1997 Stock Option Plan - Odyssey Marine Exploration Inc.
ODYSSEY MARINE EXPLORATION, INC.
1997 STOCK OPTION PLAN
2,000,000 SHARES
This Stock Option Plan was adopted this 18th day of August 1997, by
Odyssey Marine Exploration, Inc., a Nevada corporation, upon the following
terms and conditions:
1. Definitions. Except as otherwise expressly provided in this Plan,
the following capitalized terms shall have the respective meanings hereafter
ascribed to them:
(a) "Board" shall mean the Board of Directors of the
Corporation;
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended;
(c) "Consultant" shall mean a person who provides services to
the Corporation as an independent contractor;
(d) "Corporation" means Odyssey Marine Exploration, Inc. and
each and all of any present and future subsidiaries;
(e) "Date of Grant" shall mean, for each participant in the
Plan, the date on which the Board approves the specific grant of stock options
to that participant;
(f) "Employee" shall be an employee of the Corporation or any
subsidiary of the Corporation;
(g) "Grantee" shall mean the recipient of an Incentive Stock
Option or a Non-statutory Option under the Plan;
(h) "Incentive Stock Option" shall refer to a stock option which
qualifies under Section 422 of the Code.
(i) "Non-statutory Option" shall mean an option which is not an
Incentive Stock Option.
(j) "Shares" shall mean the Corporation's common stock, $.0001
par value;
(k) "Shareholders" shall mean owners of record of any Shares.
2. Purpose. The purpose of this Stock Option Plan (the "Plan") is
two-fold. First, the Plan will further the interests of the Corporation and
its shareholders by providing incentives in the form of stock options to
employees who contribute materially to the success and profitability of the
Corporation. Such stock options will be granted to recognize and reward
outstanding individual performances and contributions and will give selected
employees an interest in the Corporation parallel to that of the shareholders,
thus enhancing their proprietary interest in the Corporation's continued
success and progress. This program also will enable the Corporation to
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attract and retain experienced employees. Second, the Plan will provide the
Corporation flexibility and the means to reward directors and consultants who
render valuable contributions to the Corporation.
3. Administration. This Plan will be administered by the Board.
The Board has the exclusive power to select the participants in this Plan, fix
the awards to each participant, and make all other determinations necessary or
advisable under the Plan, to determine whether the performance of an eligible
employee warrants an award under this Plan, and to determine the amount and
duration of the award. The Board has full and exclusive power to construe and
interpret this Plan, to prescribe, amend and rescind rules and regulations
relating to this Plan, and to take all actions necessary or advisable for this
Plan's administration. The Board shall have full power and authority to
determine, and at the time such option is granted shall clearly set forth,
whether the option shall be an Incentive Stock Option or a Non-statutory
Option. Any such determination made by the Board will be final and binding
on all persons. A member of the Board will not be liable for performing any
act or making any determination required by or pursuant to the Plan, if such
act or determination is made in good faith. The Board has the authority to
set up a committee of directors to administer the Plan and to delegate
whichever of the above powers it determines.
4. Participants. Any employee, officer, director or consultant that
the Board, in its sole discretion, designates is eligible to participate in
this Plan. However, only employees of the Corporation shall be eligible to
receive grants of Incentive Stock Options. The Board's designation of a
person as a participant in any year does not require the Board to designate
that person to receive an award under this Plan in any other year or, if so
designated, to receive the same award as any other participant in any year.
The Board may consider such factors as it deems pertinent in selecting
participants and in determining the amount of their respective awards,
including, but without being limited to: (a) the financial condition of the
Corporation; (b) expected profits for the current or future years; (c) the
contributions of a prospective participant to the profitability and success of
the Corporation; and (d) the adequacy of the prospective participant's other
compensation. The Board, in its discretion, may grant benefits to a
participant under this Plan, even though stock, stock options, stock
appreciation rights or other benefits previously were granted to him under
this or another plan of the Corporation, whether or not the previously granted
benefits have been exercised, but the participant may hold such options only
on the terms and subject to the restrictions hereafter set forth. Subject to
the foregoing limitation, a person who has participated in another benefit
plan of the Corporation may also participate in this Plan.
5. Kinds of Benefits. Awards under this Plan, if any, will be
granted in options to acquire Shares as described below.
6. Options; Expiration; Limitations. Any Incentive Stock Option
granted under this Plan shall automatically expire ten years after the Date of
Grant or at such earlier time as may be described in Article 9 or directed by
the Board in the grant of the option. Notwithstanding the preceding sentence,
no Incentive Stock Option granted to a Shareholder who owns, as of the Date of
Grant, stock possessing more than ten percent of the total combined voting
power of all classes of stock of the Corporation shall, in any event, be
exercisable after the expiration of five years from the Date of Grant. For
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the purpose of determining under any provision of this Plan whether a
shareholder owns stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Corporation, such Shareholder
shall be considered as owning the stock owned, directly or indirectly, by or
for his brothers and sisters (whether by the whole or half blood), spouse,
ancestors and lineal descendants, and stock owned, directly or indirectly, by
or for a corporation, partnership, estate or trust shall be considered as
being owned proportionately by or for its shareholders, partners or
beneficiaries.
