Document:

EXHIBIT 10.1

 

CAVAN MARITIME LIMITED 

2005 EQUITY INCENTIVE PLAN

 

1.                                       Purpose.  The purpose of the Cavan Maritime Limited 2005
Equity Incentive Plan (the “Plan”) is to establish a flexible vehicle through
which Cavan Maritime Limited, a Marshall Islands holding company (the “Company”),
can offer equity-based compensation incentives to eligible personnel of the
Company and its subsidiaries and affiliates in order to attract, retain and
motivate such personnel and to further align the interests of such personnel with
those of the shareholders of the Company.

 

2.                                       Types
of Awards.  Awards under the Plan may
be in the form of (a) options to purchase shares of the Company’s common
stock, $.001 par value (“Common Stock”), including options intended to qualify
as “incentive stock options” (“ISOs”) within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”), and options which
do not qualify as ISOs (“NQSOs”), (b) restricted shares of Common Stock, (c) restricted
stock units, and (d) other equity-based awards related to shares of Common
Stock, including stock appreciation rights and dividend equivalents, which the
Committee (as hereinafter defined) determines to be consistent with the
purposes of the Plan.  In addition,
Non-Employee Directors (as hereinafter defined) shall receive automatic grants
of NQSOs pursuant to Section 9 hereof.

 

3.                                       Administration.

 

(a)                                  Committee.  The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company (the “Board”) or
such other committee or subcommittee thereof appointed by the Board from time
to time (the “Committee”), provided however that, (i) the Board may, in
its sole discretion, make awards under the Plan, and (ii) to the extent
permitted by applicable law, the Board may, in its sole discretion, delegate to
an executive officer or officers of the Company the authority to grant a
specified number of options under the Plan, on such terms and conditions as the
Board shall establish from time to time, to employees of the Company or its
subsidiaries or affiliates who are not officers or directors of the
Company.  If a Committee is appointed,
then, unless the Board determines otherwise, its members shall consist solely
of two (2) or more individuals who qualify as “non-employee directors”
under Rule 16b-3 promulgated under Section 16 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and as “outside
directors” under Section 162(m) of the Code.  If for any reason the Committee does not
satisfy the “non-employee director” requirements of Rule 16b-3 or the “outside
director” requirements of Section 162(m) of the Code, such non-compliance
shall not affect the validity of the awards, interpretations or other actions
of the Committee.  To the extent that the
Plan is administered by the Board, the Board shall have all the authority and
responsibility granted to the Committee herein.

 

(b)                                 Authority
of Committee.  Subject to the
limitations of the Plan, the Committee, acting in its sole and absolute
discretion, shall have full power and authority to (i) select the persons
to whom awards shall be made under the Plan, (ii) make awards to such
persons and prescribe the terms and conditions of such awards, (iii) construe,
interpret and apply the provisions of the Plan and of any agreement or other
document evidencing an award made

 

 

under the Plan, (iv) prescribe,
amend and rescind rules and regulations relating to the Plan, including rules governing
its own operations, (v) correct any defect, supply any omission and
reconcile any inconsistency in the Plan, (vi) amend any outstanding award
in any respect, including, without limitation, to accelerate the time or times
at which the award becomes vested, unrestricted or may be exercised, (vii) carry
out any responsibility or duty specifically reserved to the Committee under the
Plan, and (viii) make any and all determinations and interpretations and
take such other actions as may be necessary or desirable in order to carry out
the provisions, intent and purposes of the Plan.  A majority of the members of the Committee
shall constitute a quorum.  The Committee
may act by the vote of a majority of its members present at a meeting at which
there is a quorum or by unanimous written consent.  All decisions of the Committee pursuant to
the provisions of the Plan, including questions of construction, interpretation
and administration, shall be final, conclusive and binding on all persons.

 

(c)                                  Indemnification.  To the maximum extent permitted by law, the
Company shall indemnify and hold harmless each member of the Committee and any
employee or director of the Company to whom any duty or power relating to the
administration or interpretation of the Plan is delegated from and against any
loss, cost, liability (including any sum paid in settlement of a claim with the
approval of the Board), damage and expense (including legal and other expenses
incident thereto) arising out of or incurred in connection with the Plan,
unless and except to the extent attributable to such person’s fraud or willful
misconduct.

 

4.                                       Share
Limitations.  Subject to adjustment
pursuant to Section 13 hereof, the aggregate number of shares of Common
Stock that may be issued (or used for reference purposes) under the Plan is
                                .  For this purpose, the following shares shall
be deemed not to have been issued and shall be deemed to remain available for
issuance: (a) shares covered by the unexercised portion of an option or
stock appreciation right that terminates, expires or is canceled, (b) shares
of restricted stock that are forfeited or repurchased in accordance with the
terms of the award, (c) shares represented by restricted stock units or
other-equity based awards that are forfeited, canceled or otherwise terminated,
and (d) shares that are withheld in order to pay the purchase price for
shares covered by any award or to satisfy the tax withholding obligations
associated with any award under the Plan. 
Shares of Common Stock available for issuance under the Plan may be
authorized and unissued, held by the Company in its treasury or otherwise
acquired for purposes of the Plan.  No
fractional shares of Common Stock shall be issued under the Plan.

