EXHIBIT 4.3
SEALIFE CORPORATION
2004 STOCK AWARD PLAN
1. PURPOSE OF THE PLAN.
The purpose of this 2004 Stock Award Plan (the "Plan") is to provide
incentives and rewards to selected eligible directors, officers, employees and
consultants of Sealife Corporation (the "Company") or its subsidiaries in order
to assist the Company and its subsidiaries in attracting, retaining and
motivating those persons by providing for or increasing the proprietary
interests of those persons in the Company, and by associating their interests in
the Company with those of the Company's shareholders.
2. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Board of Directors of the Company
(the "Board"), or a committee of the Board (the "Committee") whose members shall
serve at the pleasure of the Board. If administration is delegated to the
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board (and references in this
Plan to the Board shall thereafter be to the Committee), subject, however, to
such resolutions, not inconsistent with the provisions of the Plan as may be
adopted from time to time by the Board.
The Board shall have all the powers vested in it by the terms of the
Plan, including exclusive authority (i) to select from among eligible directors,
officers, employees and consultants, those persons to be granted "Awards" (as
defined below) under the Plan; (ii) to determine the type, size and terms of
individual Awards (which need not be identical) to be made to each person
selected; (iii) to determine the time when Awards will be granted and to
establish objectives and conditions (including, without limitation, vesting and
performance conditions), if any, for earning Awards; (iv) to amend the terms or
conditions of any outstanding Award, subject to applicable legal restrictions
and to the consent of the other party to such Award; (v) to determine the
duration and purpose of leaves of absences which may be granted to holders of
Awards without constituting termination of their employment for purposes of
their Awards; (vi) to authorize any person to execute, on behalf of the Company,
any instrument required to carry out the purposes of the Plan; and (vii) to make
any and all other determinations which it determines to be necessary or
advisable in the administration of the Plan. The Board shall have full power and
authority to administer and interpret the Plan and to adopt, amend and revoke
such rules, regulations, agreements, guidelines and instruments for the
administration of the Plan and for the conduct of its business as the Board
deems necessary or advisable. The Board's interpretation of the Plan, and all
actions taken and determinations made by the Board pursuant to the powers vested
in it hereunder, shall be conclusive and binding on all parties concerned,
including the Company, its shareholders, any participants in the Plan and any
other employee of the Company or any of its subsidiaries.
3. PERSONS ELIGIBLE UNDER THE PLAN.
Any person who is a director, officer, employee or consultant of the
Company, or any of its subsidiaries (a "Participant"), shall be eligible to be
considered for the grant of Awards under the Plan.
4. AWARDS.
(a) COMMON STOCK AND DERIVATIVE SECURITY AWARDS. Awards authorized
under the Plan shall consist of any type of arrangement with a Participant that
is not inconsistent with the provisions of the Plan and that, by its terms,
involves or might involve or be made with reference to the issuance of (i)
shares of the Common Stock of the Company (the "Common Stock") or (ii) a
"derivative security" (as that term is defined in Rule 16a-1(c) of the Rules and
Regulations of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, as the same may be amended from time to time)
with an exercise or conversion price related to the Common Stock or with a value
derived from the value of the Common Stock.
(b) TYPES OF AWARDS. Awards are not restricted to any specified
form or structure and may include, but need not be limited to, sales, bonuses
and other transfers of stock, restricted stock, stock options, reload stock
options, stock purchase warrants, other rights to acquire stock or securities
convertible into or redeemable for stock, stock appreciation rights, phantom
stock, dividend equivalents, performance units or performance shares, or any
other type of Award which the Board shall determine is consistent with the
objectives and limitations of the Plan. An Award may consist of one such
security or benefit, or two or more of them in tandem or in the alternative.
(c) CONSIDERATION. Common Stock may be issued pursuant to an Award
for any lawful consideration as determined by the Board, including, without
limitation, a cash payment, services rendered, or the cancellation of
indebtedness.
(d) GUIDELINES. The Board may adopt, amend or revoke from time to
time written policies implementing the Plan. Such policies may include, but need
not be limited to, the type, size and term of Awards to be made to participants
and the conditions for payment of such Awards.
(e) TERMS AND CONDITIONS.
(i) Subject to the provisions of the Plan, the Board, in
its sole and absolute discretion, shall determine all of the terms and
conditions of each Award granted pursuant to the Plan.
(ii) The terms and conditions of an Award may include,
among other things:
(1) any provision necessary for such Award to
qualify as an incentive stock option under
Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") (an "Incentive
Stock Option");
(2) a provision permitting the recipient of such
Award to pay the purchase price of the
Common Stock or other property issuable
pursuant to such Award, or to pay such
recipient's tax withholding obligation with
respect to such issuance, in whole or in
part, by delivering previously owned shares
of capital stock of the Company (including
"pyramiding") or other property, or by
reducing the number of shares of Common
Stock or the amount of other property
otherwise issuable pursuant to such Award;
or
2
(3) a provision conditioning or accelerating the
receipt of benefits pursuant to the Award,
or terminating the Award, either
automatically or in the discretion of the
Board, upon the occurrence of specified
events, including, without limitation, a
change of control of the Company, an
acquisition of a specified percentage of the
voting power of the Company, the dissolution
or liquidation of the Company, a sale of
substantially all of the property and assets
of the Company or an event of the type
described in Section 7 of the Plan.
