Delaware
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20-2876380
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(State of incorporation)
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(I.R.S. Employer
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Identification Number)
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Omagine, Inc. | ||
Fiscal Year Ended December 31, 2013
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Page
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3
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Part I
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Item 1.
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4
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Item 1A.
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18
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Item 1B.
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25
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Item 2.
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25
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Item 3.
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25
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Item 4.
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25
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Part II
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Item 5.
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26
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Item 6.
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29
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Item 7.
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29
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Item 7A.
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35
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Item 8.
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35
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Item 9.
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35
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Item 9A.
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35
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Item 9B.
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36
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Part III
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Item 10.
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37
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Item 11.
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38
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Item 12.
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50
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Item 13.
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51
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Item 14.
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52
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Part IV
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Item 15.
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53
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55
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●
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the uncertainty associated with whether or not the Government of the Sultanate of Oman will sign the agreed DA with Omagine LLC;
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●
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the uncertainty associated with political events in general in the Middle East and North Africa (the “MENA Region”);
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the success or failure of the Company’s efforts to secure additional financing, including project financing for the Omagine Project;
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oversupply of residential and/or commercial property inventory in the Oman real estate market or other adverse conditions in such market;
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the impact of MENA Region or international economies and/or future events (including natural disasters) on the Oman economy, on the Company’s business or operations, on tourism within or into Oman, on the oil and natural gas businesses in Oman and on other major industries operating within the Omani market;
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●
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deterioration or malaise in economic conditions in Oman, the MENA Region or in the international real estate markets;
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●
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inflation, interest rates, movements in interest rates, securities market and monetary fluctuations;
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●
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acts of war, civil or political unrest, terrorism or political instability; or
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●
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the ability to attract and retain skilled employees.
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1.
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As of the date hereof an initial portion of the New Investment equal to 130,000 Omani Rials (equivalent to approximately $338,000) has been invested into Omagine LLC by the New Shareholders and Omagine, Inc.
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2.
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Subsequent to the signing of the DA but prior to the Financing Agreement Date (as hereinafter defined), an additional portion of the New Investment equal to 210,000 Omani Rials which is equivalent to approximately $546,000 (the “OMAG Final Equity Investment”) will be invested into Omagine LLC by Omagine, Inc.
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3.
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On or immediately subsequent to the Financing Agreement Date, the final portion of the New Investment equal to 26,628,125 Omani Rials (equivalent to approximately $69,233,125) will be invested into Omagine LLC by the New Shareholders.
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1.
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CCIC’s two subsidiaries will invest an aggregate of 19,010,000 Omani Rials (equivalent to approximately $49,426,000) into Omagine LLC. CCC-Panama will invest 12,673,333 Omani Rials (equivalent to approximately $32,950,666) and CCC-Oman will invest 6,336,667 Omani Rials in cash (equivalent to approximately $16,475,334), as follows:
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(i)
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As of the date hereof, CCC-Panama has invested 15,000 Omani Rials (equivalent to approximately $39,000) into Omagine LLC and CCC-Panama will invest an additional 12,658,333 Omani Rials (equivalent to approximately $32,911,666) on the Financing Agreement Date.
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(ii)
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As of the date hereof, CCC-Oman has invested 7,500 Omani Rials (equivalent to approximately $19,500) into Omagine LLC and CCC-Oman will invest an additional 6,329,167 Omani Rials (equivalent to approximately $16,455,834) on the Financing Agreement Date.
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(iii)
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The CCC-Panama and CCC-Oman initial combined investments of 22,500 Omani Rials (equivalent to approximately $58,500) have been received by Omagine LLC as of the date hereof and payment of the CCC-Panama and CCC-Oman combined investment balance of 18,987,500 Omani Rials (equivalent to approximately $49,367,500) is contingent upon (i) the signing of a contract between Omagine LLC and CCC-Oman appointing CCC-Oman as the general contractor for the Omagine Project, and (ii) the occurrence of the Financing Agreement Date.
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(iv)
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The result of the foregoing is that CCC-Panama presently owns ten percent (10%) of Omagine LLC and CCC-Oman presently owns five percent (5%) of Omagine LLC.
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2.
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RCA will invest an aggregate of 7,678,125 Omani Rials (equivalent to approximately $19,963,125) into Omagine LLC plus RCA will also invest the non-cash value of the PIK into Omagine LLC, as follows:
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(i)
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As of the date hereof, RCA has invested 37,500 Omani Rials (equivalent to approximately $97,500) into Omagine LLC and, contingent only upon the occurrence of the Financing Agreement Date, RCA will invest an additional 7,640,625 Omani Rials (equivalent to approximately $19,865,625) on the Financing Agreement Date.
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(ii)
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Subsequent to Omagine LLC acquiring its rights over the Omagine Site pursuant to the terms of the Development Agreement, the PIK will be valued by an independent valuation expert and only after the approval and concurrence of Omagine LLC’s independent auditors, such value will then be booked as an additional non-cash capital investment by RCA into Omagine LLC.
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(iii)
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The result of the foregoing is that RCA presently owns twenty-five percent (25%) of Omagine LLC.
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3.
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Omagine, Inc.’s total aggregate investment into Omagine LLC will be 300,000 Omani Rials (equivalent to approximately $780,000). In addition to the 20,000 Omani Rial OMAG Initial Investment made in 2009, Omagine, Inc. will invest an additional 280,000 Omani Rials (equivalent to approximately $728,000) into Omagine LLC as follows:
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(i)
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As of the date hereof Omagine, Inc. has invested an additional 70,000 Omani Rials (equivalent to approximately $182,000) into Omagine LLC.
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(ii)
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Omagine Inc. will invest the OMAG Final Equity Investment of 210,000 Omani Rials (equivalent to approximately $546,000) into Omagine LLC after the DA is signed but before the Financing Agreement Date. Investment of the OMAG Final Equity Investment by Omagine, Inc. is not contingent upon the occurrence of the Financing Agreement Date. As of the date hereof 41,000 Omani Rials (equivalent to approximately $106,600) of the OMAG Final Equity Investment has been advanced by Omagine, Inc. to Omagine LLC.
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(iii)
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The result of the foregoing is that Omagine, Inc. presently owns sixty percent (60%) of Omagine LLC.
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Omagine LLC
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||||||||||||||||
Shareholder
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Percent Ownership
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Investment (Omani Rials)
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Investment (US Dollars)
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Cash Advances (Omani Rials)
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||||||||||||
Omagine, Inc.
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60 | % | 90,000 | $ | 234,000 |
41,000
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||||||||||
RCA
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25 | % | 37,500 | $ | 97,500 | |||||||||||
CCC-Panama
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10 | % | 15,000 | $ | 39,000 | |||||||||||
CCC-Oman
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5 | % | 7,500 | $ | 19,500 | |||||||||||
Total Capital:
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100 | % | 150,000 | $ | 390,000 |
(i)
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the Pre-Development Expense Amount and,
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(ii)
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the $10 million Success Fee.
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(a)
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Omagine LLC intends to appoint BNP Paribas CIB as the financial advisor to Omagine LLC and to arrange the financing for the Omagine Project, including evaluating various funding, capital and debt structures available to Omagine LLC; and
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(b)
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Omagine LLC intends to appoint BNP Paribas Real Estate for real estate advisory services to Omagine LLC and to assist Omagine LLC by, among other things, providing a full financial feasibility assessment and a market feasibility study for the Omagine Project. This study will be utilized by BNP Paribas CIB in arranging the project financing.
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●
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increases in interest rates;
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adverse changes in foreign exchange rates;
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a decline in prevailing rental rates for the properties we intend to own and lease;
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a general tightening of the availability of credit and project financing facilities;
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a decline in economic conditions in Oman;
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an increase in competition for customers or a decrease in demand by customers for the residential and commercial properties we plan to develop and offer for sale;
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a decline in prevailing sales prices for the properties we intend to develop and offer for sale;
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an increase in supply in Oman of property types similar to those proposed to be developed by us;
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declines in consumer spending during an economic recession or recovery from an economic recession that adversely affect our revenue; and
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the adoption by the relevant government authorities in Oman of more restrictive laws and governmental regulations, including more restrictive zoning, licensing, land use, building or environmental regulations or increased real estate taxes.
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·
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failure to sign a development agreement with the Government of Oman;
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·
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adverse changes in the perceptions of prospective purchasers or users of the attractiveness of the properties proposed to be developed by us;
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·
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opposition from local community or political groups with respect to development or construction at a particular site;
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·
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a change in existing comprehensive zoning plans or zoning or environmental or business licensing regulations that impose additional restrictions on use or requirements with respect to the properties proposed to be developed by us;
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·
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our inability to provide adequate management and maintenance or to obtain adequate insurance for the properties proposed to be developed by us;
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·
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an increase in operating costs;
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·
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new development of a competitor's property in close proximity to the Omagine Project;
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·
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earthquakes, floods or underinsured or uninsured natural disasters; and
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·
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terrorism, political instability or civil unrest in Oman or the MENA Region.
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·
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an inability to obtain or delays in obtaining zoning, environmental, occupancy or other required governmental permits, approvals and authorizations;
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·
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an inability to secure sufficient financing on favorable terms, including an inability to obtain or refinance construction loans;
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·
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a general tightening of the availability of credit and project financing facilities;
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·
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the prices of housing and commercial properties in Oman and consumer and/or business confidence; any of which could affect Omagine LLC’s ability to construct and/or sell homes and to construct, sell and/or lease commercial properties and/or to secure financing;
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·
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construction delays or cost overruns, either of which may increase project development costs; and
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·
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an increase in commodity costs.
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●
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failure to sign the DA with the Government of Oman;
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●
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the exercise of Warrants;
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actual or anticipated fluctuations in our operating results;
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changes in financial estimates by securities analysts or our failure to perform in line with such estimates;
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changes in market valuations of other real estate companies, particularly those that sell products similar to ours;
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announcements by us or our competitors of significant innovations, acquisitions, strategic investors or partnerships, joint ventures or capital commitments; or
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departure of key personnel.
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the broker or dealer approve a person's account for transactions in penny stocks; and
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the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
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obtain the financial information and investment experience and objectives of the person; and
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make a reasonable determination that (a) transactions in penny stocks are suitable for that person, and (b) the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
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sets forth the basis on which the broker or dealer made the suitability determination; and
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states that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
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Quarter Ended
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High
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Low
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||||||
3/30/12
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$
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1.40
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$
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1.10
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||||
6/29/12
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$
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1.52
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$
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1.21
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||||
9/28/12
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$
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1.83
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$
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1.53
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||||
12/31/12
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$
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1.70
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$
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1.51
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||||
3/30/13
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$
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2.03
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$
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1.25
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||||
6/29/13
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$
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1.94
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$
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1.07
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||||
9/28/13
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$
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1.55
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$
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0.68
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||||
12/31/13
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$
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1.25
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$
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0.73
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Plan Category
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Number of shares of Common Stock to be issued upon the exercise of outstanding Stock Options
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Weighted average exercise price of outstanding Stock Options
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Number of shares of Common Stock remaining available for future issuance under equity compensation plans [excluding shares reflected in column (a)]
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|||||||||
(a)
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(b)
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(c)
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||||||||||
Equity compensation plans approved by shareholders (the 2003 Plan)
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2,285,000 | $ | 1.72 | 0 | ||||||||
Equity compensation plans not approved by shareholders
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-0- | -0- | -0- | |||||||||
Total
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2,285,000 | $ | 1.72 | -0- |
●
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Revenue Recognition
.
The method of revenue recognition at Omagine LLC will be determined by management when and if it becomes likely that Omagine LLC will begin generating revenue.
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●
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Valuation Allowance for Deferred Tax Assets
.
The carrying value of deferred tax assets assumes that the Company will not be able to generate sufficient future taxable income to realize the deferred tax assets, based on management's estimates and assumptions.
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●
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$206,250 in 2013 and $168,000 in 2012 of unpaid but accrued salaries payable to Company executives, and
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●
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$1,445,744 in 2013 and $1,761,076 in 2012 representing the fair value of Stock Option awards and/or the extension of the expiration date of certain Stock Options as calculated using the Black-Scholes option pricing model, and
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$76,250 in 2013 and $76,250 in 2012 representing the value of the shares of Common Stock contributed to employees 401(k) plan accounts, and
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●
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$203,484 in 2013 and $181,327 in 2012 representing the value of the shares of Common Stock used by the Company to pay various consulting and professional fees.
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(1)
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Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Registrant;
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(2)
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Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Registrant are being made only in accordance with authorizations of management and directors of the Registrant; and
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(3)
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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Registrant's assets that could have a material effect on the financial statements.
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(a)
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(b)
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(c-1)
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(c-2)
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(d)
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(e)
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(f)
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(g)
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(h)
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Name and Principal Position
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Year
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Unpaid Salary Accrued (1)
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Salary Payments (2)
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Bonus
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Stock Awards (3)
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Option Awards (4)
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All Other
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Total
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Comp.