 

5.                                       Eligibility.  Awards under the Plan may be made to such
officers, directors, employees (including prospective employees), consultants
and other individuals who may perform services for the Company or its
subsidiaries or affiliates, as the Committee may select.  In making awards under the Plan, the Committee
may give consideration to the functions and responsibilities of a potential
recipient, the potential recipient’s previous and/or expected future
contributions to the business of the Company or its subsidiaries or affiliates
and such other factors as the Committee deems relevant under the circumstances.

 

6.                                       Stock
Options.  Subject to the provisions
of the Plan, the Committee may grant options to eligible personnel upon such
terms and conditions as the Committee deems appropriate.  The terms and conditions of any option shall
be evidenced by a written option agreement or other instrument approved for
this purpose by the Committee.

 

2

 

(a)                                  Exercise
Price.  The exercise price per share
of Common Stock covered by an option granted under the Plan may not be less
than the Fair Market Value per share on the date of grant (or, in the case of
an ISO granted to an optionee who, at the time the option is granted, owns
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or a “subsidiary” or “parent” of the
Company within the meaning of Section 424 of the Code, 110% of such Fair
Market Value).

 

(b)                                 Term
of Options.  No option granted under
the Plan may be exercisable (if at all) more than ten (10) years after the
date the option is granted (or, in the case of an ISO granted to a ten percent
(10%) shareholder within the meaning of Section 424 of the Code, five (5) years).

 

(c)                                  Vesting
of Options.  The Committee may
establish such vesting and other conditions and restrictions on the exercise of
an option and/or upon the issuance of Common Stock in connection with the
exercise of an option as it deems appropriate.

 

(d)                                 Method
of Exercise.  Subject to satisfaction
of applicable withholding requirements, once vested and exercisable, an option
may be exercised by transmitting to the Company (i) a notice specifying
the number of shares to be purchased and (ii) payment of the aggregate
exercise price of the shares so purchased in cash or its equivalent, and any
taxes due thereon in accordance with Section 14 hereof.  As determined by the Committee, in its sole
discretion, payment of the exercise price of an option in whole or in part may
also be made (1) if the Common Stock is publicly traded, by means of any
cashless exercise procedure approved by the Committee, (2) in the form of
unrestricted shares of Common Stock which have a Fair Market Value on the date
of surrender equal to the aggregate exercise price of the shares of Common
Stock as to which such option shall be exercised, (3) any other form of
consideration approved by the Committee and permitted by applicable law or (4) any
combination of the foregoing.

 

(e)                                  Rights
as a Shareholder.  No shares of
Common Stock shall be issued in respect of the exercise of an option until full
payment of the exercise price and the applicable tax withholding obligation
with respect to such exercise has been made or provided for.  The holder of an option shall have no rights
as a shareholder with respect to any shares covered by an option until the date
such shares are issued.  Except as
otherwise provided herein, no adjustments shall be made for dividend
distributions or other rights for which the record date is prior to the date
such shares are issued.

 

(f)                                    Buy
Out and Settlement.  The Committee,
on behalf of the Company, may at any time offer to buy out any outstanding
option on such terms and conditions as the Committee shall establish.

 

7.                                       Restricted
Stock and Restricted Stock Units. 
Subject to the provisions of the Plan, the Committee may award
restricted shares of Common Stock and/or restricted stock units tied to shares
of Common Stock to eligible personnel upon such terms and subject to such
conditions and restrictions as the Committee deems appropriate.  The terms and conditions of any restricted
stock or restricted stock unit award shall be evidenced by a written agreement
or other instrument approved for this purpose by the Committee.

 

3

 

(a)                                  Purchase
Price.  The purchase price payable
for shares of restricted stock and for shares issued pursuant to the settlement
of a restricted stock unit may be as low as zero, provided, however, that to
the extent required by applicable law, the purchase price per share shall be no
less than the par value of a share of Common Stock.

 

(b)                                 Restrictions
and Vesting.  The Committee may
establish such conditions and restrictions on the vesting of restricted stock
and restricted stock units and on the issuance of shares of restricted stock as
it deems appropriate, including, without limitation, conditions and
restrictions based upon continued service, the attainment of specified
performance goals and/or other factors and criteria deemed relevant for this
purpose.

