2009 MARINE EXPLORATION, INC.
STOCK OPTION AND AWARD PLAN
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SECTION 1: GENERAL PURPOSE OF PLAN
The name of this
plan is the 2009 MARINE EXPLORATION, INC. STOCK OPTION
AND AWARD PLAN (the "Plan"). The
purpose of the Plan is to enable MARINE
EXPLORATION, INC., a Colorado company (the
"Company"), and any Parent or any
Subsidiary to obtain and retain
the services of the types of Employees,
Consultants and Directors who will
contribute to the Company's long range
success and to provide incentives which are
linked directly to increases in
share value which will inure to the benefit of all stockholders of
the Company.
SECTION
2: DEFINITIONS
For purposes of the Plan, the
following terms shall be defined as set forth
below:
"Administrator" shall have the meaning as
set forth in Section 3,
hereof.
"Board" means the
Board of Directors of the Company.
"Cause"
means (i) failure by an Eligible
Person to substantially
perform his or her duties and obligations to the
Company (other than any such
failure resulting from his or her incapacity due to physical or
mental illness);
(ii) engaging in misconduct or a fiduciary breach which
is or potentially is
materially injurious to the Company or its
stockholders; (iii) commission of a
felony; (iv) the commission of a
crime against the Company which is
or
potentially is materially injurious to the Company; or (v) as
otherwise provided
in the Stock Option Agreement or Stock Purchase Agreement.
For purposes of this
Plan, the existence of Cause shall be determined by
the Administrator in its
sole discretion.
"Change in
Control" shall mean:
The
consummation of a merger or consolidation of the
Company with or
into another entity or any other corporate
reorganization, if more than 50% of
the combined voting power (which voting power shall
be calculated by assuming
the conversion of all equity securities
convertible (immediately or at some
future time) into shares entitled to vote, but not assuming
the exercise of any
warrant or right to subscribe to or purchase those shares) of
the continuing or
Surviving Entity's securities
outstanding immediately after such
merger,
consolidation or other reorganization is
owned, directly or indirectly, by
persons who were not stockholders of the
Company immediately prior to such
merger, consolidation or other reorganization; provided, however,
that in making
the determination of ownership by the stockholders of the
Company, immediately
after the reorganization, equity securities which persons own
immediately before
the reorganization as stockholders of another party to the
transaction shall be
disregarded; or
The sale,
transfer or other disposition of all or substantially all of
the Company's assets.
A
transaction shall not constitute a Change in
Control if its sole
purpose is to change the state of the Company's
incorporation or to create a
holding company that will be owned in substantially the same
proportions by the
persons who held the Company's securities immediately before such
transaction.
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"Code" means the
Internal Revenue Code of 1986, as amended from time to
time.
"Committee"
means a committee of the Board designated by the Board to
administer the Plan.
"Company" means
MARINE EXPLORATION, INC., a corporation organized under
the laws of the State of Colorado (or any successor
corporation).
"Consultant" means
a consultant or advisor who is a natural person or a
legal entity and who provides bona fide services to the
Company, a Parent or a
Subsidiary; provided such services are not in connection with
the offer or sale
of securities in a capital-raising transaction and do not directly
or indirectly
promote or maintain a market for the Company's securities.
"Date of
Grant" means the date on which the
Administrator adopts a
resolution expressly granting a Right to a Participant
or, if a different date
is set forth in such resolution as the Date of Grant,
then such date as is set
forth in such resolution.
"Director" means a
member of the Board.
"Disability"
means that the Optionee is unable
to engage in any
substantial gainful activity by reason of any medically
determinable physical or
mental impairment; provided, however, for purposes of determining
the term of an
ISO pursuant to Section 6.6 hereof, the term Disability
shall have the meaning
ascribed to it under Code Section 22(e)(3).
The determination of whether an
individual has a Disability shall be determined under
procedures established by
the Plan Administrator.
"Eligible
Person" means an Employee, Consultant or
Director of the
Company, any Parent or any Subsidiary.
"Employee"
shall mean any individual who is a
common-law employee
(including officers) of the Company, a Parent or a Subsidiary.
"Exercise
Price" shall have the meaning set forth
in Section 6.3
hereof.
"Exchange Act"
means the Securities Exchange Act of 1934, as amended.
"Fair
Market Value" shall mean the fair
market value of a Share,
determined as follows: (i) if the Stock is
listed on any established stock
exchange or a national market system, including without
limitation, the NASDAQ
National Market, the Fair Market Value of a share of Stock
shall be the closing
sales price for such stock (or the closing bid, if no sales
were reported) as
quoted on such system or exchange (or the exchange with the
greatest volume of
trading in the Stock) on the last
market trading day prior to the day of
determination, as reported in the Wall Street Journal
or such other source as
the Administrator deems reliable; (ii) if
the Stock is quoted on the NASDAQ
System (but not on the NASDAQ National Market) or any similar
system whereby the
stock is regularly quoted by a recognized
securities dealer but closing sale
prices are not reported, the Fair Market Value of a share of
Stock shall be the
mean between the bid and asked prices for the Stock on the
last market trading
day prior to the day of determination, as reported in the Wall
Street Journal or
such other source as the Administrator deems reliable;
or (iii) in the absence
of an established market for the
Stock, the Fair Market Value
shall be
determined in good faith by the Administrator and such
determination shall be
conclusive and binding on all persons.
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"First
Refusal Right" shall have the meaning set forth in Section
8.7
hereof.
"ISO" means a
Stock Option intended to qualify as an "incentive
stock
option" as that term is defined in Section 422(b) of the Code.
"Non-Employee Director" means a member of
the Board who is not an
Employee of the Company, a Parent or Subsidiary, who
satisfies the requirements
of such term as defined in Rule 16b-3(b)(3)(i) promulgated by the
Securities and
Exchange Commission.
"Non-Qualified Stock Option" means a Stock
Option not described in
Section 422(b) of the Code.
"Offeree"
means a Participant who is granted a Purchase Right pursuant
to the Plan.
"Optionee"
means a Participant who is granted a Stock Option
pursuant
to the Plan.
"Outside
Director" means a member of the Board who is not an
Employee
of the Company, a Parent or Subsidiary, who satisfies
the requirements of such
term as defined in Treasury Regulations (26 Code of
Federal Regulation Section
1.162-27(e)(3)).
"Parent" means any
corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the
corporations other
than the Company owns stock possessing 50% or more of the
total combined voting
power of all classes of stock in one of the other
corporations in such chain. A
corporation that attains the status of a Parent on a date
after the adoption of
the Plan shall be considered a Parent commencing as of such
date.