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||||||||
($)
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($)
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($)
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($)
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($)
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($)
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($)
|
||
Frank J. Drohan, Chief Executive and Financial Officer
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||||||||
2013
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$125,000
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$0
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$0
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$33,889
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$566,727
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$0
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$725,616
|
|
2012
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$125,000
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$0
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$0
|
$34,388
|
$691,874
|
$0
|
$851,262
|
|
2011
|
$125,000
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$0
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$0
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$33,834
|
$47,170
|
$0
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$206,004
|
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Charles P. Kuczynski, Vice-President and Secretary
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||||||||
2013
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$17,917
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$82,083
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$0
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$35,301
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$194,805
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$0
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$330,186
|
|
2012
|
$18,000
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$82,000
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$0
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$35,882
|
$236,847
|
$0
|
$372,729
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2011
|
$69,500
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$30,500
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$0
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$35,444
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$23,585
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$0
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$159,029
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William Hanley, Controller and Principal Accounting Officer
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||||||||
2013
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$63,333
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$16,667
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$0
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$7,060
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$42,508
|
$0
|
$129,568
|
|
2012
|
$25,000
|
$55,000
|
$0
|
$5,980
|
$51,183
|
$0
|
$137,163
|
|
2011
|
$65,000
|
$15,000
|
$0
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$3,222
|
$2,975
|
$0
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$86,197
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Sam Hamdan, Deputy Managing Director, Omagine LLC (5)
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||||||||
2013
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$0
|
$0
|
$0
|
$0
|
$531,350
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$0
|
$531,350
|
|
2012
|
$0
|
$0
|
$0
|
$0
|
$644,479
|
$0
|
$644,479
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2011
|
$0
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$0
|
$0
|
$0
|
$18,768
|
$0
|
$18,768
|
1. Amounts included under Column (c-1) represent amounts recognized as compensation expense for financial statement reporting purposes and not an amount paid to the Named Executive Officers in the year indicated. Such amounts represent salary due to the Named Executive Officer for the year indicated that was not paid to such Named Executive Officer and was accrued as salaries payable.
|
2. Amounts included under Column (c-2) represent amounts recognized as compensation expense for financial statement reporting purposes which were paid to the Named Executive Officers in the year indicated. Such amounts represent the portion of salary due to the Named Executive Officer for the year indicated that was paid to such Named Executive Officer in the year indicated.
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3. Amounts included under Column (e) represent contributions of the Registrant’s Common Stock made in the year indicated to the 401(k) Plan account of the Named Executive Officer, valued at the closing market price of the Common Stock on the dates of such contributions.
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4. Amounts included under Column (f) represent the dollar amount recognized as compensation expense for financial statement reporting purposes for the year indicated under ASC 718 and not an amount paid to or realized by the Named Executive Officers. There can be no assurance that the amounts determined by ASC 718 will ever be realized. In December 2012, the Company extended the expiration date of all January 2012 Options from December 31, 2012 to December 31, 2013 and in December 2013 the Company again extended the expiration date of such January 2012 Options to December 31, 2014. Assumptions used in the calculation of the amounts specified in Column (f) are included in Note 1- STOCK-BASED COMPENSATION and Note 7 – STOCK OPTIONS to the Company's audited financial statements for the fiscal year ended December 31, 2013. (Also see: “Equity Compensation Plan Information” in this Item 11 below).
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5. In addition to the 750,000 January 2012 Stock Options exercisable at $1.70 per share awarded to Mr. Hamdan in 2012, Mr. Hamdan also holds 160,000 Stock Options exercisable at $1.25 per share which were awarded to him in March 2007.
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Name
|
2013
|
2012
|
2011
|
2010
|
||||||||||||
Frank J. Drohan (1)
|
$ | 0 | $ | 155,921 | $ | 125,000 | $ | 0 | ||||||||
Charles P. Kuczynski (2)
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$ | 0 | $ | 11,591 | $ | 62,500 | $ | 0 | ||||||||
William Hanley (3)
|
$ | 0 | $ | 31,250 | $ | 0 | $ | 100,000 |
1.
|
At December 31, 2013, 2012, 2011 and 2010, unpaid accrued officer’s compensation due to Mr. Drohan was $398,154; $273,154; $281,250; and $281,250 respectively. During the year ended December 31, 2012, $155,921 of such accrued but unpaid salary and $247,492 of principal and interest owed by the Company to Mr. Drohan pursuant to a promissory note was offset and utilized by Mr. Drohan for the exercise of 322,730 Rights to purchase 322,730 shares of the Company’s Common Stock at $1.25 per share. During the year ended December 31, 2011, $125,000 of such accrued but unpaid salary due to Mr. Drohan was offset and utilized by him for the exercise of 100,000 stock options at $1.25 per share.
|
2.
|
At December 31, 2013, 2012, 2011 and 2010, unpaid accrued officer’s compensation due to Mr. Kuczynski was $163,575; $145,658; $139,249; and $132,250 respectively. During the year ended December 31, 2012, $11,591 of such accrued but unpaid salary and $51,497 of principal and interest owed by the Company to Mr. Kuczynski pursuant to a promissory note was offset and utilized by Mr. Kuczynski for the exercise of 50,470 Rights to purchase 50,470 shares of the Company’s Common Stock at $1.25 per share. During the year ended December 31, 2011, $62,500 of such accrued but unpaid salary due to Mr. Kuczynski was offset and utilized by him for the exercise of 50,000 stock options at $1.25 per share.
|
3.
|
At December 31, 2013, 2012, 2011 and 2010, unpaid accrued officer’s compensation due to Mr. Hanley was $165,883; $102,550; $108,800; and $43,799 respectively. During the year ended December 31, 2012, $31,250 of such accrued but unpaid salary owed by the Company to Mr. Hanley was offset and utilized by Mr. Hanley for the exercise of 25,000 Rights to purchase 25,000 shares of the Company’s Common Stock at $1.25 per share. During the year ended December 31, 2010, $100,000 of such accrued but unpaid salary due to Mr. Hanley was offset and utilized by him for the purchase of 82,305 shares of the Company’s Common Stock at $1.215 per share.
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
|||||||||||||||
Name
|
Fees Earned or Paid in Cash
($)
|
Stock Awards
($)
|
Option Awards (1)(2)
($)
|
All Other
Compensation ($)
|
Total
($)
|
|||||||||||||||
Estate of Salvatore Bucchere (3)
|
$
|
0
|
$
|
0
|
$
|
35,423
|
$ |
0
|
$
|
35,423
|
||||||||||
Kevin Green (3)
|
$
|
0
|
$
|
0
|
$
|
0
|
$ |
0
|
$
|
0
|
||||||||||
Louis Lombardo
|
$
|
2,500
|
$
|
0
|
$
|
35,963
|
$ |
0
|
$
|
38,463
|
(1)
|
Column (d) represents the dollar amount recognized as compensation expense for financial statement reporting purposes for the year indicated under ASC 718, and not an amount paid to or realized by the named director. There can be no assurance that the amounts determined by ASC 718 will ever be realized. Assumptions used in the calculation of the amounts specified in Column (d) are included in Note 1 - STOCK-BASED COMPENSATION and Note 7 – STOCK OPTIONS to the Company's audited financial statements for the fiscal year ended December 31, 2013.
|
||||||||||||||||||||
(2)
|
In December 2013, the Company extended the expiration date of all January 2012 Options from December 31, 2013 to December 31, 2014. As of December 31, 2013, (a) each of Mr. Lombardo and the estate of Mr. Bucchere had 50,000 fully vested January 2012 Options and Mr. Green had no January 2012 Options. In addition as of December 31, 2013, Mr. Lombardo held (i) 2,000 fully vested Stock Options exercisable at $0. 85 per share, (ii) 2,000 fully vested Stock Options exercisable at $1.38 per share, and (iii) 2,000 fully vested Stock Options exercisable at $1.70 per share; Mr. Green held (i) 2,000 fully vested Stock Options exercisable at $0.85 per share and (ii) 2,000 fully vested Stock Options exercisable at $0.51 per share (See: “Equity Compensation Plan Information” - “Stock Options Granted to Independent Directors” in this Item 11 below).
|
||||||||||||||||||||
(3)
|
Mr. Green resigned in January 2012 and Mr. Bucchere died in April 2012.
|
Compensation Item
|
Amount
|
|||
Annual Retainer
|
$
|
0
|
||
Attendance at Annual Meeting
|
500
|
|||
Per Board Meeting Fee (attendance in person)
|
500
|
|||
Per Board Meeting Fee (attendance by teleconference)
|
250
|
|||
Per Committee Meeting Fee (in person or by teleconference)
|
0
|
|||
Appointment Fee Upon Election to Board of Directors
|
0
|
|||
Non-qualified stock options
|
(1)(2)
|
(1)
|
On the date of appointment to the Board of Directors, new Independent Directors are entitled to a one-time grant of 6,000 non-qualified stock options at the closing price on the date of grant, vesting 2,000 on the date of grant and 2,000 on the first business day of January in each of the two years next following the date of grant.
|
|||
(2)
|
For Independent Directors that have served on the Board for at least 3 years, 2,000 options (or such other number of options as determined by the Board in its discretion) will be granted on the first business day of January in each fiscal year next following such 3 year period, at the closing price on the date of such grant, and vesting immediately upon grant.
|
●
|
In August 2011, the Company’s president exchanged $125,000 of accrued but unpaid salary due to him in order to exercise 100,000 Stock Options at $1.25 per share then held by him and in March 2012 he also exchanged an aggregate of $403,413 of unpaid salary and accrued principal and interest due to him from the Company under a promissory note, in order to exercise 322,730 Rights to purchase 322,730 shares of Common Stock at $1.25 per share in the Company’s 2012 Rights Offering, and
|
●
|
In August 2011, the Company’s vice-president exchanged $62,500 of accrued but unpaid salary due to him in order to exercise 50,000 Stock Options at $1.25 per share then held by him and in March 2012, he also exchanged an aggregate of $63,088 of unpaid salary and accrued principal and interest due to him from the Company under a promissory note, in order to exercise 50,470 Rights to purchase 50,470 shares of Common Stock at $1.25 per share in the Company’s 2012 Rights Offering, and
|
●
|
In July 2010, the Company’s controller exchanged $100,000 of accrued but unpaid salary due to him in order to purchase 82,305 shares of the Company’s Common Stock at $1.215 per share and in March 2012 he also exchanged $31,250 of accrued but unpaid salary due to him in order to exercise 25,000 Rights to purchase 25,000 shares of Common Stock at $1.25 per share in the Company’s 2012 Rights Offering.
|
1)
|
January 2012 Options may be exercised in whole or in part by the holder thereof by delivery of a written notice to the Company (the “Exercise Notice”), of such holder’s election to exercise such January 2012 Options, which Exercise Notice shall (a) specify the number of shares of Common Stock (“Option Shares”) to be purchased, (b) be accompanied by payment to the Company of an amount equal to $1.70 per Option Share multiplied by the number of Option Shares for which the January 2012 Options are being exercised (the “Aggregate Option Exercise Price”) in cash or wire transfer of immediately available funds, and (c) include the surrender of the relevant certificate representing such January 2012 Options (or an indemnification undertaking with respect to such January 2012 Options in the case of the loss, theft or destruction of such certificate). Such documentation and payment shall be delivered by such holder to a common carrier for overnight delivery to the Company as soon as practicable following the date of such Exercise Notice, but in no event later than December 30, 2014 (“Cash Basis”) or
|
2)
|
by delivering an Exercise Notice and in lieu of making payment of the Aggregate Option Exercise Price in cash or wire transfer, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (the “Cashless Exercise”):
|
A =
|
the total number of Option Shares with respect to which the relevant January 2012 Options are then being exercised.
|
|
B =
|
the closing bid price of the Common Stock on the date of exercise of the relevant January 2012 Options.
|
|
C =
|
the exercise price of one dollar and seventy cents ($1.70) in United States currency.