 

(c)                                  Rights
as a Shareholder.  The holder of
restricted stock units awarded under the Plan shall have only the rights of a
general unsecured creditor of the Company and shall have no rights as a shareholder
with respect to the shares of Common Stock referenced by such units until such
shares are issued in the name of the holder following the satisfaction or
expiration of the vesting and other conditions and restrictions applicable to
such units.  The recipient of restricted
stock shall have the rights of a shareholder with respect to the restricted
stock, subject to any restrictions and conditions as the Committee may impose.

 

(d)                                 Stock
Certificates for Restricted Stock. 
Unless the Committee elects otherwise, shares of restricted stock shall
be evidenced by book entries on the Company’s stock transfer records pending
the expiration of restrictions thereon. 
If a stock certificate for shares of restricted stock is issued, it
shall bear an appropriate legend to reflect the nature of the restrictions
applicable to the shares represented by the certificate, and the Committee may
require that any or all such stock certificates be held in custody by the
Company until the applicable restrictions have lapsed.  The Committee may establish such other
conditions as it deems appropriate in connection with the issuance of
certificates for shares of restricted stock, including, without limitation, a
requirement that the grantee deliver a duly signed stock power, endorsed in
blank, for the shares covered by the award.

 

(e)                                  Lapse
of Restrictions.  If and when the
vesting conditions and other restrictions applicable to a restricted stock or
restricted stock unit award are satisfied or expire, a certificate for the
shares covered or referenced by the award, to the extent vested and free of restrictions,
shall be delivered to the holder.  All
legends shall be removed from said certificates at the time of delivery except
as otherwise required by applicable law.

 

8.                                       Other
Equity-Based Awards.  The Committee
may grant other types of equity-based awards, including, without limitation,
the grant or offer for sale of unrestricted shares of Common Stock and/or the
grant of stock appreciation rights or dividend equivalents, in such amounts and
subject to such terms and conditions as the Committee shall determine.  Such awards may entail the transfer of actual
shares of Common Stock to recipients, or payment in cash or otherwise of
amounts based on the value of shares of Common Stock and may include, without
limitation, awards designed to comply with or take advantage of the applicable
local laws or jurisdictions other than the United States.

 

4

 

9.                                       Non-Employee
Director Stock Options.

 

(a)                                  Automatic
Grants.  Subject to adjustment
pursuant to Section 13 hereof, without further action by the Board or the
shareholders of the Company:

 

(i)                                     each
director who is a Non-Employee Director on the day prior to the date of the
initial public offering of the Common Stock (the “IPO Date”) shall
automatically be granted an option to purchase               
shares of Common Stock (the “IPO Options”);

 

(ii)                                  each
person who first becomes a Non-Employee Director after the IPO Date shall
automatically be granted an option to purchase               
shares of Common Stock on the first trading day following the date he or she
commences service as a Non-Employee Director (the “Initial Options”); and

 

(iii)                               each
Non-Employee Director shall automatically be granted an option to purchase               
shares of Common Stock on the first trading day following each Annual Meeting
of Shareholders after the IPO Date at which such director is re-elected to the
Board, provided that such Non-Employee Director did not receive an IPO Option
or an Initial Option during the one hundred eighty (180) day period ending on
the date of such Annual Meeting of Shareholders (the “Annual Options” and,
collectively with the IPO Options and Initial Options, the “Director Options”).

 

For purposes hereof, “Non-Employee Director” shall
mean any member of the Board who is not employed by the Company or any of its
subsidiaries and shall include, without limitation, any director who serves as
an officer of the Company but who is not paid by the Company for such service.

 

(b)                                 Exercise
Price.  The exercise price per share
covered by a Director Option shall be equal to the Fair Market Value of the
Common Stock on the date of grant, which for purposes of the IPO Options shall
be equal to the initial public offering price of the Common Stock.

 

(c)                                  Term
of Director Options.  Except as
otherwise provided herein, if not previously exercised, each Director Option
shall expire on the tenth anniversary of the date of grant.

 

(d)                                 Vesting
of Director Options.  Each Director Option
shall, subject to the optionee remaining in continuous service with the Company
through each applicable vesting date, become vested and exercisable with
respect to 1/48 of the shares of Common Stock covered thereby at the end of
each calendar month during the first four years following the date of the grant.  Notwithstanding anything in this Section 9(d) to
the contrary, each Director Option shall become fully vested and exercisable
upon the occurrence of a Change in Control (as hereinafter defined) of the
Company.  For this purpose, a “Change in
Control” of the Company shall be deemed to have occurred upon any of the
following:

 

(i)                                     there
occurs (x) any consolidation or merger in which the Company is not the
continuing or surviving entity or pursuant to which shares of the Common Stock
would be converted into cash, securities or other property, other than (1) a
consolidation or

 

