250,000,000 of those new shares are for the stock option plan and are at .05! I know all of us will be very happy when this hits .05!
Our Board of Directors determined it to be in the best interests of the Company and its stockholders to provide for the payment of various forms of incentive compensation to employees, consultants and directors of the Company. Pursuant to NRS § 78.200 on November 17, 2011 the Board of Directors approved the parameters for a Company qualified stock option plan and on June 7, 2012 adopted and approved the Sierra Resource Group Inc. 2012 Incentive Stock Plan (the “ 2012 Incentive Stock Plan ”). In order for stock options issued under the 2012 Incentive Stock Plan to qualify for special tax treatment under §§ 421 and 422 of the Internal Revenue Code (the “ Code ”), and in order to comply with the listing standards of the New York Stock Exchange and the Nasdaq Stock Market requiring stockholder approval of equity compensation plans, on September 7, 2012 the Majority Stockholders approved the 2012 Incentive Stock Plan.
Summary of the 2012 Incentive Stock Plan
The description set forth in this Information Statement summarizes the principal terms and conditions of the 2012 Incentive Stock Plan, does not purport to be complete and is qualified in its entirety by reference to the text of the 2012 Incentive Stock Plan, a copy of which is attached to this Information Statement and incorporated by reference, as Exhibit B .
Objectives
The primary objectives of the 2012 Incentive Stock Plan are to retain directors, executives and selected employees and consultants and reward them for making major contributions to the success of the Company. These objectives are accomplished by making long-term incentive awards under the Plan thereby providing participants with a proprietary interest in the growth and performance of the Company.
Administration
The 2012 Incentive Stock Plan is administered by our Board of Directors. They may delegate the plan administration to the Executive Compensation Committee, which would be composed of not less than two members of the Board of Directors, all of whom are “disinterested persons” as defined by Rule 16b-3promulgated under the Exchange Act and all of whom fulfill the “outside director” requirements of § 16(m) of the Code, and the applicable regulations promulgated there under. The Board of Directors and/or any committee that has been delegated the authority to administer the 2012 Incentive Stock Plan are referred to in this Information Statement as the “ Plan Administrator .”
The Plan Administrator is authorized to, among other things, select grantees and to determine the amount, duration and type of each incentive award. They also may determine in good faith the fair market value of the stock covered by any grant, as well as any restrictions and other terms and conditions to be included in such grants. They are authorized to construe and interpret the plan and all related incentive agreements. All determinations and decisions of the Plan Administrator are conclusive and final. We have agreed that no member of the Board of Directors and/or its committee shall be liable for any action or determination made in good faith with respect to the 2012 Incentive Stock Plan or any grant made thereunder.
Eligibility
Our employees, directors and consultants are eligible to participate in the 2012 Incentive Stock Plan, as determined by the Plan Administrator. With respect to awards that are options, directors who are not employees of the Company, proposed non-employee directors, proposed employees, and consultants who are independent contractors will be eligible to receive only nonstatutory stock options.
Types of Incentive Awards
Under the 2012 Incentive Stock Plan, the Plan Administrator may grant incentive awards as any of the following:
| • | Incentive stock options as defined in § 422 of the Code; |
| • | Nonstatutory stock options, i.e. stock options that do not qualify for special tax treatment under § 422 of the Code; |
| • | Stock awards; and |
| • | Restricted Stock Purchase Offers. |
Stock Reserved Under the 2012 Incentive Stock Plan
The shares underlying the options, stock awards, and restricted stock offers under the 2012 Incentive Stock Plan are comprised of Class A Common Stock of the Company. The number of shares of Common Stock of the Company reserved under the 2012 Incentive Stock Plan is 250,000,000. The Company must reserve only such number of shares that are sufficient to satisfy the requirements of the plan. If any grant terminates or expires for any reason, any shares allocated to that grant, but remaining unpurchased upon such expiration or termination, will again be available for future grants. Similarly, any shares of stock issued pursuant to a grant and repurchased according to the terms of the grant will be available for future grants.
In the event of any change in the outstanding stock of the Company by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, or similar event, the Plan Administrator may adjust proportionally (i) the number of shares of stock reserved under the plan or available for options or covered by outstanding stock awards or restricted stock purchase offers; (ii) the stock prices related to outstanding grants; and (iii) the appropriate fair market value and other price determinations for such grants. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Plan Administrator is authorized to issue or assume stock options, whether or not in a transaction to which Code § 424(a) applies, and other grants by means of substitution of new grant agreements for previously issued grants or an assumption of previously issued grants.
