You are entitled to attend and vote at the annual meeting, or any postponement or adjournment of the annual meeting, if you are a holder of our common stock at the close of business on July 12, 2022.March 25, 2024. This Proxy Statement, proxy card and Annual Report to Stockholders, including financial statements for the fiscal year ended MarchDecember 31, 2022,2023, are first being sent to stockholders on or around July 25, 2022.April 3, 2024.
This Proxy Statement is furnished to the stockholders of Dakota Gold Corp. (“Dakota Gold,” the “Company,” “we” or “our”) in connection with the solicitation of proxies by the board of directors of Dakota Gold Corp. (the “Board of Directors”) of Dakota Gold Corp. to be voted at the annual meeting of stockholders on August 22, 2022,May 14, 2024, or at any postponements or adjournments of the annual meeting. Our annual meeting is being held for the purposes set forth in the accompanying Notice of 20222024 Annual Meeting of Stockholders. The Proxy Statement, proxy card and Annual Report to Stockholders, including financial statements for the fiscal year period ended MarchDecember 31, 2022,2023, were first made available to stockholders on or about July 25, 2022.April 3, 2024.
At our annual meeting, stockholders will vote on the following three items of business:
Stockholders will also vote on such other matters as may properly come before the annual meeting or any postponement or adjournment thereof.
Most stockholders hold their shares through a broker or other holder of record rather than directly in their own names. As summarized below, there are some distinctions between shares held of record and those owned beneficially.
No action is proposed at this meeting for which the laws of the state of Nevada or our Bylawsamended and restated bylaws (the “Bylaws”) provide a right of our stockholders to dissent and obtain appraisal of or payment for such stockholders’ common stock.
Votes will be tabulated by Odyssey Trust Company. We do not expect any matters to be presented for a vote at the annual meeting other than the matters described in this Proxy Statement. If you grant a proxy, any of the officers named as proxy holder, Robert Quartermain, Patrick Malone, Shawn Campbell Daniel Cherniak or their nominee(s) or substitute(s), will have the discretion to vote your shares on any additional matters that are properly presented for a vote at the annual meeting. If a nominee is not available as a candidate for director, any of the officers named as proxy holder will vote your proxy for another candidate nominated by our boardBoard of directors.Directors.
Proxies submitted properly will be voted in accordance with the instructions contained therein. If you submit a proxy but do not provide voting directions, the proxy will be voted “FOR” each of the six director nominees, “FOR” the ratification of the appointment of Ham, Langston & Brezina, L.L.P. as our independent registered public accounting firm, “FOR” the approval of the Dakota Gold 2022 Stock Incentive Plan, voted:
and in such manner as the proxy holders named on the proxy determine, in their discretion, upon such other business as may properly come before the annual meeting or any adjournment or postponement thereof.
If your shares are held through a broker, bank or other nominee (collectively referred to as “brokers”), the broker will vote your shares according to the specific instructions it receives from you. If the broker does not receive voting instructions from you, the broker may vote only on proposals that are considered “routine” matters. Under applicable NYSE rules and guidance, at this year’s annual meeting, your broker may vote without your instructions only on Proposal 2 (the ratification of the appointment of Ham, LangstonErnst & Brezina, L.L.P.Young LLP as our independent registered public accounting firm for the fiscal year ending MarchDecember 31, 2023)2024). The broker’s failure to vote on Proposal 1 (the election of directors) and Proposal 3 (the approval(reincorporation of the Dakota Gold 2022 Stock Incentive Plan),Company from Nevada to Delaware) because the broker lacks discretionary authority to do so is commonly referred to as a “broker non-vote”, will not affect the outcome of the vote on that matter..
After you have submitted your proxy, you may change the votes you cast or revoke your proxy at any time before the votes are cast at the annual meeting by:
In addition, the powers of the proxy holders to vote your stock will be suspended if you attend the annual meeting and so request, although attendance at the annual meeting will not by itself revoke a previously granted proxy.
The following table sets forth the name, age, and current positions of each nominee:
PROPOSAL 3 reincorporation from Nevada TO DELAWARE |
The Board of Directors unanimously recommends that the Company’s stockholders vote FOR the proposal to reincorporate the Company from the State of Nevada to the State of Delaware.
Our Board of Directors has approved and recommends to the stockholders a proposal to change the Company’s state of incorporation from the State of Nevada to the State of Delaware (the “Reincorporation”). If our stockholders approve the proposal, we will effect the Reincorporation by converting the corporation as provided in the Delaware General Corporation Law (the “DGCL”) and the Nevada Revised Statutes (the “NRS”).
Reasons for the Reincorporation
Our Board of Directors believes that there are a number of reasons why Delaware is an attractive state for the incorporation of the Company and why reincorporating is in the best interests of our stockholders. For many years, Delaware has followed a policy of encouraging incorporation in that state. To advance that policy, Delaware has adopted comprehensive, modern and flexible corporate laws that are updated and revised periodically to meet changing business needs. As a result, many major corporations have initially chosen Delaware for their domicile or have subsequently reincorporated in Delaware. Delaware courts have developed considerable expertise in dealing with corporate issues. In doing so, Delaware courts have created a substantial body of case law construing Delaware law and establishing public policies with respect to Delaware corporations. Our Board of Directors believes that this environment provides greater predictability with respect to corporate legal affairs and allows a corporation to be managed more efficiently.
In contrast, Nevada case law concerning the effects of its statutes and regulations is more limited, resulting in less predictability with respect to legality of corporate affairs and transactions and stockholders’ rights to challenge them. The Company believes that investors are familiar with Delaware law and generally comfortable with the degree of certainty that Delaware jurisprudence provides, which may help attract investors and potentially bolster trading in the Company’s Common Stock.
As discussed below under “Certain Effects of the Change in State of Incorporation,” there are differences in Delaware Law and Nevada Law that may affect the rights of stockholders.
The Plan of Conversion
To accomplish the reincorporation, the Board of Directors has adopted a plan of conversion (the “Plan of Conversion”), substantially in the form attached hereto as Appendix A. The Plan of Conversion provides that we will convert into a Delaware corporation and thereafter will be subject to the DGCL.
Assuming the holders of a majority of our outstanding shares of common stock vote in favor of this Proposal 3, we will cause the Reincorporation to be effected at such time as we determine by filing with (1) the Secretary of State of the State of Nevada articles of conversion, substantially in the form attached hereto as Appendix B (the “Articles of Conversion”) and (2) the Secretary of State of the State of Delaware (i) the certificate of conversion, substantially in the form attached hereto as Appendix C (the “Delaware Certificate of Conversion”) and (ii) the Certificate of Incorporation, substantially in the form attached hereto as Appendix D (the “Delaware Certificate of Incorporation”). In addition, if and when the Board of Directors effects the Reincorporation, the Board of Directors will adopt the Bylaws of Dakota Gold Corp. substantially in the form attached hereto as Appendix E (the “Delaware Bylaws”). Approval of this Proposal 3 by our stockholders will constitute approval of the Plan of Conversion, the Articles of Conversion, the Delaware Certificate of Conversion, the Delaware Certificate of Incorporation, and the Delaware Bylaws.
The Reincorporation will be effected pursuant to the Plan of Conversion. The Plan of Conversion provides that the Company will convert into a Delaware corporation, which will continue with all of the assets, rights, privileges and powers of the Company, and all property owned by the Company, all debts due to the Company, as well as all other causes of action belonging to the Company immediately prior to the conversion, remaining vested in Dakota Gold Corp., a Delaware corporation (“Reincorporated Dakota Gold”) following the conversion. The Company will remain as the same entity following the Reincorporation. The directors and officers of the Company immediately prior to the conversion will be the directors and officers of Reincorporated Dakota Gold.
After the Reincorporation, the Delaware Certificate of Incorporation and Delaware Bylaws will be the governing instruments of Reincorporated Dakota Gold, resulting in some changes from the current amended and restated articles of incorporation of the Company (the “Articles of Incorporation”) and Bylaws, such as a change in the registered office and agent of the Company from an office and agent in Nevada to an office and agent in Delaware.
Effect of Vote for the Reincorporation
A vote in favor of the Reincorporation proposal is a vote to approve the Plan of Conversion and therefore the Reincorporation. A vote in favor of the Reincorporation proposal is also effectively a vote in favor of the Delaware Certificate of Incorporation and Delaware Bylaws.
If the Reincorporation proposal fails to obtain the requisite vote for approval, the Reincorporation will not be consummated and the Company will continue to be incorporated in Nevada and be subject to the Company’s existing Articles of Incorporation and Bylaws.
Effective Time
If the Reincorporation proposal is approved, the Reincorporation will become effective upon the filing of, and at the date and time specified in (as applicable), the Delaware Certificate of Conversion and Delaware Certificate of Incorporation filed with the Secretary of State of Delaware and the Nevada Articles of Conversion are filed with the Secretary of State of Nevada, in each case, upon acceptance thereof by the Delaware Secretary of State and the Nevada Secretary of State, respectively. If the Reincorporation proposal is approved, it is anticipated that our Board of Directors will cause the Reincorporation to be effected as soon as reasonably practicable. However, the Reincorporation may be delayed by the Board of Directors or the Reincorporation may be terminated and abandoned by action of the Board of Directors at any time prior to the effective time of the Reincorporation, whether before or after the approval by the Company’s stockholders, if the Board of Directors determines for any reason that the consummation of the Reincorporation should be delayed or would be inadvisable or not in the best interests of the Company and its stockholders, as the case may be.
Certain Effects of the Reincorporation
The Reincorporation will effect a change in our legal domicile; however, it will not result in any change in headquarters, business, jobs, management, location of any of offices or facilities, number of employees, assets, liabilities or net worth (other than as a result of the costs incident to reincorporating, which are immaterial). Management, including the directors and officers, will remain the same in connection with reincorporating. There will be no substantive change in the employment agreements for executive officers or in other direct or indirect interests of the current directors or executive officers as a result of reincorporating. Upon the effective time of the Reincorporation, each share of our common stock outstanding immediately prior to such effective time, by virtue of reincorporating and without any action on the part of the holder thereof, be converted into one fully paid and non-assessable share of common stock of Dakota Gold Corp., a Delaware corporation.
The following chart summarizes some of the material differences between the DGCL and the NRS. This chart does not address each difference between Delaware law and Nevada law but focuses on some of those differences which the Company believes are most relevant to the existing stockholders. This chart is not intended as an exhaustive list of all differences and is qualified in its entirety by reference to the DGCL and the NRS.
| Delaware | | Nevada |
| Removal of Directors | | |
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| Unless otherwise provided in the certificate of incorporation, the DGCL permits the holders of a majority of shares of a corporation without a classified board then entitled to vote in an election of directors, to remove directors, with or without cause. | | Unless otherwise provided in the articles of incorporation, the NRS provides that any one or all of the directors of a corporation may be removed by the holders of not less than two-thirds of the voting power of a corporation’s issued and outstanding stock, with or without cause. |
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| Number of Directors | | |
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| Delaware law provides that a corporation must have at least one director and that the number of directors shall be fixed by or in the manner provided in the bylaws unless the certificate of incorporation fixes the number of directors. If that is the case, then the number of directors can only be changed by amending the certificate of incorporation. | | Nevada law provides that a corporation must have at least one director and may provide in its articles of incorporation or in its bylaws for a fixed number of directors or a variable number, and for the manner in which the number of directors may be increased or decreased. |
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| Dividends and Other Distributions | | |
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Delaware law permits the directors of a corporation, subject to any restrictions contained in its certificate of incorporation, to declare and pay dividends upon the shares of its capital stock, either (1) out of its surplus, as computed in accordance with the DGCL, or (2) in case there is no surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. However, such dividends cannot be declared out of net profits if the capital of the corporation, has diminished by depreciation in the value of its property, or by losses or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets. PROPOSAL 3Additionally, the DGCL also imposes on any director under whose administration distributions are declared in violation of the foregoing provision, personal liability to a corporation’s creditors in the event of its dissolution or insolvency, up to the full amount of the unlawful distribution, for a period of 6 years following a dividend declaration, unless such director’s dissent was recorded in the minutes of the proceedings approving the distribution.
| | Nevada law prohibits distributions to stockholders when the distributions would (i) render the corporation unable to pay its debts as they become due in the usual course of business and (ii) render the corporation’s total assets less than the sum of its total liabilities plus the amount that would be needed to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution. ApprovalAdditionally, the NRS imposes personal liability on any director under whose administration distributions are declared in violation of the 2022 Stock Incentive Planforegoing provision to a corporation’s creditors in the event of its dissolution or insolvency, up to the full amount of the unlawful distribution, for a period of 3 years following a dividend declaration, unless such director’s dissent was recorded in the minutes of the proceedings approving the distribution.
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| Limitation of Liability | | |
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A Delaware corporation is permitted to adopt provisions in its certificate of incorporation limiting or eliminating the liability of a director to a company and its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such liability does not arise from certain proscribed conduct, including breach of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law or liability to the corporation based on unlawful dividends or distributions or improper personal benefit. The boardDelaware Certificate of Incorporation includes such a provision. | | Under Nevada law, unless the articles of incorporation provide for greater individual liability, a director or officer is not individually liable to the corporation or its stockholders for any damages as a result of any act or failure to act in his capacity as a director or officer unless it is proven that: (a) his act or failure to act constituted a breach of his fiduciary duties as a director or officer; and (b) his breach of those duties involved intentional misconduct, fraud or a knowing violation of law. |
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| Indemnification | | |
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Under the DGCL, a corporation may indemnify current or former directors, unanimously recommendsofficers, employees or agents against reasonable expenses, attorney’s fees, fines, judgments, and settlements incurred in actions brought against them in their capacity as such, so long as they acted in good faith and under the reasonable belief that their actions were not opposed to the Company’s stockholders vote FORbest interests of the corporation and were lawful. However, to the extent a person is found liable to the corporation in such an action, the corporation may only indemnify that person upon approval of the Dakota Gold 2022 Stock Incentive Plan.court where the action was brought. Additionally, a corporation can advance defense and expenses after the receiving individual agrees to repay the corporation if such person is ultimately determined not to be entitled to indemnification. BackgroundThe Delaware Certificate of Incorporation and ReasonsDelaware Bylaws provide for Adoptingindemnification of directors and officers to the 2022 Stock Planfullest extent permitted by the DGCL.
| | Under the NRS, a corporation may indemnify current or former directors, officers, employees or agents against expenses, including attorney’s fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding if the person acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. The corporation may also identify such individuals in actions by or in the right of the corporation to procure a judgment in its favor. A corporation can advance expenses after the receiving individual agrees to repay the corporation if such person is ultimately determined not to be entitled to indemnification. On March 30, 2022,In derivative suits, a corporation may indemnify its agents for expenses that the Boardperson actually and reasonably incurred. A corporation may not indemnify a person if the person was adjudged to be liable to the corporation unless a court otherwise orders.
No corporation may indemnify a party unless it determines, through its stockholders, directors or independent counsel, that the indemnification is proper. |
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Expiration of Directors approved the Dakota Gold Corp. 2022 Stock Incentive Plan (the “2022 Stock Plan”). The purposeProxies | | |
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Section 212 of the 2022 Stock PlanDGCL provides that the appointment of a proxy with no expiration date may be valid for up to 3 years, but that a proxy may be provided for a longer period. Furthermore, a duly executed proxy may be irrevocable if it states that it is to fosterirrevocable and promote the long-term financial success of the Company and materially increase shareholder value by (a) motivating superior performance by means of performance-related incentives, (b) encouraging and providing for the acquisition ofif, it is coupled with an ownership interest in the Company by Employees, Non-Employee Directors and Third Party Service Providers (as defined therein), and (c) enablingstock itself or an interest in the Companycorporation generally, sufficient in law to attract and retain qualified and competent persons to serve as members ofsupport an outstanding management team and the Board of Directorsirrevocable power. | | Section 78.355(4) of the Company upon whose judgment,NRS provides that proxies may not be valid for more than 6 months, unless the proxy is irrevocable due to being coupled with an interest and performance are requiredor the stockholder specifies that the proxy is to continue in force for the successful and sustained operations of the Company.The following discussion and summary of the material terms of the 2022 Stock Plan is qualified in its entirety by reference to the full text of the 2022 Stock Plan, a form of which is set forth in Appendix A to this proxy statement.
Key Features of the 2022 Stock Plan
The following features of the 2022 Stock Plan reflect the equity incentive plan “best practices” intended to protect the interests of our stockholders:
A fixed reserve of 6,250,000 shares of common stock that are authorized for issuance pursuant to plan awards;
No “evergreen” increase to the share reserve;
A ten (10) year term that expires on August 22, 2032;
Permitted awards include options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), performance shares, performance units (“PSUs”), and other cash and stock-based awards;
No direct or indirect repricing of options or SARs without shareholder approval; and
Dividend equivalents on unvested awards subject to performance vesting are accrued and paid only if related awards vest.
Shares Available for Issuance under the 2022 Stock Plan
The number of shares reserved for issuance under the 2022 Stock Plan is 6,250,000. The Board determined the share reserve based on the Company’s current stage of development and the burn rate of peer companies. The Company has authorized specific grants of awards to be made under the 2022 Stock Plan and such awards will be granted following stockholder approval of the 2022 Stock Plan at the 2022 annual meeting of stockholders.
longer period. |
| Shareholder Meeting Quorum Requirements | | |
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The 2022 Stock Plan does not setSection 216 of the DGCL provides that the certificate of incorporation or bylaws of any corporation authorized to issue stock may specify the number of shares subjecthaving voting power and the number of such shares that must be present or represented by proxy at any meeting in order to equity awards that will be granted in future years. In setting each year’s award amounts for executive officers, the Compensation Committee considersconstitute a varietyquorum, however, a quorum may not consist of factors such as: the relative market positionless than one-third of the awards, the proportion of each executive’s total compensationshares entitled to be delivered as a long-term incentive award, internal pay equity, executive performance, retention concerns, and the Company’s performance. Similar considerations are taken into account in granting awards to participants who are not executive officers.
To reduce the dilutive impact of our equity award grants on our stockholders’ interests, equity awards are generally limited to individuals whose personal performance makes them highly valuable to us and essential new hires.
New Plan Benefits
No awards have yet been granted under the 2022 Stock Plan, as it will only take effect upon stockholder approvalvote at the 2022 annual meeting of stockholders, however, the Company has authorized certain grants of awards to be made following and subject to stockholder approval of the 2022 Stock Plan, as shown in the following table.meeting.
2022 Stock Plan
| Name and Position | | Dollar Value
($) | | | Number of Units(1) | | Jonathan Awde, Chief Executive Officer | | $ | 400,000 | | | 25% restricted share units; 25% performance share units; and 50% options(2) | | Shawn Campbell, Chief Financial Officer | | $ | 250,000 | | | 25% restricted share units; 25% performance share units; and 50% options(2) | | Gerald Aberle, Chief Operating Officer | | $ | 350,000 | | | 25% restricted share units; 25% performance share units; and 50% options(2) | | James Berry, Vice President of Exploration | | $ | 350,000 | | | 25% restricted share units; 25% performance share units; and 50% options(2) | | Executive Group | | | | | | | | Non-Executive Director Group | | $ | 200,000 | | | 100% restricted share units(3) | | Non-Executive Officer Employee Group | | $ | 727,250 | | | 100% restricted share units(4) |
(1) | The number of units will be determined based on the fair market value of the Company’s common stock at the time of the grant. | (2) | Restricted share units vest 1/3 annually over three years from the date of grant; performance share units vest 1/3 annually from the time of grant and pay out 50% of their value to a maximum of 200% of their value based on the value of the Company’s shares over each applicable performance period, measured against the MVIS Global Junior Gold Miners Index (MVGDXJ); and stock options will vest 1/3 annually over three years and expire five years from the date of grant. | (3) | Restricted share units vest will vest one year from the date of grant. | (4) | Restricted share units vest 1/3 annually over three years from the date of grant. |
Description of the 2022 Stock Plan
The following summary of the material terms of the 2022 Stock Plan is qualified in its entirety by reference to the full text of the 2022 Stock Plan, a form of which is set forth in Appendix A to this Proxy Statement. Purpose of the 2022 Plan
The purpose of the 2022 Stock Plan is to foster and promote the long-term financial success of the Company and materially increase shareholder value by providing an additional means for the Company to attract, motivate, retain and reward directors, officers, employees and certain independent consultants.
Administration
The Compensation Committee will administer the 2022 Stock Plan. Except where prohibited by applicable law, the Compensation Committee may delegate some or all of its administrative duties or powers with respect to the 2022 Stock Plan to one or more of its members or to one or more officers of the Company or any subsidiary or to one or more agents or advisors. For purposes of Rule 16b-3 of the Exchange Act and for grants to non-employee directors, the 2022 Stock Plan must be administered by a committee consisting solely of two or more independent directors. The appropriate acting body, be it the Compensation Committee, a member thereof or an officer within his or her delegated authority, is referred to in this proposal as the “Administrator.”