5

 

merger
of the Company in which the holders of the Common Stock immediately prior to
the consolidation or merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the consolidation or
merger, or (2) a consolidation or merger which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to represent
(by being converted into voting securities of the continuing or surviving
entity) more than fifty percent (50%) of the combined voting power of the
voting securities of the surviving or continuing entity immediately after such
consolidation or merger and which would result in the members of the Board
immediately prior to such consolidation or merger (including, for this purpose,
any individuals whose election or nomination for election was approved by a
vote of at least two-thirds of such members), constituting a majority of the
board of directors (or equivalent governing body) of the surviving or
continuing entity immediately after such consolidation or merger, or (y) any
sale, lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all the Company’s assets;

 

(ii)                                  the
Company’s shareholders approve any plan or proposal for the liquidation or
dissolution of the Company;

 

(iii)                               any
person (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act) shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of forty percent (40%) or more of the Common Stock
other than pursuant to a plan or arrangement entered into by such person and
the Company; or

 

(iv)                              during
any period of two (2) consecutive years, individuals who at the beginning
of such period constitute the entire Board shall cease for any reason to
constitute a majority of the Board unless the election or nomination for
election by the Company’s shareholders of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.

 

(e)                                  Effect
of Termination of Service.

 

(i)                                     Termination
by Reason of Death or Disability.  If
an optionee’s service with the Company terminates by reason of his or her death
or Disability (as defined in Section 10 below), then:  (1) any portion of a Director Option
that is exercisable on the date of termination shall remain exercisable by the
optionee (or, in the event of death, the optionee’s beneficiary) during the one
year period following the date of termination but in no event after expiration
of the stated term thereof and, to the extent not exercised during such period,
shall thereupon terminate, provided that, in the event of a termination due to
Disability, if the optionee dies during such one-year period, then the deceased
optionee’s beneficiary may exercise the Director Option, to the extent
exercisable by the deceased optionee immediately prior to his or her death, for
a period of one year following the date of death but in no event after
expiration of the stated term thereof, and (2) any portion of a Director
Option that is not exercisable on the date of termination shall thereupon
terminate.

 

(ii)                                  Other
Termination.  If an optionee’s
service with the Company terminates for any other reason, then: (1) any
portion of a Director Option that is exercisable on the date of termination
shall remain exercisable by the optionee during the one hundred eighty

 

6

 

(180)
day period following the date of
termination but in no event after expiration of the stated term thereof and, to
the extent not exercised during such period, shall thereupon terminate, and (2) any
portion of a Director Option that is not exercisable on the date of termination
shall thereupon terminate.

 

10.                                 Termination
of Employment or Other Service. 
Unless otherwise determined by the Committee at grant or, if no rights
of the recipient are thereby reduced, thereafter, and subject to earlier
termination in accordance with the provisions hereof, the following rules apply
with regard to awards (other than Director Options) held by a recipient at the
time of his or her termination of employment or other service with the Company
and its subsidiaries and affiliates (collectively, the “Company Group”):

 

(a)                                  Stock
Options and Stock Appreciation Rights.

 

(i)                                     Termination
by Reason of Death, Disability or Retirement.  If a recipient’s employment or other service
with the Company Group is terminated due to his or her death, Disability (as
hereinafter defined) or Retirement (as hereinafter defined), then (1) any
portion of an option or stock appreciation right that is exercisable on the
date of termination shall remain exercisable by the recipient (or, in the event
of death, the recipient’s beneficiary) during the one year period following the
date of termination but in no event after expiration of the stated term thereof
and, to the extent not exercised during such period, shall thereupon terminate,
provided that, in the event of a termination due to Disability, if the
recipient dies during such one-year period, then the deceased recipient’s
beneficiary may exercise the option or stock appreciation right, to the extent
exercisable by the deceased recipient immediately prior to his or her death,
for a period of one year following the date of death but in no event after
expiration of the stated term thereof, and (2) any portion of an option or
stock appreciation right that is not exercisable on the date of termination
shall thereupon terminate.  “Disability”
means, unless otherwise determined by the Committee, a recipient’s absence from
employment or other service for at least one hundred eighty (180) days in any
twelve (12) month period as a result of his or her incapacity due to physical
or mental illness, as determined by the Committee.  “Retirement” means a recipient’s voluntary
termination of employment or other service when no ground for termination for
Cause exists and (A) the recipient has attained age sixty (60), (B) the
recipient has attained age fifty-five (55) and completed at least ten (10) years
of employment or other service with the Company Group, or (C) the
recipient has attained age fifty (50) and the Committee specifically determines
that the termination of the recipient’s employment or other service constitutes
a “Retirement” for purposes hereof.