"Participant" means any Eligible Person selected by the
Administrator,
pursuant to the Administrator's authority in
Section 3, to receive grants of
Rights.
"Plan" means this
2009 MARINE EXPLORATION, INC. STOCK OPTION AND AWARD
PLAN, as the same may be amended or supplemented from time to
time.
"Purchase Price"
shall have the meaning set forth in Section 7.3.
"Purchase
Right" means the right to purchase Stock granted pursuant to
Section 7.
"Rights" means
Stock Options and Purchase Rights.
"Repurchase
Right" shall have the meaning set forth in Section 8.8 of
the Plan.
"Service" shall
mean service as an Employee, Director or Consultant.
"Stock" means
Common Stock of the Company.
"Stock Option" or
"Option" means an option to purchase shares of Stock
granted pursuant to Section 6.
"Stock
Option Agreement" shall have the meaning set forth in
Section
6.1.
"Stock
Purchase Agreement" shall have the meaning set forth in
Section
7.1.
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"Subsidiary"
means any corporation (other than the
Company) in an
unbroken chain of corporations
beginning with the Company, if each of the
corporations other than the last corporation in
the unbroken chain owns stock
possessing 50% or more of the total combined
voting power of all classes of
stock in one of the other corporations in such chain. A corporation
that attains
the status of a Subsidiary on a date after the
adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
"Surviving
Entity" means the Company if immediately
following any
merger, consolidation or similar transaction, the holders of
outstanding voting
securities of the Company immediately prior to the
merger or consolidation own
equity securities possessing more
than 50% of the voting power
of the
corporation existing following the merger, consolidation or similar
transaction.
In all other cases, the other entity to the
transaction and not the Company
shall be the Surviving Entity. In making the
determination of ownership by the
stockholders of an entity immediately after the merger,
consolidation or similar
transaction, equity securities which the stockholders
owned immediately before
the merger, consolidation or similar transaction
as stockholders of another
party to the transaction shall be
disregarded. Further, outstanding voting
securities of an entity shall be calculated by assuming
the conversion of all
equity securities convertible (immediately or at some
future time) into shares
entitled to vote.
"Ten Percent
Stockholder" means a person who on the Date of Grant owns,
either directly or through attribution as provided in
Section 424 of the Code,
Stock constituting more than 10% of the
total combined voting power of all
classes of stock of his or her
employer corporation or of any Parent
or
Subsidiary.
SECTION 3: ADMINISTRATION
3.1
Administrator. The Plan shall be administered by
either (i) the
Board, or (ii) a Committee appointed by the Board (the
group that administers
the Plan is referred to as the "Administrator").
3.2 Powers
in General. The Administrator shall
have the power and
authority to grant to Eligible Persons, pursuant to the
terms of the Plan, (i)
Stock Options, (ii) Purchase Rights or (iii) any combination of the
foregoing.
3.3 Specific
Powers. In particular, the Administrator shall
have the
authority: (i) to construe and interpret the Plan and apply its
provisions; (ii)
to promulgate, amend and rescind
rules and regulations relating to
the
administration of the Plan; (iii) to authorize any person to
execute, on behalf
of the Company, any instrument required to carry out
the purposes of the Plan;
(iv) to determine when Rights are to be granted under the Plan; (v)
from time to
time to select, subject to the
limitations set forth in this Plan,
those
Eligible Persons to whom Rights shall be granted; (vi)
to determine the number
of shares of Stock to be made subject to each Right; (vii) to
determine whether
each Stock Option is to be an ISO or a Non-Qualified
Stock Option; (viii) to
prescribe the terms and conditions of each Stock
Option and Purchase Right,
including, without limitation, the Purchase Price and medium of
payment, vesting
provisions and repurchase provisions, and to specify the provisions
of the Stock
Option Agreement or Stock Purchase
Agreement relating to such grant or sale;
(ix) to amend any outstanding Rights for the purpose of
modifying the time or
manner of vesting, the Purchase Price or Exercise
Price, as the case may be,
subject to applicable legal restrictions and to the
consent of the other party
to such agreement; (x) to determine
the duration and purpose of leaves of
absences which may be granted to a Participant without
constituting termination
of their employment for purposes of the
Plan; (xi) to make decisions with
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respect to outstanding Stock Options that may become
necessary upon a change in
corporate control or an event that triggers anti-dilution
adjustments; and (xii)
to make any and all other determinations which it determines
to be necessary or
advisable for administration of the Plan.
3.4 Decisions
Final. All decisions made by the Administrator
pursuant
to the provisions of the Plan shall be final and binding on
the Company and the
Participants.
3.5 The
Committee. The Board may, in its sole and absolute
discretion,
from time to time, and at any period of time during which the
Company's Stock is
registered pursuant to Section 12 of the Exchange
Act, delegate any or all of
its duties and authority with respect to the Plan to the Committee
whose members
are to be appointed by and to serve at the pleasure of the
Board. From time to
time, the Board may increase or
decrease the size of the Committee, add
additional members to, remove members (with or without cause)
from, appoint new
members in substitution therefor, and fill
vacancies, however caused, in the
Committee. The Committee shall act pursuant
to a vote of the majority of its
members or, in the case of a committee
comprised of only two members, the
unanimous consent of its members, whether present
or not, or by the unanimous
written consent of the majority of its members and minutes
shall be kept of all
of its meetings and copies thereof shall be provided to
the Board. Subject to
the limitations prescribed by the
Plan and the Board, the Committee
may
establish and follow such rules and regulations for the
conduct of its business
as it may determine to be advisable. During any period of
time during which the
Company's Stock is registered pursuant to Section
12 of the Exchange Act, all
members of the Committee shall be Non-Employee Directors and
Outside Directors.
3.6
Indemnification. In addition
to such other rights
of
indemnification as they may have as Directors or members of
the Committee, and
to the extent allowed by applicable law,
the Administrator and each of the
Administrator's consultants shall be
indemnified by the Company against the
reasonable expenses, including attorney's fees, actually
incurred in connection
with any action, suit or proceeding or in connection with any
appeal therein, to
which the Administrator or any of its consultants may be
party by reason of any
action taken or failure to act under or
in connection with the Plan or any
option granted under the Plan, and against all amounts paid by the
Administrator
or any of its consultants in settlement thereof
(provided that the settlement
has been approved by the Company, which
approval shall not be unreasonably
withheld) or paid by the Administrator or any of its consultants 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 Administrator or any of its consultants did not act in
good faith and in a
manner which such person reasonably believed to be in the
best interests of the
Company, or was grossly negligent, and in the case of a criminal
proceeding, had
no reason to believe that the conduct complained
of was unlawful; provided,
however, that within 60 days after
institution of any such action, suit or
proceeding, such Administrator or any of
its consultants shall, in writing,
offer the Company the opportunity at its own expense to
handle and defend such
action, suit or proceeding.