The Administrator has broad authority under the 2022 Stock Plan with respect to award grants, including, without limitation, the authority:
To select participants and determine the type(s) of award(s) that they are to receive;
To determine the number of shares that are to be subject to awards and the terms and conditions of awards, including the price (if any) to be paid for the shares or the award;
Subject to the other provisions of the 2022 Stock Plan, to make certain adjustments to outstanding awards and authorize the conversion, succession or substitution of awards; and
To allow the purchase price of awards or shares of common stock to be paid in the form of cash or its equivalent, by the delivery of already-owned shares of common stock or by a reduction of the number of shares deliverable pursuant to the awards, by cashless exercise, on such terms as the Administrator may authorize, or any other form permitted by law.
Eligibility
Persons eligible to receive awards under the 2022 Stock Plan include officers and employees of the Company or any of its subsidiaries and non-employee directors of the Company, as well as certain independent contractors who render bona fide services to the Company or one of its subsidiaries. As of July 22, 2022, there were 11 employees (including officers) and 0 consultants of the Company and its subsidiaries, and five non-employee directors of the Company who would potentially be eligible to receive awards under the 2022 Stock Plan.
Authorized Shares
The 2022 Stock Plan authorizes the issuance of up to 6,250,000 shares of common stock pursuant to plan awards.
Shares that are subject to or underlie awards that expire or for any reason are canceled or terminated, are forfeited, fail to vest, or for any other reason are not paid or delivered under the 2022 Stock Plan are available for reissuance under the 2022 Stock Plan. In addition, shares tendered or withheld to satisfy the exercise price of options or tax withholding obligations, and shares covering the portion of exercised share-settled SARs that were not issued upon the exercise of such SAR, are available for reissuance under the 2022 Stock Plan.
No Repricing
In no event will any adjustment be made to a stock option or SAR under the 2022 Stock Plan (by amendment, cancellation and regrant, exchange for other awards or cash or other means) that would constitute a repricing of the per share exercise or base price of the award, unless such adjustment is approved by the shareholders of the Company. Adjustments made in accordance with the 2022 Stock Plan to reflect a stock split or similar event are not deemed to be a repricing.
Dividends and Dividend Equivalents
Unless otherwise determined by the Compensation Committee, dividends accrue on unvested shares of restricted stock, providedDelaware Bylaws provides that the Compensation Committee may require that any dividends on such sharesholders of restricted stock be automatically deferred and reinvested in additional restricted stock subject to the same restrictions on vesting as the underlying award, or may require that dividends or other distributions on restricted stock be paid to the Company for the account of the participant and held pending vesting of the underlying award. Accrued dividend-equivalent amounts with respect to awards subject to performance vesting shall not be paid unless and until such awards to which they relate become vested.
Types of Awards
The 2022 Stock Plan authorizes stock options, SARs, restricted stock, RSUs, performance units, performance shares (“PSUs”one-third (33 1/3%), and other forms of awards that may be granted or denominated in or otherwise determined by reference to the shares of common stock of the Company, as well as cash awards. The 2022 Stock Plan provides flexibility to offer competitive incentives and to tailor benefits to specific needs and circumstances. Awards may, in certain cases, be paid or settled in cash.
Stock Options
A stock option is a right to purchase shares of common stock at a future date at a specified price per share (the “exercise price”). The per share exercise price of an option generally may not be less than the fair market value of a share of common
stock on the date of grant. On July 22, 2022, the last sale price of the shares of our common stock as reported on the NYSE American was $3.78 per share. The maximum term of an option is ten years from the date of grant. An option may be either an incentive stock option oroutstanding and entitled to vote will constitute a nonqualified stock option. Incentive stock options are taxed differently than nonqualified stock options and are subject to more restrictive terms under the Internal Revenue Code of 1986, as amended (the “Code”), and the 2022 Stock Plan. Incentive stock options may be granted only to employeesquorum.
| | Section 78.320(1)(a) of the CompanyNRS provides that unless the articles of incorporation or bylaws provide for different proportions, a subsidiary thereof.majority of the voting power of the common stock constitutes a quorum for the transaction of business. SARs
A SAR is the right to receive payment of an amount equal to the excess of the fair market value of a share of common stock on the date of exercise of the SAR over the base price of the SAR. The base price is established by the Administrator at the time of grant of the SAR and may not be less than the fair market value of a share of common stock on the date of grant. SARs may be granted in connection with other awards or independently. The maximum term of a SAR is ten years from the date of grant.
Restricted Stock
Shares of restricted stock are shares of the Company’s common stock that are subject to forfeiture and to certain restrictions on sale, pledge, or other transfer by the recipient during a particular period of employment or service or until certain performance vesting conditions are satisfied. Subject to the restrictions provided in the applicable award agreement and the 2022 Stock Plan, a participant receiving restricted stock may have all of the rights of a stockholder as to such shares, including the right to vote and the right to receive dividends; provided, however,current bylaws provide that the Compensation Committee may require that any dividends on such sharesholders of restricted stock be automatically deferred and reinvested in additional restricted stock subject to the same restrictions on vesting as the underlying award, or may require that dividends or other distributions on restricted stock be paid to the Company for the account of the participant and held pending vesting of the underlying award.
RSUs
An RSU represents the right to receive one share of common stock on a specific future vesting or payment date. Subject to the restrictions provided in the applicable award agreement and the 2022 Stock Plan, a participant receiving RSUs has no rights as a shareholder with respect to the RSUs until the shares of common stock are issued to the participant. RSUs may be granted with dividend-equivalent rights that are payable only if the underlying RSUs vest. RSUs may be settled in cash if so provided in the applicable award agreement.
Performance Units
A performance unit is a performance-based award that has an initial notional value equal to a dollar amount determined by the Compensation Committee. The number of performance units earned is determined based on the attainment of one or more performance goals set forth in the award agreement over a specified performance period. Earned performance units (if any), may be settled in the form or cash, shares of common stock, or a combination thereof at the end of the applicable performance period.
PSUs
A PSU is a performance-based award that entitles the recipient to receive shares of common stock based on attainment of one or more performance goals. Each PSU shall designate a target number of shares payable under the award, with the actual number of shares earned (if any) based on a formula set forth in the award agreement related to the attainment of one or more performance goals. A participant receiving PSUs has no rights as a shareholder until the shares of common stock are issued to the participant. PSUs may be granted with dividend-equivalent rights that are payable only if the underlying PSUs are earned. PSUs may be settled in cash if so provided in the applicable award agreement.
Cash Awards
The Administrator, in its sole discretion, may grant cash awards, including, without limitation, discretionary awards, awards based on objective or subjective performance criteria, and awards subject to other vesting criteria.
Other Awards
The other types of awards that may be granted under the 2022 Stock Plan include, without limitation, the grant or offer for sale of unrestricted shares of common stock and the grant of deferred shares of common stock or deferred share units, and similar securities with a value derived from the value of, or related to, the shares of common stock or returns thereon.
Other Terms
Change of Control
In the event of a change in control, unless otherwise determined by the Compensation Committee, (a) all outstanding options and SARs will immediately become fully vested (and, to the extent applicable, all performance conditions shall be deemed satisfied) and exercisable, (b) all other awards subject to time vesting will immediately become fully vested and will be settled in cash, shares of common stock or a combination thereof as soon as practicable following such change in control, (c) all other awards, other than options and SARs, that are subject to performance vesting will immediately vest and all performance conditions will be deemed satisfied as if target performance was achieved, and will be settled in cash, shares of common stock or a combination thereof as soon as practicable following such change in control, and (d) the treatment of other awards that do not vest pursuant to (a), (b) or (c) above will be determined in accordance with the applicable award agreement or, if not specified in the award agreement, will be determined by the Compensation Committee.
Transferability of Awards
Awards under the 2022 Stock Plan generally are not transferable by the recipient other than by will or the laws of descent and distribution, or pursuant to domestic relations orders. Awards with exercise features are generally exercisable during the recipient’s lifetime only by the recipient. Any amounts payable or shares issuable pursuant to an award generally will be paid only to the recipient or the recipient’s beneficiary or representative. The Administrator has discretion, however, to establish written conditions and procedures for the transfer of awards to other persons or entities, as long as such transfers comply with applicable federal, state and provincial securities laws and provided that any such transfers are not for consideration.
Adjustments
As is customary in plans of this nature, the share limits and the number and kind of shares available under the 2022 Stock Plan and any outstanding awards, as well as the exercise or purchase prices of awards, are subject to adjustment in the event of certain reorganizations, mergers, combinations, recapitalizations, stock splits, stock dividends, or other similar events that change the number or kind of shares outstanding, and extraordinary dividends or distributions of property to the shareholders.
No Limit on Other Authority
The 2022 Stock Plan does not limit the authority of the Board or any committee thereof to grant awards or authorize any other compensation, with or without reference to the shares of common stock of the Company, under any other plan or authority.
Termination of, or Changes to, the 2022 Stock Plan
The Board may amend or terminate the 2022 Stock Plan at any time and in any manner. Shareholder approval for an amendment will be required only to the extent then required by applicable law or any applicable stock exchange rules, or as required to preserve the intended tax consequences of the 2022 Stock Plan. For example, shareholder approval is required for any proposed amendment to increase the maximum number of shares that may be delivered with respect to awards granted under the 2022 Stock Plan. Adjustments as a result of stock splits or similar events will not, however, be considered amendments requiring shareholder approval. Unless terminated earlier by the Board, the authority to grant new awards under the 2022 Stock Plan will terminate ten years after the date on which the 2022 Stock Plan was approved by the Board. Outstanding awards will generally continue following the expiration or termination of the 2022 Stock Plan. Generally speaking, outstanding awards may be amended by the Board (except for a repricing), but the consent of the award holder is required if the amendment (or any plan amendment) materially and adversely affects the award holder.
Certain Federal Income Tax Consequences
The following summary of the United States federal income tax consequences of awards under the 2022 Stock Plan is based upon U.S. federal income tax laws in effect on the date of this Proxy Statement. This summary does not purport to be complete, and does not discuss state, local or non-U.S. tax consequences. The tax consequences of individual awards may vary depending upon the particular circumstances applicable to any individual participant.
Nonqualified Stock Options
The grant of a nonqualified stock option under the 2022 Stock Plan will not result in any federal income tax consequences to the participant or to the Company. Upon exercise of a nonqualified stock option, the participant will recognize ordinary compensation income equal to the excess of the fair market valueone-third (33 1/3%) of the shares of our common stock of the Company at the time of exercise over the option exercise price. If the participant is an employee, this income is subject to withholding for federal incomeoutstanding and employment tax purposes. The Company is entitled to an income tax deduction invote will constitute a quorum.
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| Shareholder Voting Requirements | | |
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Under the amountDGCL, the bylaws or certificate of incorporation may set the income recognizedpercentage vote required for any specific action by the participant, subject to possible limitations imposed by the Code, including Section 162(m) thereof. Any gain or loss on the participant’s subsequent disposition of the shares will be treated as long-term or short-term capital gain or loss, depending on the sales proceeds received and whether the shares are held for more than one year following exercise. The Company does not receive a tax deduction for any subsequent capital gain.Incentive Stock Options
The grant of an incentive stock option (or “ISO”) under the 2022 Stock Plan will not result in any federal income tax consequences to the participant or to the Company. A participant recognizes no federal taxable income upon exercising an ISO (subject to the alternative minimum tax rules discussed below), and the Company receives no deduction at the time of exercise.stockholders. In the event of a disposition of shares acquired upon exercise of an ISO, the tax consequences depend upon how long the participant has held the shares. If the participant does not dispose of the shares within two years after the ISO was granted, nor within one year after the ISO was exercised, the participant will recognize a long-term capital gain (or loss) equal to the difference between the sale price of the shares and the exercise price. The Company is not entitled to any deduction under these circumstances.
If the participant fails to satisfy either of the foregoing holding periods (referred to as a “disqualifying disposition”), he or she will recognize ordinary compensation income in the year of the disposition. The amount of ordinary compensation income generally is the lesser of (i) the difference between the amount realized on the disposition and the exercise price or (ii) the difference between the fair market value of the shares at the time of exercise and the exercise price. Such amount is not subject to withholding for federal income and employment tax purposes, even if the participant is an employee of the Company. Any gain in excess of the amount taxed as ordinary income will generally be treated as a short-term capital gain. The Company, in the year of the disqualifying disposition, is entitled to a deduction equal to the amount of ordinary compensation income recognized by the participant, subject to possible limitations imposed by the Code, including Section 162(m) thereof.
The “spread” under an ISO (i.e., the difference between the fair market value of the shares at exercise and the exercise price) is classified as an item of adjustment in the year of exercise for purposes of the alternative minimum tax. If a participant’s alternative minimum tax liability exceeds such participant’s regular income tax liability, the participant will owe the alternative minimum tax liability.
Restricted Stock
Restricted stock is generally taxable to the participant as ordinary compensation income on the date that the restrictions lapse (i.e., the date that the stock vests), in an amount equal to the excess of the fair market value of the shares on such date over the amount paid for such stock, if any. If the participant is an employee, this income is subject to withholding for federal income and employment tax purposes. The Company is entitled to an income tax deduction in the amount of the ordinary income recognized by the participant, subject to possible limitations imposed by the Code, including Section 162(m) thereof. Any gain or loss on the participant’s subsequent disposition of the shares will be treated as long-term or short-term capital gain or loss depending on the sales price and how long the stock has been held since the restrictions lapsed. The Company does not receive a tax deduction for any subsequent gain.
Participants receiving restricted stock awards may make an election under Section 83(b) of the Code (a “Section 83(b) Election”) to recognize as ordinary compensation income in the year that such restricted stock is granted in an amount equal to the excess of the fair market value on the date of the issuance of the stock over the amount paid for such stock. If the participant is an employee, this income is subject to withholding for federal income and employment tax purposes. If such an election is made, the recipient recognizes no further amounts of compensation income upon the lapse of any restrictions and any gain or loss on subsequent disposition will be long-term or short-term capital gain or loss to the recipient. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Section 83(b) Election. The Section 83(b) Election must be made within 30 days from the time the restricted stock is issued. The Company is entitled to a deduction equal to the amount of income taken into account as a result of the Section 83(b) Election, subject to possible limitations imposed by the Code, including Section 162(m) thereof.
To the extent dividends are paid while the restrictions on the stock are in effect, any such dividends will be taxable to the participant as ordinary income (and will be treated as additional wages for federal income and employment tax withholding purposes, if the recipient is an employee) and will be deductible by the Company (subject to possible limitations imposed by the Code, including Section 162(m) thereof), unless the participant has made a Section 83(b) Election, in which case the dividends will generally be taxed at dividend rates and will not be deductible by the Company.
Other Awards
Other awards (such as RSUs and PSUs) are generally treated as ordinary compensation income as and when shares of common stock or cash are paid to the participant upon vesting or settlementabsence of such awards. Ifa provision, the participant is an employee, this income is subject to withholding for income and employment tax purposes. The Company is generally entitled to an income tax deduction equal to the amount of ordinary income recognizedstockholders may approve corporate actions by the recipient, subject to possible limitations imposed by the Code, including Section 162(m) thereof.
Section 162(m) of the Internal Revenue Code
Under Code Section 162(m), no deduction is generally allowed in any taxable year of the Company for compensation in excess of $1 million paid to any of the Company’s “covered employees.” A “covered employee” is any individual who has served at any time after December 31, 2016 as the Company’s chief executive officer, chief financial officer, or other executive officer whose compensation has been reported in a Company proxy statement, regardless of whether any such individual is still employed by the Company. The Company may be prohibited under Code Section 162(m) from deducting compensation paid pursuant to the 2022 Stock Plan to our “covered employees.”
Section 409A of the Internal Revenue Code
Section 409A of the Code provides certain requirements for the deferral and payment of deferred compensation arrangements. In the event that any award under the 2022 Stock Plan is deemed to be a deferred compensation arrangement, and if such arrangement does not comply with Section 409A of the Code, the recipient of such award will recognize ordinary income once such award is vested, as opposed to at the time or times set forth above. In addition, the amount taxable will be subject to an additional 20% federal income tax along with other potential taxes and penalties. It is intended, although not guaranteed, that all awards issued under the 2022 Stock Plan will either be exempt from or compliant with the requirements of Section 409A of the Code.
Interested Parties
Approval of the 2022 Stock Plan will change the number of shares available for issuance to the directors and executive officers of the Company, thus each of those persons has an interest in and will be affected from the approval of the 2022 Stock Plan.
Vote Required and Recommendation
The affirmative vote of a majority of those shares represented at the meeting and elect directors by a plurality.
| | Unless provided otherwise under the NRS, the articles of incorporation or the bylaws, action by the stockholders of a Nevada corporation on a matter other than the election of directors is approved if the number of votes cast for this proposal is required to approvein favor of the 2022 Stock Plan. Abstentions will haveaction exceeds the effectnumber of a vote “against” the 2022 Stock Plan. Broker non-votes will not be counted as either votes cast forin opposition to the action. |
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| Amendment to the Bylaws | | |
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Delaware law provides that the stockholders may amend or against this proposal. The Board recommends that shareholdersrepeal bylaws at any annual or special meeting where a quorum is present, by a majority vote “FOR”of those shares present (or by a supermajority vote if required by the adoption and approvalcertificate of incorporation or current bylaws), unless the 2022 Stock Plan.
THE BOARD AND ITS COMMITTEES |
Board Leadership Structure and Risk Oversightcertificate of incorporation confers such power on the board of directors, although the power vested in the stockholders is not divested or limited where the board of directors also has such power.
Our CEO and Co-Chairmen roles are separate. The board has not reached a formal policy on separationDelaware Certificate of the roles of CEO and Chairman and will periodically review the leadership structure to determine appropriateness. Drs. Quartermain and O’Rourke, our Co-Chairmen, bring significant experience in the mining and natural resource industries, serving in various executive and board positions. In their capacity as Co-Chairmen, both work closely with Mr. Awde, the Chief Executive Officer.
Companies such as ours face a variety of risks, including financial reporting, legal, credit, liquidity, operational, health, safety and cybersecurity. The Board of Directors believes an effective risk management system will (1) identify the material risksIncorporation provides that we face in a timely manner, (2) communicate necessary information with respect to material risks to senior executives and to the Board of Directors is expressly authorized and empowered to adopt, amend, alter, or relevantrepeal the Bylaws without any action on the part of the stockholders.
| | Nevada law provides that, unless otherwise prohibited by any bylaws adopted by the stockholders, the board committee, (3) implementof directors may amend any bylaw, including any bylaw adopted by the stockholders. The articles of incorporation may grant the authority to adopt, amend or oversee implementationrepeal bylaws exclusively to the directors. |
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Amendment to the Certificate of appropriateIncorporation | | |
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Section 242(b) of the DGCL provides that the stockholders must approve most amendments to the corporation’s certificate of incorporation adopted by the board of directors at a special or annual meeting by a majority vote (or by a supermajority vote if required by the certificate of incorporation) of those shares entitled to vote on such matter. Unless required by the certification of incorporation, the DGCL exempts a name change or deletion of certain provisions of a certificate of incorporation from the requirement of stockholder approval. Additionally, Section 242(d) provides that amendments for reverse stock splits and responsive risk managementto increase or decrease to the number of authorized shares of a class of stock may be approved by majority of votes cast (unless the certificate of incorporation expressly elects to maintain a “majority of the shares outstanding” voting standard under Section 242(b)) if the class of stock in question is listed on a national exchange immediately before the amendment becomes effective and mitigation strategies consistent with our risk profile,the affected class of stock continues to meet the listing requirements of the applicable national securities exchange regarding any minimum number of holders after giving effect to such amendment. A Delaware corporation need not solicit stockholder votes to amend its certificate of incorporation to effectuate a forward stock split and (4) integrate risk managementproportionately increase its authorized shares, so long as the corporation has only one class of stock outstanding and it is not divided into our decision-making.series. The BoardDelaware Certificate of Directors oversees risk managementIncorporation follows the default voting standards permitted by Section 242(d). | | Nevada law provides that the articles of incorporation may be amended after receiving briefingsthe board of directors adopt a resolution setting forth the amendment and a majority of the stockholders approve such amendment. However, stockholder approval is not required for a change in the corporation’s name unless the articles of incorporation provide otherwise. |
| Stockholder Inspection Rights | | |
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Under Delaware law, any stockholder or beneficial owner of shares may, upon written demand under oath stating the proper purpose thereof and during usual business hours, either in person or by attorney, inspect and make copies and extracts from managementa corporation’s stock ledger, list of stockholders and advisorsits other books and basedrecords for any proper purpose. The burden of proving a proper purpose is on its own analysis and conclusions regarding the adequacy of our risk management processes. The Board of Directors, with assistance and input from its committees, continuously evaluates and manages material risks, including geopolitical and enterprise risk, financial risk, environmental risk, health and safety risk, andstockholder who seeks to inspect corporate records; however, the effect of compensation structures on risk-taking behaviors. The Board of Directors’ committees are an integral part of its oversight of risk management. As examples, the Board of Directors assesses the Company’s safety culture and related risks; the Audit Committee assesses and manages the Company’s exposure to enterprise-level risks, as well as the Company’s major financial risk exposure; the Compensation Committee assess risksstated judicial standard is a purpose reasonably related to an interest as a stockholder. | | Under Nevada law, any person who has been a stockholder of record for at least six months or holds at least 5% of all outstanding shares shall have the performanceright to examine, in person or by agent, a copy of the Company’s executive officers;corporation’s articles of incorporation (and all amendments and bylaws) and stock ledger. The Nevada corporation may require the ESG Committee and Technical Committee assess environmental and social risks.By virtuestockholder to furnish an affidavit that the inspection is not desired for a purpose which is in the interest of a business or object other than the business of the directors working closely with executive management, whocorporation.