 

(ii)                                  Termination
for Cause.  If a recipient’s
employment or other service is terminated by the Company Group for Cause (as
hereinafter defined), then, notwithstanding anything to the contrary contained
herein, any option or stock appreciation right held by the recipient (whether
or not otherwise exercisable) shall immediately terminate and cease to be
exercisable.  A termination for “Cause”
means (1) in the case where there is no employment or consulting agreement
between the recipient and the Company Group or where such an agreement exists
but does not define “cause” (or words of like import), a termination classified
by the Company Group, in its sole discretion, as a termination due to the
recipient’s dishonesty, fraud, insubordination, willful misconduct, refusal to
perform services or materially unsatisfactory performance of his or her duties,
or (2) in the case where there is an employment

 

7

 

or
consulting agreement between the recipient and the Company Group that does
define “cause” (or words of like import), a termination that is or would be
deemed for “cause” (or words of like import), as classified by the Company
Group in its sole discretion, under such agreement.

 

(iii)                               Other
Termination.  If a recipient’s
employment or other service with the Company Group terminates for any other
reason (other than those described in Section 10(a)(i) or 10(a)(ii) above)
or no reason, then: (1) any portion of an option or stock appreciation
right that is exercisable on the date of termination shall remain exercisable
by the recipient during the thirty (30) day period following the date of
termination but in no event after expiration of the stated term thereof and, to
the extent not exercised during such period, shall thereupon terminate, and (2) any
portion of an option or stock appreciation right that is not exercisable on the
date of termination shall thereupon terminate.

 

(b)                                 Restricted
Stock, Restricted Stock Units and Other Equity-Based Awards.  Unless otherwise determined by the Committee,
upon the termination of a recipient’s employment or other service for any
reason (including, without limitation, death or Disability) or no reason, any
shares of restricted stock, restricted stock units or other equity-based awards
(other than stock options and stock appreciation rights covered by Sections 9
or 10(a) hereof) which have not yet become fully vested shall be
forfeited, and any certificate therefor or book entry with respect thereto or
other evidence thereof shall be canceled.

 

11.                                 Fair
Market Value.  For purposes of the
Plan, “Fair Market Value” as of a particular date shall mean the fair market
value of a share of Common Stock as determined by the Committee in its sole
discretion; provided that (a) if the shares of Common Stock are admitted
to trading on a national securities exchange, fair market value of a share of
Common Stock on any date shall be the closing sale price reported for such
share on such exchange on the last date preceding such date on which a sale was
reported, (b) if the shares of Common Stock are admitted to quotation on
the National Association of Securities Dealers Automated Quotation (“Nasdaq”)
System or other comparable quotation system and have been designated as a
National Market System (“NMS”) security, fair market value of a share of Common
Stock on any date shall be the closing sale price reported for such share on
such system on the last date preceding such date on which a sale was reported,
or (c) if the shares of Common Stock are admitted to quotation on the
Nasdaq System but have not been designated as an NMS security, fair market
value of a share of Common Stock on any date shall be the average of the
highest bid and lowest asked prices of such share on such system on the last
date preceding such date on which both bid and ask prices were reported.

 

12.                                 Non-Transferability.  No stock option or stock appreciation right
granted under the Plan shall be transferable by the recipient other than upon
the recipient’s death to a beneficiary designated by the recipient in a manner
acceptable to the Committee, or, if no designated beneficiary shall survive the
recipient, pursuant to the recipient’s will or by the laws of descent and
distribution.  All stock options and
stock appreciation rights shall be exercisable during the recipient’s lifetime
only by the recipient (or, in the event of the recipient’s incapacity, his or
her guardian or legal representative). 
Shares of restricted stock and restricted stock units may not be
transferred prior to the date on which shares are issued or, if later, the date
on which such shares have vested and are free of any applicable restriction
imposed hereunder.  Except as otherwise
specifically provided by law or the provisions hereof or the applicable award

 

8

 

agreement
or instrument, no award received under the Plan may be transferred in any
manner, and any attempt to transfer any such award shall be void, and no such
award shall in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person who shall be entitled to such
award, nor shall it be subject to attachment or legal process for or against
such person.  Notwithstanding the
foregoing, the Committee may determine at the time of grant or thereafter that
a stock option is transferable in whole or part to such persons, under such
circumstances, and subject to such conditions as the Committee may prescribe.

 

