A report was presented to the Board that included goals that should be achieved to reach the four objectives listed,
the potential risks to achieving each of these goals and potential internal responses if those risk factors were to happen.
During 2017, we concluded that the
Companys incentive compensation plans are not structured toward performance measures that would encourage risk-oriented activities by officers and key employees.
Board Diversity
The
Company understands and appreciates that a Board of Directors, consisting of individuals with diverse personal characteristics, experiences, skills, and attributes, contributes positively to corporate governance and enhancing stockholder value.
Although the Company has no express diversity policy in the identification of nominees for director, diversity is just one of many factors, none of which are assigned any particular weight that the Board of Directors considers in identifying
candidates. Further qualifications are written in the Charter and Guidelines of the Governance and Nominating Committee.
Independence of Board Committee Members
The Company currently has four directors, John C. Abbott, Mark B. Justh, James S. Pignatelli and Jon D. Sawyer
who are independent directors as defined in Section 5605 of the listing standards of the NASDAQ Stock Market. The Board of Directors affirmatively determined, from its review of the completed Directors and Officers Questionnaires, that each of
the current independent directors nominated for election at the Annual Meeting continues to meet the standards for independence under NASDAQ Rules 5605(a)(2), 5605(d)(3), and 5605A(d),
IM-5605A-6,
and Rule
10A-3(b)(1)(ii)(A)
under the Exchange Act.
The Unaffiliated Director Proposal
At the annual meeting of stockholders held on June 9, 2015, the
stockholders approved an amendment to our articles of incorporation to provide that each director of the Company who is not an officer, employee or other member of management of the Company, and each agent and affiliate thereof, will have the right:
(a) to directly or indirectly engage in any activities or lines of business that are the same as or similar to those pursued by, or competitive with, the Company and its subsidiaries, (b) to directly or indirectly do business with any
client or customer of the Company and its subsidiaries, and (c) not to present potential transactions, matters, or business opportunities to the Company or any of its subsidiaries, and to pursue, directly or indirectly, any such opportunity for
himself or herself, and to direct any such opportunity to another person (the Unaffiliated Director Proposal). This proposal is to be implemented as a condition to the initial closing of the Purchase Agreement which has not yet occurred.
As a result, this provision has not yet been implemented.
Service on Other Boards of Directors
Our Board of Directors believes that each director of the Company should be allowed to sit on the board of not more than two publicly traded
for-profit
companies without the prior approval of the Board of Directors. It is the position of the Board that approval of a director to sit on more than two boards simultaneously while sitting on Odysseys
Board will be limited to special circumstances, provided that the arrangement will not interfere with the director carrying out the duties to the Board of the Company. None of our Directors currently sits on the board of more than two publicly
traded companies.
Director Stock Ownership Policy
To further establish the link between our directors and stockholder interests, the Board of Directors adopted a Director Stock Ownership Policy in 2013. The policy
requires each director, within five years of the applicable date, to hold an amount of our common stock valued at four times the amount of the annual retainer for the year the policy first applies to them. Our directors have all increased their
beneficial ownership holdings by accepting common stock and stock options in lieu of cash compensation for retainers and services and continue to advance towards these ownership requirements.
Annual Board Self Assessments
In the best interest of the Company and its stockholders, the Board of Directors normally performs an annual assessment in which the Board members review and assess each
director, the Boards function itself and its committees. This evaluation is usually completed shortly after the end of the year. The latest annual assessment was completed during January 2018 and reported on during the March 2018 Governance
and Nominating Committee meeting. During 2017, the Board assisted management in the development of inventive funding and management strategies required to keep management operating at a high level while enduring an extended regulatory approval
process for the Companys phosphate deposit. The Board also worked with management to develop a new method of awarding incentive executive compensation for the Companys officers and directors in order to keep them incentivized at a time
when the Company needed its cash for operations and the stock option plan had a very limited number of shares available.
Odyssey Marine Exploration, Inc.
2018 Proxy
Statement
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