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| Interested Stockholder Combinations | | |
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Delaware has a business combination statute, set forth in turn work closely with Company’s employees and contractors, we believe we have created an effective and efficient risk communication system that enables collaboration and communication. MeetingsSection 203 of the BoardDGCL, which provides that any person who acquires 15% or more of Directors
The currenta corporation’s voting stock (thereby becoming an “interested stockholder”) may not engage in certain “business combinations” with the target corporation for a period of 3 years following the time the person became an interested stockholder, unless (i) the board of directors of the Company was appointed on March 31, 2022. Since March 31, 2022, our boardcorporation has approved, prior to the interested stockholder’s acquisition of stock, either the business combination or the transaction that resulted in the person becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in the person becoming an interested stockholder, that person owns at least 85% of the corporation’s voting stock outstanding at the time the transaction is commenced (excluding shares owned by persons who are both directors held one meeting. Each incumbent director attended all meetings ofand officers and shares owned by employee stock plans in which participants do not have the right to determine confidentially whether shares will be tendered in a tender or exchange offer), or (iii) the business combination is approved by the board of directors and committeesauthorized by the affirmative vote (at an annual or special meeting and not by written consent) of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.
| | Section 78.438 of the NRS prohibits a Nevada corporation from engaging in any business combination with any interested stockholder (any entity or person beneficially owning, directly or indirectly, 10% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by any of these entities or persons) for a period of 3 years following the date that the stockholder became an interested stockholder, unless prior to that date, the board of directors onof the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder. Section 78.439 provides that business combinations after the 2-year period following the date that the stockholder becomes an interested stockholder may also be prohibited unless approved by the corporation’s directors or other stockholders or unless the price and terms of the transaction meet the criteria set forth in the statute. |
For purposes of determining whether a person is the “owner” of 15% or more of a corporation’s voting stock for purposes of Section 203 of the DGCL, ownership is defined broadly to include the right, directly or indirectly, to acquire the stock or to control the voting or disposition of the stock. A business combination is also defined broadly to include (i) mergers or consolidations of the corporation or its subsidiaries with or caused by the interested stockholder, (ii) sales or other dispositions of 10% or more of the assets of a corporation with or to an interested stockholder, (iii) certain transactions resulting in the issuance or transfer to the interested stockholder of any stock of the corporation or its subsidiaries, (iv) certain transactions which hewould result in increasing the proportionate share of the stock of a corporation or she served. All directors hold office until hisits subsidiaries owned by the interested stockholder, and (v) receipt by the interested stockholder of the benefit (except proportionately as a stockholder) of any loans, advances, guarantees, pledges or her successor is elected or until his or her earlier death, resignation or removal.other financial benefits. CommitteesThese restrictions placed on interested stockholders by Section 203 of the Board & Director IndependenceDGCL do not apply under certain circumstances, including, but not limited to, the following: (i) if the corporation’s original certificate of incorporation contains a provision expressly electing not to be governed by Section 203, (ii) if the corporation, by action of its stockholders, adopts an amendment to its bylaws or certificate of incorporation expressly electing not to be governed by Section 203, provided that such an amendment is approved by the affirmative vote of not less than a majority of the outstanding shares entitled to vote and that such an amendment will not be effective until 12 months after its adoption (except for limited circumstances where effectiveness will occur immediately) and will not apply to any business combination with a person who became an interested stockholder at or prior to such adoption.
Our boardThe Delaware Certificate of Incorporation does not include an election to not be governed by Section 203.
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| Advance Notice Provisions | | |
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Delaware law permits a corporation to include in its bylaws provisions requiring advance notice of shareholder proposals. The Delaware Bylaws will provide that advance notice of a stockholder’s proposal or director nominee must be delivered to the Secretary at the Company’s principal executive offices not less than ninety (90) days nor more than one hundred and twenty (120) days prior to the one-year anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not earlier than the one hundred twentieth (120th) day prior to such annual meeting and not later than the later of (i) the ninetieth (90th) day prior to such annual meeting, or (ii) the tenth (10th) day following the day on which public disclosure of the date of such annual meeting was first made. | | Nevada law permits a corporation to include in its bylaws provisions requiring advance notice of shareholder proposals. The Company’s current Bylaws do not include such an advance notice provision. |
| Selection of Forum | | |
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The Delaware Bylaws contain a provision regarding selection of forum, which provides that unless the Company consents in writing to the selection of an alternative forum, the Delaware Court of Chancery shall, to the fullest extent permitted by law, be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company, (b) any action asserting a claim of, or claim based on, breach of a fiduciary duty owed by, or other wrongdoing by, any director, officer, or other employee of the Company to the Company or the Company’s stockholders (including a beneficial owner of stock), (c) any action asserting a claim against the Company arising pursuant to any provision of the DGCL, the Company’s Certificate of Incorporation or these Bylaws, (d) any action to interpret, apply, enforce or determine the validity of the Company’s Certificate of Incorporation or Bylaws, or (e) any action asserting a claim against the Company governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to this provision. These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, is currently composedofficers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. If a court were to find either exclusive-forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of seven directors, fouroperations. | | The Company’s current Articles of which are independent. Incorporation and Bylaws do not contain any provisions governing selection of forum for litigating corporate claims. |
Securities Act Consequences
The shares of the Company’s common stock to be issued in exchange for shares of our common stock are not being registered under the Securities Act of 1933, as amended (the “Securities Act”). In that respect, the Company is relying on Rule 145(a)(2) under the Securities Act, which provides that a conversion that has as its sole purpose a change in a corporation’s domicile does not involve the sale of securities for purposes of the Securities Act. After the Reincorporation, Reincorporated Dakota Gold will be a publicly held company, and it will file with the SEC and provide to its stockholders the same type of information that we have previously filed and provided. Stockholders, whose shares of our common stock are freely tradable before the Reincorporation, will continue to have freely tradable shares of Reincorporated Dakota Gold common stock. In summary, Reincorporated Dakota Gold and its stockholders will be in the same respective positions under the federal securities laws after the Reincorporation as the Company and our stockholders prior to the Reincorporation.
No Exchange of Stock Certificates Required
Stockholders are not required to exchange their stock certificates for new certificates representing shares of Reincorporated Dakota Gold common stock. New stock certificates representing shares of Reincorporated Dakota Gold common stock will not be issued to a stockholder until such stockholder submits one or more existing certificates for transfer, whether pursuant to a sale or other disposition. However, stockholders (at their option and at their expense) may exchange their stock certificates for new certificates representing shares of Reincorporated Dakota Gold common stock following the Effective Time of the Conversion.
| THE BOARD AND ITS COMMITTEES |
Board Leadership Structure and Risk Oversight
Our CEO and Co-Chairmen roles are separate. The Board of Directors has not reached a formal policy on separation of the roles of CEO and Chairman and will periodically review the leadership structure to determine appropriateness. Drs. Quartermain and O’Rourke, our Co-Chairmen, bring significant experience in the mining and natural resource industries, serving in various executive and board positions. In their capacity as Co-Chairmen, both work closely with Mr. Awde, the Chief Executive Officer.
Companies such as ours face a variety of risks, including financial reporting, legal, credit, liquidity, operational, health, safety and cybersecurity. The Board of Directors believes an effective risk management system will (1) identify the material risks that we face in a timely manner, (2) communicate necessary information with respect to material risks to senior executives and to the Board of Directors or relevant board committee, (3) implement or oversee implementation of appropriate and responsive risk management and mitigation strategies consistent with our risk profile, and (4) integrate risk management into our decision-making.
The Board of Directors oversees risk management after receiving briefings from management and advisors and based on its own analysis and conclusions regarding the adequacy of our risk management processes. The Board of Directors, with assistance and input from its committees, continuously evaluates and manages material risks, including geopolitical and enterprise risk, financial risk, environmental risk, health and safety risk, and the effect of compensation structures on risk-taking behaviors. The Board of Directors’ committees are an integral part of its oversight of risk management. As examples, the committees provide the following assistance to the Board of Directors: the Audit Committee assists with the assessment of the Company’s exposure to enterprise-level risks, as well as the Company’s major financial risk exposure; the Compensation Committee assists with the assessment of risks related to the performance of the Company’s executive officers; and the ESG Committee and Technical Committee assist with the assessment of operating, safety culture, environmental and social risks.
By virtue of the Board of Directors working closely with executive management, who in turn work closely with Company’s employees and contractors, we believe we have created an effective and efficient risk communication system that enables collaboration and communication.
Meetings of the Board of Directors
Our Board of Directors held 4 meetings during the fiscal year ended December 31, 2023. Each incumbent director attended all meetings of the Board of Directors and committees of the Board of Directors on which he or she served.All directors hold office until his or her successor is elected or until his or her earlier death, resignation or removal.
Committees of the Board & Director Independence
Our Board of Directors is currently composed of seven directors, five of which are independent as defined by the listing standards of the NYSE American LLC (the “NYSE American”). We believe that our current board leadership structure is appropriate as a majority of our Board of Directors are independent directors.
On March 31, 2022, the Company formed an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, a Technical Committee and an Environmental, Social and Governance Committee. The following table sets forth the number of meetings held by the Board of Directors and each committee during the fiscal year ended December 31, 2023.
| Board or Committee | | Number of Meetings during
Fiscal Year Ended December 31,
2023 | |
| Board of Directors | | 4 | |
| Audit Committee | | 4 | |
| Compensation Committee | | 3 | |
Nominating and Corporate Governance Committee a | | 2 | |
Technical Committee and an | | 5 | |
Environmental, Social and Governance Committee. The following table sets forth the number of meetings held by the Board of Directors since March 31, 2022 and each committee since the committees were formed on March 31, 2022.
Board or Committee | | Number of MeetingsCommittee | | 4 | | Board of Directors | | 1 | | Audit Committee | | 1 | | Compensation Committee | | 1 | | Nominating and Corporate Governance Committee | | 1 | | Technical Committee | | 1 | | Environmental, Social and Governance Committee | | 0 | |
Audit Committee. Our Audit Committee currently consists of the following members who are all independent under applicable NYSE American listing standards: Ms. Grafton, Ms. Koenig and Mr. Morrison. Mr. Morrison qualifies as an "Audit Committee Financial Expert" as that term is defined in rules promulgated by the SEC. As Mr. Morrison will not be standing for re-election as a director of the Company, the Board of Directors is seeking a candidate with financial expertise. The purpose of the Audit Committee is to provide assistance to the Board of Directors in fulfilling its legal and fiduciary obligations with respect to matters involving the accounting, auditing, financial reporting, internal control and legal compliance functions of the Company and its subsidiaries, including, without limitation: (i) assisting the Board of Directors in its oversight of (a) the integrity of the financial statements of the Company, (b) the Company’s compliance with legal and regulatory requirements, (c) the qualifications and independence of the Company’s independent auditor and (d) the performance of the independent auditor; (ii) preparing the audit committee report required pursuant to the rules of the SEC for inclusion in the Company’s annual proxy statement and (iii) performing such further functions as may be consistent with the Audit Committee charter or assigned by applicable law, the Company’s certificate of incorporation or bylaws
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Audit Committee
Our Audit Committee currently consists of the following members who are all independent under applicable NYSE American listing standards: and Ms. Schroeder (Chair), Ms. Grafton and Ms. Koenig. Ms. Schroeder qualifies as an “Audit Committee Financial Expert” as that term is defined in rules promulgated by the SEC. The purpose of the Audit Committee is to provide assistance to the Board of Directors in fulfilling its legal and fiduciary obligations with respect to matters involving the accounting, auditing, financial reporting, internal control and legal compliance functions of the Company and its subsidiaries, including, without limitation: (i) assisting the Board of Directors in its oversight of (a) the integrity of the financial statements of the Company, (b) the Company’s compliance with legal and regulatory requirements, (c) the qualifications and independence of the Company’s independent auditor and (d) the performance of the independent auditor; (ii) preparing the audit committee report required pursuant to the rules of the SEC for inclusion in the Company’s annual proxy statement and (iii) performing such further functions as may be consistent with the Audit Committee charter or assigned by applicable law, the Company’s Articles of Incorporation or Bylaws or the Board of Directors.
The Board of Directors has adopted a written charter for the Audit Committee that may be viewed on Dakota Gold’s website at: https://dakotagoldcorp.com/site/assets/files/8378/audit-committee-charter-2023-05-17.pdf.
The Board of Directors has adopted a written charter for the Audit Committee that may be viewed on Dakota Gold’s website at: https://dakotagoldcorp.com/site/assets/files/8378/audit_committee_charter_2022-03-30.pdf.
Compensation Committee.
Our Compensation Committee currently consists of the following members who are all independent under applicable NYSE American listing standards: Ms. Grafton (Chair), Ms. Koenig and Mr. Morrison.Dr. Quartermain. The purpose of the Compensation Committee is (i) to oversee the Company’s compensation and employee benefit plans and practices, including its executive and director compensation plans, and its incentive-compensation and equity-based plans; (ii) to reviewevaluate annually the performance of the Chief Executive Officer in light of the goals and discuss with managementobjectives of the Company’s executive compensation discussionplans and analysismake recommendations to be included in the Company’s annual proxy statement or annual reportBoard of Directors to determine and approve the Chief Executive Officer’s compensation level based on Form 10-K filed with the SEC;this evaluation; (iii) to prepareretain, in its sole discretion, a compensation consultant, legal counsel or other adviser and evaluate the Compensation Committee Report as required by the rulesperformance and advice of the SEC;such compensation consultant, legal counsel or other adviser; and (iv) to perform such further functions as may be consistent with the Compensation Committee charter or assigned by applicable law, the Company’s bylawsBylaws or the Board of Directors. In performing its functions, the Compensation Committee considers, among other things, the Company’s performance and relative stockholder return, the value of similar awardscompensation paid to executive officers of comparable companies, and the awards given to the executive officersperformance of the Company in past years.Company’s executive officers.
The Board of Directors has adopted a written charter for the Compensation Committee that may be viewed on Dakota Gold’s website at: https://dakotagoldcorp.com/site/assets/files/8118/compensation_committee_charter_2022-03-30.pdfcompensation-committee-charter-2023-05-17.pdf.
Nominating and Corporate Governance Committee.
Our Nominating and Corporate Governance Committee currently consists of the following members who are all independent under applicable NYSE American listing standards: Ms. Koenig (Chair), Ms. Grafton and Ms. Koenig and Mr. Morrison.Schroeder. The purpose of the Nominating and Corporate Governance Committee is (i) to identify and to recommend to the Board of Directors individuals qualified to serve as directors of the Company and on committees of the Board of Directors; (ii) to advise the Board of Directors with respect to the Board of Directors composition, procedures and committees; (iii) to develop and recommend to the Board of Directors a set of corporate governance principles applicable to the Company and (iv) to oversee the evaluation of the Board of Directors and management of the Company. The Nominating and Corporate Governance Committee considers candidates that possess a variety of skill sets that complement the skills that are represented by the composition of the boardBoard of Directors at any given point in time, including diversity, strategic managerial and financial skills and experience, mining industry expertise, and knowledge in other areas that are strategically important to us. Other considerations include diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest and such other relevant factors that the Committee considers appropriate in the context of the needs of the Board of Directors.
The Board of Directors has adopted a written charter for the Nominating and Corporate Governance Committee that may be viewed on Dakota Gold’s website at: https://dakotagoldcorp.com/site/assets/files/6960/nominating_and_governance_committee_charter_2022-03-30.pdfnominating-and-governance-committee-charter-2023-05-17.pdf.
Technical Committee.
Our Technical Committee currently consists of the following members: Dr. Quartermain Mr. Aberle,(Chairman), Dr. O’Rourke and Ms. Koenig and Mr. Morrison.Koenig. The purpose of the Technical Committee is to assist the Board of Directors in discharging its responsibilities relating to technical, health & safety matters relating to the Company’s operations, reserve and resource reporting and to address related matters. The Board of Directors has adopted a written charter for the Technical Committee that may be viewed on Dakota Gold’s website at: https://dakotagoldcorp.com/site/assets/files/6959/technical_committee_charter_2022-03-30.pdftechnical-committee-charter-2023-05-17.pdf.
Environmental, Social and Governance Committee.
Our Environmental, Social and Governance Committee currently consists of the following members: Dr. O’Rourke (Chairman), Dr. Quartermain Dr. O’Rourke and Mr. Awde.Ms. Grafton. The purpose of the Environmental, Social and Governance Committee is to assist the Board of Directors in fulfilling its oversight responsibilities with respect to environmental, social and governance (“ESG”) matters, including overseeing the Company’s ESG strategy and objectives, including health, safety, leadership and governance, the environment and matters regarding communities and Native American peoples. The Board of Directors has adopted a written charter for the Environmental, Social and Governance Committee that may be viewed on Dakota Gold’s website at: https://dakotagoldcorp.com/site/assets/files/6962/esg_committee_charter_2022-03-30.pdfesg-committee-charter-2023-05-17.pdf.
Director Attendance at the Annual Meeting
All members of the Board of Directors are encouraged, but not required, to attend the annual meeting of stockholders. All board members at the time of the 2023 annual meeting of stockholders held on May 16, 2023 attended the annual meeting.
Family Relationships
There are no family relationships among our directors or officers.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of our common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors and greater than 10% beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To our knowledge based on a review of Section 16(a) filings, our officers and directors timely filed during our last fiscal year ended December 31, 2023.
Insider Trading Policy and Hedging Restrictions
The Board of Directors has adopted an insider trading policy. The provisions of this policy expressly prohibit all directors, officers and other employees of the Company from purchasing or selling, either directly or indirectly, securities of the Company while in possession of material nonpublic information related to the Company. To further ensure adherence with this policy, procedures have been established for setting blackout periods and permissible open trading windows, as well as advance notice of market transactions. The insider trading policy provides guidance as to what constitutes material information, when information becomes public and how to safeguard confidential information of the Company. The insider trading policy addresses transactions by family members and under Company plans, as well as other transactions which may be prohibited, such as short-term trading, short sales, publicly trading in options, hedging transactions and post-termination transactions. The policy discusses the consequences of an insider trading violation, additional trading restrictions and certain reporting requirements applicable to directors, officers, and designated key employees. The policy also contains guidelines and procedures related to the establishment of Rule 10b5-1 trading plans, in accordance with the new safe harbor requirements of Securities Exchange Act Rule 10b5-1.
The insider trading policy also expressly prohibits all officers, directors and employees of the Company from engaging in short sales of Company securities, hedging transactions or engaging in any other type of transaction where they will earn a profit based on a decline in the Company’s stock price, or otherwise entering into any similar arrangement with respect to Company securities.
Our insider trading policy and related Rule 10b5-1 trading plan requirements have been filed with the SEC as an Exhibit 19.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Code of Ethics
On March 30, 2022, we approved our code of ethics which applies to all our directors, officers and employees which is available on our website at www.dakotagoldcorp.com.
Where You Can Find Additional Information About Us
We maintain a company website at www.dakotagoldcorp.comfrom which you can alternatively access the reports we file with the SEC. Our committee charters and other important corporate governance documents are also available on our website. Information contained on the Company’s website is not part of, and is not incorporated by reference into, this proxy statement.
Communications with the Board of Directors
Stockholders and other interested parties who wish to communicate with our Board of Directors, including our Co-Chairs of the Board of Directors, independent and nonmanagementnon-management directors as a group, or any other individual director, may send their communication to our Corporate Secretary at info@dakotagoldcorp.comdcherniak@dakotagoldcorp.com or 106 Glendale Drive, Suite A, Lead, South Dakota, 57754, USA.USA. Our Corporate Secretary reviews communications to the Board. Communications relating to accounting, auditing, or fraud are forwarded to the Chair of our Audit Committee, and any other communications addressing a legitimate business issue are forwarded to other members of our Board as appropriate.
In addition to our CEO and President, Jonathan Awde, and our COO, Gerald Aberle, who also serve as members of our Board of Directors and whose biographical information is disclosed under the heading “Nominees for Election,” our executive officers as of the date of this proxy statement include the following individuals:
Shawn Campbell
Mr. Campbell, 41, was appointed Chief Financial Officer of Dakota Gold in June 2021. He has over 15 years of progressively senior experience in project and operations financial management obtained via professional practice, capital markets and industry experience. Mr. Campbell most recently served as the Chief Financial Officer of GT Gold Corp. and before that with Goldcorp Inc in various roles, including the Head of Investor Relations and the Head of Finance for Canada and US. He holds a Bachelor of Commerce Degree (Distinction) from the University of Victoria, and a Diploma in Accounting (DAP) from the University of British Columbia. He is a Chartered Professional Accountant (CPA, CA) and a CFA Charter Holder.
