability, with a sound financial position

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[1] InvestingPro - “Kopin Corp announces executive compensation updates” (https://www.investing.com/news/sec-filings/kopin-corp-announces-executive-compensation-updates-93CH-3804167)

[2] Business Wire - “Kopin Corporation Accelerates Growth Strategy with Key Executive Appointments” (https://www.businesswire.com/news/home/20251204125297/en/)

[3] SEC.gov - Kopin Corporation Form DEF 14A (https://www.sec.gov/Archives/edgar/data/771266/000164117225011816/formdef14a.htm)

[4] Yahoo Finance - “How Recent Contracts Are Rewriting The Kopin (KOPN) Story For Analysts And Investors” (https://finance.yahoo.com/news/recent-contracts-rewriting-kopin-kopn-161015269.html)

[5] Insider Monkey - “Kopin Corporation (KOPN) Gains Strong Buy Support as Strategic Partnerships Drive Its AR Expansion” (https://www.insidermonkey.com/blog/kopin-corporation-kopn-gains-strong-buy-support-as-strategic-partnerships-drive-its-ar-expansion-1654717/)

[0] Jinling AI Market Data API