(iii) The terms and conditions of each Award which is a
stock option or stock purchase right shall be in compliance with te
following limitations:
(1) The exercise price of an option or purchase
price of a stock purchase right may not be
less than 85% of the fair value of the
Common Stock at the time the option or stock
purchase right is granted, unless the
Participant owns stock possessing more than
10% of the total combined voting power of
all classes of stock of the Company, in
which event the exercise price of an option
may not be less than 110% of the fair value
of the Common Stock and the purchase price
of a stock purchase right may not be less
than 100% of the fair value of the Common
Stock;
(2) The exercise period of an option may not be
more than 120 months from the date the
option is granted;
(3) A Participant who is not an officer,
director or consultant of the Company must
have the right to exercise an option at the
rate of at least 20% per year over 5 years
from the date the option is granted, subject
to earlier termination of the option and
other reasonable conditions;
(4) An option or stock purchase right may not be
transferable by the Participant other than
by will or the laws of descent and
distribution;
(5) The Participant must have the right to
exercise an option, following termination of
employment, to the extent it was exercisable
at termination of employment: (I) at least
six months from the date of termination if
termination is caused by death or
disability; and (II) at least 30 days from
the date of termination if termination was
caused other than by death or disability;
and
(6) If an option agreement or stock purchase
agreement gives the Company the right to
repurchase shares upon termination of
employment, (I) the repurchase price must be
equal to either the fair value of the shares
on the date of termination of employment or
the original purchase price paid by the
Participant for the shares
3
(provided that the right to repurchase at
the original purchase price must lapse at
the rate of at least 20% of the shares per
year over 5 years from the date the option
or stock purchase right is granted), (II)
the right must be exercised for cash or
cancellation of purchase money indebtedness
for the shares within 90 days of termination
of employment, and (III) the right must
expire if the Common Stock of the Company
becomes publicly traded.
(f) SUSPENSION OR TERMINATION OF AWARDS. If the Company believes
that a Participant has committed an act of misconduct as described below, the
Company may suspend the Participant's rights under any then outstanding Award
pending a determination by the Board. If the Board determines that a Participant
has committed an act of embezzlement, fraud, nonpayment of any obligation owed
to the Company or any subsidiary, breach of fiduciary duty or deliberate
disregard of the Company's rules resulting in loss, damage or injury to the
Company, or if a Participant makes an unauthorized disclosure of trade secret or
confidential information of the Company, engages in any conduct constituting
unfair competition, or induces any customer of the Company to breach a contract
with the Company, neither the Participant nor his or her estate shall be
entitled to exercise any rights whatsoever with respect to such Award. In making
such determination, the Board shall act fairly and shall give the Participant a
reasonable opportunity to appear and present evidence on his or her behalf to
the Board.
(g) MAXIMUM GRANT OF AWARDS TO ANY PARTICIPANT. No Participant
shall receive Awards representing more than ___ shares of Common Stock per
annum, subject to adjustment as provided in Section 7 hereof.
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
The aggregate number of shares of Common Stock that may be issued or
issuable pursuant to all Awards under the Plan (including Awards in the form of
Incentive Stock Options and Non-Statutory Stock Options) shall not exceed an
aggregate of one million three hundred fifty thousand (1,350,000) shares of
Common Stock, subject to adjustment as provided in Section 7 of the Plan. Shares
of Common Stock subject to the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares. Any shares of Common Stock
subject to an Award which for any reason expires or is terminated unexercised as
to such shares shall again be available for issuance under the Plan. For
purposes of this Section 5, the aggregate number of shares of Common Stock that
may be issued at any time pursuant to Awards granted under the Plan shall be
reduced by: (i) the number of shares of Common Stock previously issued pursuant
to Awards granted under the Plan, other than shares of Common Stock subsequently
reacquired by the Company pursuant to the terms and conditions of such Awards
and with respect to which the holder thereof received no benefits of ownership,
such as dividends; and (ii) the number of shares of Common Stock which were
otherwise issuable pursuant to Awards granted under this Plan but which were
withheld by the Company as payment of the purchase price of the Common Stock
issued pursuant to such Awards or as payment of the recipient's tax withholding
obligation with respect to such issuance.
4
6. PAYMENT OF AWARDS.
The Board shall determine the extent to which Awards shall be payable
in cash, shares of Common Stock or any combination thereof. The Board may, upon
request of a Participant, determine that all or a portion of a payment to that
Participant under the Plan, whether it is to be made in cash, shares of Common
Stock or a combination thereof, shall be deferred. Deferrals shall be for such
periods and upon such terms as the Board may determine in its sole discretion.