SECTION 4: STOCK SUBJECT TO THE PLAN
4.1 Stock
Subject to the Plan. Subject to adjustment as
provided in
Section 9, Two Million (2,000,000) shares of Common Stock
shall be reserved and
available for issuance under the Plan. Stock reserved hereunder may
consist, in
whole or in part, of authorized and unissued shares or treasury
shares.
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4.2 Basic
Limitation. The number of shares that are subject to
Rights
under the Plan shall not exceed the number of shares that then
remain available
for issuance under the Plan. The Company, during the term of
the Plan, shall at
all times reserve and keep available a sufficient
number of shares to satisfy
the requirements of the Plan.
4.3
Additional Shares. In the event that any
outstanding Option or
other right for any reason expires or is canceled or
otherwise terminated, the
shares allocable to the unexercised portion of such Option or
other right shall
again be available for the purposes of the Plan. In the event that
shares issued
under the Plan are reacquired by the
Company pursuant to the terms of any
forfeiture provision, right of repurchase or right of first
refusal, such shares
shall again be available for the purposes of the Plan.
SECTION 5: ELIGIBILITY
Eligible
Persons who are selected by the
Administrator shall be
eligible to be granted Rights hereunder subject to limitations set
forth in this
Plan; provided, however, that only
Employees shall be eligible to be granted
ISOs hereunder.
SECTION 6: TERMS AND CONDITIONS OF OPTIONS.
6.1 Stock
Option Agreement. Each grant of an Option
under the Plan
shall be evidenced by a Stock Option
Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms
and conditions of
the Plan and may be subject to any other terms
and conditions which are not
inconsistent with the Plan and which the
Administrator deems appropriate for
inclusion in a Stock Option Agreement. The
provisions of the various Stock
Option Agreements entered into under the Plan need not be
identical.
6.2 Number of
Shares. Each Stock Option Agreement shall
specify the
number of shares of Stock that are subject to the Option and
shall provide for
the adjustment of such number in accordance with
Section 9, hereof. The Stock
Option Agreement shall also specify
whether the Option is an ISO or
a
Non-Qualified Stock Option.
6.3 Exercise
Price.
6.3.1 In General. Each Stock Option Agreement shall state
the
price at which
shares subject to the Stock Option may be purchased (the
"Exercise
Price"), which shall, with respect
to Incentive Stock
Options, be not
less than 100% of the Fair Market Value of the Stock on
the Date of
Grant. In the case of Non-Qualified Stock
Options, the
Exercise
Price shall be determined in the sole
discretion of the
Administrator.
6.3.2 Payment. The Exercise Price shall be payable in a
form
described in
Section 8 hereof.
6.4 Withholding
Taxes. As a condition to the exercise of an Option, the
Optionee shall make such arrangements
as the Board may require for the
satisfaction of any federal, state, local or foreign withholding
tax obligations
that may arise in connection with such
exercise or with the disposition of
shares acquired by exercising an Option.
6.5
Exercisability. Each Stock Option Agreement shall specify the
date
when all or any installment of the Option becomes exercisable. In
the case of an
Optionee who is not an officer of the Company, a Director or
a Consultant, an
Option shall become exercisable at a rate of no
more than 25% per year over a
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four-year period commencing on January 1
following the Date of Grant and 25%
each year thereafter on January 1. Subject
to the preceding sentence, the
exercise provisions of any Stock Option
Agreement shall be determined by the
Administrator, in its sole discretion.
6.6 Term.
The Stock Option Agreement shall specify
the term of the
Option. No Option shall be exercised after the expiration of ten
years after the
date the Option is granted. Unless
otherwise provided in the Stock Option
Agreement, no Option may be exercised
(i) three months after the date the
Optionee's Service with the Company, its Parent or its
Subsidiaries terminates
if such termination is for any reason other than
death, Disability or Cause,
(ii) one year after the date the Optionee's Service with the
Company, its Parent
or its subsidiaries terminates if such
termination is a result of death or
Disability, and (iii) if the Optionee's Service with the Company,
its Parent, or
its Subsidiaries terminates for Cause, all outstanding
Options granted to such
Optionee shall expire as of the
commencement of business on the date of such
termination. The Administrator may,
in its sole discretion, waive
the
accelerated expiration provided for in (i) or (ii). Outstanding
Options that are
not exercisable at the time of termination of
employment for any reason shall
expire at the close of business on the date of such
termination.
6.7 Leaves of
Absence. For purposes of Section 6.6 above, to the extent
required by applicable law, Service
shall be deemed to continue while the
Optionee is on a bona fide leave of absence. To the
extent applicable law does
not require such a leave to be deemed to continue
while the Optionee is on a
bona fide leave of absence, such leave shall be deemed to
continue if, and only
if, expressly provided in writing by the
Administrator or a duly authorized
officer of the Company, Parent, or Subsidiary for whom
Optionee provides his or
her services.
6.8
Modification, Extension and Assumption of
Options. Within the
limitations of the Plan, the
Administrator may modify, extend or
assume
outstanding Options (whether granted by the
Company or another issuer) or may
accept the cancellation of outstanding Options (whether
granted by the Company
or another issuer) in return for the grant of
new Options for the same or a
different number of shares and at the same
or a different Exercise Price.
Without limiting the foregoing, the Administrator may amend a
previously granted
Option to fully accelerate the exercise schedule of such Option and
provide that
upon the exercise of such Option,
the Optionee shall receive shares
of
Restricted Stock that are subject to repurchase by the
Company at the Exercise
Price paid for the Option in accordance with Section 8.8.1
with such Company's
right to repurchase at such price
lapsing at the same rate as the exercise
provisions set forth in Optionee's
Stock Option Agreement. The foregoing
notwithstanding, no modification of an Option shall, without
the consent of the
Optionee, impair the Optionee's rights or increase the
Optionee's obligations
under such Option. However, a termination of the
Option in which the Optionee
receives a cash payment equal to the difference
between the Fair Market Value
and the Exercise Price for all shares subject to exercise under
any outstanding
Option shall not be deemed to impair any rights of the
Optionee or increase the
Optionee's obligations under such Option.
