ODYSSEY MARINE EXPLORATION, INC.
3604 SWANN AVENUE
TAMPA, FLORIDA 33609
(813) 876-1776
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 7, 2003
TO THE SHAREHOLDERS OF ODYSSEY MARINE EXPLORATION, INC.:
NOTICE HEREBY IS GIVEN that the Annual Meeting of Shareholders of Odyssey
Marine Exploration, Inc., a Nevada corporation (the "Company"), will be held
at the Crowne Plaza Hotel Tampa-Westshore, 700 North Westshore Blvd., Tampa,
Florida, on Tuesday, October 7, 2003, at 10:00 a.m., Eastern Time, and at any
and all adjournments thereof, for the purpose of considering and acting upon
the following matters:
1. The election of six (6) Directors of the Company to serve until the
next Annual Meeting of Shareholders and until their successors have been duly
elected and qualified;
2. The ratification of the appointment of Ferlita, Walsh & Gonzalez,
P.A. as the Company's independent auditors; and
3. The transaction of such other business as may properly come before
the meeting or any adjournment thereof.
Only holders of the common stock, $.0001 par value, of the Company of
record at the close of business on August 29, 2003, will be entitled to notice
of and to vote at the Meeting or at any adjournment or adjournments thereof.
The proxies are being solicited by the Board of Directors of the Company.
All shareholders, whether or not they expect to attend the Annual Meeting
of Shareholders in person, are urged to sign and date the enclosed Proxy and
return it promptly in the enclosed postage-paid envelope which requires no
additional postage if mailed in the United States. The giving of a proxy will
not affect your right to vote in person if you attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
JOHN C. MORRIS, PRESIDENT
Tampa, Florida
August 29, 2003
ODYSSEY MARINE EXPLORATION, INC.
3604 SWANN AVENUE
TAMPA, FLORIDA 33609
(813) 876-1776
------------------------------
PROXY STATEMENT
------------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 7, 2003
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of Odyssey Marine Exploration, Inc., a Nevada corporation (the
"Company"), for use at the Company's Annual Meeting of Shareholders to be held
at the Crowne Plaza Hotel Tampa-Westshore, 700 North Westshore Blvd., Tampa,
Florida, on Tuesday, October 7, 2003, at 10:00 a.m., Eastern Time, and at any
adjournment thereof. It is anticipated that this Proxy Statement and the
accompanying Proxy will be mailed to the Company's shareholders on or about
September 8, 2003.
Any person signing and returning the enclosed Proxy may revoke it at any
time before it is voted by giving written notice of such revocation to the
Company, or by voting in person at the Meeting. The expense of soliciting
proxies, including the cost of preparing, assembling and mailing this proxy
material to shareholders, will be borne by the Company. It is anticipated
that solicitations of proxies for the Meeting will be made only by use of the
mails; however, the Company may use the services of its Directors, Officers
and employees to solicit proxies personally or by telephone, without
additional salary or compensation to them. Brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the proxy soliciting
materials to the beneficial owners of the Company's shares held of record by
such persons, and the Company will reimburse such persons for their reasonable
out-of-pocket expenses incurred by them in that connection.
All shares represented by valid proxies will be voted in accordance
therewith at the Meeting.
The Company's Annual Report on Form 10-KSB for the fiscal year ended
February 28, 2003, is being simultaneously mailed to the Company's
shareholders, but does not constitute part of these proxy soliciting
materials.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the Company's
common stock, $.0001 par value, with each share entitled to one vote. Only
shareholders of record at the close of business on August 29, 2003, are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
On August 29, 2003, the Company had 34,338,799 shares of its common stock
outstanding, each share of which is entitled to one vote on all matters to be
voted upon at the Meeting, including the election of Directors. Cumulative
voting in the election of Directors is not permitted.
A majority of the Company's outstanding common stock represented in
person or by proxy shall constitute a quorum at the Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of the
Company's no par value common stock owned beneficially, as of August 29, 2003,
by any person, who is known to the Company to be the beneficial owner of 5% or
more of such common stock, and, in addition, by each Director of the Company,
Nominee for Director, and Executive Officer and by all Directors, Nominees for
Director and Executive Officers of the Company as a group. Information as to
beneficial ownership is based upon statements furnished to the Company by such
persons.