7. DILUTION AND OTHER ADJUSTMENT.
In the event of any change in the outstanding shares of the Common
Stock or other securities then subject to the Plan by reason of any stock split,
reverse stock split, stock dividend, recapitalization, merger, consolidation,
combination or exchange of shares or other similar corporate change, or if the
outstanding securities of the class then subject to the Plan are exchanged for
or converted into cash, property or a different kind of securities, or if cash,
property or securities are distributed in respect of such outstanding securities
as a class (other than cash dividends), then the Board may, and shall in the
event of a stock split, reverse stock split, stock dividend, recapitalization,
combination of recapitalization of the Company's stock, make such equitable
adjustments to the Plan and the Awards thereunder (including, without
limitation, appropriate and proportionate adjustments in (i) the number and type
of shares or other securities or cash or other property that may be acquired
pursuant to Incentive Stock Options and other Awards theretofore granted under
the Plan, (ii) the maximum number and type of shares or other securities that
may be issued pursuant to Incentive Stock Options and other Awards thereafter
granted under the Plan; and (iii) the maximum number of securities with respect
to which Awards may thereafter be granted to any Participant in any fiscal year)
as the Board in its sole discretion determines appropriate, including any
adjustments in the maximum number of shares referred to in Section 5 of the
Plan. Such adjustments shall be conclusive and binding for all purposes of the
Plan.
8. MISCELLANEOUS PROVISIONS.
(a) DEFINITIONS. As used herein, "subsidiary" means any current or
future corporation which would be a "subsidiary corporation," as that term is
defined in Section 424(f) of the Code, of the Company; and the term "or" means
"and/or."
(b) CONDITIONS ON ISSUANCE. Securities shall not be issued
pursuant to Awards unless the grant and issuance thereof shall comply with all
relevant provisions of law and the requirements of any securities exchange or
quotation system upon which any securities of the Company are listed, and shall
be further subject to approval of counsel for the Company with respect to such
compliance. Inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is determined by Company counsel to be
necessary to the lawful issuance and sale of any security or Award, shall
relieve the Company of any liability in respect of the nonissuance or sale of
such securities as to which requisite authority shall not have been obtained.
(c) RIGHTS AS SHAREHOLDER. A participant under the Plan shall have
no rights as a holder of Common Stock with respect to Awards hereunder unless
and until certificates for shares of such stock are issued to the participant.
5
(d) AGREEMENTS. All Awards granted under the Plan shall be
evidenced by written agreements in such form and containing such terms and
conditions (not inconsistent with the Plan) as the Board shall from time to time
adopt.
(e) WITHHOLDING TAXES. The Company shall have the right to deduct
from all Awards hereunder paid in cash any federal, state, local or foreign
taxes required by law to be withheld with respect to such awards and, with
respect to awards paid in stock, to require the payment (through withholding
from the participant's salary or otherwise) of any such taxes. The obligation of
the Company to make delivery of Awards in cash or Common Stock shall be subject
to the restrictions imposed by any and all governmental authorities.
(f) NO RIGHTS TO AWARD. No Participant or other person shall have
any right to be granted an Award under the Plan. Neither the Plan nor any action
taken hereunder shall be construed as giving any Participant any right to be
retained in the employ of the Company or any of its subsidiaries or shall
interfere with or restrict in any way the rights of the Company or any of its
subsidiaries, which are hereby reserved, to discharge a Participant at any time
for any reason whatsoever, with or without good cause.
(g) COSTS AND EXPENSES. The costs and expenses of administering
the Plan shall be borne by the Company and not charged to any Award nor to any
Participant receiving an Award.
(h) FUNDING OF PLAN. The Plan shall be unfunded. The Company shall
not be required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Award under the Plan.
(i) INFORMATION TO AWARD HOLDERS. The Company will provide to
Participants who have received Awards under the Plan financial statements of the
Company at least annually.
9. AMENDMENTS AND TERMINATION.
(a) AMENDMENTS. The Board may at any time terminate or from time
to time amend the Plan in whole or in part, but no such action shall adversely
affect any rights or obligations with respect to any Awards theretofore made
under the Plan. However, with the consent of the Participant affected, the Board
may amend outstanding agreements evidencing Awards under the Plan in a manner
not inconsistent with the terms of the Plan.
(b) SHAREHOLDER APPROVAL. To the extent that Section 422 of the
Code, other applicable law, or the rules, regulations, procedures or listing
agreement of any national securities exchange or quotation system, requires that
any amendment of the Plan be approved by the shareholders of the Company, no
such amendment shall be effective unless and until it is approved by the
shareholders in such a manner and to such a degree as is required.
(c) TERMINATION. Unless the Plan shall theretofore have been
terminated as above provided, the Plan (but not the awards theretofore granted
under the Plan) shall terminate on and no awards shall be granted after November
15, 2014.
6
10. EFFECTIVE DATE.
The Plan is effective on November 15, 2004, the date on which it was
adopted by the Board of Directors of the Company, subject to the approval of the
Plan by the holders of at least a majority of the outstanding shares of the
Common Stock. Awards may be made under the Plan on and after its effective date,
subject to shareholder approval of the Plan as provided above. If approval of
the shareholders is not obtained, all Awards granted under the Plan shall be
null and void.
11. GOVERNING LAW.
The Plan and any agreements entered into thereunder shall be construed
and governed by the laws of the State of California applicable to contracts made
within, and to be performed wholly within, such state, without regard to the
application of conflict of laws rules of such State.
7