SECTION 7: TERMS AND CONDITIONS OF AWARDS OR SALES
7.1 Stock
Purchase Agreement. Each award or sale of shares under
the
Plan (other than upon exercise of an
Option) shall be evidenced by a Stock
Purchase Agreement between the Purchaser and the
Company. Such award or sale
shall be subject to all applicable terms and conditions
of the Plan and may be
subject to any other terms and conditions which are not
inconsistent with the
Plan and which the Board deems appropriate for
inclusion in a Stock Purchase
Agreement. The provisions of the various Stock Purchase
Agreements entered into
under the Plan need not be identical.
7.2 Duration of
Offers. Unless otherwise provided in the Stock Purchase
Agreement, any right to acquire shares under the
Plan (other than an Option)
shall automatically expire if not exercised by
the Purchaser within 15 days
after the grant of such right was communicated to the Purchaser by
the Company.
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7.3 Purchase
Price.
7.3.1 In General. Each Stock Purchase Agreement
shall state
the price at which
the Stock subject to such Stock Purchase Agreement
may be purchased
(the "Purchase Price"), which, with respect to
Stock
Purchase
Rights, shall be determined in the sole
discretion of the
Administrator.
7.3.2
Payment of Purchase Price. The Purchase Price shall
be
payable in a form
described in Section 8.
7.4
Withholding Taxes. As a condition to the purchase of
shares, the
Purchaser shall make such
arrangements as the Board may require
for the
satisfaction of any federal, state, local or foreign withholding
tax obligations
that may arise in connection with such purchase.
SECTION 8: PAYMENT; RESTRICTIONS
8.1 General Rule.
The entire Purchase Price or Exercise Price of shares
issued under the Plan shall be
payable in full by, as applicable, cash or
certified check for an amount equal to the aggregate Purchase
Price or Exercise
Price for the number of shares being purchased,
or in the discretion of the
Administrator, upon such terms as the Administrator
shall approve, (i) in the
case of an Option and provided the Company's stock is publicly
traded, by a copy
of instructions to a broker directing such broker
to sell the Stock for which
such Option is exercised, and to remit to the Company
the aggregate Exercise
Price of such Options (a "cashless exercise"), (ii) in the
case of an Option or
a sale of Stock, by paying all or a portion of the
Exercise Price or Purchase
Price for the number of shares being purchased by
tendering Stock owned by the
Optionee, duly endorsed for transfer to the Company, with a Fair
Market Value on
the date of delivery equal to the aggregate
Purchase Price of the Stock with
respect to which such Option or portion thereof is
thereby exercised or Stock
acquired (a "stock-for-stock exercise") or (iii) by a
stock-for-stock exercise
by means of attestation whereby the Optionee identifies
for delivery specific
shares of Stock already owned by Optionee
and receives a number of shares of
Stock equal to the difference between the Option shares
thereby exercised and
the identified attestation shares of Stock (an "attestation
exercise").
8.2
Withholding Payment. The Purchase Price or
Exercise Price shall
include payment of the amount of all federal,
state, local or other income,
excise or employment taxes subject to withholding (if any) by the
Company or any
parent or subsidiary corporation as a result of the exercise
of a Stock Option.
The Optionee may pay all or a portion of the tax
withholding by cash or check
payable to the Company, or, at the discretion of the
Administrator, upon such
terms as the Administrator
shall approve, by (i) cashless
exercise or
attestation exercise; (ii) stock-for-stock
exercise; (iii) in the case of an
Option, by paying all or a portion of the
tax withholding for the number of
shares being purchased by withholding shares from any transfer or
payment to the
Optionee ("Stock withholding"); or (iv) a
combination of one or more of the
foregoing payment methods. Any shares
issued pursuant to the exercise of an
Option and transferred by the
Optionee to the Company for the purpose
of
satisfying any withholding obligation shall not again be
available for purposes
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of the Plan. The Fair Market Value of the
number of shares subject to Stock
withholding shall not exceed an amount equal to the
applicable minimum required
tax withholding rates.
8.3 Services
Rendered. At the discretion of the Administrator,
shares
may be awarded under the Plan in consideration
of services rendered to the
Company, a Parent or a Subsidiary prior to the award.
8.4
Promissory Note. To the extent that a Stock
Option Agreement or
Stock Purchase Agreement so provides, in the discretion
of the Administrator,
upon such terms as the Administrator shall
approve, all or a portion of the
Exercise Price or Purchase Price (as the case may be) of shares
issued under the
Plan may be paid with a full-recourse promissory
note. However, in the event
there is a stated par value of the shares and applicable law
requires, the par
value of the shares, if newly issued, shall be paid in cash or cash
equivalents.
The shares shall be pledged as security for payment of the
principal amount of
the promissory note and interest thereon,
and held in the possession of the
Company until said amounts are repaid in full. The
interest rate payable under
the terms of the promissory note shall not be less than
the minimum rate (if
any) required to avoid the imputation of
additional interest under the Code.
Subject to the foregoing, the Administrator
(at its sole discretion) shall
specify the term, interest rate, amortization
requirements (if any) and other
provisions of such note. Unless the Administrator determines
otherwise, shares
of Stock having a Fair Market Value at least equal to
the principal amount of
the loan shall be pledged by the holder to the Company as
security for payment
of the unpaid balance of the loan and such pledge shall be
evidenced by a pledge
agreement, the terms of which shall be determined by the
Administrator, in its
discretion; provided, however, that each loan shall
comply with all applicable
laws, regulations and rules of the Board of
Governors of the Federal Reserve
System and any other governmental agency having jurisdiction.
8.5
Exercise/Pledge. To the extent that a Stock
Option Agreement or
Stock Purchase Agreement so allows and if Stock
is publicly traded, in the
discretion of the Administrator, upon such terms
as the Administrator shall
approve, payment may be made all or
in part by the delivery (on a
form
prescribed by the Administrator) of an irrevocable direction to
pledge shares to
a securities broker or lender approved by the Company,
as security for a loan,
and to deliver all or part of the loan proceeds to the Company in
payment of all
or part of the Exercise Price and any withholding taxes.
8.6 Written
Notice. The purchaser shall deliver a written notice to the
Administrator requesting that the Company direct the transfer
agent to issue to
the purchaser (or to his designee) a
certificate for the number of shares of
Common Stock being exercised or purchased or, in the case of a
cashless exercise
or share withholding exercise, for any shares that were not sold in
the cashless
exercise or withheld.