James Berry
Mr. Berry, 59,61, was appointed Vice-President of Exploration of Dakota Gold in December 2021. He has over 30 years of experience in the mining and exploration industry as an exploration and production geologist working in gold, silver, nickel, copper, and platinum-group element commodities for both underground and open pit deposits. He has worked for Asarco LLC, Homestake Mining Company of California, Goldcorp Inc., Barrick Gold Corporation, Romarco Minerals Inc., OceanaGold Corporation, Nickel Creek Platinum Corp. and Hycroft Mining Holding Corporation in increasing roles of responsibility. Highlights of Mr. Berry'sBerry’s career include working on the Haile deposit in South Carolina, where he developed an exploration model that tripled the size of the deposit and advanced the deposit to production. In addition, while at Homestake he was part of an exploration team that identified several Precambrian and Tertiary targets in the Homestake District. These included the North Drift, Lower Main Ledge, Upper 7 Ledge, 11 Ledge, 15 Ledge, Tinton, Maitland, and Chism Gulch. Mr. Berry holds a Bachelor'sBachelor’s degree in Geology from the University of Tennessee and is a Registered Member of the Society for Mining, Metallurgy & Exploration.
Shawn Campbell
Mr. Campbell, 43, was appointed Chief Financial Officer of Dakota Gold in June 2021. He has over 15 years of progressively senior experience in project and operations financial management obtained via professional practice, capital markets and industry experience. Mr. Campbell most recently served as the Chief Financial Officer of GT Gold Corp. and before that with Goldcorp Inc in various roles, including the Head of Investor Relations and the Head of Finance for Canada and U.S. He holds a Bachelor of Commerce Degree (Distinction) from the University of Victoria, and a Diploma in Accounting (DAP) from the University of British Columbia. He is a Chartered Professional Accountant (CPA, CA) and a CFA Charter Holder.
Patrick Malone
Mr. Malone, 51, joined Dakota Gold as Chief Sustainability Officer in November 2022 and in January 2024 was appointed to the position of Senior Vice President, Chief Administrative Officer and External Relations. Mr. Malone has more than two decades experience in sustainable permitting, operation, closure, and redevelopment of mining properties. Previously, Mr. Malone held legal and executive positions at Barrick Gold Corporation, including Associate General Counsel - North America, Vice President Environment, and finally Vice President Reclamation and Closure, where he oversaw closure planning for Barrick’s international operations as well as for general management of a portfolio of closed mining properties. In this last role, Mr. Malone was responsible for both the Homestake and Richmond Hill mines, serving as President of both Homestake Mining Company of California and LAC Minerals (USA). Mr. Malone holds degrees in both Conservation Biology from Brigham Young University and a Juris Doctorate from J Reuben Clark Law School at Brigham Young University.
The officers are appointed by our Board of Directors and shall hold office until his or her successor has been elected, unless a different term is specified in the resolution electing the officer, or until his or her earlier death, resignation or removal.
Summary Compensation Table
The following summary compensation table summarizes the compensation paid to our namesnamed executive officers (each a “NEO”) for the 2023 fiscal year (ending on December 31, 2023), for the stub period of April 1, 2022 through December 31, 2022 which resulted from the Company’s election to change fiscal year ends (the stub period is indicated as “SP” in the table below), and for the 2022 fiscal year (ending on March 31, 2022.2022).
Name
and Principal
Position | | Fiscal
Year | | | Salary
($) | | | Bonus (1)
($) | | | Stock
Awards (2)
($) | | | Option
Awards (3)
($) | | | All
Other
Compensation
($) | | | Total
($) | |
| Jonathan Awde, CEO (6) | | | 2022 | | | | 285,000 | | | | 194,480 | | | | 1,732,500 | | | | 1,410,454 | | | | 17,716 | (4) | | | 3,622,434 | |
| | | | 2021 | | | | 114,000 | | | | -- | | | | -- | | | | -- | | | | -- | | | | 114,400 | |
| | | | 2020 | | | | -- | | | | -- | | | | -- | | | | -- | | | | -- | | | | -- | |
| Shawn Campbell, CFO (7) | | | 2022 | | | | 166,188 | | | | 52,887 | | | | 618,750 | | | | 1,091,965 | | | | -- | | | | 1,929,790 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gerald Aberle, COO | | | 2022 | | | | 260,000 | | | | 195,065 | | | | 618,750 | | | | 1,000,968 | | | | 21,296 (5) | | | | 2,096,079 | |
| | | | 2021 | | | | 108,000 | | | | -- | | | | -- | | | | -- | | | | -- | | | | 108,000 | |
| | | | 2020 | | | | 108,000 | | | | -- | | | | -- | | | | -- | | | | -- | | | | 108,000 | |
| James Berry, VP of Exploration (8) | | | 2022 | | | | 92,308 | | | | 16,219 | | | | 580,000 | | | | 1,021,009 | | | | -- | | | | 1,709,536 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | All | | | | |
| Name | | | | | | | | | | Stock | | | Option | | | Other | | | | |
| and Principal | | Fiscal | | Salary | | | Bonus (1) | | | Awards (2) | | | Awards (3) | | | Compensation | | | Total | |
| Position | | Year | | ($) | | | ($) | | | ($) | | | ($) | | | ($) | | | ($) | |
| Jonathan Awde, | | 2023 | | | 305,833 | | | | 186,000 | | | | 337,500 | | | | 112,500 | | | | -- | | | | 941,833 | |
| CEO (5) | | SP | | | 213,750 | | | | 147,060 | | | | 200,000 | | | | 200,000 | | | | -- | | | | 760,810 | |
| | | 2022 | | | 285,000 | | | | 194,480 | | | | 1,732,500 | | | | 1,410,454 | | | | 12,903 | (4) | | | 3,635,337 | |
| Shawn Campbell, | | 2023 | | | 220,367 | | | | 117,000 | | | | 225,000 | | | | 75,000 | | | | -- | | | | 637,367 | |
| CFO (6) | | SP | | | 151,371 | | | | 69,491 | | | | 125,000 | | | | 125,000 | | | | -- | | | | 470,862 | |
| | | 2022 | | | 166,188 | | | | 52,887 | | | | 618,750 | | | | 1,091,965 | | | | -- | | | | 1,929,790 | |
| Gerald Aberle, | | 2023 | | | 280,962 | | | | 171,000 | | | | 300,000 | | | | 100,000 | | | | -- | | | | 851,962 | |
| COO | | SP | | | 195,000 | | | | 134,160 | | | | 175,000 | | | | 175,000 | | | | -- | | | | 679,160 | |
| | | 2022 | | | 260,000 | | | | 195,065 | | | | 618,750 | | | | 1,000,968 | | | | -- | | | | 2,059,783 | |
| James Berry, | | 2023 | | | 221,923 | | | | 117,000 | | | | 262,500 | | | | 87,500 | | | | -- | | | | 688,923 | |
| VP of Exploration (7) | | SP | | | 150,000 | | | | 86,000 | | | | 175,000 | | | | 175,000 | | | | -- | | | | 586,000 | |
| | | 2022 | | | 92,308 | | | | 16,219 | | | | 580,000 | | | | 1,021,009 | | | | -- | | | | 1,709,536 | |
| Patrick Malone, | | 2023 | | | 250,000 | | | | 130,000 | | | | 262,500 | | | | 87,500 | | | | 19,381 | (9) | | | 749,381 | |
| SVP, CAO and External Relations (8) | | SP | | | 38,462 | | | | 53,842 | | | | 465,000 | | | | 527,435 | | | | -- | | | | 1,084,739 | |
(1) Amounts reported in this column represent discretionary annual cash bonus amounts paid to the NEOs for fiscal year 2022.
(2) Amounts are based on the grant date fair value, calculated in accordance with FASB Accounting Standards Codification Topic 718, Compensation - Stock Compensation ("ASC 718"), utilizing the assumptions discussed in Note 10 to the Company's
| (1) | Amounts reported in this column represent discretionary annual cash bonus amounts paid to the NEOs for fiscal years 2023 and 2022 and for the stub period beginning on April 1, 2022 and ending on December 31, 2022. |
| (2) | Amounts are based on the grant date fair value, calculated in accordance with FASB Accounting Standards Codification Topic 718, Compensation – Stock Compensation (“ASC 718”), utilizing the assumptions discussed in Note 10 to the Company’s consolidated financial statements for the fiscal year ended December 31, 2023. With respect to the stub period, the amounts shown in this column include both restricted stock units and performance share units shown at target achievement. The value of the performance share units granted in the stub period, assuming achievement of the maximum performance level, would have been $200,000 for Mr. Awde, $125,000 for Mr. Campbell, $175,000 for Mr. Aberle, $175,000 for Mr. Berry and $0 for Mr. Malone. The value of the performance share units granted in fiscal year 2023, assuming achievement of the maximum performance level, would have been $450,000 for Mr. Awde, $300,000 for Mr. Campbell, $400,000 for Mr. Aberle, $350,000 for Mr. Berry and $350,000 for Mr. Malone. |
| (3) | Amounts are based on the grant date fair value, calculated in accordance with ASC 718, utilizing the assumptions discussed in Note 9 to the Company’s consolidated financial statements for the fiscal year ended December 31, 2023. Option-based awards granted during the stub period and the year ended March 31, 2022 include vested and unvested amounts. |
| (4) | Club membership of $3,517, and other health-related expenditures of $9,386. |
| (5) | Mr. Awde became CEO of Dakota Territory Resource Corp. (“DTRC”) effective March 12, 2021 and had previously been appointed CEO of the Company on November 15, 2017. |
| (6) | Mr. Campbell became CFO of DTRC effective June 1, 2021 and was appointed CFO of the Company on March 31, 2022. |
| (7) | Mr. Berry became VP Exploration of DTRC effective December 1, 2021 and was appointed VP Exploration of the Company on March 31, 2022. |
| (8) | Mr. Malone was appointed Chief Sustainability Officer of the Company on November 14, 2022 and was appointed Senior Vice President, Chief Administrative Officer and External Relations in January 2023. |
| (9) | Travel and accommodation costs of $19,381. |
Executive Compensation Agreements and Summary of Executive Compensation
Prior to the Company’s merger with Dakota Territory, DGC Merger Sub I Corp. and DGC Merger Sub II LLC on March 31, 2022 (the “Merger”), decisions regarding executive compensation were made by the Board of Directors of Dakota Territory, whose board of directors was composed of the same directors as the Company’s Board of Directors. During the year ended March 31, 2022. The recipients were granted restricted stock units2022, and prior to the Merger, the Board of DTRC, which were assumedDirectors of Dakota Territory was responsible for establishing a compensation policy and administering the compensation programs of the Company’s executive officers. Following the Merger, the amount of compensation paid by the Company to each of the Company’s officers and vested on June 4, 2022.
(3) Amounts are based on the grant date fair value, calculatedterms of those persons’ employment is determined by the Board of Directors. The Board of Directors evaluates past performance and considers future incentive and retention in accordance with ASC 718, utilizingconsidering the assumptions discussed in Note 10appropriate compensation for the Company’s officers. The Company believes that the compensation paid to the Company’s consolidated financial statementsdirectors and officers is fair to the Company. The Board of Directors believes that the use of equity compensation is at times appropriate for employees, and in the future intends to use equity compensation awards to reward outstanding service or to attract and retain individuals with exceptional talent and credentials. The use of stock options and other incentive equity awards is intended to strengthen the alignment of interests of executive officers and other key employees with those of our stockholders.
The Company entered into an employment agreement with its President and Chief Executive Officer, Mr. Awde and Mr. Awde’s wholly-owned management company, JCTA Capital Management Corp., effective as of March 12, 2021 (the “Awde Agreement”), pursuant to which agreement he will receive an annual base salary of $285,000. Pursuant to the terms and conditions of the Awde Agreement, Mr. Awde will be eligible (i) to receive an annual bonus based upon attaining certain performance criteria set by the Board of Directors of the Company with a target bonus opportunity of 60% of Mr. Awde’s base salary and (ii) to participate in the Company’s securities-based compensation plans, with the award of any grants being at the discretion of the Board of Directors. Pursuant to the terms and conditions of the Awde Agreement, if the Company terminates Mr. Awde without cause, then Mr. Awde will be entitled to receive a lump-sum payment equal to: (i) the then current base fee and pro-rated estimated annual bonus payment for the fiscal year ended March 31, 2022. Option-based awards granted duringof termination earned to the years ended March 31, 2020, 2021termination date; (ii) payment in lieu of notice in an amount equivalent to: (a) if the Awde Agreement is terminated by the Company 3 months prior to, or within 12 months following, a change in control of the Company: (1) 2 times Mr. Awde’s then current base annual fee and 2022 include vested(2) 2 times an annual bonus deemed to be 75% of Mr. Awde’s then current base annual fee; or (b) in any other circumstance: (1) 2 times Mr. Awde’s then current base annual fee and unvested amounts. The recipients were granted(2) 2 times an annual bonus deemed to be 75% of Mr. Awde’s then current base annual fee. In addition, any stock options with an exercise priceor other incentive equity awards held by Mr. Awde will fully vest as of $4.76, the fair market value of DTRC’s stock on the date of grant,such termination.
The Company entered into an employment agreement with its Chief Operating Officer, Mr. Aberle, effective as of March 12, 2021 (the “Aberle Agreement”), pursuant to which vest 1/3 on May 17, 2021, 1/3 on May 17, 2022agreement he will receive an annual base salary of $260,000. Pursuant to the terms and 1/3 on May 17, 2023conditions of the Aberle Agreement, Mr. Aberle will be eligible (i) to receive an annual bonus based upon attaining certain performance criteria set by the Board of Directors of the Company with a target bonus opportunity of 60% of Mr. Aberle’s base salary and expire on May 17, 2026,(ii) to participate in the Company’s securities-based compensation plans, with the exceptionaward of any grants being at the discretion of the Board of Directors. Pursuant to the terms and conditions of the Aberle Agreement, if the Company terminates Mr. Aberle without cause, then Mr. Aberle will be entitled to receive a lump-sum payment equal to: (i) the then current base fee and pro-rated estimated annual bonus payment for the year of termination earned to the termination date; (ii) payment in lieu of notice in an amount equivalent to: (a) if the Aberle Agreement is terminated by the Company 3 months prior to, or within 12 months following, a change in control of the Company: (1) 2 times Mr. Aberle’s then current base annual fee and (2) 2 times an annual bonus deemed to be 75% of Mr. Berry who was grantedAberle’s then current base annual fee; or (b) in any other circumstance: (1) 2 times Mr. Aberle’s then current base annual fee and (2) 2 times an annual bonus deemed to be 75% of Mr. Aberle’s then current base annual fee. In addition, any stock options with an exercise priceor other incentive equity awards held by Mr. Aberle will fully vest as of $4.60, the fair market value of DTRC’s stock on the date of such termination.
The Company entered into an employment agreement with its Chief Financial Officer, Mr. Campbell, effective as of June 1, 2021 (the “Campbell Agreement”), pursuant to which agreement he will receive an annual base salary of C$250,000 and a grant which vest 1/3 on October 18, 2021, 1/3 on October 18, 2022of certain stock options and 1/3 on October 18, 2023restricted share units. Pursuant to the terms and expire on October 18, 2026.
(4) Parkingconditions of $4,812, club membershipthe Campbell Agreement, Mr. Campbell will be eligible (i) to receive an annual bonus based upon attaining certain performance criteria set by the Board of $3,517, and other health-related expenditures of $9,386.27.
(5) Health spending account contribution by employer of $1,350, vehicle allowance of $9,750 and other health-related expenditures of $10,196.
(6) Mr. Awde became CEO of DTRC effective March 12, 2021 and was appointed CEODirectors of the Company on November 15, 2017.
(7) with a target bonus opportunity of 60% of Mr. Campbell’s base salary and (ii) to participate in the Company’s securities-based compensation plans, with the award of any grants being at the discretion of the Board of Directors. Pursuant to the terms and conditions of the Campbell Agreement, if the Company terminates Mr. Campbell became CFOwithout cause, then Mr. Campbell will be entitled to receive a lump-sum payment equal to: (i) the then current base fee and pro-rated estimated annual bonus payment for the year of DTRCtermination earned to the termination date; (ii) payment in lieu of notice in an amount equivalent to: (a) if the Campbell Agreement is terminated by the Company 3 months prior to, or within 12 months following, a change in control of the Company: (1) 1.5 times Mr. Campbell’s then current base annual fee and (2) 1.5 times an annual bonus deemed to be 75% of Mr. Campbell’s then current base annual fee; or (b) in any other circumstance: (1) 1.5 times Mr. Campbell’s then current base annual fee and (2) 1.5 times an annual bonus deemed to be 75% of Mr. Campbell’s then current base annual fee. In addition, any stock options or other incentive equity awards held by Mr. Campbell will fully vest as of the date of such termination.
The Company entered into an employment agreement with its VP Exploration, Mr. Berry, effective Juneas of December 1, 2021 (the “Berry Agreement”), pursuant to which agreement he will receive an annual base salary of $200,000 and was appointed CFOa grant of certain stock options and restricted share units. Pursuant to the terms and conditions of the Berry Agreement, Mr. Berry will be eligible (i) to receive an annual bonus based upon attaining certain performance criteria set by the Board of Directors of the Company on March 31, 2022.
(8) with a target bonus opportunity of 40% of Mr. Berry’s base salary and (ii) to participate in the Company’s securities-based compensation plans, with the award of any grants being at the discretion of the Board of Directors. Pursuant to the terms and conditions of the Berry Agreement, if the Company terminates Mr. Berry became VP Explorationwithout cause, then Mr. Berry will be entitled to receive a lump-sum payment equal to: (i) the then current base fee and pro-rated estimated annual bonus payment for the year of DTRCtermination earned to the termination date; (ii) payment in lieu of notice in an amount equivalent to: (a) if the Berry Agreement is terminated by the Company 3 months prior to, or within 12 months following, a change in control of the Company: (1) 1.5 times Mr. Berry’s then current base annual fee and (2) 1.5 times an annual bonus deemed to be 75% of Mr. Berry’s then current base annual fee; or (b) in any other circumstance: (1) 1.5 times Mr. Berry’s then current base annual fee and (2) 1.5 times an annual bonus deemed to be 75% of Mr. Berry’s then current base annual fee. In addition, any stock options or other incentive equity awards held by Mr. Berry will fully vest as of the date of such termination.