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|||||||||
Name
|
Number of Common
Shares Underlying Unexercised Options
(#) Exercisable
|
Number of Common
Shares Underlying
Unexercised Options
(#) Un-exercisable
|
Option
Exercise
Price
|
Option
Expiration
Date
|
|||||||||
Frank Drohan (1)
|
750,000 | 0 | $ | 1.70 |
December 31, 2014
|
||||||||
100,000 | 0 | $ | 2.60 |
September 22, 2018
|
|||||||||
Charles Kuczynski (2)
|
250,000 | 0 | $ | 1.70 |
December 31, 2014
|
||||||||
50,000 | 0 | $ | 2.60 |
September 22, 2018
|
|||||||||
William Hanley (3)
|
60,000 | 0 | $ | 1.70 |
December 31, 2014
|
||||||||
Sam Hamdan (4)
|
750,000 | 0 | $ | 1.70 |
December 31, 2014
|
||||||||
160,000 | 0 | $ | 1.25 |
March 30, 2017
|
(1)
|
In September 2008, 100,000 Stock Options, vesting ratably over five years, expiring after ten years and exercisable at $2.60 per share, were granted to the Company's President & Chief Executive Officer. In January and April of 2012, an aggregate of 750,000 Stock Options, vesting 50% upon grant and 50% on July 1, 2012, expiring on December 31, 2014 and exercisable at $1.70 per share were granted to the Company's President & Chief Executive Officer.
|
|||||
(2)
|
In September 2008, 50,000 Stock Options, vesting ratably over five years, expiring after ten years and exercisable at $2.60 per share, were granted to the Company's Vice-President & Secretary. In January 2012, 250,000 Stock Options, vesting 50% upon grant and 50% on July 1, 2012, expiring on December 31, 2014 and exercisable at $1.70 per share were granted to the Company's Vice-President & Secretary.
|
|||||
(3)
|
In January 2012, 60,000 Stock Options, vesting 50% upon grant and 50% on July 1, 2012, expiring on December 31, 2014 and exercisable at $1.70 per share were granted to the Company's Controller & Principal Accounting Officer.
|
|||||
(4)
|
In March 2007, 160,000 Stock Options, vesting ratably over five years, expiring after ten years and exercisable at $1.25 per share, were granted to a consultant to the Company who is also the Deputy Managing Director of Omagine LLC. In January 2012, 750,000 Stock Options, vesting 50% upon grant and 50% on July 1, 2012, expiring on December 31, 2014 and exercisable at $1.70 per share were granted to the Deputy Managing Director of Omagine LLC.
|
Number of Options
|
Exercise
Price
|
Date of Grant
|
Expiration Date
|
||||||
Frank Drohan
|
100,000
|
$2.60
|
9/23/2008
|
9/22/2018
|
|||||
Frank Drohan
|
739,000
|
$1.70
|
1/2/2012
|
12/31/2014
|
|||||
Frank Drohan
|
11,000
|
$1.70
|
4/13/2012
|
12/31/2014
|
|||||
Charles Kuczynski
|
50,000
|
$2.60
|
9/23/2008
|
9/22/2018
|
|||||
Charles Kuczynski
|
250,000
|
$1.70
|
1/2/2012
|
12/31/2014
|
|||||
William Hanley
|
10,000
|
$1.80
|
3/28/2014
|
3/27/2019
|
|||||
William Hanley
|
60,000
|
$1.70
|
1/2/2012
|
12/31/2014
|
|||||
Sam Hamdan
|
160,000
|
$1.25
|
3/19/2007
|
3/31/2017
|
|||||
Sam Hamdan
|
750,000
|
$1.70
|
1/2/2012
|
12/31/2014
|
Name
|
Number of Options
|
Exercise Price
|
Date of Grant
|
Expiration Date
|
|||||||
Louis Lombardo
|
2,000 | $ | 0.85 |
5/17/2011
|
5/16/2016
|
||||||
Louis Lombardo
|
50,000 | $ | 1.70 |
1/2/2012
|
12/31/2014
|
||||||
Louis Lombardo
|
2,000 | $ | 1.70 |
4/13/2012
|
4/12/2017
|
||||||
Louis Lombardo
|
2,000 | $ | 1.38 |
1/15/2013
|
1/14/2018
|
||||||
Louis Lombardo
|
10,000 | $ | 1.80 |
3/28/2014
|
3/27/2019
|
||||||
Salvatore Bucchere
|
50,000 | $ | 1.70 |
1/2/2012
|
12/31/2014
|
||||||
Kevin Green
|
2,000 | $ | 0.51 |
7/1/2010
|
6/30/2015
|
||||||
Kevin Green
|
2,000 | $ | 0.85 |
5/17/2011
|
5/16/2016
|
i.
|
member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on the compensation committee or board of directors of the Registrant, or
|
||
ii.
|
director of another entity, one of whose executive officers served on the compensation committee of the Registrant, or
|
||
iii.
|
member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a director of the Registrant.
|
Plan Category
|
Number of shares of Common Stock to be issued upon the exercise of outstanding Stock Options
|
Weighted average exercise price of outstanding Stock Options
|
Number of shares of Common Stock remaining available for future issuance under equity compensation plans [excluding shares reflected in column (a)]
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity compensation plans approved by shareholders
|
2,285,000 | $ | 1.72 | 0 | ||||||||
Equity compensation plans not approved by shareholders
|
0 | $ | 0 | 0 | ||||||||
Total
|
2,285,000 | $ | 1.72 | 0 | ** |
**
|
On March 6, 2014, the Board of Directors approved the adoption of the 2014 Omagine Inc. Stock Option Plan (the “2014 Plan”) pursuant to which three million (3,000,000) shares of Common Stock were reserved for issuance thereunder. The Company intends to seek its shareholders’ ratification of the adoption by the Company of the 2014 Plan. As of the date hereof, 40,000 Stock Options have been issued under the 2014 Plan.
|
(a)
|
(b)
|
(c)
|
||||||
Name and Address
|
Beneficial
Ownership (1)(10)
|
Percent (1)
|
||||||
Frank J. Drohan (2)(4)
|
3,375,137
|
19.9 %
|
||||||
Charles P. Kuczynski (2)(5)
|
931,163
|
5.9 %
|
||||||
Louis J. Lombardo (2)(6)
|
232,487
|
1.5%
|
||||||
Mohammed K. Al-Sada (3)(7)
|
1,636,420
|
10.3%
|
||||||
William Hanley (3)(8)
|
246,034
|
1.6 %
|
||||||
Sam Hamdan (3)(9)
|
910,000
|
5.6 %
|
||||||
All officers and Directors
|
||||||||
As a Group of 5 Persons
|
5,694,821
|
30.7 %
|
(1)
|
Applicable percentage ownership in column (c) is based on 15,454,898 Common Shares outstanding as of April 11, 2014 and on Common Shares owned by the named individual including Common Shares underlying Stock Options, Warrants and convertible notes owned by the named individual that are exercisable for Common Shares within 60 days of April 11, 2014. Beneficial ownership and shares outstanding are determined in accordance with Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended (the “Act”). Common Shares underlying Stock Options, Warrants or convertible notes that are currently exercisable or convertible or exercisable or convertible within 60 days of April 11, 2014 are deemed to be outstanding and beneficially owned by the person holding such Stock Options, Warrants or convertible notes for the purpose of computing the percentage of outstanding Common Shares owned by such person, but are not deemed to be outstanding for the purpose of computing the percentage of outstanding Common Shares owned by any other person.
|
||||||||
(2)
|
The address for each of these individuals is c/o Omagine, Inc. and each is a director of Omagine, Inc. Mr. Drohan and Mr. Kuczynski are officers of the Company.
|
||||||||
(3)
|
The address for each of these individuals is c/o Omagine, Inc. Mr. Hanley is an officer of Omagine, Inc. and Mr. Hamdan is an officer of Omagine LLC.
|
||||||||
(4)
|
Amount in column (b) for Mr. Drohan includes 1,879,677 Common Shares owned of record as of April 11, 2014 by Mr. Drohan plus 1,495,460 Common Shares with respect to which Mr. Drohan has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued shares underlying (i) 100,000 Stock Options exercisable at $2.60 per share, (ii) 750,000 Stock Options exercisable at $1.70 per share, (iii) 322,730 Warrants exercisable at $5.00 per share and (iv) 322,730 Warrants exercisable at $10.00 per share.
|
||||||||
(5)
|
Amount in column (b) for Mr. Kuczynski includes 530,223 Common Shares owned of record as of April 11, 2014 by Mr. Kuczynski plus 400,940 Common Shares with respect to which Mr. Kuczynski has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued shares underlying (i) 50,000 Stock Options exercisable at $2.60 per share, (ii) 250,000 Stock Options exercisable at $1.70 per share, (iii) 50,470 Warrants exercisable at $5.00 per share and (iv) 50,470 Warrants exercisable at $10.00 per share.
|
||||||||
(6)
|
Amount in column (b) for Mr. Lombardo includes 59,057 Common Shares owned of record as of April 11, 2014 by Mr. Lombardo plus 173,430 Common Shares with respect to which Mr. Lombardo has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued shares underlying (i) 2,000 Stock Options exercisable at $0.85 per share, (ii) 2,000 Stock Options exercisable at $1.70 per share, (iii) 2,000 Stock Options exercisable at $1.38 per share, (iv) 10,000 Stock Options exercisable at $1.80 per share, (v) 50,000 Stock Options exercisable at $1.70 per share, (vi) 13,230 Warrants exercisable at $5.00 per share, (vii) 13,230 Warrants exercisable at $10.00 per share, and (viii) a convertible promissory note in the principal amount of $150,000 which together with $52,425 of accrued interest thereon (as of March 31, 2014) is convertible at $2.50 per share into 80,970 Common Shares.
|
||||||||
(7)
|
Amount in column (b) for Mr. Al-Sada includes 1,195,300 Common Shares owned of record as of April 11, 2014 by Mr. Al-Sada plus 441,120 Common Shares with respect to which Mr. Al-Sada has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued shares underlying (i) 220,560 Warrants exercisable at $5.00 per share and (ii) 220,560 Warrants exercisable at $10.00 per share.
|
||||||||
(8)
|
Amount in column (b) for Mr. Hanley includes 126,034 Common Shares owned of record as of April 11, 2014 by Mr. Hanley plus 120,000 Common Shares with respect to which Mr. Hanley has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued shares underlying (i) 10,000 Stock Options exercisable at $1.80 per share, (ii) 60,000 Stock Options exercisable at $1.70 per share, (iii) 25,000 Warrants exercisable at $5.00 per share and (iv) 25,000 Warrants exercisable at $10.00 per share.
|
||||||||
(9)
|
All 910,000 Common Shares included in column (b) for Mr. Hamdan are shares with respect to which Mr. Hamdan has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued shares underlying (i) 160,000 Stock Options exercisable at $1.25 per share and (ii) 750,000 Stock Options exercisable at $1.70 per share.
|
||||||||
(10)
|
Subject to community property laws where applicable, each beneficial owner named in column (a) has sole voting and investment power over the shares beneficially owned by him listed in column (b).
|
March 31, 2014
|
December 31, 2013
|
|||||||
Due to Louis J. Lombardo, a director of the Company, interest at 10%, due on demand, convertible into common stock at a conversion price of $2.50 per share:
|
||||||||
Principal
|
$ | 150,000 | $ | 150,000 | ||||
Accrued interest
|
$ | 52,425 | $ | 48,726 | ||||
Totals
|
$ | 202,425 | $ | 198,726 |
(a)
|
On March 30, 2012 a total of $298,988 representing the entire principal amount and accrued interest on two Notes which were satisfied in March 2012 ($247,492 on a note that was due to Mr. Drohan and $51,496 on a note that was due to Mr. Kuczynski), both as of March 30, 2012, were offset against the payment due from Messrs. Drohan and Kuczynski to the Company for the shares of Common Stock purchased by them pursuant to the exercise of their Rights in the Rights Offering.
|
|||
(b)
|
Other than as mentioned in note (a) above, the amounts provided in the above chart reflect the largest aggregate amount of principal outstanding during the periods for which disclosures are provided.
|
2.
Unpaid salary and unreimbursed expenses due to officers and directors of the Company
:
|
|
||||
December 31, 2013
|
||||
Due to Frank Drohan, a Director and the President of the Company
|
$ | 399,329 | ||
Due to Charles Kuczynski, a Director and the Secretary of the Company
|
$ | 163,575 | ||
Due to William Hanley, the Controller of the Company
|
$ | 168,207 | ||
Due to Louis Lombardo, a Director of the Company
|
$ | 4,000 | ||
Totals
|
$ | 735,111 |
Report of Independent Registered Public Accounting Firm;
|
|
F-2
|
Consolidated Balance Sheets as of the fiscal years ended December 31, 2013 and December 31, 2012;
|
F-3
|
Consolidated Statements of Operations for fiscal years ended December 31, 2013 and December 31, 2012 and for the cumulative period from October 11, 2005 (inception) to December 31, 2013;
|
F-4
|
Consolidated Statements of Changes in Stockholders' Deficit for the cumulative period from October 11, 2005 (inception) to December 31, 2013;
|
F-5
|
Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2013 and December 31, 2012 and for the cumulative period from October 11, 2005 (inception) to December 31, 2013;
|
Notes to the Financial Statements.
|
Exhibit
|
||
Numbers
|
Description
|
|
2
|
Certificate of Ownership and Merger (3)
|
|
3(i)
|
Restated Certificate of Incorporation of the Company dated June 2, 2010 (1)
|
|
3(ii)
|
By-laws of the Company (2)
|
|
4.1
|
Form of Subscription and Warrant Agent Agreement, dated January 31, 2012 between the Company and Continental Stock Transfer & Trust Company (9)
|
|
4.2
|
Specimen of $5 Warrant Certificate (9)
|
|
4.3
|
Specimen of $10 Warrant Certificate (9)
|
|
10.1
|
The CCIC and CCC Agreement (3)
|
|
10.2
|
The May 4, 2011 Standby Equity Distribution Agreement (6)
|
|
10.3
|
The Shareholder Agreement dated as of April 20, 2011 (7)
|
|
10.5
|
Amendment Agreement to the May 4, 2011 SEDA, dated June 21, 2011 (8)
|
|
10.6
|
Convertible Promissory Note payable to Frank J. Drohan (12)
|
|
10.7
|
Convertible Promissory Note payable to Charles P. Kuczynski (12)
|
|
10.8
|
Convertible Promissory Note No. 1 payable to Louis Lombardo (12)
|
|
10.9
|
Convertible Promissory Note No. 2 payable to Louis Lombardo (12)
|
|
10.10
|
Lease Extension Agreement expiring December 31, 2015 between Omagine, Inc. and the Empire State Building LLC (13)
|
|
10.11
|
Waiver Letter
dated May 22, 2012 signed by the Company and YA Master
(10)
|
|
10.12
|
YA Note Purchase Agreement and Amended Schedule III thereto (14)
|
|
14
|
The Code of Ethics (3)
|
|
21
|
Subsidiaries of the Registrant (12)
|
|
99.1
|
The Omagine, Inc. 401(k) Adoption Agreement (4)
|
|
99.2
|
Amended Omagine, Inc. 2003 Stock Option Plan (5)
|
|
99.4
|
Omagine LLC letter to the Minister of Tourism dated December 15, 2013 (
11)
|
|
EX-101.INS
|
XBRL INSTANCE DOCUMENT
|
|
EX-101.SCH
|
XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
|
|
EX-101.CAL
|
XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
|
|
EX-101.DEF
|
XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
|
|
EX-101.LAB
|
XBRL TAXONOMY EXTENSION LABELS LINKBASE
|
|
EX-101.PRE
|
XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE
|
(1)
|
Previously filed with the SEC on July 20, 2010 as an exhibit to the Company’s Report on Form 10-Q for the period ended June 30, 2010 and incorporated herein by reference thereto.