13.                                 Adjustments
Upon Changes in Capitalization.  Upon
any increase, reduction, or change or exchange of the Common Stock for a
different number or kind of shares or other securities, cash or property by
reason of a reclassification, recapitalization, merger, consolidation,
reorganization, stock dividend, stock split or reverse stock split, combination
or exchange of shares or any other similar corporate action that affects the
capitalization of the Company (a “Change in Capitalization”), an equitable
substitution or adjustment may be made in (a) the aggregate number and/or
kind of shares reserved for issuance (or reference purposes) under the Plan, (b) the
number and/or kind of shares for which prospective option awards to Non
Employee Directors pursuant to Section 9 hereof are made, (c) the
kind, number and/or exercise price of shares or other property subject to
outstanding options granted under the Plan (including outstanding options
granted pursuant to Section 9 hereof), and (d) the kind, number
and/or purchase price of shares or other property subject to outstanding awards
of restricted stock, restricted stock units, stock appreciation rights, dividend
equivalents and other equity-based awards granted under the Plan, in each case
as may be determined by the Committee, in its sole discretion.  Such other equitable substitutions or
adjustments shall be made as may be determined by the Committee, in its sole
discretion.  Without limiting the
generality of the foregoing, in connection with a Change in Capitalization, the
Committee may provide, in its sole discretion, for the cancellation of any
outstanding awards in exchange for payment in cash or other property of the
Fair Market Value of the shares of Common Stock covered by such awards (whether
or not otherwise vested or exercisable), reduced, in the case of options, by
the exercise price thereof.  In the event
of any adjustment in the number of shares covered by any award pursuant to the
provisions hereof, any fractional shares resulting from such adjustment shall
be disregarded, and each such award shall cover only the number of full shares
resulting from the adjustment.  All
adjustments under this Section 13 shall be made by the Committee, and its
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive.

 

14.                                 Tax
Withholding.  As a condition to the
exercise of any award or the delivery of any shares of Common Stock pursuant to
any award or the lapse of restrictions on any award, or in connection with any
other event that gives rise to a federal or other governmental tax withholding
obligation on the part of the Company Group relating to an award, (a) the
Company Group may deduct or withhold (or cause to be deducted or withheld) from
any payment or distribution to a grantee whether or not pursuant to the Plan or
(b) the Company Group shall be entitled to require that the grantee remit
cash to the Company Group (through payroll deduction or otherwise), in each
case in an amount sufficient in the opinion of the Company to satisfy such
withholding obligation.  If the event
giving rise to the withholding obligation involves a transfer of shares of
Common Stock, then, at the discretion of the Committee, the grantee may satisfy
the withholding obligation described under this Section 14 by electing to
have the Company withhold shares of Common Stock (which withholding, to the
extent necessary to avoid adverse

 

9

 

accounting
treatment, shall be at a rate not in excess of the statutory minimum rate) or
by tendering previously owned shares of Common Stock, in each case having a
Fair Market Value equal to the amount of tax to be withheld (or by any other
mechanism as may be required or appropriate to conform with local tax and other
rules).

 

15.                                 Amendment
and Termination.  The Board may amend
or terminate the Plan, provided, however, that no such action may affect adversely
the rights of the holder of any outstanding award without the consent of the
holder.  Except as otherwise provided in Section 13
hereof, any amendment which would increase the number of shares of Common Stock
that may be issued (or used for reference purposes) under the Plan or modify
the class of employees eligible to receive awards under the Plan shall be
subject to the approval of the Company’s shareholders to the extent such
approval is necessary or desirable to comply with applicable law or listing
requirements.  The Committee may amend
the terms of any agreement or certificate made or issued hereunder at any time
and from time to time, provided, however, that no amendment which would affect
adversely the rights of the holder of any outstanding award may be made without
the consent of such holder.

 

16.                                 General
Provisions.

 

(a)                                  Compliance
with Law.  Shares of Common Stock
shall not be issued hereunder unless the issuance and delivery of such shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended (the “Securities Act”),
the Exchange Act and the requirements of any stock exchange or market upon
which the Common Stock may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.

 

(b)                                 Transfer
Orders; Placement of Legends.  All
certificates for shares of Common Stock delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange or market upon which the
Common Stock may then be listed, and any applicable federal or state securities
law.  The Committee may cause a legend or
legends to be placed on any such certificates to make appropriate reference to
such restrictions.

 

(c)                                  Lock-Up.  Unless the Committee expressly provides
otherwise, in connection with any underwritten public offering by the Company
of its equity securities pursuant to an effective registration statement filed
under the Securities Act, for such period as the Company or its underwriters
may request and subject to such other provisions as the Committee may deem necessary
or desirable, the recipient of an award shall not, directly or indirectly,
sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell
any option or other contract for the purchase of, purchase any option or other
contract for the sale of, or otherwise dispose of or transfer, or agree to
engage in any of the foregoing transactions with respect to, any shares of
Common Stock acquired under the Plan without the prior written consent of the
Company or its underwriters.

 

(d)                                 No
Employment or Other Service Rights. 
Nothing contained in the Plan or in any award agreement shall confer
upon any recipient of an award any right with respect to

 

10

 

the
continuation of his or her employment or other service with the Company or its
subsidiaries or affiliates, or interfere in any way with the right of the
Company or any subsidiary or affiliate at any time to terminate such employment
or other service or to increase or decrease, or otherwise adjust, the other
terms and conditions of the recipient’s employment or other service with the
Company and its subsidiaries and affiliates.