The Company entered into an employment agreement with its Chief Sustainability Officer, Mr. Malone, effective December 1, 2021as of November 14, 2022 (the “Malone Agreement”), pursuant to which agreement he will receive an annual base salary of $250,000 and was appointed VP Explorationa grant of certain stock options and restricted share units. Pursuant to the terms and conditions of the Malone Agreement, Mr. Malone will be eligible (i) to receive an annual bonus based upon attaining certain performance criteria set by the Board of Directors of the Company on March 31, 2022.with a target bonus opportunity of 50% of Mr. Malone’s base salary and (ii) to participate in the Company’s securities-based compensation plans, with the award of any grants being at the discretion of the Board of Directors. Pursuant to the terms and conditions of the Malone Agreement, if the Company terminates Mr. Malone without cause, then Mr. Malone will be entitled to receive a lump-sum payment equal to: (i) the then current base fee and pro-rated estimated annual bonus payment for the year of termination earned to the termination date; (ii) payment in lieu of notice in an amount equivalent to: (a) if the Malone Agreement is terminated by the Company 3 months prior to, or within 12 months following, a change in control of the Company: (1) 1.5 times Mr. Malone’s then current base annual fee and (2) 1.5 times an annual bonus deemed to be 75% of Mr. Malone ’s then current base annual fee; or (b) in any other circumstance: (1) 1.5 times Mr. Malone’s then current base annual fee and (2) 1.5 times an annual bonus deemed to be 75% of Mr. Malone’s then current base annual fee. In addition, any stock options or other incentive equity awards held by Mr. Malone will fully vest as of the date of such termination.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth the stock optionsoutstanding equity awards held by the Company's Named Executive OfficersCompany’s NEOs as of MarchDecember 31, 2022. No stock appreciation rights were awarded.2023.
| Option Awards | |
| | | | | | Option Awards | | Stock Awards | |
| Name | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned Options
(#) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | Option
Exercise
Price ($) | | Option Expiration
Date | | Number
of Shares
or Units
of Stock
That
Have
Not
Vested
(#) | | Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested
($) | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#) | | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares or
Other
Rights
That Have
Not Vested
($) | |
| Jonathan Awde | | 129,166 | (1) | | 258,334 | | | | - | | | | 4.76 | | | May 17, 2026 | | | 387,500 | | - | | 4.76 | | May 17, 2026 | | - | | | - | | - | | | - | |
| | | | | 46,562 | | 93,126 | (1) | | 3.01 | | September 2, 2027 | | - | | | - | | - | | | - | |
| | | | | - | | 81,143 | (2) | | 2.81 | | March 1, 2028 | | - | | | - | | - | | | - | |
| | | | | - | | - | | - | | - | | 22,149 | (3) | | 58,030 | | 22,290 | (5) | | 58,400 | |
| | | | | - | | - | | - | | - | | 40,036 | (4) | | 104,894 | | 80,071 | (6) | | 209,786 | |
| Shawn Campbell | | 100,000 | (2) | | 200,000 | | | | - | | | | 4.76 | | | May 17, 2026 | | | 300,000 | | - | | 4.76 | | May 17, 2026 | | - | | | - | | - | | | - | |
| | | | | 29,101 | | 58,204 | (1) | | 3.01 | | September 2, 2027 | | | | | | | | | | | | |
| | | | | - | | 54,096 | (2) | | 2.81 | | March 1, 2028 | | - | | | - | | - | | | - | |
| | | | | - | | - | | - | | - | | 13,843 | (3) | | 36,269 | | 13,931 | (5) | | 36,499 | |
| | | | | - | | - | | - | | - | | 26,690 | (4) | | 69,928 | | 53,381 | (6) | | 139,858 | |
| Gerald Aberle | | 91,666 | (3) | | 183,334 | | | | - | | | | 4.76 | | | May 17, 2026 | | | 275,000 | | - | | 4.76 | | May 17, 2026 | | - | | | - | | - | | | - | |
| | | | | 40,742 | | 81,485 | (1) | | 3.01 | | September 2, 2027 | | - | | | - | | - | | | - | |
| | | | | - | | 72,127 | (2) | | 2.81 | | March 1, 2028 | | - | | | - | | - | | | - | |
| | | | | - | | - | | - | | - | | 19,380 | (3) | | 50,776 | | 19,503 | (5) | | 51,098 | |
| | | | | - | | - | | - | | - | | 35,587 | (4) | | 93,238 | | 71,174 | (8) | | 186,476 | |
| James Berry | | 100,000 | (4) | | 200,000 | | | | - | | | | 4.64 | | | Oct 15, 2026 | | | 300,000 | | - | | 4.76 | | October 15, 2026 | | - | | | - | | - | | | - | |
| | | | | 40,742 | | 81,485 | (1) | | 3.01 | | September 2, 2027 | | - | | | - | | - | | | - | |
| | | | | - | | 63,111 | (2) | | 2.81 | | March 1, 2028 | | - | | | - | | - | | | - | |
| | | | | - | | - | | - | | - | | 19,380 | (3) | | 50,776 | | 19,503 | (5) | | 51,098 | |
| | | | | - | | - | | - | | - | | 31,139 | (4) | | 81,584 | | 62,278 | (6) | | 163,168 | |
| Patrick Malone | | | | 300,000 | | - | | 3.74 | | November 18, 2027 | | - | | | - | | - | | | - | |
| | | | | - | | 63,111 | (2) | | 2.81 | | March 1, 2028 | | - | | | - | | - | | | - | |
| | | | | - | | - | | - | | | | | | 83,333 | (3) | | 218,332 | | - | | | - | |
| | | | | - | | - | | - | | | | | | 31,139 | (4) | | 81,584 | | 62,278 | (6) | | 163,168 | |
(1) Mr. Awde’s options vest 1/3 on May 17, 2021, 1/3 on May 17, 2022 and 1/3 on May 17, 2023.
| (1) | Represents unvested options that vest in two equal tranches on May 11, 2024 and May 11, 2025. |
(2) Mr. Campbell’s options vest 1/3 on May 17, 2021, 1/3 on May 17, 2022 and 1/3 on May 17, 2023.
| (2) | Represents unvested options that vest in three equal tranches on March 1, 2024, 2025 and 2026. |
(3) Mr. Aberle’s options vest 1/3 on May 17, 2021, 1/3 on May 17, 2022 and 1/3 on May 17, 2023 .
| (3) | Represents restricted stock units that vest in two equal tranches on May 11, 2024 and 2025. The market value of the restricted stock units is calculated by multiplying the number of shares underlying the restricted stock units by $2.62, the closing price of the Company’s stock on December 30, 2023. |
(4) Mr. Berry’s options vest 1/3 on October 18, 2021, 1/3 on October 18, 2022 and 1/3 on October 18, 2023 .
| (4) | Represents restricted stock units that vest in three equal tranches on March 1, 2024, 2025 and 2026. The market value of the restricted stock units is calculated by multiplying the number of shares underlying the restricted stock units by $2.62, the closing price of the Company’s stock on December 30, 2023. |
| (5) | Represents performance share units that can vest between 0% - 200% of the target number of shares, based on relative total stockholder return of the Company as compared to the MVIS Global Junior Gold Miners Index. The performance share units will settle in two equal tranches on March 1, 2024 and 2025. The market value of the performance share units is calculated by multiplying the target number of shares underlying the performance share units by $2.62, the closing price of the Company’s stock on December 30, 2023. |
| (6) | Represents performance share units that can vest between 0% - 200% of the target number of shares, based on relative total stockholder return of the Company as compared to the MVIS Global Junior Gold Miners Index. The performance share units will settle in three equal tranches on March 1, 2024, 2025 and 2026. The market value of the performance share units is calculated by multiplying the target number of shares underlying the performance share units by $2.62, the closing price of the Company’s stock on December 30, 2023. |
Potential Payments Upon Termination or Change of Control
The following table describes the estimated potential payments and benefits under the Company'sCompany’s compensation and benefit plans and contractual agreements to which the Named Executive OfficersNEOs would have been entitled if a termination of employment or change of control occurred on MarchDecember 31, 2022.2023. The actual amounts to be paid out can only be determined at the time of the Named Executive Officer'sNEO’s departure from the Company. The amounts reported in the table below do not include payments and benefits to the extent they are provided generally to all salaried employees upon termination of employment and do not discriminate in scope, terms or operation in favor of the Named Executive OfficersNEOs or include distributions of plan balances under the Company'sCompany’s 401(k) plan or savings plans. The amounts reported assume payment of all previously earned and unpaid salary, vacation pay and short- and long-term incentive awards.
| | | Termination
without “Cause” | | Death or
Disability (1) | | Change of
Control (2) | | Double-Trigger
(3) | |
| Named Executive Officer | | Termination
without
"Just Cause" or
Breach or Default
by the Company
$ | | Death or Disability
$ | | Change of Control (1)
$ | | Double-Trigger (2)
$ | | | $ | | $ | | $ | | $ | |
| Jonathan Awde | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash severance | | | 997,500 | | | | - | | | | - | | | | 997,500 | | |
Acceleration of equity awards (3) | | | 1,843,000 | | | | 1,812,000 | | | | 1,843,000 | | | | 1,843,000 | | |
| Cash severance(4) | | | | 1,085,000 | | | | - | | | | - | | | | 1,085,000 | |
| Acceleration of equity awards (5) | | | | 431,111 | | | | 262,053 | | | | 431,111 | | | | 431,111 | |
| Total Termination Benefits | | | 2,840,500 | | | | 1,812,000 | | | | 1,843,000 | | | | 2,840,500 | | | | 1,516,111 | | | | 262,053 | | | | 431,111 | | | | 1,516,111 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shawn Campbell | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash severance (4) | | | 525,000 | | | | - | | | | - | | | | 525,000 | | | | 590,625 | | | | - | | | | - | | | | 590,625 | |
Acceleration of equity awards (3) | | | 72,000 | | | | 48,000 | | | | 72,000 | | | | 72,000 | | |
| Acceleration of equity awards (5) | | | | 282,554 | | | | 171,065 | | | | 282,554 | | | | 282,554 | |
| Total Termination Benefits | | | 597,000 | | | | 48,000 | | | | 72,000 | | | | 597,000 | | | | 873,179 | | | | 171,065 | | | | 282,554 | | | | 873,179 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gerald Aberle | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash severance | | | 910,000 | | | | - | | | | - | | | | 910,000 | | |
Acceleration of equity awards (3) | | | 66,000 | | | | 44,000 | | | | 66,000 | | | | 66,000 | | |
| Cash severance(4) | | | | 997,500 | | | | - | | | | - | | | | 997,500 | |
| Acceleration of equity awards (5) | | | | 381,587 | | | | 231,721 | | | | 381,587 | | | | 381,587 | |
| Total Termination Benefits | | | 976,000 | | | | 44,000 | | | | 66,000 | | | | 976,000 | | | | 1,092,783 | | | | 231,721 | | | | 381,587 | | | | 1,092,783 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| James Berry | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash severance | | | 525,000 | | | | - | | | | - | | | | 525,000 | | |
Acceleration of equity awards (3) | | | 72,000 | | | | 24,000 | | | | 72,000 | | | | 72,000 | | |
| Cash severance(4) | | | | 590,625 | | | | - | | | | - | | | | 590,625 | |
| Acceleration of equity awards (5) | | | | 346,626 | | | | 212,298 | | | | 346,626 | | | | 346,626 | |
| Total Termination Benefits | | | 597,000 | | | | 24,000 | | | | 72,000 | | | | 597,000 | | | | 937,251 | | | | 212,298 | | | | 346,626 | | | | 937,251 | |
| | | | | | | | | | | | | | | | | | |
| Patrick Malone | | | | | | | | | | | | | | | | | |
| Cash severance(4) | | | | 656,250 | | | | - | | | | - | | | | 656,250 | |
| Acceleration of equity awards (5) | | | | 463,085 | | | | 354,306 | | | | 463,085 | | | | 463,085 | |
| Total Termination Benefits | | | | 1,119,335 | | | | 354,306 | | | | 463,085 | | | | 1,119,335 | |
| (1) | The values in this column represent the intrinsic value of the unvested stock options, restricted stock units and performance share units that are subject to acceleration upon a termination due to death or disability. Such intrinsic value calculated as (x) the market value per share of our common shares minus the exercise price (if any) of the award, multiplied by (y) the number of shares underlying the unvested award. Options that are “out-of-the-money” have a value of $0 for purposes of the above table. Pursuant to the 2022 Plan, (i) unvested restricted stock units outstanding as of the date of a termination due to death or disability fully accelerate, (ii) any performance share units eligible to vest in a performance period during which such termination occurs fully vest assuming achievement of target performance and (iii) unvested stock options outstanding as of the date of a termination due to death or disability fully accelerate. |
(1) Represents the value of all outstanding RSUs and stock options previously awarded, the vesting of which will be fully accelerated upon the occurrence of a "change of control" under the 2022 Plan.
| (2) | Represents the value of all unvested PSUs at target, RSUs and stock options outstanding as of December 31, 2023. Under the 2022 Plan, all RSUs and stock options will be fully accelerated and all PSUs will be fully accelerated at target level upon the occurrence of a change of control. |
(2) Represents payments upon the occurrence of a double-trigger.
| (3) | Represents payments upon a termination of the NEO’s employment within three months prior to, or twelve months following, a Change of Control without Cause or, other than in case of Mr. Aberle, due to (i) a material reduction in responsibilities, (ii) a reduction in the base salary, or (iii) a requirement to relocate ordinary place of business more than 50 miles from the current location. |
(3) Value based on the closing price of the Company's common shares on March 31, 2022, which was $5.00.
| (4) | Cash severance is equal to two times (in case of Messrs. Awde and Aberle), or one and a half times (in case of Messrs. Campbell, Malone and Berry), the sum of the then current base salary and an annual bonus deemed to be 75% of the then current base salary. |
(4) For conversion of figures in Canadian dollars, a rate of @ 0.80 was used.
| (5) | The value in this row represents the intrinsic value of the unvested stock options, restricted stock units and performance share units that are subject to acceleration, with such intrinsic value calculated as (x) the market value per share of our common shares minus the exercise price (if any) of the award, multiplied by (y) the number of shares underlying the unvested award. Options that are “out-of-the-money” have a value of $0 for purposes of the above table. The number of shares underlying unvested PSUs is determined assuming performance at target levels. See “Outstanding Equity Awards” table above for a full listing of all unvested equity awards as of December 31, 2023. Market value per share of our common stock is equal to the closing price of the Company’s common shares on December 31, 2023, which was $2.62. |
There are no provisions for termination for "just cause" or resignation.
Compensation Committee Interlocks and Insider Participation
No executive or director of the Company serves as a member of the compensation committee or board of directors of another entity, one of whose executive officers serves on the board of directors of the Company.
Executive Compensation Agreements and Summary of Executive Compensation
Prior to the Company’s merger with Dakota Territory, DGC Merger Sub I Corp. and DGC Merger Sub II LLC on March 31, 2022 (the “Merger”), decisions regarding executive compensation were made by the board of directors of Dakota Territory, whose board of directors was composed of the same directors as the Company’s board of directors. During the year ended March 31, 2022, and prior to the Merger, the Board of Directors of Dakota Territory was responsible for establishing a compensation policy and administering the compensation programs of the Company's executive officers. The amount of compensation paid by the Company to each of the Company's officers and the terms of those persons' employment is determined by the Board of Directors. The Board evaluates past performance and considers future incentive and retention in considering the appropriate compensation for the Company's officers. The Company believes that the compensation paid to the Company's directors and officers is fair to the Company. The Board of Directors believes that the use of equity compensation is at times appropriate for employees, and in the future intends to use equity compensation awards to reward outstanding service or to attract and retain individuals with exceptional talent and credentials. The use of stock options and other awards is intended to strengthen the alignment of interests of executive officers and other key employees with those of our stockholders.
The Company entered into an employment agreement with its President and Chief Executive Officer, Mr. Awde and Mr. Awde's wholly-owned management company, JCTA Capital Management Corp., effective as of March 12, 2021 (the "Awde Agreement"), pursuant to which agreement he will receive an annual base salary of $285,000. Pursuant to the terms and conditions of the Awde Agreement, Mr. Awde will be eligible (i) to receive an annual bonus based upon attaining certain performance criteria set by the board of directors of the Company with a target bonus opportunity of 60% of Mr. Awde’s base salary and (ii) to participate in the Company's securities based compensation plans, with the award of any grants being at the discretion of the board. Pursuant to the terms and conditions of the Awde Agreement, if the Company terminates Mr. Awde without cause, then Mr. Awde will be entitled to receive a lump-sum payment equal to: (i) the then current base fee and pro-rated estimated annual bonus payment for the year of termination earned to the termination date; (ii) payment in lieu of notice in an amount equivalent to: (a) if the Awde Agreement is terminated by the Company 3 months prior to, or within 12 months following, a change in control of the Company: (1) 2 times Mr. Awde's then current base annual fee and (2) 2 times an annual bonus deemed to be 75% of Mr. Awde's then current base annual fee; or (b) in any other circumstance: (1) 2 times Mr. Awde's then current base annual fee and (2) 2 times an annual bonus deemed to be 75% of Mr. Awde's then current base annual fee. In addition, any stock options or other incentive equity awards held by Mr. Awde will fully vest as of the date of such termination.
The Company entered into an employment agreement with its Chief Operating Officer, Mr. Aberle, effective as of March 12, 2021 (the "Aberle Agreement"), pursuant to which agreement he will receive an annual base salary of $260,000. Pursuant to the terms and conditions of the Aberle Agreement, Mr. Aberle will be eligible (i) to receive an annual bonus based upon attaining certain performance criteria set by the board of directors of the Company with a target bonus opportunity of 60% of Mr. Aberle’s base salary and (ii) to participate in the Company's securities based compensation plans, with the award of any grants being at the discretion of the board. Pursuant to the terms and conditions of the Aberle Agreement, if the Company terminates Mr. Aberle without cause, then Mr. Aberle will be entitled to receive a lump-sum payment equal to: (i) the then current base fee and pro-rated estimated annual bonus payment for the year of termination earned to the termination date; (ii) payment in lieu of notice in an amount equivalent to: (a) if the Aberle Agreement is terminated by the Company 3 months prior to, or within 12 months following, a change in control of the Company: (1) 2 times Mr. Aberle's then current base annual fee and (2) 2 times an annual bonus deemed to be 75% of Mr. Aberle's then current base annual fee; or (b) in any other circumstance: (1) 2 times Mr. Aberle's then current base annual fee and (2) 2 times an annual bonus deemed to be 75% of Mr. Aberle's then current base annual fee. In addition, any stock options or other incentive equity awards held by Mr. Aberle will fully vest as of the date of such termination.
The Company entered into an employment agreement with its Chief Financial Officer, Mr. Campbell, effective as of June 1, 2021 (the "Campbell Agreement"), pursuant to which agreement he will receive an annual base salary of C$250,000 and a grant of certain stock options and restricted share units. Pursuant to the terms and conditions of the Campbell Agreement, Mr. Campbell will be eligible (i) to receive an annual bonus based upon attaining certain performance criteria set by the board of directors of the Company with a target bonus opportunity of 60% of Mr. Campbell’s base salary and (ii) to participate in the Company's securities based compensation plans, with the award of any grants being at the discretion of the board. Pursuant to the terms and conditions of the Campbell Agreement, if the Company terminates Mr. Campbell without cause, then Mr. Campbell will be entitled to receive a lump-sum payment equal to: (i) the then current base fee and pro-rated estimated annual bonus payment for the year of termination earned to the termination date; (ii) payment in lieu of notice in an amount equivalent to: (a) if the Campbell Agreement is terminated by the Company 3 months prior to, or within 12 months following, a change in control of the Company: (1) 1.5 times Mr. Campbell's then current base annual fee and (2) 1.5 times an annual bonus deemed to be 75% of Mr. Campbell's then current base annual fee; or (b) in any other circumstance: (1) 1.5 times Mr. Campbell's then current base annual fee and (2) 1.5 times an annual bonus deemed to be 75% of Mr. Campbell's then current base annual fee. In addition, any stock options or other incentive equity awards held by Mr. Campbell will fully vest as of the date of such termination.
The Company entered into an employment agreement with its VP Exploration, Mr. Berry, effective as of December 1, 2021 (the "Berry Agreement"), pursuant to which agreement he will receive an annual base salary of $200,000 and a grant of certain stock options and restricted share units. Pursuant to the terms and conditions of the Berry Agreement, Mr. Berry will be eligible (i) to receive an annual bonus based upon attaining certain performance criteria set by the board of directors of the Company with a target bonus opportunity of 40% of Mr. Berry’s base salary and (ii) to participate in the Company's securities based compensation plans, with the award of any grants being at the discretion of the board. Pursuant to the terms and conditions of the Berry Agreement, if the Company terminates Mr. Berry without cause, then Mr. Berry will be entitled to receive a lump-sum payment equal to: (i) the then current base fee and pro-rated estimated annual bonus payment for the year of termination earned to the termination date; (ii) payment in lieu of notice in an amount equivalent to: (a) if the Berry Agreement is terminated by the Company 3 months prior to, or within 12 months following, a change in control of the Company: (1) 1.5 times Mr. Berry's then current base annual fee and (2) 1.5 times an annual bonus deemed to be 75% of Mr. Campbell's then current base annual fee; or (b) in any other circumstance: (1) 1.5 times Mr. Berry's then current base annual fee and (2) 1.5 times an annual bonus deemed to be 75% of Mr. Berry's then current base annual fee. In addition, any stock options or other incentive equity awards held by Mr. Berry will fully vest as of the date of such termination.entity.
Non-Executive Director Compensation
The table below summarizes the compensation provided to the Company'sCompany’s non-executive Directors during the fiscal year ended MarchDecember 31, 2022, prior to the Merger:2023:
| | | Fees Earned or
Paid in Cash | | | Stock Awards (1) | | Option Awards | | Total | |
| Director | | Fees Earned or
Paid in Cash
$ | | | Stock Awards (5)
$ | | Option Awards (6)
$ | | Total
$ | | | $ | | | $ | | $ | | $ | |
| Robert Quartermain | | | | - | (2) | | | 150,000 | | | | - | | | | 150,000 | |
| Stephen O’Rourke | | | | 86,000 | (3) | | | 150,000 | | | | - | | | | 236,000 | |
| Jennifer Grafton | | | 27,394 | (3) | | | 0 | | | | 381,071 | | | | 408,465 | | | | 50,000 | (4) | | | 100,000 | | | | - | | | | 150,000 | |
| Amy Koenig | | | 27,394 | (4) | | | 0 | | | | 381,071 | | | | 408,465 | | | | 50,000 | (4) | | | 100,000 | | | | - | | | | 150,000 | |
| Alex Morrison | | | 46,500 | (2) | | | 556,875 | | | | 668,828 | | | | 1,272,203 | | |
| Stephen O'Rourke | | | 81,000 | (1) | | | 928,125 | | | | 1,000,968 | | | | 2,010,093 | | |
| Robert Quartermain | | | 0 | (7) | | | 1,856,250 | | | | 1,000,968 | | | | 2,857,218 | | |
| Alice Schroeder | | | | 50,000 | (4) | | | 100,000 | | | | - | | | | 150,000 | |
| (1) | The amounts reported in this column represent grant date fair value calculated pursuant to FASB ASC Topic 718. Each director was granted restricted stock units on March 1, 2023 which will vest ratably on the three anniversaries following the grant date. |
(1) $16,500 pro-rated for the quarter ended June 30, 2021, then $21,500 per quarter thereafter, for serving as co-Chairman.
| (2) | Dr. Quartermain has elected not to receive any fees for his services as a non-executive director for the Company and instead has asked that the Company donate the fees he would have otherwise received to national charities as well as local charities in South Dakota. |
(2) $9,000 pro-rated for the quarter ended June 30, 2021, then $12,500 per quarter thereafter.