Amount of
Name and Address Beneficial Percentage
of Beneficial Owner Ownership of Class
------------------- -------------- ----------
MacDougald Family
Limited Partnership 9,344,008 (1) 27.0%
3773 Howard Hughes Pkwy.
Suite 300 N
Las Vegas, NV 89109
Gregory P. Stemm 2,036,741 (2) 5.9%
3604 Swann Ave
Tampa, FL 33609
John C. Morris 1,653,729 (3) 4.8%
3604 Swann Ave
Tampa, FL 33609
David A. Morris 416,940 (4) 1.2%
3604 Swann Ave
Tampa, FL 33609
Michael V. Barton 264,615 (5) 0.8%
3604 Swann Avenue
Tampa, FL 33609
David J. Saul 505,000 (6) 1.5%
3604 Swann Ave
Tampa, FL 33609
Henri DeLauze 305,000 (7) 0.9%
3604 Swann Ave
Tampa, FL 33609
George Knutsson 137,500 (8) 0.4%
3604 Swann Avenue
Tampa, FL 33609
George Becker 144,000 (9) 0.4%
3604 Swann Avenue
Tampa, FL 33609
George Lackman 225,000 0.7%
3604 Swann Avenue
Tampa, FL 33609
All Officers and Directors
as a group (9 persons) 5,688,525 15.9%
_______________
(1) Includes 9,114,008 shares and 230,000 shares underlying currently
exercisable stock options, beneficially held by MacDougald Family Limited
Partnership(MFLP), MacDougald Management, Inc.(MMI), and James E. MacDougald.
The limited partners of MFLP are James E. MacDougald, his wife Suzanne M.
MacDougald, and two trusts created for the children and grandchildren of Mr.
and Mrs. MacDougald. MMI is the general partner of MFLP.
(2) Includes 606,182 shares held of record by Greg and Laurie Stemm, 1,218,059
shares held by Adanic Capital, Ltd., a limited partnership for which Greg
Stemm serves as general partner, and 212,500 shares underlying currently
exercisable stock options.
(3) Includes 1,441,229 shares held by John Morris, and 212,500 shares
underlying currently exercisable stock options.
(4) Includes 307,626 shares held by David A. Morris, 24,314 shares held by
Chad E. Morris, his son who lives in the same household, and 85,000 shares
underlying currently exercisable stock options.
(5) Includes 72,000 shares, 75,000 shares underlying currently exercisable
options, and 10,000 shares underlying a currently exercisable warrant held by
Michael Barton, and 95,115 shares and 12,500 shares underlying currently
exercisable stock options held by Laura Barton, Mr. Barton's wife.
(6) Includes 240,000 shares, 125,000 shares underlying currently exercisable
stock options, and 140,000 shares underlying currently exercisable warrants
held by David J. Saul.
(7) Includes 100,000 shares and 125,000 shares underlying currently
exercisable stock options held by Henri DeLauze, and 40,000 shares and 40,000
shares underlying a currently exercisable warrant held by COMEX, SA of which
Mr. DeLauze is owner.
(8) Includes 50,000 shares and 87,500 shares underlying currently exercisable
stock options held by George Knutsson.
(9) Includes 24,000 shares, 110,000 shares underlying currently exercisable
stock options, and 10,000 shares underlying a currently exercisable warrant
held by George Becker.
(10) Includes 100,000 shares, 25,000 shares underlying currently exercisable
stock options and 100,000 shares underlying a currently exercisable warrant
held by Mr. Lackman.
ELECTION OF DIRECTORS
The Board of Directors currently consists of six members. The Board of
Directors recommends the election as Directors of the six (6) nominees listed
below, to hold office until the next Annual Meeting of Shareholders and until
their successors are elected and qualified or until their earlier death,
resignation or removal. Each of the six current members of the present Board
of Directors has been nominated for re-election. The persons named as
"Proxies" in the enclosed form of Proxy will vote the shares represented by
all valid returned proxies in accordance with the specifications of the
shareholders returning such proxies. If at the time of the Meeting any of the
nominees named below should be unable to serve, which event is not expected to
occur, the discretionary authority provided in the Proxy will be exercised to
vote for such substitute nominee or nominees, if any, as shall be designated
by the Board of Directors.
The following table sets forth the name and age of each nominee for
Director, indicating all positions and offices with the Company presently
held, and the period during which each person has served as a Director:
Positions and Offices Held
Name Age and Term as a Director
---- --- --------------------------
John C. Morris 54 Chairman, CEO and Director since
May 1994
Gregory P. Stemm 46 Vice-President - Research and
Operations and Director since
May 1994
George Knutsson 64 Director since June 2001
David J. Saul 63 Director since October 2001
Henri Germain DeLauze 74 Director since October 2001
George E. Lackman, Jr. 72 Director since November 2002
There is no family relationship between any of the Directors or the
Executive Officers of the Company except John Morris and David Morris who are
brothers.
All directors will hold office until the next annual meeting of the
Shareholders.
The Company has no Nominating Committee, but does have a Compensation
Committee and an Audit Committee.
The Compensation Committee presently consists of George Knutsson and
David Saul and George E. Lackman, Jr. The Compensation Committee reviews the
compensation arrangements for each of the Company's Executive Officers and
makes recommendations to the Board of Directors. During the fiscal year ended
February 28, 2003, this Committee held one (1) meeting.
The Audit Committee presently consists of George Knutsson, David Saul and
George E. Lackman, Jr. The Audit Committee reviews audit plans, reports on
material changes in accounting principles and audit reports. During the
fiscal years ended February 28, 2003, the Audit Committee held four (4)
meetings.