 

(e)                                  Decisions
and Determinations Final.  All
decisions and determinations made by the Board pursuant to the provisions hereof
and, except to the extent rights or powers under the Plan are reserved
specifically to the discretion of the Board, all decisions and determinations
of the Committee, shall be final, binding and conclusive on all persons.

 

17.                                 Governing
Law.  All rights and obligations
under the Plan and each award agreement or instrument shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to its principles of conflict of laws.

 

18.                                 Term
of the Plan.  The Plan shall become
effective upon its adoption by the Board, subject to approval by the shareholders
of the Company within twelve (12) months of the date of such adoption.  Unless sooner terminated by the Board, the
Plan shall terminate on the tenth anniversary of the date of its adoption by
the Board.  The rights of any person with
respect to an award made under the Plan that is outstanding at the time of the
termination of the Plan shall not be affected solely by reason of the termination
of the Plan and shall continue in accordance with the terms of the award (as
then in effect or thereafter amended) and the Plan (as then in effect or
thereafter amended).

 

11Exhibit 10.2

 

DIRECTOR IPO GRANT

 

STOCK OPTION AGREEMENT

PURSUANT TO THE

CAVAN MARITIME LIMITED

2005 EQUITY INCENTIVE PLAN

 

AGREEMENT, made as of the
      day of                                   ,
2005, by and between Cavan Maritime Limited, a Marshall Islands corporation
(the “Company”), and                              
(the “Optionee”).

 

1.                                       Grant
of Option.  Pursuant to Section 9
of the Company’s 2005 Equity Incentive Plan (the “Plan”), the Optionee, as a
Non-Employee Director of the Company, has been automatically granted an option
(the “Option”) to purchase                 
shares of the Company’s common stock, $.001 par value (the “Common Stock”), at
a purchase price per share of $                .

 

2.                                       Tax
Status of Option.  The Option is not
intended to qualify as an “incentive stock option” under Section 422 of
the Internal Revenue Code of 1986, as amended.

 

3.                                       Term
of Option.  The term of the Option
shall be for a period of ten (10) years from the date hereof, subject to
earlier termination as provided herein.

 

4.                                       Vesting
of Option.  Subject to the Optionee
remaining in continuous service with the Company through each applicable
vesting date, the Option shall become vested and exercisable with respect to 1/48th
of the shares of Common Stock covered hereby at the end of each calendar month
during the first four years following the date of the grant.  Notwithstanding anything in this Section 4
to the contrary, the Option shall become fully vested and exercisable upon the
occurrence of a Change in Control of the Company.  For this purpose, a “Change in Control” of
the Company shall be deemed to have occurred upon any of the following:

 

(a)                                  there
occurs (x) any consolidation or merger in which the Company is not the
continuing or surviving entity or pursuant to which shares of the Common Stock
would be converted into cash, securities or other property, other than (1) a
consolidation or merger of the Company in which the holders of the Common Stock
immediately prior to the consolidation or merger have the same proportionate
ownership of common stock of the surviving corporation immediately after the
consolidation or merger, or (2) a consolidation or merger which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (by being converted into voting securities of
the continuing or surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of the surviving or continuing
entity immediately after such consolidation or merger and which would result in
the members of the Board immediately prior to such consolidation or merger
(including, for this

 

 

purpose,
any individuals whose election or nomination for election was approved by a
vote of at least two-thirds of such members), constituting a majority of the
board of directors (or equivalent governing body) of the surviving or
continuing entity immediately after such consolidation or merger, or (y) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all the Company’s assets;

 

(b)                                 the
Company’s shareholders approve any plan or proposal for the liquidation or
dissolution of the Company;

 

(c)                                  any
person, other than Wexford or its affiliates,  (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of forty percent (40%) or more of the Common Stock
other than pursuant to a plan or arrangement entered into by such person and
the Company; or

 

(d)                                 during
any period of two (2) consecutive years, individuals who at the beginning
of such period constitute the entire Board shall cease for any reason to
constitute a majority of the Board unless the election or nomination for
election by the Company’s shareholders of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.

 

5.                                       Effect
of Termination of Service.  If the
Optionee’s service with the Company terminates by reason of the Optionee’s
death or Disability (as defined in the Plan), then: (i) any portion of the
Option that is exercisable on the date of termination shall remain exercisable
by the Optionee (or, in the event of death, the Optionee’s beneficiary) during
the one year period following the date of termination but in no event after
expiration of the stated term hereof and, to the extent not exercised during
such period, shall thereupon terminate, provided that, in the event of a
termination due to Disability, if the Optionee dies during such one-year
period, then the deceased Optionee’s beneficiary may exercise the Option, to
the extent exercisable by the deceased Optionee immediately prior to death, for
a period of one year following the date of death but in no event after
expiration of the stated term hereof, and (ii) any portion of the Option
that is not exercisable on the date of termination shall thereupon terminate.  If the Optionee’s service with the Company
terminates for any reason other than death or disability, then: (i) any
portion of the Option that is exercisable on the date of termination shall
remain exercisable by the Optionee during the one hundred eighty (180) day
period following the date of termination but in no event after expiration of
the stated term hereof and, to the extent not exercised during such period,
shall thereupon terminate, and (ii) any portion of the Option that is not
exercisable on the date of termination shall thereupon terminate.