8.7 First Refusal
Right. Each Stock Option Agreement and Stock Purchase
Agreement may provide that the Company shall have
the right of first refusal
(the "First Refusal Right"), exercisable in connection
with any proposed sale,
hypothecation or other disposition of the
Stock purchased by the Optionee or
Offeree pursuant to a Stock Option Agreement or Stock Purchase
Agreement; and in
the event the holder of such Stock desires to
accept a bona fide third-party
offer for any or all of such Stock, the Stock
shall first be offered to the
Company upon the same terms and conditions
as are set forth in the bona fide
offer.
8.8
Repurchase Rights. Following a termination of
the Participant's
Service, the Company may repurchase the Participant's Rights as
provided in this
Section 8.8 (the "Repurchase Right").
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8.8.1 Repurchase Price. Following
a termination of the
Participant's
Service the Repurchase Right shall be exercisable
at a
price equal
to (i) the Fair Market Value of vested Stock or,
in the
case of
exercisable options, the Fair Market
Value of the Stock
underlying
such unexercised options less the Exercise Price, or
(ii)
the Purchase Price
or Exercise Price, as the case may be, of unvested
Stock;
provided, however, the right to repurchase
unvested stock as
described in
Section 8.8.1(ii) shall lapse at a rate of at least 33.33%
per year over
three years from the date the Right is granted.
8.8.2 Exercise of Repurchase Right. A Repurchase Right may
be
exercised only within 90
days after the termination
of the
Participant's Service (or in the case of Stock issued upon
exercise of
an Option or after
the date of termination or the purchase of
Stock
under a Stock
Purchase Agreement after the date of termination, within
90 days after the
date of the exercise or Stock purchase, whichever is
applicable) for
cash or for cancellation of indebtedness incurred
in
purchasing the
shares.
8.9
Termination of Repurchase and First Refusal
Rights. Each Stock
Option Agreement and Stock Purchase Agreement shall provide
that the Repurchase
Rights and First Refusal Rights shall have no effect
with respect to, or shall
lapse and cease to have effect when the issuer's
securities become publicly
traded or a determination is made
by counsel for the Company that
such
Repurchase Rights and First Refusal Rights are not
permitted under applicable
federal or state securities laws.
8.10 No
Transferability. Except as provided herein, a Participant
may
not assign, sell or transfer Rights,
in whole or in part, other than by
testament or by operation of the laws of descent and
distribution.
8.10.1 Permitted Transfer of
Non-Qualified Option. The
Administrator, in its sole discretion may permit
the transfer of a
Non-Qualified Option (but not an ISO or
Stock Purchase Right) as
follows: (i) by
gift to a member of the Participant's immediate family,
or (ii) by
transfer by instrument to a trust providing that the
Option
is to be passed
to beneficiaries upon death of the Settlor (either
or
both (i) or (ii)
referred to as a "Permitted Transferee"). For purposes
of this
Section 8.10.1, "immediate family" shall mean the
Optionee's
spouse
(including a former spouse subject to
terms of a domestic
relations order);
child, stepchild, grandchild, child-in-law; parent,
stepparent,
grandparent, parent-in-law; sibling and sibling-in-law, and
shall include
adoptive relationships.
8.10.2 Conditions of Permitted Transfer. A transfer
permitted
under this Section
8.10 hereof may be made only upon written notice to
and approval
thereof by Administrator. A Permitted Transferee may
not
further assign,
sell or transfer the transferred Option, in whole or in
part, other
than by testament or by operation of the laws of
descent
and
distribution. A Permitted Transferee shall agree in
writing to be
bound by the
provisions of this Plan, which a copy of said
agreement
shall
be provided to the Administrator for
approval prior to the
transfer.
SECTION
9: ADJUSTMENTS; MARKET STAND-OFF
9.1 Effect of
Certain Changes.
9.1.1 Stock Dividends, Splits, Etc. If there is any change
in
the number
of outstanding shares of Stock by reason of a stock
split,
reverse stock
split, stock dividend, recapitalization, combination
or
reclassification, then (i) the number of shares of Stock
available for
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Rights, (ii)
the number of shares of Stock covered
by outstanding
Rights, and
(iii) the Exercise Price or Purchase Price of any
Stock
Option or
Purchase Right, in effect prior to such
change, shall be
proportionately adjusted by the Administrator to
reflect any increase
or decrease in the
number of issued shares of Stock; provided, however,
that any
fractional shares resulting from the
adjustment shall be
eliminated.
9.1.2 Liquidation, Dissolution, Merger or
Consolidation. In
the event of
a dissolution or liquidation of the
Company, or any
corporate
separation or division, including, but not
limited to, a
split-up, a
split-off or a spin-off, or a sale of substantially all
of
the
assets of the Company; a merger or
consolidation in which the
Company is not the
Surviving Entity; or a reverse merger in which the
Company is
the Surviving Entity, but the shares
of Company stock
outstanding
immediately preceding the merger are converted by virtue of
the merger into
other property, whether in the form of securities, cash
or
otherwise, then, the Company, to the extent permitted by
applicable
law,
but otherwise in its sole discretion may
provide for: (i) the
continuation
of outstanding Rights by the Company (if the Company
is
the
Surviving Entity); (ii) the
assumption of the Plan and such
outstanding
Rights by the Surviving Entity or its parent;
(iii) the
substitution
by the Surviving Entity or its parent of
Rights with
substantially the same terms for such outstanding
Rights; or (iv) the
cancellation
of such outstanding Rights
without payment of any
consideration, provided that if such Rights
would be canceled in
accordance with
the foregoing, the Participant shall have the
right,
exercisable
during the later of the ten-day period ending on the fifth
day
prior to such merger or consolidation
or ten days after the
Administrator provides the Rights holder a notice of
cancellation, to
exercise
such Rights in whole or in part
without regard to any
installment
exercise provisions in the Rights agreement.
9.1.3 Par Value Changes. In the event of a change in the Stock
of the Company as
presently constituted which is limited to a change of
all of its
authorized shares with par value, into the same number
of
shares
without par value, or a change in the par
value, the shares
resulting
from any such change shall be "Stock" within the meaning
of
the Plan.
9.2 Decision
of Administrator Final. To the extent that the
foregoing
adjustments relate to stock or securities of the Company, such
adjustments shall
be made by the Administrator, whose
determination in that respect shall be
final, binding and conclusive; provided, however, that each ISO
granted pursuant
to the Plan shall not be adjusted in a manner that causes
such Stock Option to
fail to continue to qualify as an ISO without the prior
consent of the Optionee
thereof.