The following sets forth biographical information as to the business
experience of each Officer and Director of the Company for at least the last
five years.
John C. Morris has served as an Officer and Director of the Company since
May 1994. Prior to that, Mr. Morris was an officer and director of Seahawk
Deep Ocean Technology, Inc. ("SDOT") from March 1989, until January 1994. As
President of SDOT, Mr. Morris was in charge of the Company that completed the
first archaeologically sound recovery of a deep-water shipwreck, salvaging a
Spanish shipwreck from approximately 1,500 feet of water near the Dry
Tortugas. The recovery yielded nearly 17,000 artifacts consisting of gold,
silver coins, pottery, pearls, jewelry, and numerous other artifacts. From
1992 until 1997, Mr. Morris served on the Board of Directors of the Florida
Aquarium, a not for profit corporation engaged in the operation of a large
aquarium facility in Tampa, Florida.
Gregory P. Stemm has served as Vice President, Research and Operations
and as a member of the Board of Directors since May 1994 and is responsible
for research and operations on all shipwreck projects. Prior to that, he
served as an officer and director of Seahawk Deep Ocean Technology from the
time he co- founded the company in 1989 until January 1994. Stemm is a member
of the United States delegation to the United Nations, Educational, Scientific
and Cultural Organization (UNESCO) expert meeting to consider the "Draft
Convention for the Protection of Underwater Cultural Heritage". This group
will determine future international deep-ocean shipwreck guidelines. As a
principal of Seahawk, Stemm was involved in directing research and technology
for the company, which resulted in locating two Spanish Colonial shipwrecks in
depths greater than 1,000 feet. He was also responsible for directing the
archaeological team and operations that accomplished the world's first remote
archaeological excavation, in a depth of 1,500 feet southwest of the Florida
Keys.
George Knutsson has served as a Director of the Company since June 2001.
Since 1995, Mr. Knutsson has been the President and Chairman of American Boat
Trailer Rental Company, Inc., which is the largest provider of boat trailer
rentals in the Southeast US. In 1978, he founded Dollar Rental Car of Florida
and served as CEO until 1990, when he sold the company. Mr. Knutsson also
owned and operated Pirates Cove Marina in the Tampa Bay area from 1984 until
he sold it in 1995. From 1995 to 1999, he was the co-founder and Chief
Financial Officer of Pro-Tech Monitoring, which uses patented GPS/cellular
technology in the monitoring and tracking of felons worldwide. He received
his Bachelors degree from the University of Florida and a MBA from the
University of South Florida.
Dr. David J. Saul, who is retired, has served as a member of the
Company's Board of Directors since October 2001. Dr. Saul was Bermuda's
Minister of Finance from 1989 to 1995, and Premier of Bermuda from 1995 to
1997. In addition to his political background, Dr. Saul held two senior posts
with Fidelity Investments, from 1984 through 1995, as the President of
Fidelity Bermuda and Executive Vice President of Fidelity International. He
retired from the firm in 1999, but remains a Director of Fidelity's main
international Board, and a Director of some 40 other Fidelity Companies around
the world - including the U.K., Bermuda, Jersey, Tokyo, Hong Kong, Cayman
Islands, Luxembourg and Taiwan. Dr. Saul's professional activities include
two stints as a Director of the Bermuda Monetary Authority and he currently
serves as a Director of Lombard Odier (Bermuda), a subsidiary of the Swiss
Bank, and a Director of the London Steam Ship Owners' Mutual Insurance
Association (Bermuda) Ltd. A keen oceanographer with a passion for shipwrecks
and the sea, he is a founding Trustee of the Bermuda Underwater Exploration
Institute, and a founding Director of the Professional Shipwreck Explorers
Association.
Henri Germain DeLauze has served as a member of the Company's Board of
Directors since October 2001. Mr. DeLauze, one of the world's leading
underwater technology pioneers, brings extensive technical, operational and
management expertise to Odyssey's Board of Directors. Mr. DeLauze was founder
of one of the world's leading underwater technology companies, COMPAGNIE
MARITIME D'EXPERTISES (COMEX), where he has served as President since November
1961. Mr. DeLauze pioneered deep saturation diving using synthetic breathing
mixtures. DeLauze was the first man to reach 335 m. depth during an
experimental dive in May 1968, and his company holds world records for both
deep sea and chamber saturation diving. In 1975, he created COMEX INDUSTRIES
and COMEX PRO, two subsidiaries that design, manufacture and market
sophisticated equipment for professional diving, work submarines and remote
operated vehicles (ROV's). COMEX SERVICES, the Group's oil subsidiary,
extended its activities to all the major offshore oil production areas around
the world from 1966 onwards. Mr. DeLauze is still the principal shareholder
of COMEX SA, which maintains the following divisions: CYBERNETIX (advanced
robotics, manned observation submarines and ROVs/AUVs for scientific
deep-water archaeology and military purposes), COMEX PRO (manufactures
hyperbaric centers for deep diving, large hospital centers and develops and
manufactures ROVs, especially the ACHILLE and the 2,000 m. SUPER ACHILLE.)