|
(2)
|
Previously filed with the SEC on November 18, 2005 as an exhibit to the Company’s quarterly Report on Form 10-QSB for the period ended September 30, 2005 and incorporated herein by reference thereto.
|
(3)
|
Previously filed with the SEC on April 14, 2008 as an exhibit to the Company’s Report on Form 10-KSB for the fiscal year ended December 31, 2007 and incorporated herein by reference thereto.
|
(4)
|
Previously filed with the SEC on February 25, 2009 as an exhibit to the Company’s Report on Form 10-K for the fiscal year ended December 31, 2008 and incorporated herein by reference thereto.
|
(5)
|
|
(6)
|
Previously filed with the SEC on May 5, 2011 as an exhibit to the Company’s current Report on Form 8-K and incorporated herein by reference thereto.
|
(7)
|
Previously filed with the SEC on November 8, 2011 as an exhibit to the Company’s quarterly Report on Form 10-Q for the period ended September 30, 2011 and incorporated herein by reference thereto and a reference copy was filed as an exhibit to the Company’s current Report on Form 8-K filed with the SEC on May 31, 2011.
|
(8)
|
Previously filed with the SEC on June 21, 2011 as an exhibit to the Company’s current Report on Form 8-K and incorporated herein by reference thereto.
|
(9)
|
Previously filed with the SEC on February 7, 2012 as an exhibit to the Company’s registration statement on Form S-1/A (Registration No. 333-179040) and incorporated herein by reference thereto.
|
(10)
|
Previously filed with the SEC on September 12, 2012 as an exhibit to the Company's registration statement on Form S-1/A (Registration No. 333-175168) and incorporated herein by reference thereto.
|
(11)
|
Previously filed with the SEC on December 16, 2013 and included in the Company’s current Report on Form 8-K and incorporated herein by reference thereto
|
(12)
|
Previously filed with the SEC on January 22, 2013 as an exhibit to the Company’s Amendment Number 2 on Form 10-K/A amending (a) the Company’s Report on Form 10-K filed with the SEC on April 16, 2012 for the fiscal year ended December 31, 2011 (the “Original Filing”), and (b) Amendment No. 1 to the Original Filing filed on Form 10-K/A with the SEC on May 17, 2012, and incorporated herein by reference thereto.
|
(13)
|
Previously filed with the SEC on April 1, 2013 as an exhibit to the Company’s Report on Form 10-K for the fiscal year ended December 31, 2012 and incorporated herein by reference thereto.
|
(14)
|
YA Note Purchase Agreement previously filed with the SEC on August 5, 2013 as an exhibit to the Company's quarterly Report on Form 10-Q for the period ended June 30, 2013 and incorporated herein by reference thereto; Amended Schedule III to the YA Note Purchase Agreement previously filed with the SEC on November 19, 2013 as an exhibit to the Company's quarterly Report on Form 10-Q for the period ended September 30, 2013 and incorporated herein by reference thereto.
|
By:
|
/s/
Frank J. Drohan
|
||
FRANK J. DROHAN, Chairman
|
|||
of the Board of Directors,
|
|||
President and Chief
|
|||
Executive and Financial Officer
|
|||
(Principal Executive Officer and
|
|||
Principal Financial Officer)
|
By:
|
/s/
Frank J. Drohan
|
||
FRANK J. DROHAN
Chairman of the Board of Directors,
|
|||
President and Chief Executive and Financial Officer
|
|||
(Principal Executive Officer and
|
|||
Principal Financial Officer)
|
|||
By:
|
/s/ William Hanley
|
||
WILLIAM HANLEY
Controller and Principal Accounting Officer
|
|||
By:
|
/s/ Charles P. Kuczynski
|
||
CHARLES P. KUCZYNSKI,
|
|||
Vice President, Secretary and Director
|
|||
By:
|
/s/ Louis J. Lombardo
|
||
LOUIS J. LOMBARDO,
|
|||
Director
|
/s/ Michael T. Studer CPA P.C.
|
April 15, 2014
Freeport, New York
|
October 11, 2005
|
||||||||||||
(Inception of
|
||||||||||||
Development
|
||||||||||||
Stage) to
|
||||||||||||
Year Ended December 31,
|
December 31,
|
|||||||||||
2013
|
2012
|
2013
|
||||||||||
REVENUE:
|
||||||||||||
Total revenue
|
$ | - | $ | - | $ | - | ||||||
OPERATING EXPENSES:
|
||||||||||||
Officers and directors compensation (including
|
||||||||||||
stock-based compensation of $951,677, $1,141,458 and
|
||||||||||||
$3,028,036, respectively)
|
1,259,177 | 1,449,958 | 4,997,203 | |||||||||
Professional fees
|
115,698 | 61,588 | 1,474,940 | |||||||||
Consulting fees (including stock-based compensation
|
||||||||||||
of $773,802, $ 699,118 and $1,517,957 respectively)
|
804,885 | 736,499 | 2,765,034 | |||||||||
Commitment fees
|
- | - | 300,000 | |||||||||
Travel
|
102,838 | 136,546 | 1,097,522 | |||||||||
Occupancy
|
146,897 | 123,978 | 1,011,337 | |||||||||
Other selling, general and administrative (including sponsorship fee of
|
||||||||||||
$0 and $30,220, respectively)
|
201,060 | 281,406 | 1,929,542 | |||||||||
Total Operating Expenses
|
2,630,555 | 2,789,975 | 13,575,578 | |||||||||
OPERATING LOSS
|
(2,630,555 | ) | (2,789,975 | ) | (13,575,578 | ) | ||||||
OTHER (EXPENSE) INCOME
|
||||||||||||
Settlement of Qatar Real Estate development dispute
|
- | - | 1,004,666 | |||||||||
Impairment of goodwill
|
- | - | (5,079,919 | ) | ||||||||
Amortization of debt discount
|
(9,168 | ) | - | (103,078 | ) | |||||||
Interest income
|
- | - | 8,805 | |||||||||
Interest expense
|
(36,238 | ) | (35,998 | ) | (279,947 | ) | ||||||
Other (Expense) - Net
|
(45,406 | ) | (35,998 | ) | (4,449,473 | ) | ||||||
NET LOSS FROM CONTINUING OPERATIONS - REAL ESTATE
|
||||||||||||
DEVELOPMENT
|
(2,675,961 | ) | (2,825,973 | ) | (18,025,051 | ) | ||||||
Add net loss attributable to noncontrolling interest in Omagine LLC
|
35,371 | 35,997 | 91,524 | |||||||||
NET LOSS ATTRIBUTABLE TO OMAGINE, INC.
|
(2,640,590 | ) | (2,789,976 | ) | (17,933,527 | ) | ||||||
LOSS FROM DISCONTINUED OPERATIONS - SPORTS APPAREL
|
- | - | (345,990 | ) | ||||||||
NET LOSS
|
(2,640,590 | ) | (2,789,976 | ) | (18,279,517 | ) | ||||||
Net preferred stock dividends
|
- | - | 27,778 | |||||||||
LOSS APPLICABLE TO COMMON STOCKHOLDERS
|
$ | (2,640,590 | ) | $ | (2,789,976 | ) | $ | (18,307,295 | ) | |||
LOSS PER SHARE - BASIC AND DILUTED
|
$ | (0.18 | ) | $ | (0.20 | ) | $ | (1.87 | ) | |||
LOSS PER SHARE - CONTINUING OPERATIONS -REAL ESTATE
|
||||||||||||
DEVELOPMENT
|
$ | (0.18 | ) | $ | (0.20 | ) | $ | (1.83 | ) | |||
LOSS PER SHARE DISCONTINUED OPERATIONS - SPORTS APPAREL
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.04 | ) | |||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
|
14,798,906 | 14,240,622 | 9,789,997 | |||||||||
NOTE 1.
|
NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
|
Shares Issuable
|
||||||||
Years Ended December 31,
|
||||||||
2013
|
2012
|
|||||||
Convertible Notes
|
139,175
|
128,174
|
||||||
Stock Options
|
2,285,000
|
2,269,000
|
||||||
Warrants
|
6,422,124
|
6,363,674
|
||||||
Total Shares of Common Stock Issuable
|
8,846,299
|
8,760,848
|
Percent
|
||||
Shareholder
|
Ownership
|
|||
Omagine, Inc.
|
60
|
%
|
||
RCA
|
25
|
%
|
||
CCC-Panama
|
10
|
%
|
||
CCC-Oman
|
5
|
%
|
||
Total:
|
100
|
%
|
2013
|
2012
|
|||||||
Fair value of restricted shares of common stock issued on December 14, 2012 to investor relations consultant (See Note 6) (a)
|
$ | 0 | $ | 151,700 | ||||
$29,520 fair value of of 30,000 shares of restricted shares of common stock issued to investor relations consultant for period covering September 5, 2013 to March 4, 2014, net of $19,245 amortization thereof (See Note 6) (a)
|
$ | 10,275 | $ | 0 | ||||
Travel advances
|
$ | 0 | $ | 12,439 | ||||
Totals
|
$ | 10,275 | $ | 164,139 |
December 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Due to a director of the Company, interest at 10% per annum, due on demand, convertible into common stock at a conversion price of $2.50 per share:
|
||||||||
Principal
|
150,000
|
150,000
|
||||||
Accrued Interest
|
48,726
|
33,726
|
||||||
Due to investors, interest at 15% per annum, due on demand, convertible into common stock at a conversion price of $2.50 per share:
|
||||||||
Principal
|
50,000
|
50,000
|
||||||
Accrued Interest
|
36,195
|
28,695
|
||||||
Due to investors, interest at 10% per annum, due on demand, convertible into common stock at a conversion price of $2.50 per share:
|
||||||||
Principal
|
50,000
|
100,000
|
||||||
Accrued Interest
|
13,014
|
8,014
|
||||||
$
|
347,935
|
320,435
|
December 31,
|
||||||||
2013
|
2012
|
|||||||
Due to YA Global Master SPV Ltd., interest at 10% per annum, payable in monthly installments of principal plus interest, due in September 2014.