Upon the exercise of an option, the Corporation shall deliver to the
participant certificates representing authorized but unissued Shares. The
cumulative total number of shares which may be subject to options issued and
outstanding pursuant to this Plan is limited to 2,000,000 shares. This amount
automatically will be adjusted in accordance with Article 21 of this Plan. If
an option is terminated, in whole or in part, for any reason other than its
exercise, the Board may reallocate the shares subject to that option (or to
the part thereof so terminated) to one or more other options to be granted
under this Plan.
7. Option Exercise Price. Each option shall state the option price,
which shall be not less than 100% of the fair market value of the Shares on
the Date of Grant or the par value thereof whichever is greater.
Notwithstanding the preceding sentence, in the case of a grant of an Incentive
Stock Option to an employee who, as of the Date of Grant, owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Corporation or its Parent or Subsidiaries, the option
price shall not be less than 110% of the fair market value of the Shares on
the Date of Grant or the par value thereof, whichever is greater.
During such time as the Shares are not traded in any securities market,
the fair market value per share shall be determined by a good faith effort of
the Board, using its best efforts and judgment. During such time as the
Shares are traded in a securities market but not listed upon an established
stock exchange, the fair market value per share shall be the highest closing
bid price in the securities market in which it is traded on the Date of Grant,
as reported by the National Association of Securities Dealers, Inc. If the
Shares are listed upon an established stock exchange or exchanges such fair
market value shall be deemed to be the highest closing price on such stock
exchange or exchanges on the Date of Grant, or if no sale of any Shares shall
have been made on any stock exchange on that day, on the next preceding day on
which there was such a sale. Subject to the foregoing, the Board shall have
full authority and discretion in fixing the option price and shall be fully
protected in doing so.
8. Maximum Option Exercise. The aggregate fair market value
(determined as of the Date of Grant) of the stock with respect to which
Incentive Stock Options are exercisable for the first time by a grantee during
any calendar year (under all such plans of the Corporation and its parent or
subsidiary, if any) shall not exceed $100,000. For purposes of this Article
8, the value of stock acquired through the exercise of Non-statutory Options
shall not be included in the computation of the aggregate fair market value.
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9. Exercise of Options.
(a) No stock option granted under this Plan may be exercised
before the Grantee's completion of such period of services as may be specified
by the Board on the Date of Grant. Furthermore, the timing of the exercise of
any option granted under this Plan may be subject to a vesting schedule based
upon years of service or an expiration schedule as may be specified by the
Board on the Date of Grant. Thereafter, or if no such period is specified
subject to the provisions of subsections (c), (d), (e), (f) and (g) of this
Article 9, the Grantee may exercise the option in full or in part at any time
until expiration of the option.
A Grantee cannot exercise an Incentive Stock Option granted under
this Plan unless, at the time of exercise, he has been continuously employed
by the Corporation since the date the option was granted. The Board may
decide in each case to what extent bona fide leaves of absence for illness,
temporary disability, government or military service, or other reasons will
not be deemed to interrupt continuous employment.
(b) Unless an Option specifically provides to the contrary, all
options granted under this Plan shall immediately become exercisable in full
in the event of the consummation of any of the following transactions:
(i) A merger or acquisition in which the Corporation is not
the surviving entity;
(ii) The sale, transfer or other disposition of all or
substantially all of the assets of the Corporation; or
(iii) Any merger in which the Corporation is the surviving
entity but in which fifty percent (50%) or more of the Corporation's
outstanding voting stock is issued to holders different from those who held
the stock immediately prior to such merger.
(c) Except as provided in subsections (d), (e) and (f) of this
Article 9, a Grantee cannot exercise an Incentive Stock Option after he ceases
to be an employee of the Corporation, unless the Board, in its sole
discretion, grants the recipient an extension of time to exercise the
Incentive Stock Option after cessation of employment. The extension of time
of exercise that may be granted by the Board under this subsection (c) shall
not exceed three months after the date on which the Grantee ceases to be an
employee and in no case shall extend beyond the stated expiration date of the
option.
(d) If the employment of a Grantee is terminated by the
Corporation for a cause as defined in subsection (i) of this Article 9, all
rights to any stock option granted under this Plan shall terminate, including
but not limited to the ability to exercise such stock options.