During the year 2002, COMEX S.A., its subsidiaries and CYBERNETIX (group
consolidation) employed over 500 people, including 200 engineers.
George E. Lackman Jr., has served as a member of the Company's Board of
Directors since November 2002, and brings experience from his distinguished
career in banking, business operations, shipbuilding, international business
and public service to Odyssey Marine Exploration. Mr. Lackman was founding
Chairman and President of Citrus Park Bank, which was sold to Florida National
Bank in 1985. At Florida National, he served as head of Retail Banking,
Business Banking and Commercial Banking for the Tampa area. After the merger
of Florida National and First Union National Bank he started First Union's
first Private Banking Program in the Tampa area. He retired from First Union
as Vice President of Corporate Development. Mr. Lackman spent 25 years in the
shipyard business, including service as Vice President of Tampa Ship Repair
and Dry Dock Company, Tampa's largest shipyard. He was President of Nutri-Sol
Chemical Company, Marine Insulation Company, Corban Industries and Acetogen
Gas Company of Florida. Mr. Lackman's international experience spans service
as President of an International Investment Group, Chairman of the Tampa
Chamber of Commerce International Board and as President/Chairman of the Tampa
Bay International Business Council. He also served as an Advisor to the
Central American Banks. Mr. Lackman extensive public and community service
includes service to and leadership of many health care organizations. He was
especially active in groups working to reduce infant mortality and increase
prenatal care. Two Florida Governors have called on Mr. Lackman to serve on
various health care and community service groups.
George Becker Jr. (age 68), joined Odyssey as Chief Operating Officer
during April 2002. From 1992 until April 2002, Mr. Becker was the President
of George J. Becker Jr. & Associates, consultants to companies in the leisure,
themed attraction and hospitality industries. Mr. Becker is a senior
executive with thirty years experience in major leisure industry profit center
development, management, marketing, staffing and operations. For twenty-two
years, Mr. Becker was involved in the development and management of the Sea
World marine life parks in the United States and served at various times in
several positions including as the former Executive Vice President of Sea
World Inc., Chairman and Chief Executive Officer, Sea World of Texas,
President and Chief Executive Officer of Sea World of California and President
and Chief Executive Officer of Sea World of Florida. In 1997 Mr. Becker
became President of Entercitement LLC. He led the creative concept and design
of a proposed theme park in Indianapolis, Indiana. Park development was
stopped in 1998 due to a lack of financing and Mr. Becker resigned in 1999
from Entercitement. Mr. Becker has been recognized as a tourism leader for
his work in several regions of the country. A skilled new business developer
and team builder, Mr. Becker is known for creating viable management teams,
achieving excellent productivity and harmony between employees of widely
divergent skills and personalities. Becker has been active in a number of
national, regional and state visitor organizations. He served as Executive
Director of the Florida Tourism Commission. In 1983, he was President of the
Florida Chamber of Commerce and in 1984 he chaired Governor Bob Graham's
Commission on Public Facility Financing.
Michael V. Barton (age 43) joined Odyssey during May 2002, to serve as
Chief Financial Officer. Mr. Barton has spent nearly two decades working in
the financial arena. From 1995 to May 2002 he was Vice President, Wealth
Management Group for First Union National Bank where he had been assisting
high net worth clients with estate and business succession planning,
investment strategies and tax planning since 1995. Prior to that Mr. Barton
worked in the mutual fund industry as a Senior Compliance Officer and in
public accounting. Mr. Barton received B.S. in Business Administration
(Accounting) and Master of Accountancy degrees from the University of South
Florida. He maintains Certified Public Accountant and Certified Financial
Planner designations. Mr. Barton has served in board member and officer
positions with the Tampa Bay Estate Planning Council and as a volunteer with
The United Way Evaluation Committee, H. Lee Moffitt Foundation Planned Giving
Steering Committee and the Easter Seals Planned Giving Committee.
David A. Morris (age 52) has served as Secretary and Treasurer of the
Company since August 1997. Prior to that, Mr. Morris was employed by Seahawk
Deep Ocean Technology where he was an Administrative Assistant to the Chief
Financial Officer from 1994 through 1997, and manager of the Conservation and
Archaeology departments from 1990 through 1994. Mr. Morris graduated with a
Bachelor of Science degree in Mechanical Engineering from Michigan State
University in 1974.
The Company's Board of Directors held three (3) meetings during the
fiscal year ended February 28, 2003. Each Director attended at least 75% of
the aggregate number of meetings held by the Board of Directors and its
Committees during the time each such Director was a member of the Board or of
any Committee of the Board.