|
$ | 175,000 | - | |||||
Less: Unamortized debt discount
|
(13,332 | ) | - | |||||
Principal, net
|
161,668 | - | ||||||
Accrued interest
|
1,458 | - | ||||||
Total
|
$ | 163,126 | - |
1 monthly installment of $12,500
|
$ |
12,500
|
||
3 monthly installments of $17,500
|
52,500
|
|||
4 monthly installments of $20,000
|
80,000
|
|||
Final Installment
|
30,000
|
|||
Total
|
$ |
175,000
|
Number of Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Term (in years)
|
Aggregate Intrinsic Value
|
|||||||||||||
Outstanding at January 1, 2012
|
344,000
|
$
|
2.01
|
5.67
|
$
|
13,860
|
||||||||||
Granted in 2012
|
2,017,000
|
$
|
1.70
|
0.94
|
-
|
|||||||||||
Exercised in 2012
|
-
|
-
|
-
|
-
|
||||||||||||
Forfeited / Expired in 2012
|
(62,000
|
)
|
$
|
2.19
|
-
|
-
|
||||||||||
Outstanding December 31, 2012
|
2,299,000
|
$
|
1.79
|
1.58
|
$
|
52,960
|
||||||||||
Exercisable at December 31, 2012
|
2,269,000
|
$
|
1.78
|
1.50
|
$
|
52,960
|
||||||||||
Outstanding at January 1, 2013
|
2,299,000
|
$
|
1.79
|
1.58
|
$
|
52,960
|
||||||||||
Granted in 2013
|
2,000
|
$
|
1.38
|
-
|
$
|
-
|
||||||||||
Exercised in 2013
|
(4,000)
|
$
|
0.68
|
-
|
$
|
-
|
||||||||||
Forfeited / Expired in 2013
|
(12,000)
|
$
|
3.55
|
-
|
$
|
-
|
||||||||||
Outstanding December 31, 2013
|
2,285,000
|
$
|
1.72
|
1.43
|
$
|
1,100
|
||||||||||
Exercisable at December 31, 2013
|
2,285,000
|
$
|
1.72
|
1.43
|
$
|
1,100
|
Number of Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Term (in years)
|
||||||||||
Nonvested shares at January 1, 2012
|
60,000
|
$
|
2.60
|
6.83
|
||||||||
Granted in 2012
|
2,017,000
|
$
|
1.70
|
0.96
|
||||||||
Forfeited / Expired in 2012
|
(50,000
|
) |
$
|
1.70
|
0.92
|
|||||||
Vested in 2012
|
(1,997,000
|
) |
$
|
1.70
|
0.72
|
|||||||
Nonvested shares at December 31, 2012
|
30,000
|
$
|
2.60
|
5.83
|
||||||||
Nonvested shares at January 1, 2013
|
30,000
|
$
|
2.60
|
5.83
|
||||||||
Granted in 2013
|
2,000
|
$
|
1.38
|
4.83
|
||||||||
Forfeited / Expired in 2013
|
-
|
$
|
-
|
-
|
||||||||
Vested in 2013
|
(32,000)
|
$
|
2.52
|
3.83
|
||||||||
Nonvested shares at December 31, 2013
|
-
|
-
|
-
|
Year Granted
|
Number Outstanding
|
Number Exercisable
|
Exercise Price
|
Expiration Date
|
||||||
2007
|
160,000
|
160,000
|
$
|
1.25
|
March 31, 2017
|
|||||
2008
|
150,000
|
150,000
|
$
|
2.60
|
September 23, 2018
|
|||||
2010
|
2,000
|
2,000
|
$
|
0.51
|
June 30, 2015
|
|||||
2011
|
4,000
|
4,000
|
$
|
0.85
|
May 16, 2016
|
|||||
2012
|
1,965,000
|
1,965,000
|
$
|
1.70
|
December 31, 2014
|
|||||
2012
|
2,000
|
2,000
|
$
|
1.70
|
April 12, 2017
|
|||||
2013
|
2,000
|
2,000
|
$
|
1.38
|
January 14, 2018
|
|||||
Totals
|
2,285,000
|
2,285,000
|
Stock Options Outstanding
|
Exercisable
|
|||||||||||||||||||||
Range of Exercise Prices
|
Number of Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Term (in years)
|
Number of Shares
|
Weighted Average Exercise Price
|
|||||||||||||||||
$
|
0.50 - $1.00
|
6,000
|
$
|
0.74
|
2.11
|
6,000
|
$
|
0.74
|
||||||||||||||
$
|
1.01 - $2.00
|
2,129,000
|
1.67
|
1.19
|
2,129,000
|
1.67
|
||||||||||||||||
$
|
2.01 - $3.00
|
150,000
|
2.60
|
4.83
|
150,000
|
2.60
|
||||||||||||||||
Totals
|
2,285,000
|
$
|
1.72
|
1.43
|
2,285,000
|
$
|
1.72
|
December 31, 2013
|
December 31, 2012
|
|||||||
Federal net operating loss carry forwards
|
$
|
4,936,000
|
$
|
4,739,000
|
||||
State and city net operating loss carry forwards, net of federal tax benefit
|
1,410,000
|
1,354,000
|
||||||
6,346,000
|
6,093,000
|
|||||||
Less: Valuation allowance
|
(6,346,000)
|
(6,093,000)
|
||||||
Total
|
$
|
-
|
$
|
-
|
2014
|
$
|
102,878
|
||
2015
|
102,878
|
|||
Total
|
$
|
205,756
|
1)
|
The words in Section 2(ii) of the March Agreement are hereby deleted in their entirety and replaced by the following words: “December 31, 2014, or” , and
|
2)
|
The expiration date of Hamdan’s 750,000 January 2012 Options is extended from December 31, 2013 to December 31, 2014, and
|
3)
|
All other terms and conditions of the March Agreement remain in full force and effect.
|
Sam Hamdan
|
Omagine, Inc.
|
|||
|
a Delaware corporation
|
|||
|
|
By: /s/Sam Hamdan
|
By: /s/ Frank J. Drohan
|
|||
Sam Hamdan
|
Frank J. Drohan
|
|||
|
President
|
i.
|
by delivery of a written notice to the Company (the “Exercise Notice”), of Hamdan’s election to exercise such January 2012 Options, which notice shall specify the number of shares of Common Stock (“Shares”) to be purchased, payment to the Company of an amount equal to $1.70 per Share multiplied by the number of Shares for which the January 2012 Options are being exercised (the “Aggregate Exercise Price”) in cash or wire transfer of immediately available funds and the surrender of the relevant certificate representing such January 2012 Options (or an indemnification undertaking with respect to such January 2012 Options in the case of the loss, theft or destruction of such certificate). Such documentation and payment shall be delivered by Hamdan to a common carrier for overnight delivery to the Company as soon as practicable following such date, but in no event later than one business day prior to the Expiration Date (“Cash Basis”) or
|
ii.
|
by delivering an Exercise Notice and in lieu of making payment of the Aggregate Exercise Price in cash or wire transfer, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (the “Cashless Exercise”):
|
Net Number | = | (A x B) – (A x C) | ||||
B | ||||||
|
A =
|
the total number of Shares with respect to which the relevant January 2012 Options are then being exercised.
|
|
B =
|
the Closing Bid Price of the Common Stock on the date of exercise of the relevant January 2012 Options.
|
|
C =
|
the Exercise Price. The Parties agree that the Exercise Price is one dollar and seventy cents ($1.70) in United States currency.
|
|
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Report is being prepared; and
|
|
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
|
d) disclosed in this Report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Omagine, Inc.
|
1.
|
Definitions.
|
(a)
|
"
Board
" - The Board of Directors of the Company.
|
(b)
|
"
Code
" - The Internal Revenue Code of 1986, as amended from time to time.
|
(c)
|
"
Committee
" - The Compensation Committee of the Company's Board, or such other committee of the Board that is designated by the Board to administer the Plan, composed of not less than two members of the Board all of whom are disinterested persons, as contemplated by Rule 16b-3 ("
Rule 16b-3
") promulgated under the Securities Exchange Act of 1934, as amended (the "
Exchange Act
").
|
(d)
|
"
Company
" – Omagine, Inc. and its subsidiaries including subsidiaries of subsidiaries.
|
(e)
|
"
Exchange
Act
" - The Securities Exchange Act of 1934, as amended from time to time.
|
(f)
|
"
Fair Market Value
" - The fair market value of the Company's issued and outstanding Stock (as defined below) as determined in good faith by the Board or Committee.
|
(g)
|
"
Grant
" - The grant of any form of stock option, stock award, or stock purchase offer, whether granted singly, in combination or in tandem (any of which is an “
Award
”), to a Participant pursuant to such terms, conditions and limitations as the Board or Committee may establish in order to fulfill the objectives of the Plan.
|
(h)
|
"
Grant Agreement
" - An agreement between the Company and a Participant that sets forth the terms, conditions and limitations applicable to a Grant.
|
(i)
|
"
Option
" - Either an Incentive Stock Option, in accordance with Section 422 of the Code, or a Nonstatutory Option, to purchase the Company's Stock that may be awarded to a Participant under the Plan. A Participant who receives an Award of an Option shall be referred to as an "
Optionee
."
|
(j)
|
"
Participant
" - A director, officer, employee or consultant of the Company to whom an Award has been made under the Plan.
|
(k)
|
"
Restricted Stock Purchase Offer
" - A Grant of the right to purchase a specified number of shares of Stock pursuant to a written agreement issued under the Plan.
|
(l)
|
"
Securities Act
" - The Securities Act of 1933, as amended from time to time.
|
(m)
|
"
Stock
" - Authorized and issued or unissued shares of common stock of the Company.
|
(n)
|
"
Stock Award
" - A Grant made under the Plan in Stock or denominated in units of Stock for which the Participant is not obligated to pay additional consideration.
|
2.
|
Administration. The Plan shall be administered by the Board, provided however, that the Board may delegate such administration to the Committee. Subject to the provisions of the Plan, the Board and/or the Committee shall have authority to (a) grant, in its discretion, Incentive Stock Options in accordance with Section 422 of the Code, or Nonstatutory Options, Stock Awards or Restricted Stock Purchase Offers; (b) determine in good faith the fair market value of the Stock covered by any Grant; (c) determine which eligible persons shall receive Grants and the number of shares, restrictions, terms and conditions to be included in such Grants; (d) construe and interpret the Plan; (e) promulgate, amend and rescind rules and regulations relating to its administration, and correct defects, omissions and inconsistencies in the Plan or any Grant; (f) consistent with the Plan and with the consent of the Participant, as appropriate, amend any outstanding Grant or amend the exercise date or dates thereof; (g) determine the duration and purpose of leaves of absence which may be granted to Participants without constituting termination of their employment for the purpose of the Plan or any Grant; and (h) make all other determinations necessary or advisable for the Plan's administration. The interpretation and construction by the Board of any provisions of the Plan or selection of Participants shall be conclusive and final. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Grant made thereunder.
|
3.
|
Eligibility.
|
(a)
|
General:
The persons who shall be eligible to receive Grants shall be directors, officers, employees or consultants to the Company. The term consultant shall mean any person, other than an employee, who is engaged by the Company to render services and is compensated for such services. An Optionee may hold more than one Option. Any issuance of a Grant to an officer or director of the Company subsequent to the first registration of any of the securities of the Company under the Exchange Act shall comply with the requirements of Rule 16b-3.
|
(b)
|
Incentive Stock Options:
Incentive Stock Options may only be issued to employees of the Company. Incentive Stock Options may be granted to officers or directors, provided they are also employees of the Company. Payment of a director's fee shall not be sufficient to constitute employment by the Company.
|
(c)
|
Nonstatutory Option:
The provisions of the foregoing Section 3(b) shall not apply to any Option designated as a "
Nonstatutory Option
" or which sets forth the intention of the parties that the Option be a Nonstatutory Option.
|
(d)
|
Stock Awards and Restricted Stock Purchase Offers:
The provisions of this Section 3 shall not apply to any Stock Award or Restricted Stock Purchase Offer under the Plan.
|
4.
|
Stock.
|
(a)
|
Authorized Stock:
Stock subject to Grants may be either unissued or reacquired Stock.
|
(b)
|
Number of Shares:
Subject to adjustment as provided in Section 5(i) of the Plan, the total number of shares of Stock which may be purchased or granted directly by Options, Stock Awards or Restricted Stock Purchase Offers, or purchased indirectly through exercise of Options granted under the Plan shall not exceed three million (3,000,000) shares. If any Grant shall for any reason terminate or expire, any shares allocated thereto but remaining unpurchased upon such expiration or termination shall again be available for Grants with respect thereto under the Plan as though no Grant had previously occurred with respect to such shares. Any shares of Stock issued pursuant to a Grant and repurchased pursuant to the terms thereof shall be available for future Grants as though not previously covered by a Grant.
|
(c)
|
Reservation of Shares:
The Company shall reserve and keep available at all times during the term of the Plan such number of shares as shall be sufficient to satisfy the requirements of the Plan. If, after reasonable efforts, which efforts shall not include the registration of the Plan or Grants under the Securities Act, the Company is unable to obtain authority from any applicable regulatory body, which authorization is deemed necessary by legal counsel for the Company for the lawful issuance of shares hereunder, the Company shall be relieved of any liability with respect to its failure to issue and sell the shares for which such requisite authority was so deemed necessary unless and until such authority is obtained.
|
(d)
|
Application of Funds
: The proceeds received by the Company from the sale of Stock pursuant to the exercise of Options or rights under Stock Purchase Agreements will be used for general corporate purposes.
|
(e)
|
No Obligation to Exercise
: The issuance of a Grant shall impose no obligation upon the Participant to exercise any rights under such Grant.
|
5.
|
Terms and Conditions of Options. Options granted hereunder shall be evidenced by agreements between the Company and the respective Optionees, in such form and substance as the Board or Committee shall from time to time approve. The form of Incentive Stock Option Agreement attached hereto as
Exhibit A
and the three forms of a Nonstatutory Stock Option Agreement for employees, for directors and for consultants, attached hereto as
Exhibit B-1,
Exhibit B-2
and
Exhibit B-3,
respectively, shall be deemed to be approved by the Board. Option agreements need not be identical, and in each case may include such provisions as the Board or Committee may determine, but all such agreements shall be subject to and limited by the following terms and conditions:
|
(a)
|
Number of Shares:
Each Option shall state the number of shares to which it pertains.
|
(b)
|
Exercise Price:
Each Option shall state the exercise price, which shall be determined as follows:
|
(i)
|
Any Incentive Stock Option granted to a person who at the time the Option is granted owns (or is deemed to own pursuant to Section 424(d) of the Code) Stock possessing more than ten percent (10%) of the total combined voting power or value of all classes of Stock of the Company ("
Ten Percent Holder
") shall have an exercise price of no less than 110% of the Fair Market Value of the Stock as of the “Date of Grant”; and
|
(ii)
|
Incentive Stock Options granted to a person who at the time the Option is granted is not a Ten Percent Holder shall have an exercise price of no less than 100% of the Fair Market Value of the Stock as of the Date of Grant.