(3) $2,394 pro-rated for the quarter ended September 30, 2021, then $12,500 per quarter thereafter.
(4) $2,394 pro-rated for the quarter ended September 30, 2021, then $12,500 per quarter thereafter.
(5) The amounts reported in this column represent grant date fair market value calculated pursuant to FASB ASC Topic 718. Dr. O’Rourke was granted 187,500 shares of common stock the Company, Mr. Morrison was granted 112,500 shares of common stock the Company and Dr. Quartermain was granted 375,000 shares of common stock the Company.
(6) The amounts reported in this column represent grant date fair market value calculated pursuant to FASB ASC Topic 718. Dr. O’Rourke and Dr. Quartermain were each granted 275,000 options with an exercise price of $4.76, the fair market value of DTRC’s stock on the date of grant, which vest 1/3 on May 17, 2021, 1/3 on May 17, 2022 and 1/3 on May 17, 2023 and expire on May 17, 2026. Mr. Morrison was granted 183,750 options with an exercise price of $4.76, the fair market value of DTRC’s stock on the date of grant, which vest 1/3 on May 17, 2021, 1/3 on May 17, 2022 and 1/3 on May 17, 2023 and expire on May 17, 2026. Ms. Grafton and Ms. Koenig were each granted 100,000 options with an exercise price of $5.09, the fair market value of DTRC’s stock on the date of grant, which vest 1/3 on September 13, 2021, 1/3 on September 13, 2022 and 1/3 on September 13, 2023 and expire on September 13, 2026.
(7) Dr. Quartermain has elected not to receive any fees for his services as a non-executive director for the Company and instead has asked that the Company donate the fees he would have otherwise received to local charities in South Dakota.
Directors are also entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our boardBoard of directors.Directors. Our boardBoard of directorsDirectors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
| CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS |
The Company engages in related party transactions that involve its officers and directors and/or companies controlled by the officers and directors. We do not have a formal written policy for the review and approval of transactions with related parties. However, the Audit Committee Charter and our Code of Ethics each provide guidelines for reviewing any “related party transaction”.transaction.” In particular, our Code of Ethics requires that all related party transactions be disclosed to the Audit Committee or a special independent committee of the Board of Directors for review and approval. Additionally, our Code of Ethics prohibits conflicts of interest and provides non-exclusive examples of conduct that would violate the prohibition.
We annually require each of our directors and executive officers to complete a directors’ or officers’ questionnaire, respectively, that elicits information about related party transactions. Our Board of Directors and legal counsel annually review all transactions and relationships disclosed in the directors’ and officers’ questionnaires, and the Board of Directors makes a formal determination regarding each director’s independence. If a director were determined no longer to be independent, that director, if he or she serves on any of the Audit Committee, the Nominating and Corporate Governance Committee, or the Compensation Committee, would be removed from such committee prior to (or otherwise would not participate in) any future meetings of the committee. If the transaction were to present a conflict of interest, the boardBoard of Directors would determine the appropriate response. As of the date of this proxy statement, we have seven directors, including fourfive that the Board of Directors has determined as independent directors, as follows: Ms. Grafton, Ms. Koenig, Mr. MorrisonDr. Quartermain, Dr. O’Rourke and Dr. Quartermain.Ms. Schroeder. An “independent” director is a director whom the Board of Directors has determined satisfies the requirements for independence, including those established under the Sarbanes–OxleySarbanes-Oxley Act of 2002, sectionSection 10A(m)(3) of the Securities Exchange Act of 1934, as amended, and under sectionSection 803A of the NYSE American LLC Company Guide (“NYSE American Rules”).Guide.
Following is an analysis of related party transactions:
Mr. Gerald Aberle was DTRC's former President, and Chief Executive Officer and is currently Chief Operating Officer of the Company. He is also a director and significant stockholder of the Company and the owner of Jerikodie Inc. ("Jerikodie"). Under a February 2012 agreement, Jerikodie earned a fixed consulting fee of $9,000 per month, plus approved expenses. The accrued consulting fee was not paid from the inception of the agreement through October 2020. In October 2020, DTRC paid Jerikodie $200,000 of the $729,500 owed to it for accrued consulting fees and issued a note payable to Jerikodie for the remaining balance of $529,500 bearing interest at 0.25% per year. On June 1, 2021, DTRC and Jerikodie settled the outstanding debt of $529,544 through the payment of $376,550 and the issuance of 45,563 shares of common stock. The fair value of the consideration paid to settle the note exceeded the carrying amount of the note, resulting in a loss on settlement of $92,045. During the years ended March 31, 2022 and 2021, DTRC paid Jerikodie approximately $66,000 and $108,000, respectively, for consulting fees, in addition to $25,000 in the year ended March 31, 2022, for the extinguishment of a net smelter royalty on the Blind Gold Property disclosed below. Effective April 15, 2021, the agreement with Jerikodie was terminated. DTRC engaged a company controlled by a family member of Mr. Aberle, for the purpose of providing general labor and during the years ended March 31, 2022 and 2021, incurred approximately $56,000 and $37,000 in costs, respectively.
Mr. Richard Bachman was DTRC's former Chief Geological Officer. He is also a significant stockholder of the Company and the owner of Minera Teles Pires Inc. ("Minera Teles"). Under an October 2005 agreement that expired in March 2020, Minera Teles earned a $10,000 monthly consulting fee and received $1,500 per month for office rent and expenses. The consulting fee was divided between a $5,000 per month cash payment and a $5,000 per month deferred amount. DTRC also owed Mr. Bachman, individually, $305,145 in unsecured loans. These unsecured loans bore interest rates ranging from 3% to 4% per year and were due on demand. In June 2020, DTRC repaid $40,145 of the unsecured loans, plus accrued interest of $6,095. In October 2020, DTRC paid Minera Teles $200,000 for amounts owed for prior services and combined the remaining amount owed of approximately $795,500 with amounts owed under the unsecured loans, including unpaid interest, into a new note in the amount of $1,055,310, bearing interest at 0.25% per year. A payment of $145,000 was made in December 2020. In July 2021, DTRC and Mr. Bachman settled the outstanding debt of $872,578 through the payment of $425,165 in cash and the issuance of 99,049 shares of common stock. The fair value of the consideration paid to settle the note exceeded the carrying amount of the note, resulting in a loss on settlement of $32,476.
| · | During the fiscal year ended December 31, 2023, our CEO was compensated for his salary and short-term incentive through payments made to JCTA Management (“JCTA”), a company owned by our CEO. During the fiscal year ended December 31, 2023, $491,833 was paid to JCTA solely for base salary and 2022 approved short-term incentive (nine months ended December 31, 2022 - $360,810). No other payments were made to JCTA during the year. |
In October 2020, DTRC issued a note payable to WCM Associates, LP ("WCM"), an entity controlled by DTRC's former CFO, in the amount of $123,000, bearing interest at 0.25% per year, for amounts owed for consulting fees. The note was paid in full. During the years ended March 31, 2022 and 2021, DTRC incurred $6,000 and $36,000, respectively, for consulting fees with WCM. WCM's services were discontinued at the end of May 2021.
Messrs. Aberle and Bachman owned a 5% net smelter return royalty on the original 84 unpatented mining claims that comprised the Blind Gold Property. In August 2021, DTRC extinguished the royalty by paying Messrs. Aberle and Bachman $25,000 each.
In March 2021, Jonathan Awde was appointed Chief Executive Officer of DTRC and Gerald Aberle resigned as Chief Executive Officer and was appointed Chief Operating Officer of DTRC. Mr. Awde is also a director and significant stockholder of the Company.
Indemnification of Directors and Officers
Our articlesArticles of incorporationIncorporation and bylawsBylaws provide that we will indemnify our directors, officers, employees and agents to the extent and in the manner permitted by the provisions of the Nevada Revised Statutes, as amended from time to time ("NRS"),NRS, subject to any permissible expansion or limitation of such indemnification, as may be set forth in any stockholders'stockholders’ or directors'directors’ resolution or by contract. We are also permitted to maintain insurance on behalf of any director, officer, employee or other agent for liability arising out of his actions.
| OWNERSHIP OF COMMON STOCK |
The following table sets forth, as of July 21, 2022, the number and percentage of outstanding shares of common stock owned by: (a) each person who is known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; (b) each of our directors; (c) the Named Executive Officers; and (d) all current directors and executive officers, as a group. As of July 21, 2022, there were 71,994,644 shares of common stock issued and outstanding.
Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the number of shares is deemed to include the number of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person'sperson’s actual voting power at any particular date. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. The address for all listed officers and directors is 141106 Glendale Drive, Suite A, Lead, South Dakota 57754.
| Name and Address of Beneficial Owner | | Amount and Nature of Beneficial Ownership | | | Percentage of Class(1) | |
| Jonathan Awde | | | 6,975,322 | (2) | | | 9.7 | % |
| Gerald Aberle | | | 4,366,069 | (3) | | | 6.0 | % |
| James Berry | | | 225,000 | (10) | | | 0.3 | % |
| Shawn Campbell | | | 572,986 | (4) | | | 0.8 | % |
| Jennifer Grafton | | | 33,333 | (8) | | | 0.0 | % |
| Amy Koenig | | | 33,333 | (9) | | | 0.0 | % |
| Alex Morrison | | | 336,563 | (7) | | | 0.5 | % |
| Stephen O'Rourke | | | 1,033,333 | (6) | | | 1.4 | % |
| Robert Quartermain | | | 8,049,902 | (5) | | | 11.2 | % |
| All Directors and Officers as a Group (9 persons) | | | 21,463,341 | | | | 30.0 | % |
(1) Beneficial ownership is determined in accordance withThe following table sets forth, as of March 20, 2024, the rulesnumber and percentage of the SEC and generally includes voting or investment power with respect to securities. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable.
(2) Consists of 6,321,895outstanding shares of common stock 350,000 RSUs, 258,333 vested optionsowned by: (a) each person who is known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; (b) each of our directors; (c) the NEOs; and 45,094 warrants.
(3) Consists(d) all current directors and executive officers, as a group. As of 4,182,736March 20, 2024, there were 87,703,942 shares of common stock issued and 183,333 vested options. outstanding.
(4) Consists of 255,741 shares of common stock, 200,000 vested options and 117,245 warrants.
| Name and Address of Beneficial Owner | | Amount and Nature of
Beneficial Ownership | | | Percentage
of Class(1) | |
| Gerald Aberle, COO and Director | | | 4,635,389 | (2) | | | 5.26 | % |
| Jonathan Awde, President, CEO and Director | | | 6,538,373 | (3) | | | 7.41 | % |
| James Berry, Vice President of Exploration | | | 584,549 | (4) | | | 0.66 | % |
| Shawn Campbell, CFO | | | 831,717 | (5) | | | 0.94 | % |
| Jennifer Grafton, Director | | | 125,151 | (6) | | | 0.14 | % |
| Amy Koenig, Director | | | 125,151 | (7) | | | 0.14 | % |
| Patrick Malone, SVP & CAO | | | 320,235 | (8) | | | 0.36 | % |
| Stephen O’Rourke, Co-Chair and Director | | | 1,136,082 | (9) | | | 1.29 | % |
| Robert Quartermain, Co-Chair and Director | | | 8,212,664 | (10) | | | 9.28 | % |
| Alice Schroeder, Director | | | 308,138 | (11) | | | 0.35 | % |
| All Directors and Officers as a Group (10 persons) | | | 22,717,449 | | | | 26.02 | % |
Fourth Sail Capital LP
89 Nexus Way, Grand Cayman, Camana Bay, KY1-9009, Cayman Islands | | | 4,621,846 | | | | 5.27 | % |
Orion Resource Partners (USA) LP
1045 Avenue of the Americas, New York, NY, 10018 | | | 6,666,667 | | | | 7.60 | % |
(5) Consists of 7,325,436 shares of common stock, 183,333 vested options and 541,133 warrants.
(6) Consists of 850,000 shares of common stock and 183,333 vested options.
| (1) | Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. |
(7) Consists of 214,063 shares of common stock and 122,500 vested options.
| (2) | Consists of 4,245,173 shares of common stock, 380,526 vested options, and 9,690 vested RSUs. |
(8) Consists of 33,333 vested options.
| (3) | Consists of 5,974,532 shares of common stock, 11,074 vested RSUs, 507,673 vested options, and 45,094 warrants. |
(9) Consists of 33,333 vested options.
| (4) | Consists of 172,338 shares of common stock, 402,521 vested options and 9,690 vested RSUs. |
(10) Consists of 125,000 shares of common stock and 100,000 vested options.
| (5) | Consists of 331,315 shares of common stock, 376,236 vested options, 6,921 vested RSUs, and 117,245 warrants. |
| (6) | Consists of 25,151 shares of common stock and 100,000 vested options. |
| (7) | Consists of 25,151 shares of common stock and 100,000 vested options. |
| (8) | Consists of 57,531 shares of common stock, 221,037 vested options and 41,666 vested RSUs. |
| (9) | Consists of 861,082 shares of common stock and 275,000 vested options. |
| (10) | Consists of 7,396,53 shares of common stock, 275,000 vested options, and 541,133 warrants. |
| (11) | Consists of 232,454 shares of common stock, 66,666 vested options and 9,018 warrants. |
Equity Compensation Plan Information
DTRC 2021 Stock Incentive Plan
On March 11, 2021, DTRC'sDTRC’s board of directors adopted a plan entitled the "2021“2021 Stock Incentive Plan."” The 2021 Stock Incentive Plan had a total of 6,250,000 common stock purchase options available to award to DTRC'sDTRC’s directors, executive officers and consultants. As of March 31, 2022, just prior to the DTRC Merger, a total of 1,750,625 shares of DTRC'sDTRC’s common stock remained available for future grants under the 2021 Stock Incentive Plan.
Pursuant to the DTRC Merger (see Note 3), on March 31, 2022, the Company assumed DTRCsDTRC’s outstanding stock options and RSUs and replaced them with options and RSUs of DGCDakota Gold with the same terms and provisions.
Outstanding stock options have a term of five years. Outstanding stock options granted to third-party service providers generally vest over a period of up to two years.
Dakota Gold Corp. 2022 Stock Incentive Plan
On March 30, 2022, the Board of Directors approved the Dakota Gold Corp. 2022 Stock Incentive Plan (the “2022 Stock Plan”). The 2022 Stock Plan was approved by the Company’s stockholders at the 2022 Annual Meeting of Stockholders held on August 22, 2022. The 2022 Stock Incentive Plan provides for total grants of incentive securities to the Company’s directors, officers, employees and consultants of up to 6,250,000 shares of common stock. As of December 31, 2023, a total of 3,517,132 shares of the Company’s common stock remain available for future grants under the 2022 Stock Plan.
The following table gives information about our common stock that may be issued upon the exercise of options, warrants and rights under our compensation plans as of MarchDecember 31, 2022.2023.
Plan Category | | Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights | | Weighted-average exercise
price of outstanding options,
warrants and rights | | Number of securities
remaining available for
future issuance under equity
compensation plans | | | Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights | | | Weighted-average
exercise
price of outstanding
options,
warrants and rights | | | Number of securities
remaining available for
future issuance under
equity
compensation plans | |
| Equity compensation plans approved by security holders | | | 4,499,375 | | | $ | 4.06 | | | | 1,750,625 | | | | 5,561,097 | | | $ | 3.86 | | | | 3,517,132 | |
| Equity compensation plans not approved by security holders | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| Total: | | | 4,499,375 | | | | N/A | | | | 1,750,625 | | | | 5,561,097 | | | | 3.78 | | | | 3,517,132 | |
| REPORT OF THE AUDIT COMMITTEE |
The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report.
The Audit Committee is currently comprised of Alex MorrisonAlice Schroeder (Chair), Jennifer Grafton and Amy Koenig. The Audit Committee is responsible for overseeing and evaluating the Company’s financial reporting process on behalf of the boardBoard of directors,Directors, selecting and retaining the independent auditors, and overseeing and reviewing the internal audit function of the Company.
Management has the primary responsibility for the Company’s financial reporting process, accounting principles, and internal controls, as well as preparation of the Company’s financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). The independent auditors are responsible for performing an audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and issuing reports thereon. The Audit Committee is responsible for overseeing the conduct of these activities. It is not the Audit Committee’s duty or responsibility to conduct auditing or accounting reviews or procedures or to independently verify the representations made by management and the independent auditors. The Audit Committee’s considerations and discussions with management and the independent auditors do not assure that the Company’s financial statements are presented in accordance with GAAP or that an audit of the annual financial statements has been carried out in accordance with the standards of the Public Company Accounting Oversight Board (United States), or that the independent auditors are, in fact, “independent.”
The Audit Committee has met and held discussions with management and the independent auditors on a regular basis. The Audit Committee plans and schedules its meetings with a view to ensuring that it devotes appropriate attention to all of its responsibilities. The Audit Committee’s meetings include, whenever appropriate, executive sessions with the independent auditors without the presence of the Company’s management. The Audit Committee has reviewed and discussed with both management and the independent auditors the Company’s consolidated financial statements as of and for the yearnine-month transition period ended MarchDecember 31, 2022,2023, including a discussion of 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. Management advised the Audit Committee that the financial statements were prepared in accordance with GAAP. The Audit Committee has relied on this representation, without independent verification, and on the representations of the independent auditors included in their report on the consolidated financial statements.
The Audit Committee discussed with the independent auditors the matters required to be discussed pursuant to the Statement of Auditing Standards, as amended, the Public Company Accounting Oversight Board (PCAOB) Auditing Standards and the NYSE American listing standards. The independent auditors have provided to the Audit Committee the written disclosures and the letter required by PCAOB Rule 3526, “Communication with Audit Committees Concerning Independence,” and the Audit Committee has discussed with the independent auditors their independence. The Audit Committee has also considered whether the independent auditors’ provision of other non-audit services to the Company is compatible with maintaining auditor independence. The Audit Committee has concluded that the provision of non-audit services by the independent auditors was compatible with the maintenance of independence in the conduct of their auditing functions.
Based upon its review and discussions with management and the independent auditors and the reports of the independent auditors, and in reliance upon such information, representations, reports and opinions, the Audit Committee recommended that the boardBoard of directorsDirectors approve the audited financial statements for inclusion in the Company’s annual report on Form 10-K for the year ended MarchDecember 31, 2022,2023, and the boardBoard of directorsDirectors accepted the Audit Committee’s recommendations.
Submitted by the Members of the Audit Committee:
Alex Morrison, Chairman Alice Schroeder, Chair
Jennifer Grafton
Amy Koenig
Stockholder Proposals
Stockholders may present proposals for stockholder action in our proxy statement where such proposals are consistent with applicable law, pertain to matters appropriate for stockholder action and are not properly omitted by our action in accordance with the proxy rules. StockholderPursuant to SEC Rule 14a-8(e)(2), stockholder proposals prepared in accordance with the proxy rules must be received by us on or before March 27, 2023,December 4, 2024, to be included in our proxy statement for the annual meeting of stockholders in 2023.2024. However, pursuant to such proxy rule,SEC Rule 14a-4(c)(1) if the 20232024 annual meeting of stockholders is held on a date that is before July 23, 2023April 14, 2025 or after September 21, 2023,June 13, 2025, then a stockholder proposal submitted for inclusion in our proxy statement for the 20232024 annual meeting of stockholders must be received by us a reasonable time before we begin to print and mail our proxy statement for the 20232024 annual meeting. Pursuant to SEC Rule 14a-4(c)(1),such proxy rule, if our Corporate Secretary receives any stockholder proposal that is after June 4,February 17, 2023, the proxies designated by the Board will have discretionary authority to vote on such proposal. Our Board of Directors does not have a policy with regards to the consideration of any director candidates recommended by our stockholders. Our Board of Directors has determined that it is in the best position to evaluate the Company'sCompany’s requirements as well as the qualifications of each candidate when the Board of Directors considers a nominee for a position on our Board of Directors. If stockholders wish to recommend candidates directly to our Board of Directors, they may do so by sending communications to either of the Co-Chairmen of the Company at the address on the cover of this proxy statement.
Our management and the boardBoard of directorsDirectors know of no other matters to be brought before the annual meeting. If other matters are presented properly to the stockholders for action at the annual meeting and any postponements and adjournments thereof, it is the intention of the proxy holders named in the proxy to vote in their discretion on all matters on which the common stock represented by such proxy are entitled to vote.
You are urged to complete, sign, date and return your proxy promptly. You may revoke your proxy at any time before it is voted. If you attend the annual meeting, as we hope you will, you may vote your shares during the annual meeting.
| By order of the Board of Directors, | |
| |
| /s/ Robert Quartermain | |
| Robert Quartermain | |
| Co-Chairman | |
Appendix A
PLAN OF CONVERSION
Of
Dakota Gold Corp.