The Company's executive officers hold office until the next annual
meeting of directors of the Company, which currently is scheduled for October
7, 2003. There are no known arrangements or understandings between any
director or executive officer and any other person pursuant to which any of
the above-named executive officers or directors was selected as an officer or
director of the Company.
No event occurred during the past five years which is material to an
evaluation of the ability or integrity of any Director or person nominated to
be Director or Executive Officer of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year and certain representations, no persons who were either a
director, officer, or beneficial owner of more than 10% of the Company's
common stock, failed to file on a timely basis reports required by Section
16(a) of the Exchange Act during the most recent fiscal year, except that
Henri DeLauze, David Saul and George Knutsson, Directors of the Company, each
filed a Form 5 late reporting the grant of an option, and MacDougald Family
Limited Partnership failed to file a Form 5.
EXECUTIVE COMPENSATION
The following table sets forth information regarding the executive
compensation for the Company's President for the years ended February 28,
2003, February 28, 2002, and February 28, 2001, and each other executive
officer who had total annual salary and bonus in excess of $100,000 during
such years.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
----------------------------
Annual Compensation Awards Payouts
-------------------- ---------------- -------
Securi-
ties
Re- Under- All
Name and stricted lying LTIP Other
Principal Stock Options/ Payout Compen-
Position Year Salary Bonus Awards SARs(#) ($) sation
----------------- ---- -------- -------- ------- --------- ------ ------
John C. Morris, 2003 $150,000 $ 2,000 -0- -0- -0- -0-
President 2002 $125,000 $ -0- -0- 100,000 -0- -0-
2001 $150,000 $89,456 -0- 50,000 -0- -0-
Gregory P. Stemm, 2003 $150,000 $ 2,000 -0- -0- -0- -0-
Vice-President 2002 $125,000 $ -0- -0- 100,000 -0- -0-
2001 $150,000 $89,456 -0- 50,000 -0- -0-
David A. Morris, 2003 $100,000 $ 1,500 -0- -0- -0- -0-
Secr/Treas 2002 $ 90,000 $ -0- -0- -0- -0- -0-
2001 $125,000 $46,110 -0- 50,000 -0- -0-
AGGREGATE OPTION EXERCISES IN YEAR ENDED
FEBRUARY 28, 2003 AND FEBRUARY 28, 2003 OPTION VALUES
Securities Under- Value of Unexer-
lying Unexercised cised In-The-
Shares Options at Money Options at
Acquired on February 28, 2003 February 28, 2003
Exercise Value Exercisable/ Exercisable/
Name (Number) Realized Unexercisable Unexercisable
---------------- ----------- -------- ----------------- ----------------
John C. Morris -0- -0- 150,000/ -0- $52,000/ -0-
Greg P. Stemm -0- -0- 150,000/ -0- 52,000/ -0-
David A. Morris -0- -0- 50,000/ -0- 24,000/ -0-
EMPLOYMENT AGREEMENTS
John Morris, Greg Stemm, David Morris, Michael Barton and George Becker,
Jr. have employment agreements through February 28, 2005. The base salaries
for John Morris and Greg Stemm have been set at $150,000 per year. The base
salaries for David Morris, Michael Barton and George Becker, Jr. have been set
at $100,000. We anticipate that in addition to their base salary each of
these individuals will receive stock options and certain other benefits as
determined by the Board of Directors.
EMPLOYEE STOCK OPTION PLAN
During the Special Shareholder Meeting held September 8, 1997, the
Shareholders approved an Employee Stock Option Plan (the "Plan"). The Plan
authorized the issuance of options to purchase up to two million shares of the
Company's Common Stock. On November 7, 2001, the shareholders approved an
amendment to the Plan increasing the number of shares in the Plan to three
million five hundred thousand shares.
The Plan allows the Board of Directors to grant non-qualified stock
options from time to time to employees, officers and directors, and
consultants of the Company. The board determines vesting provisions at the
time options are granted. The option price for any option will be no less
than the fair market value of the Common Stock on the date the option is
granted.