|
(c)
|
Medium and Time of Payment:
The exercise price shall become immediately due upon exercise of the Option and shall be paid in cash or check made payable to the Company. Should the Company's outstanding Stock be registered under Section 12(g) of the Exchange Act at the time the Option is exercised, then the exercise price may also be paid as follows:
|
|
(i)
|
in shares of Stock held by the Optionee for the requisite period necessary to avoid a charge to the Company's earnings for financial reporting purposes and valued at Fair Market Value on the exercise date, or
|
(ii)
|
through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable written instructions (a) to a Company designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Company by reason of such purchase, and (b) to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction.
|
(d)
|
Term and Exercise of Options:
Any Option granted to an employee of the Company shall become immediately exercisable unless the Board shall specifically determine otherwise, as provided herein. In no event shall any Option be exercisable after the expiration of ten (10) years from the date it is granted, and no Incentive Stock Option granted to a Ten Percent Holder shall, by its terms, be exercisable after the expiration of five (5) years from the date of the Option. Unless otherwise specified by the Board or the Committee in the resolution authorizing such Option, the Date of Grant of an Option shall be deemed to be the date upon which the Board or the Committee authorizes the granting of such Option.
|
(e)
|
Termination of Status as Employee, Consultant or Director:
If Optionee's status as an employee shall terminate for any reason other than Optionee's disability or death, then Optionee (or if the Optionee shall die after such termination, but prior to exercise, Optionee's personal representative or the person entitled to succeed to the Option) shall have the right to exercise the portions of any of Optionee's Incentive Stock Options which were exercisable as of the date of such termination, in whole or in part, not less than 30 days nor more than three (3) months after such termination (or, in the event of "
termination for cause
" as that term is defined in Delaware case law related thereto, or by the terms of the Plan or the Option Agreement or an employment agreement, the Option shall automatically terminate as of the termination of employment as to all shares covered by the Option).
|
(f)
|
Disability of Optionee:
If an Optionee is disabled (within the meaning of Section 22(e)(3) of the Code) at the time of termination, the three (3) month period set forth in Section 5(e) shall be a period, as determined by the Board and set forth in the Option, of not less than six months nor more than one year after such termination.
|
(g)
|
Death of Optionee:
If an Optionee dies while employed by, engaged as a consultant to, or serving as a Director of the Company, the portion of such Optionee's Option which was exercisable at the date of death may be exercised, in whole or in part, by the estate of the decedent or by a person succeeding to the right to exercise such Option at any time within (i) a period, as determined by the Board and set forth in the Option, of not less than six (6) months nor more than one (1) year after Optionee's death, which period shall not be more, in the case of a Nonstatutory Option, than the period for exercise following termination of employment or services, or (ii) during the remaining term of the Option, whichever is the lesser. The Option may be so exercised only with respect to installments exercisable at the time of Optionee's death and not previously exercised by the Optionee.
|
(h)
|
Nontransferability of Option:
No Option shall be transferable by the Optionee, except by will or by the laws of descent and distribution.
|
(i)
|
Recapitalization:
Subject to any required action of shareholders, the number of shares of Stock covered by each outstanding Option, and the exercise price per share thereof set forth in each such Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock of the Company resulting from a stock split, stock dividend, combination, subdivision or reclassification of shares, or the payment of a stock dividend, or any other increase or decrease in the number of such shares affected without receipt of consideration by the Company; provided, however, the conversion of any convertible securities of the Company shall not be deemed to have been "
effected without receipt of consideration
" by the Company.
|
(j)
|
Rights as a Shareholder:
An Optionee shall have no rights as a shareholder with respect to any shares covered by an Option until the effective date of the issuance of the shares following exercise of such Option by Optionee. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 5(i) hereof.
|
(k)
|
Modification, Acceleration, Extension, and Renewal of Options:
Subject to the terms and conditions and within the limitations of the Plan, the Board may modify an Option, or, once an Option is exercisable, accelerate the rate at which it may be exercised, and may extend or renew outstanding Options granted under the Plan or accept the surrender of outstanding Options (to the extent not theretofore exercised) and authorize the granting of new Options in substitution for such Options, provided such action is permissible under Section 422 of the Code and applicable securities laws. Notwithstanding the provisions of this Section 5(k), however, no modification of an Option shall, without the consent of the Optionee, alter to the Optionee's detriment or impair any rights or obligations under any Option theretofore granted under the Plan.
|
(l)
|
Exercise Before Exercise Date:
At the discretion of the Board, the Option may, but need not, include a provision whereby the Optionee may elect to exercise all or any portion of the Option prior to the stated exercise date of the Option or any installment thereof. Any shares so purchased prior to the stated exercise date shall be subject to repurchase by the Company upon termination of Optionee's employment as contemplated by Section 5(n) hereof prior to the exercise date stated in the Option and such other restrictions and conditions as the Board or Committee may deem advisable.
|
(m)
|
Other Provisions:
The Option agreements authorized under the Plan shall contain such other provisions, including, without limitation, restrictions upon the exercise of the Options, as the Board or the Committee shall deem advisable. Shares shall not be issued pursuant to the exercise of an Option, if the exercise of such Option or the issuance of shares thereunder would violate, in the opinion of legal counsel for the Company, the provisions of any applicable law or the rules or regulations of any applicable governmental or administrative agency or body, such as the Code, the Securities Act, the Exchange Act, Delaware law, and the rules promulgated under the foregoing or the rules and regulations of any exchange upon which the shares of the Company are listed. Without limiting the generality of the foregoing, the exercise of each Option shall be subject to the condition that if at any time the Company shall determine that (i) the satisfaction of withholding tax or other similar liabilities, or (ii) the listing, registration or qualification of any shares covered by such exercise upon any securities exchange or under any state or federal law, or (iii) the consent or approval of any regulatory body, or (iv) the perfection of any exemption from any such withholding, listing, registration, qualification, consent or approval is necessary or desirable in connection with such exercise or the issuance of shares thereunder, then in any such event, such exercise shall not be effective unless such withholding, listing registration, qualification, consent, approval or exemption shall have been effected, obtained or perfected free of any conditions not acceptable to the Company.
|
(n)
|
Repurchase Agreement:
The Board may, in its discretion, require as a condition to the Grant of an Option hereunder, that an Optionee execute an agreement with the Company, in form and substance satisfactory to the Board in its discretion ("
Repurchase Agreement
"), (i) restricting the Optionee's right to transfer shares purchased under such Option without first offering such shares to the Company or another shareholder of the Company upon the same terms and conditions as provided therein; and (ii) providing that upon termination of Optionee's employment with the Company, for any reason, the Company (or another shareholder of the Company, as provided in the Repurchase Agreement) shall have the right at its discretion (or the discretion of such other shareholders) to purchase and/or redeem all such shares owned by the Optionee on the date of termination of his or her employment at a price equal to: (A) the fair value of such shares as of such date of termination; or (B) if such repurchase right lapses at 20% of the number of shares per year, the original purchase price of such shares, and upon terms of payment permissible under applicable law; provided that in the case of Options or Stock Awards granted to officers, directors, consultants or affiliates of the Company, such repurchase provisions may be subject to additional or greater restrictions as determined by the Board or Committee.
|
6.
|
Stock Awards and Restricted Stock Purchase Offers.
|
(a)
|
Types of Grants.
|
(i)
|
Stock Award.
All or part of any Stock Award under the Plan may be subject to conditions established by the Board or the Committee, and set forth in the Stock Award Agreement, which may include, but are not limited to, continuous service with the Company, achievement of specific business objectives, increases in specified indices, attaining growth rates and other comparable measurements of Company performance. Such Awards may be based on Fair Market Value or other specified valuation. All Stock Awards will be made pursuant to the execution of a Stock Award Agreement substantially in the form attached hereto as
Exhibit C
.
|
(ii)
|
Restricted Stock Purchase Offer.
A Grant of a Restricted Stock Purchase Offer under the Plan shall be subject to such (i) vesting contingencies related to the Participant's continued association with the Company for a specified time and (ii) other specified conditions as the Board or Committee shall determine, in their sole discretion, consistent with the provisions of the Plan. All Restricted Stock Purchase Offers shall be made pursuant to a Restricted Stock Purchase Offer substantially in the form attached hereto as
Exhibit D
.
|
(b)
|
Conditions and Restrictions.
Shares of Stock which Participants may receive as a Stock Award under a Stock Award Agreement or Restricted Stock Purchase Offer under a Restricted Stock Purchase Offer may include such restrictions as the Board or Committee, as applicable, shall determine, including restrictions on transfer, repurchase rights, right of first refusal, and forfeiture provisions. When transfer of Stock is so restricted or subject to forfeiture provisions it is referred to as "
Restricted Stock
". Further, with Board or Committee approval, Stock Awards or Restricted Stock Purchase Offers may be deferred, either in the form of installments or a future lump sum distribution. The Board or Committee may permit selected Participants to elect to defer distributions of Stock Awards or Restricted Stock Purchase Offers in accordance with procedures established by the Board or Committee to assure that such deferrals comply with applicable requirements of the Code including, at the choice of Participants, the capability to make further deferrals for distribution after retirement. Any deferred distribution, whether elected by the Participant or specified by the Stock Award Agreement, Restricted Stock Purchase Offers or by the Board or Committee, may require the payment be forfeited in accordance with the provisions of Section 6(c). Dividends or dividend equivalent rights may be extended to and made part of any Stock Award or Restricted Stock Purchase Offers denominated in Stock or units of Stock, subject to such terms, conditions and restrictions as the Board or Committee may establish.
|
(c)
|
Cancellation and Rescission of Grants.
Unless the Stock Award Agreement or Restricted Stock Purchase Offer specifies otherwise, the Board or Committee, as applicable, may cancel any unexpired, unpaid, or deferred Grants at any time if the Participant is not in compliance with all other applicable provisions of the Stock Award Agreement or Restricted Stock Purchase Offer, the Plan and with the following conditions:
|
(i)
|
A Participant shall not render services for any organization or engage directly or indirectly in any business which, in the judgment of the chief executive officer of the Company or other senior officer designated by the Board or Committee, is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company. For Participants whose employment has terminated, the judgment of the chief executive officer shall be based on the Participant's position and responsibilities while employed by the Company, the Participant's post-employment responsibilities and position with the other organization or business, the extent of past, current and potential competition or conflict between the Company and the other organization or business, the effect on the Company's customers, suppliers and competitors and such other considerations as are deemed relevant given the applicable facts and circumstances. A Participant who has retired shall be free, however, to purchase as an investment or otherwise, stock or other securities of such organization or business so long as they are listed upon a recognized securities exchange or traded over-the-counter, and such investment does not represent a substantial investment to the Participant or a greater than ten percent (10%) equity interest in the organization or business.
|
(ii)
|
A Participant shall not, without prior written authorization from the Company, disclose to anyone outside the Company, or use in other than the Company's business, any confidential information or material, as defined in the Company's Confidentiality and Non-Disclosure Agreement with the Participant or similar agreement regarding confidential information and intellectual property, relating to the business of the Company, acquired by the Participant either during or after employment with the Company.
|
(iii)
|
Upon exercise, payment or delivery pursuant to a Grant, the Participant shall certify on a form acceptable to the Board or Committee that he or she is in compliance with the terms and conditions of the Plan. Failure to comply with all of the provisions of this Section 6(c) prior to, or during the six months after, any exercise, payment or delivery pursuant to a Grant shall cause such exercise, payment or delivery to be rescinded. The Company shall notify the Participant in writing of any such rescission within two years after such exercise, payment or delivery. Within ten days after receiving such a notice from the Company, the Participant shall pay to the Company the amount of any gain realized or payment received as a result of the rescinded exercise, payment or delivery pursuant to a Grant. Such payment shall be made either in cash or by returning to the Company the number of shares of Stock that the Participant received in connection with the rescinded exercise, payment or delivery.
|
(d)
|
Nonassignability.
|
(i)
|
Except pursuant to Section 6(e)(iii) and except as set forth in Section 6(d)(ii), no Grant or any other benefit under the Plan shall be assignable or transferable, or payable to or exercisable by, anyone other than the Participant to whom it was granted.
|
(ii)
|
Where a Participant terminates employment and retains a Grant pursuant to Section 6(e)(ii) in order to assume a position with a governmental, charitable or educational institution, the Board or Committee, in its discretion and to the extent permitted by law, may authorize a third party (including but not limited to the trustee of a "blind" trust), acceptable to the applicable governmental or institutional authorities, the Participant and the Board or Committee, to act on behalf of the Participant with regard to such Awards.
|
(e)
|
Termination of Employment.
If the employment or service to the Company of a Participant terminates, other than pursuant to any of the following provisions under this Section 6(e), all unexercised, deferred and unpaid Stock Awards or Restricted Stock Purchase Offers shall be cancelled immediately, unless the Stock Award Agreement or Restricted Stock Purchase Offer provides otherwise:
|
(i)
|
Retirement Under a Company Retirement Plan.
When a Participant's employment terminates as a result of retirement in accordance with the terms of a Company retirement plan, the Board or Committee may permit Stock Awards or Restricted Stock Purchase Offers to continue in effect beyond the date of retirement in accordance with the applicable Grant Agreement and the exercisability and vesting of any such Grants may be accelerated.
|
(ii)
|
Rights in the Best Interests of the Company.