(e) If a Grantee ceases to be an employee as a result of
retirement, he may exercise the Incentive Stock Option within three months
after the date on which he ceases to be an employee (but no later than the
stated expiration date of the option) to the extent that the Incentive Stock
Option was exercisable when he ceased to be an employee. An employee shall be
regarded as retired if he terminates employment after his sixty-fifth
birthday.
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(f) If a Grantee ceases to be an employee because of disability
(within the meaning of Section 105(d)(4) of the Code), or if a Grantee dies,
and if at the time of the Grantee's disability or death he was entitled to
exercise an Incentive Stock Option granted under this Plan, the Incentive
Stock Option can be exercised within 12 months after his death or termination
of employment on account of disability (but no later than the stated
expiration date of the option), by the Grantee in the case of disability or,
in case of death, by his personal representative, estate or the person who
acquired by gift, bequest or inheritance his right to exercise the Incentive
Stock Option. Such options can be exercised only as to the number of shares
for which they could have been exercised at the time the Grantee died or
became disabled.
(g) With respect to Non-statutory Options granted to Board
members, the Board may provide on the Date of the Grant that such options will
expire a specified number of days after such Board member ceases to be a
member of the Board. In the absence of any such provision, the option will
expire on the stated expiration date of the option.
(h) Any stock option granted under the Plan will terminate, as a
whole or in part, to the extent that, in accordance with this Article 9, it no
longer can be exercised.
(i) For purposes of this Article 9, "cause" shall mean the
following:
(1) Fraud or criminal misconduct;
(2) Gross negligence;
(3) Willful or continuing disregard for the safety or
soundness of the Corporation;
(4) Willful or continuing violation of the published rules
of the Corporation.
10. Exercise of Options.
10.1 Notice. Options may be exercised only by delivery to the
Corporation of a written stock option exercise agreement (the "Exercise
Agreement") in a form approved by the Board (which need not be the same for
each Grantee), stating the number of shares being purchased, the restrictions
imposed on the shares, if any, and such representations and agreements
regarding Grantee's investment intent and access to information, if any, as
may be required by the Corporation to comply with applicable securities laws,
together with payment in full of the exercise price for the number of Shares
being purchased.
10.2 Payment. Payment for the shares may be made in cash (by
check) or, where approved by the Board in its sole discretion and where
permitted by law: (a) by cancellation of indebtedness of the Corporation to
the Grantee; (b) by surrender of shares of common stock of the Corporation
having a Fair Market Value equal to the applicable exercise price of the
Option that have been owned by Grantee for more than six months (and which
have been paid for within the meaning of the Securities and Exchange
Commission ("SEC") Rule 144 and, if such shares were purchased from the
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Corporation by use of a promissory note, such note has been fully paid with
respect to such shares), or were obtained by Grantee in the open public
market; (c) by waiver of compensation due or accrued to Grantee for services
rendered; (d) provided that a public market for the Corporation's stock
exists, through a "same day sale" commitment from Grantee and a broker-dealer
that is a member of the National Association of Securities Dealers (an "NASD
Dealer") whereby Grantee irrevocably elects to exercise the Option and to sell
a portion of the shares so purchased to pay for the exercise price and
whereby the NASD Dealer irrevocably commits upon receipt of such shares to
forward the exercise price directly to the Corporation; (e) provided that a
public market for the Corporation's stock exists, through a "margin"
commitment from Grantee and an NASD Dealer whereby Grantee irrevocably elects
to exercise the Option and to pledge the shares so purchased to the NASD
Dealer in a margin account as security for a loan from the NASD Dealer in the
amount of the exercise price, and whereby the NASD Dealer irrevocably commits
upon receipt of such shares to forward the exercise price directly to the
Corporation; or (f) by any combination of the foregoing.
11. Taxes; Compliance with Law; Approval of Regulatory Bodies. The
Corporation, if necessary or desirable, may pay or withhold the amount of any
tax attributable to any amount payable or shares deliverable under this Plan
and the Corporation may defer making payment on delivery until it is
indemnified to its satisfaction for that tax. Stock options are exercisable,
and shares can be delivered under this Plan, only in compliance with all
applicable federal and sate laws and regulations, including, without
limitation, state and federal securities laws, and the rules of all stock
exchanges on which the Corporation's shares are listed at any time. Any
certificate issued pursuant to options granted under this Plan shall bear such
legends and statements as the Board deems advisable to assure compliance with
federal and state laws and regulations. No option may be exercised, and
shares may not be issued under this Plan, until the Corporation has obtained
the consent or approval of every regulatory body, federal or state, having
jurisdiction over such matters as the Board deems advisable.