During the fiscal year ended February 28, 2003, we issued the following
options to directors, in addition to those itemized in the Summary
Compensation Table above, from the Plan:
Date Number of Option Date
Of Options Exercise Of
Grantee Position Grant Granted Price Expiration
----------------- --------- --------- --------- ------- ---------
George Knutsson Director 3/04/2002 25,000 $1.40 3/04/2006
David Saul Director 3/04/2002 25,000 $1.40 3/04/2006
Henri G. DeLauze Director 3/04/2002 25,000 $1.40 3/04/2006
George Lackman Director 2/28/2003 50,000 $1.25 2/28/2007
EQUITY COMPENSATION PLAN INFORMATION
Plan category Number of securities Weighted Average Number of securities
to be issued upon ex- exercise price of remaining available
exercise of outstand- outstanding options for future issuance
ing options, warrants warrants and rights
and rights
-------------- --------------------- ------------------- --------------------
Equity compen-
sation plans
approved by
securityholders 1,140,000 $ 0.80 2,144,000
--------------------------------------------------------------------------------
Equity compen-
sation plans
not approved by
securityholders (*) (*) (*)
--------------------------------------------------------------------------------
Total 1,140,000 $ 0.80 2,144,000
_______________
(*) Pursuant to a consulting agreement which expires on November 30, 2003, a
consultant has the option to receive compensation in the form of restricted common
stock on a monthly basis, providing he notifies us each month in advance. The number
of shares is determined by dividing $5,000 by the average daily closing price of our
Common Stock for each month that the consultant elects to receive common stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the last two years certain officers, directors, and beneficial
owners entered into transactions with the Company as follows:
On January 1, 2001, we renewed loan agreements with Gregory Stemm and
John Morris authorizing each to borrow a maximum of $120,000 from the Company
at 8% annual interest compounded quarterly. On October 10, 2001, the loans
were revised authorizing borrowing up to $130,000 under the same terms and an
additional $20,000 for the exercise of stock options. On March 1, 2002, the
loans were revised to allow borrowing up to $150,000 under the same terms and
up to $20,000 for the exercise of stock options. The loan balances as of
February 28, 2003, were $146,136 and $146,490 respectively, including
interest. In March 2003, both of the loans were paid down by $19,305. These
loans become due on December 31, 2004.
On April 1, 2001, we entered into a loan extension agreement with Robert
Stemm, Gregory Stemm's father, wherein Mr. Stemm extended the due date on his
loan to the Company until March 31, 2003. The principal amount of $56,144
bore interest at 10% per annum and was secured by an inventory of raw
emeralds. This loan was convertible into shares of Common Stock at the rate
of $.50 per share. On March 31, 2003, we entered into a Debt Conversion
Agreement wherein, Mr. Stemm was paid $13,373 in cash and received 108,000
shares of our common stock for payment in full of the note and accrued
interest. Payment of the note established March 31, 2005, as the expiration
date of the warrants for the purchase of common stock previously issued to Mr.
Stemm as an inducement to extend the loan due dates, and terminated the
security interest in the inventory of raw emeralds that previously secured the
note. Warrants held by Mr. Stemm as a result of his loan to the Company are
as follows:
Date Issued Number of Shares Exercise Price Expiration Date
----------- ---------------- -------------- ---------------
4/1/1999 11,000 $ 3.00/share March 31, 2005
4/1/2000 21,500 $ 2.00/share March 31, 2005
On February 28, 2001, we completed the sale of shares of our Series B
Convertible Preferred Stock, Common Stock and Warrants to MacDougald Family
Limited Partnership ("MFLP") for $3,000,000 in cash. The sale of securities
was made pursuant to a Stock Purchase Agreement dated February 28, 2001. MFLP
purchased 850,000 shares of our Series B Convertible Preferred Stock, 864,008
shares of Common Stock and Warrants to purchase an additional 1,889,000 shares
of Common Stock. The cash used came from operating funds of MFLP. Warrants
to purchase 1,659,000 shares subsequently expired. As of the date of this
report, MFLP holds options to purchase 230,000 shares at $0.30 per share.
Under the terms of the Stock Purchase Agreement, MFLP received certain
rights to require us to register the Common Stock purchased and the shares of
Common Stock issuable on the conversion or exercise of the Preferred Stock and
Warrants for resale under the Securities Act of 1933.
MFLP is a Nevada limited partnership of which MacDougald Management, Inc.
("MMI") is sole general partner. The limited partners include James E.
MacDougald, his wife Suzanne M. MacDougald, and two trusts for the benefit of
the children and grandchildren of Mr. and Mrs. MacDougald. James E.
MacDougald is the President of MMI. Mr. MacDougald served on the Board of
Directors of the Company from February through October, 2001.
On October 12, 2001, MFLP delivered a Notice of Conversion to us pursuant
to which MFLP converted 850,000 shares of Preferred Stock held by MFLP into
8,500,000 shares of Common Stock in accordance with the terms of the Stock
Purchase Agreement and the Certificate of Designation. No additional funds
were expended by MFLP in connection with its acquisition of the Common Stock.
The consideration for the Common Stock was the Preferred Stock tendered by
MFLP to us.
As a condition and an inducement to MFLP to convert the Preferred Stock,
the Company and MFLP executed an Amended and Restated Registration Rights
Agreement, dated October 12, 2001 ("Amended and Restated Registration Rights
Agreement"), pursuant to which the Issuer granted MFLP up to five demand
registration rights. Concurrently with the execution of the Amended and
Restated Registration Rights Agreement, the Company and MFLP entered into the
First Amendment to Series B Stock Purchase Agreement, dated October 12, 2001
("First Amendment to Stock Purchase Agreement"), which eliminated certain of
MFLP's rights under the Stock Purchase Agreement.