Options: Prices, Expiration Dates and other Material Conditions
The terms and conditions of options will be evidenced by written agreements between the Company and the optionee, in a form approved by the Board of Directors. Option grants will state the number and type of option shares and the exercise price , which for incentive stock options will not be less than 100% of the fair market value (as defined in the 2012 Incentive Stock Plan) of the stock on the date such option is granted. The exercise price of nonstatutory stock options will not be less than 85% of the fair market value of the stock on the date of grant. However, with respect to any stockholder who, at the time of the grant, owns or is deemed to own stock with more than 10% of the total combined voting power of all classes of capital stock of the Company (“ Ten Percent Holder ”) the exercise price of any grant shall be no less than 110% of the fair market value of the stock.
The Plan Administrator will set the term of each stock option, but no option granted to an employee will become exercisable over a period of more than 5 years, and no less than twenty percent (20%) of the shares covered by such option shall become exercisable annually. No option will be exercisable after the expiration of 10 years from the date it is granted, and no incentive stock option granted to a Ten Percent Holder will be exercisable after the expiration of 5 years from the date of the grant.
If an optionee’s status as an employee terminates for any reason other than disability or death, then such optionee may exercise the portions of an incentive stock option which were exercisable as of the date of such termination, in whole or in part, not less than 30 days nor more than 3 months after such termination; provided however, if the termination was “for cause,” the option will automatically terminate as of the termination of employment, as to all shares covered by the option. With respect to nonstatutory options granted to employees, directors or consultants, the Plan Administrator may specify such period for exercise, not less than 30 days following termination of employment or services (except for termination “for cause” where the option may automatically terminate).
Stock Awards and Restricted Stock Purchase Offers
The Plan Administrator may grant restricted stock awards or make restricted stock purchase offers in such amounts as determined by the Plan Administrator, in its discretion. Restricted stock awards may be subject to conditions established by the Plan Administrator, and set forth in the instrument evidencing the award. Such conditions may include (but are not limited to) continuous service with the Company, achievement of specific business objectives, increases in specified indices, attaining growth rates and other comparable measurements of Company performance. Grants of Restricted Stock Purchase Offers will be subject to such vesting contingencies
related to the grantee’s continued association with the Company for a specified time and any other specified conditions as the Plan Administrator may determine, in its sole discretion, consistent with the provisions of the 2012 Incentive Stock Plan.
Consideration
The Plan Administrator will grant or extend stock options and other awards under the 2012 Incentive Stock Plan in consideration for services rendered. There will be no other consideration received or to be received by the Company for the granting or extension of stock options or other awards under the 2012 Incentive Stock Plan.
Restrictions under Federal Securities Laws
The sale of our stock issuable pursuant to our Plan must be made in compliance with federal and state securities laws. Our officers, directors and 10% or greater stockholders, as well as certain other persons or parties who may be deemed to be “affiliates” of ours under federal securities laws, should be aware that re-sales by affiliates can only be made pursuant to an effective registration statement, Rule 144 promulgated under the Securities Act or other applicable exemption. Our officers, directors and 10% and greater stockholders may also be subject to the “short swing” profit rule of Section 16(b) of the Exchange Act.
Incentive Awards Nontransferable
Except in the event of death or disability, no option, stock award, restricted stock purchase offer or other benefit under the 2012 Incentive Stock Plan may be assigned or transferred to any other person than the grantee, without the consent of the Plan Administrator.
Amendment and Termination of Plan
The Board of Directors may, as permitted by law, with respect to any shares at the time not subject to outstanding grants, suspend or terminate the 2012 Incentive Stock Plan or revise or amend it in any respect whatsoever, except that without the approval of the stockholders of the Company, no such revision or amendment shall (i) increase the number of shares subject to the 2012 Incentive Stock Plan, (ii) decrease the price at which grants may be granted, (iii) materially increase the benefits to participants, or (iv) change the class of persons eligible to receive grants under the plan. No award may be issued while the plan is suspended or after it is terminated, but the rights and obligations under any award or grant issued while the plan is in effect will not be impaired by suspension or termination of the plan.
The Plan shall terminate 10 years later after the Effective Date, subject to earlier termination by the Board of Directors as described in the preceding paragraph.