9.3 No Other
Rights. Except as hereinbefore expressly provided in this
Section 9, no Participant shall have any rights by reason of
any subdivision or
consolidation of shares of Company stock or the payment
of any dividend or any
other increase or decrease in the number of shares of Company stock
of any class
or by reason of any of the events described in Section 9.1,
above, or any other
issue by the Company of shares of stock of any class, or
securities convertible
into shares of stock of any class; and, except as
provided in this Section 9,
none of the foregoing events shall affect, and no
adjustment by reason thereof
shall be made with respect to, the number or price of shares of
Stock subject to
Rights. The grant of a Right pursuant to the Plan
shall not affect in any way
the right or power of the Company to
make adjustments, reclassifications,
reorganizations or changes of its capital or business
structures or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all
or part of its
business or assets.
11
<PAGE>
9.4 Market
Stand-Off. Each Stock Option Agreement and Stock
Purchase
Agreement shall provide that, in
connection with any underwritten public
offering by the Company of its equity
securities pursuant to an effective
registration statement filed under the
Securities Act of 1933, as amended,
including the Company's initial public offering, the Participant
shall agree not
to sell, make any short sale of, loan, hypothecate, pledge, grant
any option for
the repurchase of, or otherwise dispose or transfer for value or
otherwise agree
to engage in any of the foregoing transactions with respect to any
Stock without
the prior written consent of the Company or its underwriters, for
such period of
time from and after the effective date of such registration
statement as may be
requested by the Company or such underwriters (the "Market
Stand-Off").
SECTION 10: AMENDMENT AND TERMINATION
The Board may
amend, suspend or terminate the Plan at any time and for
any reason. At the time of such amendment,
the Board shall determine, upon
advice from counsel, whether such amendment will
be contingent on stockholder
approval.
SECTION 11: GENERAL PROVISIONS
11.1 General
Restrictions.
11.1.1 No View to Distribute. The Administrator
may require
each person
acquiring shares of Stock pursuant to the Plan to represent
to and agree with
the Company in writing that such person is acquiring
the
shares without a view
towards distribution thereof.
The
certificates for such shares
may include any legend that the
Administrator deems
appropriate to reflect any
restrictions on
transfer.
11.1.2 Legends. All certificates for shares of Stock delivered
under the Plan
shall be subject to such stop transfer orders and other
restrictions as
the Administrator may deem advisable under the
rules,
regulations
and other requirements of the Securities
and Exchange
Commission,
any stock exchange upon which the Stock is then listed and
any
applicable federal or state securities laws, and the
Administrator
may cause a legend
or legends to be put on any such
certificates to
make appropriate
reference to such restrictions.
11.1.3 No Rights as Stockholder.
Except as specifically
provided in this
Plan, a Participant or a transferee of a Right
shall
have no rights as
a stockholder with respect to any shares covered by
the Rights until
the date of the issuance of a Stock certificate to him
or her for such
shares, and no adjustment shall be made for
dividends
(ordinary
or extraordinary, whether in cash,
securities or other
property) or
distributions of other rights for which the record date is
prior to the date
such Stock certificate is issued, except as provided
in Section 9.1,
hereof.
11.2 Other
Compensation Arrangements. Nothing contained in this
Plan
shall prevent the Board from
adopting other or additional
compensation
arrangements, subject to stockholder approval if such
approval is required; and
such arrangements may be either generally
applicable or applicable only in
specific cases.
11.3
Disqualifying Dispositions. Any Participant
who shall make a
"disposition" (as defined in Section 424 of the Code)
of all or any portion of
an ISO within two years from the date of grant of
such ISO or within one year
after the issuance of the shares of Stock
acquired upon exercise of such ISO
12
<PAGE>
shall be required to immediately
advise the Company in writing as to the
occurrence of the sale and the price realized
upon the sale of such shares of
Stock.
11.4 Regulatory
Matters. Each Stock Option Agreement and Stock Purchase
Agreement shall provide that no shares shall be
purchased or sold thereunder
unless and until (i) any then applicable requirements
of state or federal laws
and regulatory agencies shall have been fully complied with
to the satisfaction
of the Company and its counsel and (ii) if required to do so by the
Company, the
Optionee or Offeree shall have executed and delivered to the
Company a letter of
investment intent in such form and containing
such provisions as the Board or
Committee may require.
11.5
Recapitalizations. Each Stock Option Agreement and Stock
Purchase
Agreement shall contain provisions required to reflect the
provisions of Section
9.
11.6
Delivery. Upon exercise of a Right granted under this
Plan, the
Company shall issue Stock or pay any amounts due within a
reasonable period of
time thereafter. Subject to any statutory obligations the
Company may otherwise
have, for purposes of this Plan, thirty days shall
be considered a reasonable
period of time.
11.7 Other
Provisions. The Stock Option Agreements and Stock
Purchase
Agreements authorized under the Plan may
contain such other provisions not
inconsistent with this Plan, including, without
limitation, restrictions upon
the exercise of the Rights, as the Administrator may deem
advisable.
SECTION 12: INFORMATION TO PARTICIPANTS
To the
extent necessary to comply with Colorado law, the
Company each
year shall furnish to Participants its balance sheet and income
statement unless
such Participants are limited to key
Employees whose duties with the Company
assure them access to equivalent information.
SECTION 13: STOCKHOLDERS AGREEMENT
As a
condition to the transfer of Stock pursuant to a
Right granted
under this Plan, the Administrator, in its sole and
absolute discretion, may
require the Participant to execute and become a party
to any agreement by and
among the Company and any of its stockholders which exists on
or after the Date
of Grant (the "Stockholders Agreement"). If the Participant becomes
a party to a
Stockholders Agreement, in addition to
the terms of this Plan and the Stock
Option Agreement or Stock Purchase Agreement (whichever is
applicable) pursuant
to which the Stock is transferred, the terms and conditions
of the Stockholders
Agreement shall govern Participant's rights in and to the Stock;
and if there is
any conflict between the provisions of the Stockholders
Agreement and this Plan
or any conflict between the provisions of the
Stockholders Agreement and the
Stock Option Agreement or Stock Purchase
Agreement (whichever is applicable)
pursuant to which the Stock is transferred, the provisions of
the Stockholders
Agreement shall be controlling. Notwithstanding anything to the
contrary in this
Section 13, if the Stockholders Agreement
contains any provisions which would
violate the Colorado Corporations Code if applied to the
Participant, the terms
of this Plan and the Stock Option
Agreement or Stock Purchase Agreement
(whichever is applicable) pursuant to which
the Stock is transferred shall
govern the Participant's rights with respect to such
provisions.