On May 26, 1998, we signed an agreement with a subcontractor that
entitled it to receive 5% of the post finance cost proceeds from any
shipwrecks in a certain search area of the Mediterranean Sea. A shipwreck we
have found, which we believe to be the HMS Sussex, is located within the
specified search area and we will be responsible to share future revenues, if
any, from this shipwreck. On December 9, 2002, a Georgia limited liability
company acquired the 5% interest in the Cambridge Project from the
subcontractor through a foreclosure sale. John Morris and Greg Stemm have
member interests of 32% and 28%, respectively, in the limited liability
company.
REPORT OF THE AUDIT COMMITTEE
The Company has a standing Audit Committee (the "Audit Committee") of the
Board of Directors. The Audit Committee currently consists of Messrs.
Knutsson, Saul and Lackman, who are independent (as defined in Rule
4200(a)(14) of the National Association of Securities Dealers' listing
standards). In January 2003, the Audit Committee adopted a charter which is
attached hereto as Appendix A. The Audit Committee, on behalf of the Board,
oversees the Company's financial reporting process. In fulfilling its
oversight responsibilities, the Audit Committee reviewed with Management the
audited financial statements and the footnotes thereto in the Company's Annual
Report on Form 10-KSB for the fiscal year ended February 28, 2003, and
discussed with management the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments and the
clarity of the disclosures in the financial statements. The Audit Committee
held four (4) meetings in fiscal year ended February 28, 2003.
The Company's outside independent public accountants, Ferlita, Walsh &
Gonzalez, P.A., are responsible for expressing an opinion on the conformity of
the Company's audited financial statements in all material respects, to
accounting principles generally accepted in the United States. The Audit
Committee reviewed and discussed with the independent public accountants their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
by the Audit Committee with the Company's independent public accountants under
Statement on Auditing Standards 61, as amended by SAS 90. The Company's
independent public accountants have expressed the opinion that the Company's
audited financial statements conform, in all material respects, to accounting
principles generally accepted in the United States. The independent public
accountants have full and free access to the Audit Committee.
The Audit Committee Chairman discussed with the Company's independent
public accountants their independence from management and the Company, and
received from them the written disclosures and the letter concerning the
independent accountants' independence required by the Independence Standard
Board Standard No. 1.
The Audit Committee Chairman discussed with the Company's independent
public accountants the overall scope and plans of the audit. The Audit
Committee Chairman met with the independent public accountants to discuss the
results of their audit, their evaluations of the Company's internal controls
and the overall quality of the Company's financial reporting.
In reliance on the review and discussions referred to above, the Audit
Committee recommended to the Board that the audited financial statements be
included in the Annual Report on Form 10-KSB for the fiscal year ended
February 28, 2003, for filing with the Securities and Exchange Commission.
The Audit Committee also recommended to the Board of Directors the selection
of Ferlita, Walsh & Gonzalez, P.A., to serve as the Company's independent
public accountants for the fiscal year ending February 28, 2004.
MEMBERS OF THE AUDIT COMMITTEE:
George Knutsson, Chairman
David Saul
George E. Lackman, Jr.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The independent accounting firm of Ferlita, Walsh & Gonzalez, P.A.,
audited the financial statements of the Company for the year ended February
28, 2003, and has been selected in such capacity for the current fiscal year.
At the direction of the Board of Directors, this appointment is being
presented to the shareholders for ratification or rejection at the Annual
Meeting of Shareholders. If the shareholders do not ratify the appointment of
Ferlita, Walsh & Gonzalez, P.A., the appointment of auditors will be
reconsidered by the Board of Directors.
It is expected that representatives of Ferlita, Walsh & Gonzalez, P.A.,
will be present at the meeting and will be given an opportunity to make a
statement if they desire to do so. It is also expected that the
representatives will be available to respond to appropriate questions from
shareholders.
AUDIT FEES. The fees billed for professional services rendered by the
independent auditors for the audit of the Company's financial statements for
the fiscal year ended February 28, 2003, and for the reviews of the financial
statements included in the Company's Form 10-QSB's during the last fiscal year
amounted to $21,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The
independent auditors did not provide professional services during the fiscal
year ended February 28, 2003 relating to financial information systems design
and implementation.
ALL OTHER FEES. The fees billed by the independent auditors during the
fiscal year ended February 28, 2003, for non-audit services rendered amounted
to $2,600. These services consisted of accounting rules research. The Audit
Committee has considered the other fees paid to Ferlita, Walsh & Gonzalez,
P.A. and concluded that they do not impair the independence of Ferlita, Walsh
& Gonzalez, P.A.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
FOR THE 2004 ANNUAL MEETING OF SHAREHOLDERS
Any proposal by a shareholder intended to be presented at the Company's
2004 Annual Meeting of Shareholders must be received at the offices of the
Company, 3604 Swann Avenue, Tampa, Florida 33609, a reasonable amount of time
prior to the mailing of the proxy statement for that meeting in order to be
included in the Company's proxy statement and proxy relating to that meeting.