 

6.                                       Method
of Exercise.  Once vested and
exercisable, the Option may be exercised in whole or in part by delivering to
the Secretary of the Company (a) a written notice specifying the number of
shares of Common Stock to be purchased and (b) payment of the aggregate
exercise price of the shares of Common Stock so purchased in cash or its
equivalent, and any taxes due thereon in accordance with Section 14 of the
Plan.  If the Common Stock is publicly
traded, payment, in whole or in part, of the exercise price of the Option may
also be made by means of a cashless exercise procedure approved by the
Committee.

 

2

 

7.                                       Rights
as a Shareholder.  No shares of
Common Stock shall be issued hereunder until full payment for such shares has
been made and any other exercise conditions have been fully satisfied.  The Optionee shall have no rights as a shareholder
with respect to any shares covered by the Option until the date such shares are
reflected as having been issued to the Optionee on the Company’s records.  No adjustment shall be made for dividends or
distributions or the granting of other rights for which the record date is
prior to the date such shares are issued.

 

8.                                       Nontransferability.  The Option is not assignable or transferable
other than to a beneficiary designated to receive the Option upon the Optionee’s
death in a manner acceptable to the Company or by will or the laws of descent
and distribution, and the Option shall be exercisable during the lifetime of
the Optionee only by the Optionee (or, in the event of the Optionee’s
incapacity, the Optionee’s legal representative or guardian).  Any attempt by the Optionee or any other
person claiming against, through or under the Optionee to cause the Option or
any part of it to be transferred or assigned in any manner and for any purpose
shall be null and void and without effect upon the Company, the Optionee or any
other person.

 

9.                                       Lock-Up.  The Optionee shall not during the period
commencing on the date of the final prospectus relating to the Company’s
initial public offering and ending on the date specified by the Company and the
managing underwriter (but not to exceed one hundred eighty (180) days) (a) lend,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock, or (b) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic
consequences of ownership of the shares of Common Stock.  The foregoing provisions of this Section 9
shall apply only to the Company’s initial public offering of equity securities
and shall not apply to the sale of any shares to an underwriter pursuant to an
underwriting agreement.

 

10.                                 Adjustments
Upon Changes in Capitalization.  Upon
a Change in Capitalization (as defined in the Plan), an equitable substitution
or adjustment may be made in the kind, number and/or exercise price of shares
or other property subject to the Option as may be determined by the Committee,
in its sole discretion.  Without limiting
the generality of the foregoing, in connection with a Change in Capitalization,
the Committee may provide, in its sole discretion, for the cancellation of the
Option in exchange for payment in cash or other property of the Fair Market
Value of the shares of Common Stock covered by the Option (whether or not
otherwise vested or exercisable), reduced by the exercise price of the Option.

 

11.                                 Provisions
of the Plan Control.  This Agreement
is subject to all the terms, conditions and provisions of the Plan and to such
rules, regulations and interpretations as may be established or made by the
Committee acting within the scope of its authority and responsibility under the
Plan.  The Optionee acknowledges receipt
of a copy of the Plan prior to execution of this Agreement.  The applicable provisions of the Plan shall
govern in any situation where this Agreement is silent or where the applicable
provisions of this Agreement are contrary to or not reconcilable with such Plan
provisions.

 

12.                                 Compliance
with Law.  Shares of Common Stock shall
not be issued pursuant to the exercise of the Option unless such exercise and
the issuance and delivery of such shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation,

 

3

 

the Securities Act of
1933, as amended, the Exchange Act and the requirements of any stock exchange
or market upon which the Common Stock may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.  The Committee may require
each person acquiring shares of Common Stock to represent to and agree with the
Company in writing that such person is acquiring the shares without a view to
distribution thereof.  All certificates
for shares of Common Stock delivered hereunder shall be subject to such
stock-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange or market upon which the
Common Stock may then be listed, and any applicable federal or state securities
law.  The Committee may cause a legend or
legends to be placed on any such certificates to make appropriate reference to
such restrictions.

 

13.                                 Miscellaneous.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to its principles of conflict of laws. 
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and may not be amended, except as provided
in the Plan, other than by a written instrument executed by the parties hereto.

 

(Signature Page Follows)

 

4

 

IN WITNESS WHEREOF, this Agreement
has been executed as of the date first above written.

 

	
   

  	
  CAVAN MARITIME LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name of Optionee]

  

 

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]