13
<PAGE>
SECTION 14: EFFECTIVE DATE OF PLAN
The
effective date of this Plan is June 1, 2009. The
adoption of the
Plan is subject to approval by the Company's
stockholders, which approval must
be obtained within 12 months from the date the Plan is
adopted by the Board. In
the event that the stockholders fail to approve the Plan
within 12 months after
its adoption by the Board, any grants of Options
or sales or awards of shares
that have already occurred shall be rescinded, and no
additional grants, sales
or awards shall be made thereafter under the Plan.
SECTION 15: TERM OF PLAN
The Plan
shall terminate automatically on June 1, 2019,
but no later
than the tenth (10th) anniversary of the
effective date. No Right shall be
granted pursuant to the Plan after such date, but Rights
theretofore granted may
extend beyond that date. The Plan may be terminated on any earlier
date pursuant
to Section 10 hereof.
SECTION 16: EXECUTION
To record the
adoption of the Plan by the Board, the Company has caused
its authorized officer to execute the same as of June 1, 2009.
MARINE EXPLORATION, INC.
By: _______________________________
Paul D. Enright, President
14
<PAGE>
STOCK OPTION AGREEMENT
2009 MARINE EXPLORATION, INC. STOCK OPTION AND AWARD PLAN
Notice
Of Stock Option Grant
You have been granted the following option to
purchase Common Stock of MARINE
EXPLORATION, INC. (the "Company"):
Name of Optionee:
Total Number of Shares Granted:
Type of Option:
Exercise Price Per Share:
Date of Grant:
Vesting Commencement Date:
Vesting Schedule:
Expiration Date:
By your signature and the signature of the Company's
authorized representative
below, you and the Company agree that this option is granted
under and governed
by the terms and conditions of the 2009 MARINE
EXPLORATION, INC. STOCK OPTION
AND AWARD PLAN and the STOCK OPTION AGREEMENT, both of which are
attached hereto
and are incorporated herein by reference. Optionee
hereby represents that both
the option and any shares acquired upon exercise of the option have
been or will
be acquired for investment for his own
account and not with a view to or for
sale in connection with any distribution or resale of the
security.
Optionee:
MARINE EXPLORATION, INC.
By:
By:
-------------------------------
---------------------------------------
Name:
Paul D. Enright
President
<PAGE>
ANNEX I
THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE
SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF
COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
2009
MARINE EXPLORATION, INC. STOCK OPTION AND AWARD PLAN:
STOCK OPTION AGREEMENT
SECTION 1: GRANT OF OPTION
1.1
Option. On the terms and conditions set forth in
the notice of
stock option grant to which this agreement (the
"Agreement") is attached (the
"Notice of Stock Option Grant") and this
agreement, the Company grants to the
individual named in the Notice of Stock Option Grant (the
"Optionee") the option
to purchase at the exercise price specified in the Notice of
Stock Option Grant
(the "Exercise Price") the number of Shares
set forth in the Notice of Stock
Option Grant. This option is intended to be
either an ISO or a Non-Qualified
Stock Option, as provided in the Notice of Stock Option Grant.
1.2 Stock Plan and
Defined Terms. This option is granted pursuant
to
and subject to the terms of the 2009 MARINE
EXPLORATION, INC. STOCK OPTION AND
AWARD PLAN, as in effect on the date specified in
the Notice of Stock Option
Grant (which date shall be the later of (i) the date on which the
Board resolved
to grant this option, or (ii) the first day of the
Optionee's Service) and as
amended from time to time (the "Plan"), a copy of which is
attached hereto and
which the Optionee acknowledges having received. Capitalized terms
not otherwise
defined in this Agreement have the definitions ascribed to them in
the Plan.
SECTION 2: RIGHT TO EXERCISE
2.1
Exercisability. Subject to Sections 2.2 and 2.3 below and the
other
conditions set forth in this
Agreement, all or part of this option may be
exercised prior to its expiration at the time or times
set forth in the Notice
of Stock Option Grant. Shares purchased by exercising this option
may be subject
to the Right of Repurchase under Section 7. In
addition, all of the remaining
unexercised options shall become vested and fully exercisable if
(i) a Change in
Control occurs before the Optionee's Service terminates, and
(ii) the option is
not assumed or an equivalent option is not substituted by the
successor entity
that employs the Optionee immediately
after the Change in Control or by its
parent or subsidiary.
2.2 Limitation. If
this option is designated as an ISO in the Notice of
Stock Option Grant, then to the extent (and only to the
extent) the Optionee's
right to exercise this option causes this option (in whole or in
part) to not be
treated as an ISO by reason of the $100,000
annual limitation under Section
422(d) of the Code, such options shall
be treated as Non-Qualified Stock
Options, but shall be exercisable by their terms. The
determination of options
to be treated as Non-Qualified Stock Options
shall be made by taking options
1
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into account in the order in which they are granted. If the terms
of this option
cause the $100,000 annual limitation under
Section 422(d) of the Code to be
exceeded, a pro rata portion of each exercise shall be
treated as the exercise
of a Non-Qualified Stock Option.
2.3
Stockholder Approval. Any other
provision of this Agreement
notwithstanding, no portion of this option shall
be exercisable at any time
prior to the approval of the Plan by the Company's
stockholders.
SECTION 3: NO TRANSFER OR ASSIGNMENT OF OPTION
Except as provided
herein, an Optionee may not assign, sell or transfer
the option, in whole or in part, other than by testament or
by operation of the
laws of descent and distribution. The Administrator, in its
sole discretion may
permit the transfer of a Non-Qualified Option (but not an
ISO) as follows: (i)
by gift to a member of the Participant's immediate
family, or (ii) by transfer
by instrument to a trust providing
that the Option is to be passed
to
beneficiaries upon death of the Settlor (either or both (i)
or (ii) referred to
as a "Permitted Transferee"). For purposes of this Section 3,
"immediate family"
shall mean the Optionee's spouse (including a former spouse
subject to terms of
a domestic relations order); child, stepchild, grandchild,
child-in-law; parent,
stepparent, grandparent, parent-in-law; sibling
and sibling-in-law, and shall
include adoptive relationships. A transfer permitted under this
Section 3 hereof
may be made only upon written notice to and approval thereof by
Administrator. A
Permitted Transferee may not further assign, sell
or transfer the transferred
option, in whole or in part, other than by testament or by
operation of the laws
of descent and distribution. A Permitted Transferee shall agree in
writing to be
bound by the provisions of this Plan, which agreement shall
be submitted to and
approved by the Administrator before the transfer.