JOHN C. MORRIS, PRESIDENT
Tampa, Florida
August 29, 2003
APPENDIX A
AUDIT COMMITTEE CHARTER
This Audit Committee Charter has been adopted by the Audit Committee
(Committee) of the Board of Directors of Odyssey Marine Exploration, Inc.
(Company) and ratified by the Board of Directors of the Company.
The Committee shall consist of a minimum of three directors. As
determined by the Board of Directors in accordance with applicable
requirements, all members of the Committee shall be independent directors
having no relationship that may interfere with the exercise of their objective
judgment in discharging the responsibilities set forth below. As also
determined by the Board of Directors, all members of the Committee shall have
sufficient financial experience and ability to enable them to discharge such
responsibilities, and at least one member shall have accounting or related
financial management expertise. The Committee shall have the following
responsibilities with respect to Odyssey Marine Exploration Inc. "Company",
which term shall include without limitation its subsidiaries Odyssey Marine
Services, Inc., Odyssey Marine, Inc., and OVH, Inc.:
1. To recommend to the Board of Directors, for share owner approval, the
independent auditor to examine the Company's accounts, controls and financial
statements. The independent auditor is ultimately accountable to the Board of
Directors and to the Committee, and the Board of Directors and the Committee
have the ultimate authority and responsibility to select, evaluate and if
necessary replace the independent auditor.
2. To review and approve the scope of the examination to be conducted by
the independent auditor. In addition, the Committee shall at least annually
obtain from the independent auditor a formal written statement delineating all
relationships between the independent auditor and the Company, and shall at
least annually discuss with the independent auditor any relationship or
services which may impact the independent auditor's objectivity or
independence, and shall take or recommend that the Board take appropriate
actions to ensure such independence.
3. To review and approve the Disclosure Committee functions, including:
(I) purpose, authority and organization; (ii) quarterly disclosure committee
findings; and (iii) concurrence in the appointment, removal of the Disclosure
Committee Chairman.
4. To review results of the examinations of the financial statements of
the Company by the independent auditors, their evaluation of the Company's
internal system of disclosure and financial controls, and their annual report
on the Company's financial statements.
5. To review, with the Chief Financial Officer, Chief Accounting Officer
or such others as the Committee deems appropriate the Company's internal
system of disclosure and financial controls and the results of Disclosure
Committee findings.
6. To review the Company's financial reporting, the accounting standards
and principles followed by the Company and significant changes in such
standards or principles or in their application.
7. To review and investigate any matters pertaining to the integrity of
management, including conflicts of interest, or adherence to standards of
business conduct as required in the policies of the Company. In connection
therewith, the Committee will meet, as deemed appropriate, with Outside
Counsel and other Company officers or employees. The Committee will have
procedures in place for the receipt, retention and treatment of complaints
about accounting and internal control issues including a process for handling
anonymous and confidential submissions by Company employees.
In discharging its responsibilities, the Committee will periodically meet
with the Company's external auditors without the presence of any Company
officer or employee. The Committee shall have the authority and authorization
to seek legal and financial opinions on any matter the committee believes to
be material to the financial reporting and disclosure of the Company. The
Committee shall have the authority and authorization to appropriate funds to
pay for the audit, external opinions and expertise, tax return preparation and
committee member expenses associated with their responsibilities. The Company
shall budget funds accordingly.
This Audit Committee Charter is hereby adopted this 3rd day of January,
2003 by the undersigned.
/s/ George A. Knutsson, Chairman
/s/ George E. Lackman, Committee Member
/s/ David J. Saul, Committee Member
2
P R O X Y
ODYSSEY MARINE EXPLORATION, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John C. Morris with the power to appoint a
substitute, and hereby authorizes him to represent and to vote as designated
below, all the shares of common stock of Odyssey Marine Exploration, Inc.
held of record by the undersigned on August 29, 2003, at the Annual Meeting of
Shareholders to be held on October 7, 2003, or any adjournment thereof.
1. Election of Directors:
[ ] FOR all nominees listed below (except as marked to the contrary)
[ ] WITHHOLD authority to vote for all the nominees listed below:
John C. Morris Gregory P. Stemm
George Knutsson David J. Saul
Henri Germain DeLauze George E. Lackman, Jr.
[INSTRUCTION: To withhold authority to vote for any individual nominee, cross
out that nominee's name above and initial.]
2. The ratification of the appointment of Ferlita, Walsh & Gonzalez,
P.A., as the Company's independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN
ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATIONS ABOVE. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE
TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE
UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders, Proxy Statement and Annual Report.
Dated: _____________, 2003.
_________________________________________
_________________________________________
Signature(s) of Shareholder(s)
Signature(s) should agree with the name(s) stenciled hereon. Executors,
administrators, trustees, guardians and attorneys should indicate when
signing. Attorneys should submit powers of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ODYSSEY
MARINE EXPLORATION, INC. PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED
PRE-ADDRESSED ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO
VOTE IN PERSON IF YOU ATTEND THE MEETING.