Specifically, in the event that the Corporation deems it necessary or
desirable to file a registration statement with the Securities and Exchange
Commission or any State Securities Commission, no option granted under the
Plan may be exercised, and shares may not be issued, until the Corporation has
obtained the consent or approval of such Commission.
In the case of the exercise of an option by a person or estate acquiring
by bequest or inheritance the right to exercise such option, the Board may
require reasonable evidence as to the ownership of the option and may require
such consents and releases of taxing authorities as the Board deems advisable.
12. Assignability. Each option granted under this Plan is not
transferable other than by will or the laws of descent and distribution. Each
option is exercisable during the life of the Grantee only by him.
13. Tenure. A participant's right, if any, to continue to serve the
Corporation as an officer, employee or otherwise, will not be enlarged or
otherwise affected by his designation as a participant under this Plan, and
such designation will not in any way restrict the right of the Corporation to
terminate at any time the employment or affiliation of any participant for
cause or otherwise.
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14. Amendment and Termination of Plan. The Board may alter, amend or
terminate this Plan from time to time without approval of the shareholders.
However, without the approval of the shareholders, no amendment will be
effective that:
(a) materially increases the benefits accruing to participants
under the Plan;
(b) increases the cumulative number of shares that may be
delivered upon the exercise of options granted under the Plan or the aggregate
fair market value of options which a participant may exercise in any calendar
year;
(c) materially modifies the eligibility requirements for
participation in the Plan; or
(d) amends the requirements of paragraphs (a)-(c) of this
Article 14.
Any amendment, whether with or without the approval of shareholders, that
alters the terms or provisions of an option granted before the amendment will
be effective only with the consent of the participant to whom the option was
granted or the holder currently entitled to exercise it, except for
adjustments expressly authorized by this Plan.
15. Expenses of Plan. The expenses of the Plan will be borne by the
Corporation.
16. Duration of Plan. Options may only be granted under this Plan
during the ten years immediately following the earlier of the adoption of the
Plan or its approval by the Shareholders. Options granted during that ten
year period will remain valid thereafter in accordance with their terms and
the provisions of this Plan.
17. Other Provisions. The option agreements authorized under the
Plan shall contain such other provisions including, without limitation,
restrictions upon the exercise of the option, as the Board shall deem
advisable. Any such option agreements, which are intended to be "Incentive
Stock Options" shall contain such limitations and restrictions upon the
exercise of the option as shall be necessary in order that such option will be
an "Incentive Stock Option" as defined in Section 422 of the Code.
18. Indemnification of the Board. In addition to such other rights
of indemnification as they may have as directors, the members of the Board
shall be indemnified by the Corporation against the reasonable expenses,
including attorneys' fees actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any
appeal therein, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan or any
option granted thereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Corporation) or paid by them in satisfaction of a judgment in
any such action, suit or proceeding, except in relation to matters as to which
it shall be adjudged in such action, suit or proceeding that such director is
liable for negligence or misconduct in the performance of his duties.
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19. Application of Funds. The proceeds received by the Corporation
from the sale of stock pursuant to options granted under this Plan will be
used for general corporate purposes.
20. No Obligation to Exercise Option. The granting of an option
shall impose no obligation upon the Grantee to exercise such option.
21. Adjustment Upon Change of Shares. If a reorganization, merger,
consolidation, reclassification, recapitalization, combination or exchange of
shares, stock split, stock dividend, rights offering, or other event affecting
shares of the Corporation occurs, then the number and class of shares to which
options are authorized to be granted under this Plan, the number and class of
shares then subject to options previously granted under this Plan, and the
price per share payable upon exercise of each option outstanding under this
Plan shall be equitably adjusted by the Board to reflect such changes.
22. Number and Gender. Unless otherwise clearly indicated in this
Plan, words in the singular or plural shall include the plural and singular,
respectively, where they would so apply, and words in the masculine or neuter
gender shall include the feminine, masculine or neuter gender where
applicable.
23. Applicable Law. The validity, interpretation and enforcement of
this Plan are governed in all respects by the laws of Nevada.
24. Effective Date of Plan. This Plan shall not take effect until
adopted by the Board. This Plan shall terminate if it is not approved by the
holders of a majority of the outstanding shares of the capital stock of the
Corporation, which approval must occur within the period beginning twelve
months before and ending twelve months after the Plan is adopted by the Board.
ODYSSEY MARINE EXPLORATION, INC.
By/s/ John C. Morris
John C. Morris, President
I hereby certify that the foregoing Stock Option Plan was approved by the
Board of Directors of Odyssey Marine Exploration, Inc. the 18th day of August
1997.
/s/ David Morris
David Morris, Secretary
I hereby certify that the foregoing Stock Option Plan was approved by the
Shareholders of Odyssey Marine Exploration, Inc. the 8th day of September
1997.
/s/ David Morris
David Morris, Secretary
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