SECTION
4: EXERCISE PROCEDURES
4.1 Notice of
Exercise. The Optionee or the Optionee's
representative
may exercise this option by delivering a written notice in the form
of Exhibit A
attached hereto ("Notice of Exercise") to the Company
in the manner specified
pursuant to Section 14.4 hereof. Such Notice
of Exercise shall specify the
election to exercise this option, the
number of Shares for which it is being
exercised and the form of payment, which must comply with
Section 5. The Notice
of Exercise shall be signed by the person who is
entitled to exercise this
option. In the event that this option is to
be exercised by the Optionee's
representative, the notice shall be accompanied by
proof (satisfactory to the
Company) of the representative's right to exercise this option.
4.2 Issuance of
Shares. After receiving a proper Notice of
Exercise,
the Company shall cause to be issued a
certificate or certificates for the
Shares as to which this option has been exercised, registered in
the name of the
person exercising this option (or in the names of
such person and his or her
spouse as community property or as joint tenants with
right of survivorship).
The Company shall cause such certificate or
certificates to be deposited in
escrow or delivered to or upon the order of the person exercising
this option.
4.3 Withholding
Taxes. In the event that the Company determines that it
is required to withhold any tax as a result of the exercise of this
option, the
Optionee, as a condition to the exercise of this option, shall make
arrangements
satisfactory to the Company to
enable it to satisfy all
withholding
requirements. The Optionee shall also make
arrangements satisfactory to the
Company to enable it to satisfy any withholding
requirements that may arise in
connection with the vesting or disposition of
Shares purchased by exercising
this option, and shall provide to the Company his/her/its social
security number
or employment identification number.
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<PAGE>
SECTION 5: PAYMENT FOR STOCK
5.1 General Rule.
The entire Exercise Price of Shares issued under the
Plan shall be payable in full by cash or cashier's check for
an amount equal to
the aggregate Exercise Price for
the number of shares being
purchased.
Alternatively, in the sole discretion of the Plan
Administrator and upon such
terms as the Plan Administrator shall approve,
the Exercise Price may be paid
by:
5.1.1 Cashless Exercise. Provided the Company's Common
Stock
is publicly
traded, a copy of instructions to a broker directing such
broker to sell the
Shares for which this option is exercised, and
to
remit to the
Company the aggregate Exercise Price
of such option
("Cashless
Exercise");
5.1.2 Stock-For-Stock Exercise. Paying all or a portion of the
Exercise
Price for the number of Shares being purchased by
tendering
Shares
owned by the Optionee, duly endorsed
for transfer to the
Company,
with a Fair Market Value on the date of delivery equal to the
Exercise Price
multiplied by the number of Shares with respect to which
this option is
being exercised (the "Purchase Price") or the aggregate
Purchase
Price of the shares with respect to which
this option or
portion hereof is
exercised ("Stock-for-Stock Exercise"); or
5.1.3 Attestation Exercise. By a stock for stock
exercise by
means of
attestation whereby the Optionee identifies
for delivery
specific
Shares already owned by Optionee and
receives a number of
Shares equal
to the difference between the Option
Shares thereby
exercised
and the identified
attestation Shares ("Attestation
Exercise").
5.2
Withholding Payment. The Exercise Price shall include
payment of
the amount of all federal, state, local or other
income, excise or employment
taxes subject to withholding (if any) by the Company or any parent
or subsidiary
corporation as a result of the exercise of a Stock Option.
The Optionee may pay
all or a portion of the tax withholding by cash or check payable to
the Company,
or, at the discretion of the Administrator, upon such terms as the
Administrator
shall approve, by (i) Cashless
Exercise or Attestation
Exercise; (ii)
Stock-for-Stock Exercise; (iii) in the case of an
Option, by paying all or a
portion of the tax withholding for the number of
shares being purchased by
withholding shares from any transfer
or payment to the Optionee ("Stock
withholding"); or (iv) a combination of one or more of
the foregoing payment
methods. Any shares issued pursuant to the exercise of an Option
and transferred
by the Optionee to the Company for the purpose of
satisfying any withholding
obligation shall not again be available for
purposes of the Plan. The fair
market value of the number of shares subject to
Stock withholding shall not
exceed an amount equal to the applicable minimum required tax
withholding rates.
5.3
Promissory Note. The Plan Administrator, in its
sole discretion,
upon such terms as the Plan Administrator shall
approve, may permit all or a
portion of the Exercise Price of Shares issued under the Plan
to be paid with a
full-recourse promissory note. However, in the event there is a
stated par value
of the shares and applicable law requires, the par value of the
shares, if newly
issued, shall be paid in cash or cash equivalents. The
Shares shall be pledged
as security for payment of the principal
amount of the promissory note and
interest thereon, and shall be held in the possession
of the Company until the
promissory note is repaid in
full. Subject to the foregoing,
the Plan
Administrator (at its sole discretion) shall specify
the term, interest rate,
amortization requirements (if any) and other provisions of such
note.
3
<PAGE>
5.4
Exercise/Pledge. In the discretion of the Plan Administrator,
upon
such terms as the Plan Administrator shall approve,
payment may be made all or
in part by the delivery (on a form prescribed by the Plan
Administrator) of an
irrevocable direction to pledge Shares to a securities broker or
lender approved
by the Company, as security for a loan, and to deliver
all or part of the loan
proceeds to the Company in payment of all or part of the
Exercise Price and any
withholding taxes.
SECTION 6: TERM AND EXPIRATION
6.1 Basic
Term. This option shall expire and shall not be
exercisable
after the expiration of the earliest of (i) the Expiration Date
specified in the
Notice of Stock Option Grant, (ii) three months after
the date the Optionee's
Service with the Company and its Subsidiaries terminates if
such termination is
for any reason other than death, Disability or Cause,
(iii) one year after the
date the Optionee's Service with the Company and its
Subsidiaries terminates if
such termination is a result of death or Disability, and (iv)
if the Optionee's
Service with the Company and its
Subsidiaries terminates for Cause, all
outstanding Options granted to such Optionee shall expire as of the
commencement
of business on the date of such termination.
Outstanding Options that are not
exercisable at the time of termination of employment for any reason
shall expire
at the close of business on the date of such