When a Participant resigns from the Company and, in the judgment of the Board or Committee, the acceleration and/or continuation of outstanding Stock Awards or Restricted Stock Purchase Offers would be in the best interests of the Company, the Board or Committee may (i) authorize, where appropriate, the acceleration and/or continuation of all or any part of Grants issued prior to such termination, and (ii) permit the exercise, vesting and payment of such Grants for such period as may be set forth in the applicable Grant Agreement, subject to earlier cancellation pursuant to Section 9 or at such time as the Board or Committee shall deem the continuation of all or any part of the Participant's Grants are not in the Company's best interest.
|
(iii)
|
Death or Disability of a Participant.
|
(1)
|
In the event of a Participant's death, the Participant's estate or beneficiaries shall have a period up to the expiration date specified in the Grant Agreement within which to receive or exercise any outstanding Grant held by the Participant under such terms as may be specified in the applicable Grant Agreement. Rights to any such outstanding Grants shall pass by will or the laws of descent and distribution in the following order: (a) to beneficiaries so designated by the Participant; if none, then (b) to a legal representative of the Participant; if none, then (c) to the persons entitled thereto as determined by a court of competent jurisdiction. Grants so passing shall be made at such times and in such manner as if the Participant were living.
|
(2)
|
In the event a Participant is deemed by the Board or Committee to be unable to perform his or her usual duties by reason of mental disorder or medical condition which does not result from facts which would be grounds for termination for cause, Grants and rights to any such Grants may be paid to or exercised by the Participant, if legally competent, or a committee or other legally designated guardian or representative if the Participant is legally incompetent by virtue of such disability.
|
(3)
|
After the death or disability of a Participant, the Board or Committee may in its sole discretion at any time (1) terminate restrictions in Grant Agreements; (2) accelerate any or all installments and rights; and (3) instruct the Company to pay the total of any accelerated payments in a lump sum to the Participant, the Participant's estate, beneficiaries or representative; notwithstanding that, in the absence of such termination of restrictions or acceleration of payments, any or all of the payments due under the Grant might ultimately have become payable to other beneficiaries.
|
(4)
|
In the event of uncertainty as to interpretation of or controversies concerning this Section 6, the determinations of the Board or Committee, as applicable, shall be binding and conclusive.
|
7.
|
Investment Intent. All Grants under the Plan are intended to be exempt from registration under the Securities Act provided by Section 4(2) thereunder. Unless and until the granting of Options or sale and issuance of Stock subject to the Plan are registered under the Securities Act or shall be exempt pursuant to the rules promulgated thereunder, each Grant under the Plan shall provide that the purchases or other acquisitions of Stock thereunder shall be for investment purposes and not with a view to, or for resale in connection with, any distribution thereof. Further, unless the issuance and sale of the Stock have been registered under the Securities Act, each Grant shall provide that no shares shall be purchased upon the exercise of the rights under such Grant unless and until (i) all then applicable requirements of state and federal laws and regulatory agencies shall have been fully complied with to the satisfaction of the Company and its counsel, and (ii) if requested to do so by the Company, the person exercising the rights under the Grant shall (i) give written assurances as to knowledge and experience of such person (or a representative employed by such person) in financial and business matters and the ability of such person (or representative) to evaluate the merits and risks of exercising the Option, and (ii) execute and deliver to the Company a letter of investment intent and/or such other form related to applicable exemptions from registration, all in such form and substance as the Company may require. If shares are issued upon exercise of any rights under a Grant without registration under the Securities Act, subsequent registration of such shares shall relieve the purchaser thereof of any investment restrictions or representations made upon the exercise of such rights.
|
8.
|
Amendment, Modification, Suspension or Discontinuance of the Plan. The Board may, insofar as permitted by law, from time to time, with respect to any shares at the time not subject to outstanding Grants, suspend or terminate the Plan or revise or amend it in any respect whatsoever, except that without the approval of the shareholders of the Company, no such revision or amendment shall (i) increase the number of shares subject to the Plan, (ii) decrease the price at which Grants may be granted, (iii) materially increase the benefits to Participants, or (iv) change the class of persons eligible to receive Grants under the Plan; provided, however, no such action shall alter or impair the rights and obligations under any Option, or Stock Award, or Restricted Stock Purchase Offer outstanding as of the date thereof without the written consent of the Participant thereunder. No Grant may be issued while the Plan is suspended or after it is terminated, but the rights and obligations under any Grant issued while the Plan is in effect shall not be impaired by suspension or termination of the Plan.
|
9.
|
Tax Withholding. The Company shall have the right to deduct applicable taxes from any Grant payment and withhold, at the time of delivery or exercise of Options, Stock Awards or Restricted Stock Purchase Offers or vesting of shares under such Grants, an appropriate number of shares for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. If Stock is used to satisfy tax withholding, such stock shall be valued based on the Fair Market Value when the tax withholding is required to be made.
|
10.
|
Availability of Information. During the term of the Plan and any additional period during which a Grant granted pursuant to the Plan shall be exercisable, the Optionee shall have access to the Company’s regular quarterly and annual reports filed with the Securities and Exchange Commission (“SEC Filings”). The SEC Filings, which are publicly available documents, include information relevant to the risk factors associated with any investment in the Company. Optionee shall have reasonable opportunity to ask questions of the Company and receive answers from the Company concerning its business, operations and financial condition and previous equity sales, and to have all such questions answered to the full satisfaction of the Optionee.
|
11.
|
Notice. Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the chief executive officer of the Company, and shall become effective when it is received by the office of the chief executive officer.
|
12.
|
Indemnification of Board. In addition to such other rights or indemnifications as they may have as directors or otherwise, and to the extent allowed by applicable law, the members of the Board and the Committee shall be indemnified by the Company against the reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any claim, action, suit or proceeding, or in connection with any appeal thereof, 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 Grant granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such claim, action, suit or proceeding, except in any case in relation to matters as to which it shall be adjudged in such claim, action, suit or proceeding that such Board or Committee member is liable for negligence or misconduct in the performance of his or her duties; provided that within sixty (60) days after institution of any such action, suit or Board proceeding the member involved shall offer the Company, in writing, the opportunity, at its own expense, to handle and defend the same.
|
13.
|
Governing Law. The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the Code or the securities laws of the United States, shall be governed by the law of the State of Delaware and construed accordingly.
|
14.
|
Effective and Termination Dates. The Plan shall become effective on date it is approved by the holders of a majority of the shares of Stock then outstanding. The Plan shall terminate ten years later, subject to earlier termination by the Board pursuant to Section 8.
|
OMAGINE, INC., | |||
a Delaware corporation | |||
|
By:
|
/s/ Frank J. Drohan | |
Its: | Chief Executive Officer | ||
|
(a)
|
Date of Option:
|
|
(b)
|
Optionee:
|
|
(c)
|
Number of Shares:
|
|
(d)
|
Exercise Price:
|
|
(e)
|
Expiration Date:
|
|
|
(a)
|
Optionee is an employee of the Company.
|
(b)
|
The Board of Directors (the "
Board
" which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted the Omagine, Inc. 2014 Stock Option Plan (the "
Plan
"), pursuant to which this Option is being granted.
|
(c)
|
The Board has authorized the granting to Optionee of an incentive stock option ("
Option
") as defined in Section 422 of the Internal Revenue Code of 1986, as amended, (the "
Code
") to purchase shares of common stock of the Company ("
Stock
") upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "
Securities Act
") provided by Section 4(2) thereunder.
|
|
(a) Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.
|
(b) Optionee further represents that Optionee has had access to the
Company’s regular quarterly and annual reports filed with the Securities and Exchange Commission (“SEC Filings”). The SEC Filings, which are publicly available documents, include information relevant to the risk factors associated with any investment in the Company. Optionee has had the reasonable opportunity to ask questions of the Company and receive answers from the Company concerning its business, operations and financial condition and previous equity sales, and to have all such questions answered to the full satisfaction of the Optionee.
|
|
(c) Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form,
|
|
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
|
|
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN INCENTIVE STOCK OPTION AGREEMENT DATED ____________ BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
|
|
(a)
Repurchase Right on Termination Other Than for Cause.
For the purposes of this Section, a "
Repurchase Event
" shall mean an occurrence of one of (i) termination of Optionee's employment by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee's spouse pursuant thereto (in which case this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
|
|
(b)
Repurchase Right on Termination for Cause.
In the event Optionee's employment is terminated by the Company "
for cause
", then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
|
|
(c)
Exercise of Repurchase Right.
Any Repurchase Right under Paragraphs 16(a) or 16(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in Delaware law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 16.
|
|
(d)
Right of First Refusal.
In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
|
|
(e)
Acceptance of Restrictions.
Acceptance of the Shares shall constitute the Optionee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
|
|
(f)
Permitted Transfers.
Notwithstanding any provisions in this Section 16 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse or domestic partner, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 16(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.
|
|
(g)
Release of Restrictions on Shares.
All other restrictions under this Section 16 shall terminate five (5) years following the date of this Agreement.
|
I certify that as of the date hereof I am unmarried
|
By his or her signature, the spouse of Optionee hereby agrees to be bound by the provisions of the foregoing INCENTIVE STOCK OPTION AGREEMENT
|
|
Optionee
|
Spouse of Optionee
|
By: |
|
( signature ) | |
Name: |
(a) | Date of Option: | |||
(b) | Optionee: | |||
(c) | Number of Shares: | |||
(d) | Exercise Price: | |||
(e) | Expiration Date: |
|
(b) The Board of Directors (the "
Board
" which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted the Omagine, Inc. 2014 Stock Option Plan (the "
Plan
"), pursuant to which this Option is being granted; and
|
|
(c) The Board has authorized the granting to Optionee of a nonstatutory stock option ("
Option
") to purchase shares of common stock of the Company ("
Stock
") upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "
Securities Act
") provided by Section 4(2) thereunder.
|
|
(a) Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.
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(b) Optionee further represents that Optionee has had access to the
Company’s regular quarterly and annual reports filed with the Securities and Exchange Commission (“SEC Filings”). The SEC Filings, which are publicly available documents, include information relevant to the risk factors associated with any investment in the Company. Optionee has had the reasonable opportunity to ask questions of the Company and receive answers from the Company concerning its business, operations and financial condition and previous equity sales, and to have all such questions answered to the full satisfaction of the Optionee.
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(c) Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
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THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ____________ BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
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(a)
Repurchase Right on Termination Other Than for Cause.
For the purposes of this Section, a "
Repurchase Event
" shall mean an occurrence of one of (i) termination of Optionee's employment by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
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(b)
Repurchase Right on Termination for Cause.
In the event Optionee's employment is terminated by the Company "for cause", then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
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(c)
Exercise of Repurchase Right.
Any Repurchase Right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in Delaware law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.
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(d)
Right of First Refusal.
In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
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(e)
Acceptance of Restrictions.
Acceptance of the Shares shall constitute the Optionee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
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(f)
Permitted Transfers.
Notwithstanding any provisions in this Section 15 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 15(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.
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(g)
Release of Restrictions on Shares.
All other restrictions under this Section 15 shall terminate five (5) years following the date of this Agreement.
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I certify that as of the date hereof I am unmarried
|
By his or her signature, the spouse of Optionee hereby agrees to be bound by the provisions of the foregoing INCENTIVE STOCK OPTION AGREEMENT
|
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Optionee
|
Spouse of Optionee
|
By:
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|
( signature ) | |
Name: |
(a) | Date of Option: | |||
(b) | Optionee: | |||
(c) | Number of Shares: | |||
(d) | Exercise Price: | |||
(e) | Expiration Date: |
|
(b) The Board of Directors (the "
Board
" which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted a 2014 Incentive Stock Plan (the "
Plan
"), pursuant to which this Option is being granted; and
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(c) The Board has authorized the granting to Optionee of a nonstatutory stock option ("
Option
") to purchase shares of common stock of the Company ("
Stock
") upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "
Securities Act
") provided by Section 4(2) thereunder.
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|
(a) Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.
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(b) Optionee further represents that Optionee has had access to the
Company’s regular quarterly and annual reports filed with the Securities and Exchange Commission (“SEC Filings”). The SEC Filings, which are publicly available documents, include information relevant to the risk factors associated with any investment in the Company. Optionee has had the reasonable opportunity to ask questions of the Company and receive answers from the Company concerning its business, operations and financial condition and previous equity sales, and to have all such questions answered to the full satisfaction of the Optionee.
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(c) Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
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|
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
|
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ____________ BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
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(a)
Repurchase Right on Termination Other Than by Removal.
For the purposes of this Section, a "
Repurchase Event
" shall mean an occurrence of one of (i) termination of Optionee's service as a director; (ii) death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, and upon mutual agreement of the Company and Optionee, the Company may repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
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(b)
Repurchase Right on Removal.
In the event Optionee is removed as a director pursuant to Delaware law, or Optionee voluntarily resigns as a director prior to the date upon which the last installment of Shares becomes exercisable pursuant to Section 5, then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse ratably in equal annual increments on each anniversary of the date of this Agreement over the term of this Option specified in Section 4. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon removal or resignation all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of such removal or resignation, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
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(c)
Exercise of Repurchase Right.
Any Repurchase Right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination or cessation of services as director, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in Delaware law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.
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(d)
Right of First Refusal.
In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
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(e)
Acceptance of Restrictions.
Acceptance of the Shares shall constitute the Optionee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
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(f)
Permitted Transfers.
Notwithstanding any provisions in this Section 15 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 15(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.