Plan Benefits
The grant of incentive awards under the 2012 Incentive Stock Plan to employees, non-employee directors, and consultants is subject to the discretion of the Board of Directors. During the six months ended June 30, 2012, the Company granted options to acquire 90,250,000 shares of common stock, with a weighted average grant date fair value of $0.002, to employees, directors and service providers, as more fully disclosed in the Company’s Quarterly Report on Form 10-Q filed on August 21, 2012, and as subsequently amended.
Sierra Resource Group, Inc Table of Optionees
All Individuals
| Name | Postion/Title | Issue Date | Option Amount | Exercise Price | Grant/Vesting | Expiration | ||||||||||||||
| J. Rod Martin | CEO, Director | 08/26/2011 | 1,500,000 | $ | 0.0059 | Granted upon appointment as CEO | 08/25/2016 | |||||||||||||
| J. Rod Martin | CEO, Director | 11/27/2011 | 5,000,000 | $ | 0.0500 | 5/15/12 | 11/26/2016 | |||||||||||||
| J. Rod Martin | CEO, Director | 11/27/2011 | 5,000,000 | $ | 0.0500 | Six months after the company’s receipt of long term financing in excess of $1,000,000. | 5 Years from vesting date | |||||||||||||
| J. Rod Martin | CEO, Director | 11/27/2011 | 10,000,000 | $ | 0.0500 | Six months after the Chloride Copper Mine begins operations. | 5 Years from vesting date | |||||||||||
| J. Rod Martin | CEO, Director | 01/01/2012 | 10,000,000 | $ | 0.0500 | Upon the opening of the Chloride Copper | 5 Years from vesting date | |||||||||||
| J. Rod Martin | CEO, Director | 01/01/2012 | 10,000,000 | $ | 0.0500 | Upon the first production from the Chloride Copper | 5 Years from vesting date | |||||||||||
| J. Rod Martin | CEO, Director | 01/01/2012 | 10,000,000 | $ | 0.0500 | Upon the Company’s generation of a cumulative $5 million in revenue. | 5 Years from vesting date | |||||||||||
| J. Rod Martin | CEO, Director | 01/01/2012 | 10,000,000 | $ | 0.0500 | Upon the Company’s generation of a cumulative $10 in revenue. | 5 Years from vesting date | |||||||||||
| Barton Budman | CFO, Director | 05/10/2012 | 1,000,000 | $ | 0.0500 | Granted upon completion of consulting contract on 5/10/12. | 05/09/2017 | |||||||||||
| Barton Budman | CFO, Director | 05/10/2012 | 5,000,000 | $ | 0.0500 | Upon the implementation of the Company’s accounting software platform for the parent company as well as the operations for the Chloride Copper Mine. | 5 Years from vesting date | |||||||||||
| Barton Budman | CFO, Director | 05/10/2012 | 5,000,000 | $ | 0.0500 | When the Company begins production at the Chloride Copper Plant. | 5 Years from vesting date | |||||||||||
| Barton Budman | CFO, Director | 01/01/2012 | 5,000,000 | $ | 0.0500 | Upon the Company’s generation of a cumulative $5 million in revenue. | 5 Years from vesting date | |||||||||||
| Barton Budman | CFO, Director | 01/01/2012 | 5,000,000 | $ | 0.0500 | Upon the Company’s generation of a cumulative $10 | 5 Years from vesting date | |||||||||||
| Travis Snider | SVP Operations | 01/01/2012 | 1,250,000 | $ | 0.0500 | Upon the opening of the Chloride Copper Mine. | 5 Years from vesting date | |||||||||||
| Travis Snider | SVP Operations | 01/01/2012 | 1,250,000 | $ | 0.0500 | Upon the first production from the Chloride Copper Mine. | 5 Years from vesting date | |||||||||||
| Travis Snider | SVP Operations | 01/01/2012 | 1,250,000 | $ | 0.0500 | Upon the Company’s generation of a cumulative $5 | 5 Years from vesting date |
| Travis Snider | SVP Operations | 01/01/2012 | 1,250,000 | $0.0500 | Upon the Company’s generation of a cumulative $10 million in revenue. | 5 Years from vesting date | ||||||
| Timothy Benjamin | Chairman | 11/27/2011 | 5,000,000 | $0.0500 | 5/15/12 | 11/26/2016 | ||||||
| Timothy Benjamin | Chairman | 11/27/2011 | 5,000,000 | $0.0500 | Six months after the company’s receipt of long term financing in excess of $1,000,000. | 5 Years from vesting date | ||||||
| Timothy Benjamin | Chairman | 11/27/2011 | 10,000,000 | $0.0500 | Six months after the Chloride Copper  (0) (0) |