THIS PLAN OF CONVERSION, dated as of [●], 2024, (including all of the Exhibits attached hereto, this “Plan”), is hereby adopted by Dakota Gold Corp. a Nevada corporation (the “Converting Entity”), in order to set forth the terms, conditions and procedures governing the conversion of the Converting Entity from a Nevada corporation to Dakota Gold Corp., a Delaware corporation (the “Converted Entity”) pursuant to Section 265 of the General Corporation Law of the State of Delaware, as amended (the “DGCL”), and Section 92A of the Nevada Revised Statutes, as amended (the “NRS”).
Recitals
WHEREAS, the Converting Entity is a corporation duly organized and existing under the laws of the State of Nevada;
WHEREAS, the Board of Directors of the Converting Entity has determined that it is advisable and in the best interests of the Converting Entity and its stockholders for the Converting Entity to convert from a Nevada corporation to a Delaware corporation;
WHEREAS, the form, terms and provisions of this Plan have been authorized, approved and adopted by the Board of Directors of the Converting Entity;
WHEREAS, the Board of Directors of the Converting Entity has submitted this Plan to the stockholders of the Converting Entity for approval; and
WHEREAS, this Plan has been authorized, approved and adopted by the holders of a majority of the voting power of the stockholders of the Converting Entity.
NOW, THEREFORE, the Converting Entity hereby adopts this Plan as follows:
Plan of Conversion
1.Conversion; Effect of Conversion.
(a) The name of the Converting Entity is Dakota Gold Corp., a Nevada corporation.
(b) The name of the Converted Entity shall be Dakota Gold Corp., a Delaware corporation.
(c) Upon the Effective Time (as defined in Section 3 below), and in accordance with Section 265 of the DGCL and Section 92A of the NRS, the Converting Entity shall be converted from a Nevada corporation to a Delaware corporation (the “Conversion”) and shall thereafter be subject to all of the provisions of the DGCL, except that notwithstanding Section 106 of the DGCL, the existence of the Converted Entity shall be deemed to have commenced on the date the Converting Entity commenced its existence in the State of Nevada.
(d) Upon the Effective Time, by virtue of the Conversion and without any further action on the part of the Converting Entity or its stockholders, the Converted Entity shall, for all purposes of the laws of the State of Delaware, be deemed to be the same entity as the Converting Entity existing immediately prior to the Effective Time. Upon the Effective Time, by virtue of the Conversion and without any further action on the part of the Converting Entity or its stockholders, for all purposes of the laws of the State of Delaware, all of the rights, privileges and powers of the Converting Entity existing immediately prior to the Effective Time, and all property, real, personal and mixed, and all debts due to the Converting Entity existing immediately prior to the Effective Time, as well as all other things and causes of action belonging to the Converting Entity existing immediately prior to the Effective Time, shall remain vested in the Converted Entity and shall be the property of the Converted Entity, and the title to any real property vested by deed or otherwise in the Converting Entity existing immediately prior to the Effective Time shall not revert or be in any way impaired by reason of the Conversion; but all rights of creditors and all liens upon any property of the Converting Entity existing immediately prior to the Effective Time shall be preserved unimpaired, and all debts, liabilities and duties of the Converting Entity existing immediately prior to the Effective Time shall remain attached to the Converted Entity upon the Effective Time, and may be enforced against the Converted Entity to the same extent as if said debts, liabilities and duties had originally been incurred or contracted by the Converted Entity in its capacity as a corporation of the State of Delaware. The rights, privileges, powers and interests in property of the Converting Entity existing immediately prior to the Effective Time, as well as the debts, liabilities and duties of the Converting Entity existing immediately prior to the Effective Time, shall not be deemed, as a consequence of the Conversion, to have been transferred to the Converted Entity upon the Effective Time for any purpose of the laws of the State of Delaware.
(e) The Conversion shall not be deemed to affect any obligations or liabilities of the Converting Entity incurred prior to the Conversion or the personal liability of any person incurred prior to the Conversion.
(f) The Converting Entity intends for the Conversion to constitute a tax-free reorganization qualifying under Section 368(a) of the Internal Revenue Code of 1986, as amended.
2.Filings. As promptly as practicable following the adoption of this Plan by the Board of Directors and the stockholders of the Converting Entity, the Converting Entity shall cause the Conversion to be effective by:
(a) Executing and filing (or causing the execution and filing of) Articles of Conversion pursuant to Section 92A.205 of the NRS, substantially in the form of Exhibit A hereto (the “Nevada Articles of Conversion”), with the Secretary of State of the State of Nevada;
(b) Executing and filing (or causing the execution and filing of) a Certificate of Conversion pursuant to Sections 103 and 265 of the DGCL, substantially in the form of Exhibit B hereto (the “Delaware Certificate of Conversion”), with the Secretary of State of the State of Delaware; and
(c) Executing and filing (or causing the execution and filing of) a Certificate of Incorporation of the Converted Entity, substantially in the form of Exhibit C hereto (the “Certificate of Incorporation”), with the Secretary of State of the State of Delaware.
3.Effective Time. The Conversion shall become effective upon the last to occur of the filing of the Nevada Articles of Conversion, the Delaware Certificate of Conversion and the Certificate of Incorporation (the time of the effectiveness of the Conversion, the “Effective Time”).
4.Effect of Conversion.
(a)Effect on Common Stock. Upon the Effective Time, by virtue of the Conversion and without any further action on the part of the Converting Entity or its stockholders, each share of common stock, $0.001 par value per share, of the Converting Entity (“Converting Entity Common Stock”) that is issued and outstanding immediately prior to the Effective Time shall convert into one validly issued, fully paid and nonassessable share of common stock, $0.001 par value per share, of the Converted Entity (“Converted Entity Common Stock”).
(b)Effect on Outstanding Stock Options. Upon the Effective Time, by virtue of the Conversion and without any further action on the part of the Converting Entity or its stockholders, each option to acquire shares of Converting Entity Common Stock outstanding immediately prior to the Effective Time shall convert into an equivalent option to acquire, upon the same terms and conditions (including the vesting schedule and exercise price per share applicable to each such option) as were in effect immediately prior to the Effective Time, the same number of shares of Converted Entity Common Stock.
(c)Effect of Conversion on Outstanding Warrants or Other Rights. Upon the Effective Time, by virtue of the Conversion and without any further action on the part of the Converting Entity or its stockholders, each warrant or other right to acquire shares of Converting Entity Common Stock outstanding immediately prior to the Effective Time shall convert into an equivalent warrant or other right to acquire, upon the same terms and conditions (including the exercise price per share applicable to each such warrant or other right) as were in effect immediately prior to the Effective Time, the same number of shares of Converted Entity Common Stock.
(d)Effect of Conversion on Shares of Restricted Stock. Upon the Effective Time, by virtue of the Conversion and without any further action on the part of the Converting Entity or its stockholders, each restricted share or restricted stock unit of Converting Entity Common Stock outstanding immediately prior to the Effective Time shall convert into an equivalent restricted share or restricted stock units of Converted Entity Common Stock with the same terms and conditions (including the vesting schedule applicable to each such share) as were in effect immediately prior to the Effective Time.
(e)Effect on Stock Certificates. All of the outstanding certificates representing shares of Converting Entity Common Stock immediately prior to the Effective Time shall be deemed for all purposes to continue to evidence ownership of and to represent the same number of shares of Converted Entity Common Stock without any requirement of re-issuance.
(f)Effect on Employee Benefit, Equity Incentive or Other Similar Plans. Upon the Effective Time, by virtue of the Conversion and without any further action on the part of the Converting Entity or its stockholders, each employee benefit plan, equity incentive plan or other similar plan to which the Converting Entity is a party shall continue to be a plan of the Converted Entity. To the extent that any such plan provides for the issuance of Converting Entity Common Stock, upon the Effective Time, such plan shall be deemed to provide for the issuance of Converted Entity Common Stock.
(g)Effect on Directors and Officers. Upon the Effective Time, by virtue of the Conversion and without any further action on the part of the Converting Entity or its stockholders, the members of the Board of Directors and the officers of the Converting Entity holding their respective offices in the Converting Entity existing immediately prior to the Effective Time shall continue in their respective offices as members of the Board of Directors and officers, respectively, of the Converted Entity.
5.Further Assurances. If, at any time after the Effective Time, the Converted Entity shall determine or be advised that any deeds, bills of sale, assignments, agreements, documents or assurances or any other acts or things are necessary, desirable or proper, consistent with the terms of this Plan, (a) to vest, perfect or confirm, of record or otherwise, in the Converted Entity its right, title or interest in, to or under any of the rights, privileges, immunities, powers, purposes, franchises, properties or assets of the Converting Entity existing immediately prior to the Effective Time, or (b) to otherwise carry out the purposes of this Plan, the Converted Entity and its officers and directors (or their designees), are hereby authorized to solicit in the name of the Converted Entity any third-party consents or other documents required to be delivered by any third party, to execute and deliver, in the name and on behalf of the Converted Entity, all such deeds, bills of sale, assignments, agreements, documents and assurances and do, in the name and on behalf of the Converted Entity, all such other acts and things necessary, desirable or proper to vest, perfect or confirm its right, title or interest in, to or under any of the rights, privileges, immunities, powers, purposes, franchises, properties or assets of the Converting Entity existing immediately prior to the Effective Time and otherwise to carry out the purposes of this Plan.
6.Delaware Bylaws. Upon the Effective Time, the bylaws substantially in the form of Exhibit D hereto shall be the Bylaws of the Converted Entity.
7.Copy of Plan of Conversion. After the Conversion, a copy of this Plan will be kept on file at the offices of the Converted Entity, and any stockholder of the Converted Entity or former stockholder of the Converting Entity may request a copy of this Plan at no charge at any time.
8.Termination. At any time prior to the Effective Time, this Plan may be terminated and the transactions contemplated hereby may be abandoned by action of the Board of Directors of the Converting Entity if, in the opinion of the Board of Directors of the Converting Entity, such action would be in the best interests of the Converting Entity and its stockholders. In the event of termination of this Plan, this Plan shall become void and of no further force or effect.
9.Third-Party Beneficiaries. This Plan shall not confer any rights or remedies upon any person other than as expressly provided herein.
10.Severability. Whenever possible, each provision of this Plan will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Plan is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Plan.
IN WITNESS WHEREOF, the undersigned hereby causes this Plan to be executed as of the date first written above.
| DAKOTA GOLD CORP. |
| | |
| | /s/ Robert QuartermainBy: | |
| | Robert Quartermain | Name: | Jonathan Awde |
| | Co-Chairman | Title: | President and Chief Executive Officer |
Appendix AB
ARTICLES OF CONVERSION
| FRANCISCO V. AGUILAR Secretary of State 401 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov ABOVE SPACE IS FOR OFFICE USE ONLY Articles of Conversion/Exchange/Merger NRS 92A.200 and 92A.205 This filing completes the following: Conversion Exchange Merger TYPE OR PRINT - USE DARK INK ONLY - DO NOT HIGHLIGHT 1. Entity Information: (Constituent, Acquired or Merging) Entity Name: Jurisdiction: Entity Type*: If more than one entity being acquired or merging please attach additional page. 2. Entity Information: (Resulting, Acquiring or Surviving) Entity Name: Jurisdiction: Entity Type*: 3. Plan of Conversion, The entire plan of conversion, exchange or merger is attached to these articles. Exchange or Merger: (select one box) The complete executed plan of conversion is on file at the registered office or principal place of business of the resulting entity. The entire plan of exchange or merger is on file at the registered office of the acquiring corporation, limited-liability company or business trust, or at the records office address if a limited partnership, or other place of business of the acquiring entity (NRS 92A.200). The complete executed plan of conversion for the resulting domestic limited partnership is on file at the records office required by NRS 88.330. (Conversion only) 4. Approval: (If more than one entity being acquired or merging please attach additional approval page.) Exchange/Merger: Owner's approval (NRS 92A.200) (options a, b or c must be used for each entity) A. Owner's approval was not required from the: Acquired/merging Acquiring/surviving B. The plan was approved by the required consent of the owners of: Acquired/merging Acquiring/surviving C. Approval of plan of exchange/merger for Nevada non-profit corporation (NRS 92A.160): Non-profit Corporations only: The plan of exchange/merger has been approved by the directors of the corporation and by each public officer or other person whose approval of the plan of merger is required by the articles of incorporation of the domestic corporation. Acquired/merging Acquiring/surviving Name of acquired/merging entity Name of acquiring/surviving entity 5. Effective Date and Time: (Optional) Date: Time: (must not be later than 90 days after the certificate is filed) * corporation, limited partnership, limited-liability limited partnership, limited-liability company or business trust. Page 1 of 4 Revised: 8/1/2023 |
| FRANCISCO V. AGUILAR Secretary of State 201 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov ABOVE SPACE IS FOR OFFICE USE ONLY Articles of Conversion/Exchange/Merger NRS 92A.200 and 92A.205 This filing completes the following: Conversion Exchange Merger TYPE OR PRINT - USE DARK INK ONLY - DO NOT HIGHLIGHT 4. Approval Continued: (If more than one entity being acquired or merging please attach additional approval page.) 4. Approval Continued: (If more than one entity being acquired or merging please attach additional approval page.) Exchange/Merger: Owner's approval (NRS 92A.200) (options a, b or c must be used for each entity) A. Owner's approval was not required from the: Acquired/merging Acquiring/surviving B. The plan was approved by the required consent of the owners of: Acquired/merging Acquiring/surviving C. Approval of plan of exchange for Nevada non-profit corporation (NRS 92A.160): Non-profit Corporations only: The plan of exchange/merger has been approved by the directors of the corporation and by each public officer or other person whose approval of the plan of merger is required by the articles of incorporation of the domestic corporation. Acquired/merging Acquiring/surviving Name of acquired/merging entity Name of acquiring/surviving entity Exchange/Merger: Owner's approval (NRS 92A.200) (options a, b or c must be used for each entity) A. Owner's approval was not required from the: Acquired/merging Acquiring/surviving B. The plan was approved by the required consent of the owners of: Acquired/merging Acquiring/surviving C. Approval of plan of exchange for Nevada non-profit corporation (NRS 92A.160): Non-profit Corporations only: The plan of exchange/merger has been approved by the directors of the corporation and by each public officer or other person whose approval of the plan of merger is required by the articles of incorporation of the domestic corporation. Acquired/merging Acquiring/surviving Name of acquired/merging entity Name of acquiring/surviving entity * corporation, limited partnership, limited-liability limited partnership, limited-liability company or business trust. Page 2 of 4 Revised: 8/1/2023 |
| FRANCISCO V. AGUILAR Secretary of State 401 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov Conversion: A plan of conversion has been adopted by the constituent entity in compliance with the law of the jurisdiction governing the constituent entity. Signatures - must be signed by: 1. If constituent entity is a Nevada entity: an officer of each Nevada corporation; all general partners of each Nevada limited partnership or limited-liability limited partnership; a manager of each Nevada limited-liability company with managers or one member if there are no managers; a trustee of each Nevada business trust; a managing partner of a Nevada limited-liability partnership (a.k.a. general partnership governed by NRS chapter 87). 2. If constituent entity is a foreign entity: must be signed by the constituent entity in the manner provided by the law governing it. Care of: Name Address City State Zip/Postal Code 6.Forwarding Address for Service of Process: (Conversion and Mergers only, if resulting/surviving entity is foreign) Articles of Conversion/Exchange/Merger NRS 92A.200 and 91A.205 Name of constituent entity 9. Signature Statement: (Required) 8. Declaration: (Exchange and Merger only) Exchange: The undersigned declares that a plan of exchange has been adopted by each constituent entity (NRS 92A.200). Merger: (Select one box) The undersigned declares that a plan of merger has been adopted by each constituent entity (NRS 92A.200). The undersigned declares that a plan of merger has been adopted by the parent domestic entity (NRS 92A.180). ** Amended and restated articles may be attached as an exhibit or integrated into the articles of merger. Please entitle them "Restated" or "Amended and Restated," accordingly. The form to accompany restated articles prescribed by the secretary of state must accompany the amended and/or restated articles. Pursuant to NRS 92A.180 (merger of subsidiary into parent - Nevada parent owning 90% or more of subsidiary), the articles of merger may not contain amendments to the constituent documents of the surviving entity except that the name of the surviving entity may be changed. 7. Amendment, if any, to the articles or certificate of the surviving entity. (NRS 92A.200): (Merger only) ** Country Form will be returned if unsigned. Page 3 of 4 This form must be accompanied by appropriate fees. Revised: 8/1/2023 |
| FRANCISCO V. AGUILAR Secretary of State 401 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov Page 4 of 4 Revised: 8/1/2023 Title Date 10. Signature(s): (Required) Form will be returned if unsigned. This form must be accompanied by appropriate fees. Name of acquired/merging entity X ________________________________ Signature (Exchange/Merger) Title Date X ________________________________ Signature (Exchange/Merger) Name of acquiring/surviving entity Please include any required or optional information in space below: (attach additional page(s) if necessary) Articles of Conversion/Exchange/Merger NRS 92A.200 and 91A.205 If more than one entity being acquired or merging please attach additional page of informaiton and signatures. Signatures - Must be signed by: An officer of each Nevada corporation; All general partners of each Nevada limited partnership; All general partners of each Nevada limited-liability limited partnership; A manager of each Nevada limited-liability company with managers or one member if there are no managers; A trustee of each Nevada business trust (NRS 92A.230). The articles of merger must be signed by each foreign constituent entity in the manner provided by the law governing it (NRS 92A.230). Additional signature blocks may be added to this page or as an attachment, as needed. Merger: 9. Signature Statement Continued: (Required) Title Date X ________________________________ Signature of Constituent Entity (Conversion) Signatures - Must be signed by: An officer of each Nevada corporation; All general partners of each Nevada limited partnership; All general partners of each Nevada limited-liability limited partnership; A manager of each Nevada limited-liability company with managers or a member if there are no Managers; A trustee of each Nevada business trust (NRS 92A.230) Unless otherwise provided in the certificate of trust or governing instrument of a business trust, an exchange must be approved by all the trustees and beneficial owners of each business trust that is a constituent entity in the exchange. The articles of exchange must be signed by each foreign constituent entity in the manner provided by the law governing it (NRS 92A.230). Additional signature blocks may be added to this page or as an attachment, as needed. Exchange: |
Appendix C
STATE OF DELAWARE
CERTIFICATE OF CONVERSION
FROM A NON-DELAWARE CORPORATION
TO A DELAWARE CORPORATION
PURSUANT TO SECTION 265 of
the Delaware general corporation law
The jurisdiction where the non-Delaware corporation was first formed is the State of Nevada and the date the non-Delaware corporation was first formed is May 26, 2020.
The jurisdiction immediately prior to filing this Certificate is the State of Nevada.
The name of the non-Delaware corporation immediately prior to filing this Certificate is Dakota Gold Corp.
2022 Stock Incentive Plan
BoardThe name of Directors approved on March 30, 2022 and
Shareholders approved on ________ [ ], 2022
Article 1. Establishment, Purpose and Duration
1.1Establishment. Dakota Gold Corp. is a Nevadathe corporation establishes an incentive compensation plan to be known as Dakota Gold Corp. 2022 Stock Incentive Plan, as set forth in the Certificate of Incorporation is Dakota Gold Corp.
IN WITNESS WHEREOF, the undersigned have executed this document. This Plan permitsCertificate on the grant[●] day of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards and Other Stock-Based Awards. This Plan shall become effective upon shareholder approval (the “Effective Date”) and shall remain in effect as provided in Section 1.3.[●], A.D. 2024.
| By: | |
| | Authorized Person or Officer |
| Name: | |
| | Print or Type |
Appendix d
DELAWARE CERTIFICATE OF INCORPORATION
1.2ARTICLE I
NAME OF THE CORPORATION
The name of the corporation is Dakota Gold Corp. (the “PurposeCorporation”).
ARTICLE II
REGISTERED AGENT
The address of the registered office of the Corporation in the State of Delaware is [REGISTERED OFFICE ADDRESS]. The name of the registered agent of the Corporation at such address is [REGISTERED AGENT NAME].
ARTICLE III
BUSINESS PURPOSE
The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).
ARTICLE IV
CAPITAL STOCK
Section 4.01 Authorized Classes of Stock. The total number of shares of stock of all classes of capital stock that the Corporation is authorized to issue is 300,000,000, of which all of the shares shall be shares of common stock having a par value of $0.001 per share (“Common Stock”).
Section 4.02 Common Stock. The holders of the Common Stock shall exclusively possess all voting power. Each holder of shares of Common Stock shall be entitled to one vote for each share it holds.
ARTICLE V
BOARD OF DIRECTORS
Section 5.01 General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon the Board of Directors by statute, this Certificate of Incorporation, or the Bylaws of the Corporation (the “Bylaws”), the Board of Directors is hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject to the provisions of the DGCL, this Certificate of Incorporation and any Bylaws adopted by the stockholders; provided, however, that no Bylaws hereafter adopted by the stockholders shall invalidate any prior act of the Board of Directors that would have been valid if such Bylaws had not been adopted.