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(g)
Release of Restrictions on Shares.
All other restrictions under this Section 15 shall terminate five (5) years following the date of this Agreement.
|
I certify that as of the date hereof I am unmarried
|
By his or her signature, the spouse of Optionee hereby agrees to be bound by the provisions of the foregoing INCENTIVE STOCK OPTION AGREEMENT
|
|
Optionee
|
Spouse of Optionee
|
By: | |
( signature ) | |
Name: |
(a) | Date of Option: | |||
(b) | Optionee: | |||
(c) | Number of Shares: | |||
(d) | Exercise Price: | |||
(e) | Expiration Date: |
|
(a) Optionee is an independent consultant to the Company, not an employee;
|
|
(b) The Board of Directors (the "
Board
" which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted a Omagine, Inc. 2014 Stock Option Plan (the "
Plan
"), pursuant to which this Option is being granted; and
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(c) The Board has authorized the granting to Optionee of a nonstatutory stock option ("
Option
") to purchase shares of common stock of the Company ("
Stock
") upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "
Securities Act
") provided by Section 4(2) thereunder.
|
|
(a) Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.
|
|
(b) Optionee further represents that Optionee has had access to the Company’s regular quarterly and annual reports filed with the Securities and Exchange Commission (“SEC Filings”). The SEC Filings, which are publicly available documents, include information relevant to the risk factors associated with any investment in the Company. Optionee has had the reasonable opportunity to ask questions of the Company and receive answers from the Company concerning its business, operations and financial condition and previous equity sales, and to have all such questions answered to the full satisfaction of the Optionee.
|
|
(c) Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
|
|
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
|
|
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ___________ BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
|
|
(a)
Repurchase Right on Termination Other Than for Cause.
For the purposes of this Section, a "
Repurchase Event
" shall mean an occurrence of one of (i) termination of Optionee's service as a consultant, voluntary or involuntary and with or without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
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|
(b)
Repurchase Right on Termination for Cause.
In the event Optionee's service as a consultant is terminated by the Company "for cause" (as contemplated by Section 7), then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse ratably in equal annual increments on each anniversary of the date of this Agreement over the term of this Option specified in Section 4. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon any such termination of service for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
|
|
(c)
Exercise of Repurchase Right.
Any repurchase right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Delaware law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.
|
|
(d)
Right of First Refusal.
In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
|
|
(e)
Acceptance of Restrictions.
Acceptance of the Shares shall constitute the Optionee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
|
|
(f)
Permitted Transfers.
Notwithstanding any provisions in this Section 15 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 15(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.
|
|
(g)
Release of Restrictions on Shares.
All rights and restrictions under this Section 15 shall terminate five (5) years following the date of this Agreement.
|
I certify that as of the date hereof I am unmarried
|
By his or her signature, the spouse of Optionee hereby agrees to be bound by the provisions of the foregoing INCENTIVE STOCK OPTION AGREEMENT
|
|
Optionee
|
Spouse of Optionee
|
By: | |
( signature ) | |
Name: |
(a) |
Date of Award:
|
|||
(b) | Grantee: | |||
(c) | Number of Shares: | |||
(d) | Original Value: |
(a)
|
Grantee is a [
employee/director/consultant
] of the Company.
|
|
(b) The Company has adopted the Omagine, Inc. 2014 Stock Option Plan (the "
Plan
") under which the Company's common stock ("
Stock
") may be offered to directors, officers, employees and consultants pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "
Securities Act
") provided by Section 4(2) thereunder.
|
|
(a)
Repurchase Right on Termination Other Than for Cause.
For the purposes of this Section, a "
Repurchase Event
" shall mean an occurrence of one of (i) termination of Grantee's employment [
or service as a director/consultant
] by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Grantee; (iii) bankruptcy of Grantee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Grantee, to the extent that any of the Shares are allocated as the sole and separate property of Grantee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Grantee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but
not
an obligation) to purchase all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
|
|
(b)
Repurchase Right on Termination for Cause.
In the event Grantee's employment [
or service as a director/consultant
] is terminated by the Company "
for cause
" (as defined below), then the Company shall have the right (but not an obligation) to purchase Shares of Grantee at a price equal to the Original Value. Such right of the Company to purchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. Termination of employment [
or service as a director/consultant
] "
for cause
" means (i) as to employees or consultants, termination for cause as contemplated by Delaware law (including case law related thereto), or as defined in the Plan, this Agreement or in any employment [
or consulting
] agreement between the Company and Grantee, or (ii) as to directors, removal pursuant to Delaware law. In the event the Company elects to purchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
|
|
(c)
Exercise of Repurchase Right.
Any Repurchase Right under Paragraphs 4(a) or 4(b) shall be exercised by giving notice of exercise as provided herein to Grantee or the estate of Grantee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination or cessation of services as director, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Grantee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in Delaware law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 5.
|
|
(d)
Right of First Refusal.
In the event Grantee desires to transfer any Shares during his or her lifetime, Grantee shall first offer to sell such Shares to the Company. Grantee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Grantee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Grantee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Grantee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
|
|
(e)
Acceptance of Restrictions.
Acceptance of the Shares shall constitute the Grantee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Grantee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
|
|
(f)
Permitted Transfers.
Notwithstanding any provisions in this Section 5 to the contrary, the Grantee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Grantee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Grantee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 5(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Grantee and the Company.
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(g)
Release of Restrictions on Shares.
All rights and restrictions under this Section 5 shall terminate five (5) years following the date of this Agreement.
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(a) The Shares granted to him pursuant to this Agreement are being acquired by him for his own account, for investment purposes, and not with a view to, or for sale in connection with, any distribution of the Shares. It is understood that the Shares have not been registered under the Act by reason of a specific exemption from the registration provisions of the Act which depends, among other things, upon the bona fide nature of his representations as expressed herein;
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(b) The Shares must be held by him indefinitely unless they are subsequently registered under the Act and any applicable state securities laws, or an exemption from such registration is available. The Company is under no obligation to register the Shares or to make available any such exemption; and
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(c) Grantee further represents that Grantee has had access to the Company’s regular quarterly and annual reports filed with the Securities and Exchange Commission (“SEC Filings”). The SEC Filings, which are publicly available documents, include information relevant to the risk factors associated with any investment in the Company. Grantee has had the reasonable opportunity to ask questions of the Company and receive answers from the Company concerning its business, operations and financial condition and previous equity sales, and to have all such questions answered to the full satisfaction of the Grantee;
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(d) Unless and until the Shares represented by this Grant are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
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THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN STOCK AWARD AGREEMENT DATED ____________ BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
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and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company's transfer agent.
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(e) Grantee understands that he or she will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, as of the date of grant, exceeds the price paid by Grantee, if any. The acceptance of the Shares by Grantee shall constitute an agreement by Grantee to report such income in accordance with then applicable law. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Grantee's then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Grantee to make a cash payment to cover such liability.
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(a)
Notices.
Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and shall be deemed to have been duly delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Grantee at the last address provided by Grantee for use in the Company's records.
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(b)
Entire Agreement.
This instrument constitutes the sole agreement of the parties hereto with respect to the Shares. Any prior agreements, promises or representations concerning the Shares not included or reference herein shall be of no force or effect. This Agreement shall be binding on, and shall inure to the benefit of, the Parties hereto and their respective transferees, heirs, legal representatives, successors, and assigns.
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(c)
Enforcement.
This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware and subject to the exclusive jurisdiction of the courts located in Wilmington, County of New Castle, Delaware. If Grantee attempts to transfer any of the Shares subject to this Agreement, or any interest in them in violation of the terms of this Agreement, the Company may apply to any court for an injunctive order prohibiting such proposed transaction, and the Company may institute and maintain proceedings against Grantee to compel specific performance of this Agreement without the necessity of proving the existence or extent of any damages to the Company. Any such attempted transaction shares in violation of this Agreement shall be null and void.
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(d)
Validity of Agreement.
The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on the written consent of all parties hereto. It is intended that each Section of this Agreement shall be viewed as separate and divisible, and in the event that any Section shall be held to be invalid, the remaining Sections shall continue to be in full force and effect.
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(a) | Date of Agreement: | |||
(b) | Grantee: | |||
(c) | Number of Shares: | |||
(d) | Purchase Price: |
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(a) Grantee is a [
employee/director/consultant
] of the Company.
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(b) The Company has adopted the Omagine, Inc. 2014 Stock Option Plan (the "
Plan
") under which the Company's common stock ("
Stock
") may be offered to officers, employees, directors and consultants pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "
Securities Act
") provided by Section 4(2) thereunder.
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(c) The Grantee desires to purchase shares of the Company's common stock on the terms and conditions set forth herein.
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(a) Repurchase Right on Termination Other Than for Cause. For the purposes of this Section, a "
Repurchase Event
" shall mean an occurrence of one of (i) termination of Grantee's employment [
or service as a director/consultant
] by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Grantee; (iii) bankruptcy of Grantee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Grantee, to the extent that any of the Shares are allocated as the sole and separate property of Grantee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Grantee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Grantee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
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(b) Repurchase Right on Termination for Cause. In the event Grantee's employment [
or service as a director/consultant
] is terminated by the Company "
for cause
" (as defined below), then the Company shall have the right (but not an obligation) to repurchase Shares of Grantee at a price equal to the Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. Termination of employment [
or service as a director/consultant
] "
for cause
" means (i) as to employees and consultants, termination for cause as contemplated by Delaware law (including case law related thereto), or as defined in the Plan, this Agreement or in any employment [
or consulting
] agreement between the Company and Grantee, or (ii) as to directors, removal pursuant to Delaware law. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
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(c)
Exercise of Repurchase Right.
Any Repurchase Right under Paragraphs 4(a) or 4(b) shall be exercised by giving notice of exercise as provided herein to Grantee or the estate of Grantee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Grantee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in Delaware law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 5.
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(d)
Right of First Refusal.
In the event Grantee desires to transfer any Shares during his or her lifetime, Grantee shall first offer to sell such Shares to the Company. Grantee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Grantee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Grantee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Grantee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
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(e)
Acceptance of Restrictions.
Acceptance of the Shares shall constitute the Grantee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Grantee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
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(f)
Permitted Transfers.
Notwithstanding any provisions in this Section 5 to the contrary, the Grantee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Grantee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Grantee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 5(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Grantee and the Company.
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(g)
Release of Restrictions on Shares.
All rights and restrictions under this Section 5 shall terminate five (5) years following the date upon which the Company receives the full Price as set forth in Section 3.
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(a) The Shares granted to him pursuant to this Agreement are being acquired by him for his own account, for investment purposes, and not with a view to, or for sale in connection with, any distribution of the Shares. It is understood that the Shares have not been registered under the Act by reason of a specific exemption from the registration provisions of the Act which depends, among other things, upon the bona fide nature of his representations as expressed herein;
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(b) The Shares must be held by him indefinitely unless they are subsequently registered under the Act and any applicable state securities laws, or an exemption from such registration is available. The Company is under no obligation to register the Shares or to make available any such exemption; and
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(c) Grantee further represents that Grantee has had access to the Company’s regular quarterly and annual reports filed with the Securities and Exchange Commission (“SEC Filings”). The SEC Filings, which are publicly available documents, include information relevant to the risk factors associated with any investment in the Company. Grantee has had the reasonable opportunity to ask questions of the Company and receive answers from the Company concerning its business, operations and financial condition and previous equity sales, and to have all such questions answered to the full satisfaction of the Grantee;
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(d) Unless and until the Shares represented by this Grant are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
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THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN RESTRICTED STOCK PURCHASE AGREEMENT DATED ____________ BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
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and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company's transfer agent.
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(e) Grantee understands that he or she will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, as of the date of Grant, exceeds the price paid by Grantee. The acceptance of the Shares by Grantee shall constitute an agreement by Grantee to report such income in accordance with then applicable law. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Grantee's then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Grantee to make a cash payment to cover such liability.
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(a)
Notices.
Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and shall be deemed to have been duly delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Grantee at the last address provided by Grantee for use in the Company's records.
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(b)
Entire Agreement.
This instrument constitutes the sole agreement of the parties hereto with respect to the Shares. Any prior agreements, promises or representations concerning the Shares not included or reference herein shall be of no force or effect. This Agreement shall be binding on, and shall inure to the benefit of, the Parties hereto and their respective transferees, heirs, legal representatives, successors, and assigns.
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(c)
Enforcement.
This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware and subject to the exclusive jurisdiction of the courts located in that state. If Grantee attempts to transfer any of the Shares subject to this Agreement, or any interest in them in violation of the terms of this Agreement, the Company may apply to any court for an injunctive order prohibiting such proposed transaction, and the Company may institute and maintain proceedings against Grantee to compel specific performance of this Agreement without the necessity of proving the existence or extent of any damages to the Company. Any such attempted transaction shares in violation of this Agreement shall be null and void.
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(d)
Validity of Agreement.
The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on the written consent of all parties hereto. It is intended that each Section of this Agreement shall be viewed as separate and divisible, and in the event that any Section shall be held to be invalid, the remaining Sections shall continue to be in full force and effect.
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COMPANY:
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OMAGINE, INC.
a Delaware corporation
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By: | ||
Name: | ||
Title: | ||
GRANTEE:
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By:
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( signature ) | ||
Name: |