Section 5.02 Number of Directors. The number of directors of the Corporation which shall constitute the entire Board of Directors shall be the number of directors as fixed from time to time in accordance with the Bylaws.
Section 5.03 Written Ballot. Unless and except to the extent that the Bylaws shall so require, the election of director of the Corporation need not be by written ballot.
ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 6.01 Limitation of Liability. To the fullest extent permitted by the DGCL as it currently exists or may hereafter be amended, a director or officer of the Corporation shall not be personally liable to the Corporation or to its stockholders for monetary damages for any breach of fiduciary duty as a director or officer. No amendment to, modification of, or repeal of this PlanSection 7.01 shall apply to or have any effect on the liability or alleged liability of any director or officer of the Corporation for or with respect to any acts or omissions of such director or officer occurring prior to such amendment.
Section 6.02 Indemnification. The purposeCorporation shall indemnify to the fullest extent permitted by law as it now exists or may hereafter be amended any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative, or investigative, by reason of the Planfact that the person is to foster and promote the long-term financial successor was a director or officer of the CompanyCorporation or any predecessor of the Corporation, or serves or served at any other enterprise as a director, officer, employee, or agent at the request of the Corporation or any predecessor to the Corporation. Any amendment, repeal, or modification of this Section 7.02 shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.
ARTICLE VII
BYLAWS
Section 7.01 Board of Directors. In furtherance and materially increase shareholder valuenot in limitation of the powers conferred by (a) motivating superior performancelaw, the Board of Directors is expressly authorized and empowered to adopt, amend, alter, or repeal the Bylaws without any action on the part of the stockholders.
Section 7.02 Stockholders. The stockholders shall also have the power to adopt, amend, alter, or repeal the Bylaws.
ARTICLE VIII
AMENDMENTS
The Corporation reserves the right at any time from time to time to amend, alter, change, or repeal any provision contained in this Certificate of Incorporation, and any other provisions authorized by means of performance-related incentives, (b) encouraging and providing for the acquisition of an ownership interestDGCL may be added or inserted, in the Companymanner now or hereafter prescribed by Employees, Non-Employee Directorslaw; and Third Party Service Providers,all rights, preferences and (c) enablingprivileges of whatsoever nature conferred upon stockholders, directors, or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to this reservation.
Notwithstanding any other provision of this Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote or no vote, the Companyaffirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to attractvote thereon shall be required to amend, alter, change, or repeal any provision of this Certificate of Incorporation, or to adopt any new provision of this Certificate of Incorporation.
Appendix e
DELAWARE BYLAWS
ARTICLE I. CORPORATE OFFICES
Section 1.1. Registered Office and retain qualifiedAgent. The registered office of Dakota Gold Corp. (the “Corporation”) will be fixed in the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”).
Section 1.2. Other Offices. The Corporation may have other offices, both within and competent persons to servewithout the State of Delaware, as members of an outstanding management team and the Board of Directors of the Company upon whose judgment, interest, and performance are required forCorporation (the “Board of Directors”) from time to time shall determine or the successful and sustained operationsbusiness of the Company.Corporation may require.
1.3Duration of this Plan. Unless sooner terminated as provided herein, this Plan shall terminate ten (10) years from the Effective Date. After this Plan is terminated, no Awards may be granted but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and this Plan’s terms and conditions.ARTICLE II. MEETINGS OF STOCKHOLDERS
Article 2. DefinitionsSection 2.1. Place of Meetings; Meetings by Remote Communications.
Whenever used in this Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter(a) Place of Meetings. Meetings of the wordstockholders shall be capitalized.
2.1“Annual Award Limit”held at such place, if any, either within or “Annual Award Limits” havewithout the meaning set forth in Section 4.3.
2.2“Award”State of Delaware, or by means individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards or Other Stock-Based Awards, in each case subject to the terms of this Plan.
2.3“Award Agreement” means either (i) a written or electronic agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under this Plan, including any amendment or modification thereof, or (ii) a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including any amendment or modification thereof. The Committee may provide for the use of electronic, Internet or other non-paper Award Agreements, and the use of electronic, Internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant. The Committee shall have the exclusive authority to determine the terms of an Award Agreement evidencing an Award granted under this Plan, subject to the provisions herein. The terms of an Award Agreement need not be uniform among all Participants or among similar types of Awards.
2.4 “Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
2.5 “Board” or “Board of Directors” meansremote communication, as the Board of Directors of the Company.
2.6“Cash-Based Award” means an Award, denominated in cash, granted to a Participant as described in Article 12.
2.7“Cause” means, unless otherwise specified in an Award Agreement or in an applicable employment agreement between the Company and a Participant, any one of the following:
(a) willful and material misconduct of the Participant;shall determine.
(b) willful and continued failureMeetings by Remote Communications. The Board of Directors may, in its sole discretion, determine that any meeting of stockholders shall not be held at any place, but will instead be held solely by means of remote communication as provided under Section 211 of the ParticipantDelaware General Corporation Law (“DGCL”), subject to substantially perform his job duties;such guidelines and procedures as the Board of Directors may adopt. Stockholders and proxyholders participation in a meeting by means of remote communication permitted shall be deemed to be present in person and eligible to vote at a meeting of stockholders.
(c) the conviction of the Participant by a court of competent jurisdiction of a felony or entering the plea of nolo contendere to a felony by the Participant;
(d) the commission by the Participant of an act of theft, fraud, or dishonesty against the Company or any Subsidiary; or
(e) a material breach by the Participant of any material written policy of the Company.Section 2.2. Annual Meetings.
The existence of Cause under this Section 2.7 shall be determined in good faith by the Committee.
2.8 A “Change in Control” means the occurrence of one or moreannual meeting of the following events:
(a) The acquisition by any Person of Beneficial Ownership of more than 50% of either (A) the then-outstanding Shares (“Outstanding Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally instockholders for the election of directors (the “Outstanding Company Voting Securities”); provided, however, that,and for purposes of this Section 2.8(a) the following acquisitions shall not constitute a Change in Control:
(i) any acquisition by the Company,
(ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company,
(iii) any entity controlled by the Company, or
(iv) any acquisition by any entity pursuant to a transaction that complies with Sections 2.8(c)(i), (ii) and (iii).
(b) If during any period of two consecutive calendar years, the “Incumbent Board” (as defined below) , shall cease for any reason to constitute a majority of the Board. The “Incumbent Board” for purposes of this section, shall mean the Directors holding office at the beginning of the calendar year two years prior to the event in question; provided, however, that any individual becoming a Director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Directors then comprising the Incumbent Board shall be considered as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.
(c) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company and/or any entity controlled by the Company, or a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any entity controlled by the Company (each, a “Business Combination”), in each case, provided, however, that, for purposes of this Section 2.8(c) a Business Combination shall not constitute a Change in Control if following such Business Combination:
(i) all or substantially all of the individuals and entities that were the Beneficial Owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and more than 50% of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, ownsother business as may properly come before the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; and
(ii) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination; and
(iii) at least a majority of the members of the board of directors of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination .
(d) The complete liquidation or dissolution of the Company.
Notwithstanding anything in this Plan or any Agreement to the contrary, to the extent any provision of this Plan or an Agreement would cause a payment of an Award that is not exempt from the requirements of Code Section 409A to be made because of the occurrence of a Change in Control, then such payment shall not be made unless such Change in Control also constitutes a “change in ownership”, “change in effective control” or “change in ownership of a substantial portion of the Company’s assets” within the meaning of Code section 409A. Any payment that would have been made except for the application of the preceding sentence shall be mademeeting in accordance with the payment schedule that would have applied in the absence of a Change in Control (and other Participant rights that are tied to a Change in Control, such as vesting, shall not be affected by this paragraph).
2.9“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time. For purposes of this Plan, references to sections of the Codethese Bylaws shall be deemed to include references toheld at such date, time, and place, if any, applicable regulations thereunder and any successor or similar provision.
2.10“Commission” means the Securities and Exchange Commission.
2.11“Committee” means the Compensation Committee of the Board or a subcommittee thereof or any other committee designatedas shall be determined by the Board to administer this Plan. The membersof Directors and stated in the notice of the Committeemeeting.
At an annual meeting of the stockholders, only such business shall be appointed from time to timeconducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by and shall serveor at the discretion of the Board. If the Committee does not exist or cannot function for any reason, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee. The Committee shall be constituted to comply with the requirements of Rule 16b-3 promulgated by the Commission under the Securities Exchange Act of 1934, or such rule or any successor rule thereto which is in effect from time to time and any applicable listing or governance requirements of any securities exchange on which the Company’s common shares are listed.
2.12 “Company” means Dakota Gold Corp., and any successor thereto as provided in Section 22.21.
2.13 Reserved.
2.14 “Director” means any individual who is a memberdirection of the Board of Directors, (b) brought by or at the direction of the Company.
2.15 “Disability”Board of Directors or “Disabled” meansany duly authorized committee thereof, or (c) brought by a Participant’s eligibilitystockholder of the Corporation who was a stockholder of record of the Corporation at the time the notice provided for in this Section 2.2 is delivered to receive group long-term disability benefits under a plan sponsored by the Company or a Subsidiary, or if no such planSecretary of the Corporation, who is applicable, a Participant’s inabilityentitled to performvote at the essential functionsmeeting and who complies with the notice procedures set forth in this Section 2.2. For any business (other than nominations of his or her duties duepersons for election to a medically determinable physical or mental impairment, illness or injury,the Board of Directors, which can be expected to resultis provided for in death orSection 2.3 of these By-Laws) to be of long-continued and indefinite duration as determined in the sole discretion of the Committee, except in the case of any Option that isproperly brought before an Incentive Stock Option, if andannual meeting by a stockholder pursuant to the extent required in order for the Option to satisfy the requirements of Section 422 of the Code, the term “Disability” means disabled within the meaning of Section 22(e)(3) of the Code. Notwithstanding the preceding provisions of this Section 2.15 or anything in any Award Agreement to the contrary, to the extent any provision of this Plan or an Award Agreement would cause a payment not to be exempt from Code Section 409A to be made because of the Participant’s Disability, then there shall not be a Disability that triggers payment until the date (if any) that the Participant is disabled within the meaning of Code section 409A(a)(2)(C). Any payment that would have been made except for the applicationclause (c) of the preceding sentence, shallthe stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and any such proposed business must constitute a proper matter for stockholder action. To be made in accordance withtimely, a stockholder’s notice must be delivered to the payment schedulesecretary of the corporation at the principal executive offices of the corporation, not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred and twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that would have applied in the absenceevent that the date of a Disability (and other Participant rights that are tied to a Disability,the annual meeting is more than thirty (30) days before or more than seventy (70) days after such as vesting, shall not be affectedanniversary date, for notice by the stockholder to be timely it must be so delivered not earlier than the close of business on the one hundred and twentieth (120th) day prior sentence).
2.16 “Dividend Equivalent” hasto such annual meeting and not later than the meaning set forth in Section 18.
2.17 “Effective Date” hasclose of business on the meaning set forth in Section 1.1.
2.18 “Employee” means any individual performing services for the Company or a Subsidiary and designated as an employeelater of the Companyninetieth (90th) day prior to such annual meeting or the Subsidiarytenth (10th) day following the day on its payroll records. An Employee shall not include any individual during any period he or shewhich public disclosure of the date of such meeting is classified or treatedfirst made by the Company or Subsidiary as an independent contractor, a consultant or an employee of an employment, consulting or temporary agency or any other entity other than the Company or Subsidiary, without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified, as a common-law employee of the Company or Subsidiary during such period. An individual shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company and any Subsidiaries.Corporation. For purposes of Incentive Stock Options, no such leave may exceed 90 days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration ofthese Bylaws, public disclosure shall include disclosure in a leave of absence approvedpress release reported by the Company is not so guaranteed, then three months following the 91st day of such leave, any Incentive Stock Option held byDow Jones News Services, Associated Press, Reuters Information Services, Inc. or other national news service or in a Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonqualified Stock Option. Neither service as a Director nor payment of a director’s feedocument publicly filed by the Company shall be sufficientcorporation with the Securities and Exchange Commission pursuant to constitute “employment” by the Company.
2.19 “Exchange Act” meansSections 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended from(the “Exchange Act”). In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
A stockholder’s notice to time, or any successor act thereto.the Secretary of the Corporation shall set forth the following:
(a) a brief description of the business desired to be brought before the annual meeting;
2.20 “Fair Market Value” means,(b) the reasons for conducting such business at the annual meeting;
(c) the text of the proposal or business (including the text of any resolutions proposed for consideration and, in the event such business includes a proposal to amend the Bylaws, the language of the proposed amendment);
(d) any substantial interest (within the meaning of Item 5 of Schedule 14A under the Exchange Act) in such business of such stockholder and the beneficial owner (within the meaning of Section 13(d) of the Exchange Act), if any, on any given date (i) ifwhose behalf the Shares are listed on a national or regional securities exchangeproposal is made; and
(e) as to the proposing stockholder:
(1) the name and address of such stockholder, as they appear on the givenCorporation’s books, and of the beneficial owner, if any, on whose behalf the proposal is being made;
(2) the class or series and number of shares of the Corporation that are owned beneficially and of record by the stockholder and the beneficial owner, if any, on whose behalf the proposal is being made, as of the date of the stockholder’s notice, and a representation that the stockholder will notify the Corporation in writing of the class and number of shares owned of record and beneficially as of the record date for the meeting within five business days after the record date for the meeting;
(3) a description of any agreement, arrangement or tradedunderstanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on an over-the-counter exchange, Fair Market Value onbehalf of, such datestockholder and such beneficial owners, whether or not such instrument or right shall be subject to settlement in underlying shares of capital stock of the closingCorporation, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner, with respect to securities of the Corporation, and a Share onrepresentation that the stockholder will notify the Corporation in writing of any such securities exchange onagreement, arrangement, or understanding in effect as of the immediately preceding day on which sales were made onrecord date of the meeting within five business days after the record date for such exchange;meeting;
(4) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or (ii)by proxy at the meeting to make the proposal;
(5) a description of any agreement, arrangement or understanding with respect to the proposal between or among such stockholder and/or such beneficial owner, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, and a representation that the stockholder will notify the Corporation in writing of any such agreement, arrangement or understanding in effect as of the record date for the meeting within five business days after the record date for such meeting;
(6) a representation whether the proposing stockholder or the beneficial owner, if Shares are not listed on such an exchange, the fair market valueany, intends or is part of a Share on that date shall be determinedgroup which intends (1) to solicit proxies or votes in good faithsupport of such proposal, and (2) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation's outstanding capital stock required to approve or adopt the proposal;
(7) the names and addresses of other stockholders (including beneficial and record owners) known by the Committee; provided, however,proposing stockholder to support the Committee,proposal, and to the extent known, the class and number of all shares of the Corporation's capital stock owned beneficially or of record by such other stockholders; and
(8) any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in its discretion, may use an alternative definitiona proxy statement or other filing required to be made in connection with solicitations of Fair Market Value including, but not limitedproxies for the proposal pursuant to a price that is based on the opening, actual, high, low, or average selling prices of a Share on the securities exchange on which Shares are listed or traded on the given date, the trading date preceding the given date, the trading date next succeeding the given date, or an average of trading days. Notwithstanding the foregoing, (i) in the case of an Option or SAR, Fair Market Value shall be determinedand in accordance with a definitionSection 14(a) of fair market value that permits the Award to be exempt from Code section 409A;Exchange Act and (ii)the rules and regulations promulgated thereunder.
Notwithstanding anything in the caseBylaws to the contrary and except as otherwise expressly provided in Rule 14a-8 of an Option that is intended to qualify as an ISO under Code section 422 Fair Market Valuethe Exchange Act, no business shall be determined by the Committeeconducted at an annual meeting except in accordance with the procedures set forth in this Section 2.2. The presiding officer of an annual meeting shall, if the facts warrant, determine and declare at the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Section 2.2, and if the presiding officer should so determine, the presiding officer shall so declare at the meeting and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 2.2, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present the proposed business, such proposed business shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of these Bylaws, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.
Notwithstanding the foregoing provisions of this Section 2.2, a stockholder shall also comply with all applicable requirements of Code section 422.
2.21“Grant Date” meansthe date an Award is grantedExchange Act and the rules and regulations promulgated thereunder with respect to a Participantthe matters set forth in this Section 2.2; provided, however, that any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to proposals of business to be considered pursuant to this Section 2.2, and compliance with this Section 2.2 shall be the Plan.
2.22 “Grant Price”exclusive means the price established at the time of grant of an SAR pursuantfor a stockholder to Article 7.
2.23 “Incentive Stock Option” or “ISO” means an Award granted pursuant Article 6 that is designated as an Incentive Stock Optionsubmit business other than nominations (other than business brought properly under and that is intended to meet the requirements of Code Section 422 or any successor provision.
2.24 “Insider” shall mean an individual who is, on the relevant date, an officer (as defined in compliance with Rule 16a-1(f) (or any successor provision) promulgated by the Commission under the Exchange Act) or Director of the Company, or a more than 10% Beneficial Owner of any class of the Company’s equity securities that is registered pursuant to Section 1214a-8 of the Exchange Act, as determined bymay be amended from time to time). Nothing in this Section 2.2 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Board in accordance with Section 16corporation’s proxy statement pursuant to Rule 14a-8 of the Exchange Act.
2.25“Nonemployee Director” means a Director who is not an Employee.Section 2.3. Notice of Stockholder Nominees.
2.26 “Nonqualified Stock Option” or “NQSO” means an Award granted pursuant to Article 6 that is not intended to meetOnly persons who are nominated in accordance with the requirements of Code Section 422, or that otherwise does not meet such requirements.
2.27 “Option” means an Award granted to a Participant pursuant to Article 6, which Award may be an Incentive Stock Option or a Nonqualified Stock Option.
2.28 “Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option.
2.29 “Other Stock-Based Award” means an equity-based or equity-related Award not otherwise described by the terms of this Plan that is granted pursuant to Article 12.
2.30 “Participant” means any eligible individual asprocedures set forth in Article 5these Bylaws shall be eligible for election as directors. Nominations of persons for election to whomthe board of directors of the Corporation may be made at an Awardannual meeting of stockholders only (a) by or at the direction of the Board of Directors or any duly authorized committee thereof, or (b) by any stockholder of the Corporation who was a stockholder of record of the Corporation at the time the notice provided for in this Section 2.3 is granted.delivered to the Secretary of the Corporation, who is entitled to vote for the election of directors at the meeting and who complies with the notice procedures set forth in this Section 2.3. Nominations by stockholders shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day, nor earlier than the close of business on the one hundred and twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the one hundred and twentieth (120th) day and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public disclosure of the date of such meeting was first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
2.31 Reserved.A stockholder’s notice to the Secretary of the Corporation shall include the following:
2.32Reserved.(a) the name, age, business address, and residence address of each nominee proposed in such notice;
2.33 “Performance Period” means(b) the periodprincipal occupation or employment of time duringeach such nominee;
(c) the class and number of shares of capital stock of the Corporation which pre-established performance goals mustare owned of record and beneficially by each such nominee (if any);
(d) such other information concerning each such nominee as would be metrequired to determinebe disclosed in a proxy statement soliciting proxies for the degreeelection of payout and/such nominee as a director in an election contest (even if an election contest is not involved) or vestingthat is otherwise required to be disclosed under Section 14(a) of the Exchange Act;
(e) such person’s written consent to being named in a proxy statement and to serving as a director of the Corporation if elected; and
(f) as to the proposing stockholder:
(1) the name and address of such stockholder, as they appear on the Corporation’s books, and of the beneficial owner, if any, on whose behalf the nomination is being made;
(2) the class or series and number of shares of the Corporation that are owned beneficially and of record by the stockholder and the beneficial owner, if any, on whose behalf the nomination is being made, as of the date of the stockholder’s notice, and a representation that the stockholder will notify the Corporation in writing of the class and number of shares owned of record and beneficially as of the record date for the meeting within five business days after the record date for the meeting;
(3) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of, such stockholder and such beneficial owners, whether or not such instrument or right shall be subject to settlement in underlying shares of capital stock of the Corporation, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner, with respect to an Award.securities of the Corporation, and a representation that the stockholder will notify the Corporation in writing of any such agreement, arrangement, or understanding in effect as of the record date of the meeting within five business days after the record date for such meeting;
2.34 “Performance Share” means(4) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to make the nomination;
(5) a description of any agreement, arrangement or understanding with respect to the nomination between or among such stockholder and/or such beneficial owner, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, including the nominee, and a representation that the stockholder will notify the Corporation in writing of any such agreement, arrangement or understanding in effect as of the record date for the meeting within five business days after the record date for such meeting;
(6) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (1) to solicit proxies or votes in support of such director nominees or nomination in accordance with Rule 14a-19 promulgated under the Exchange Act, and (2) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation's outstanding capital stock required to elect the nominee;
(7) the names and addresses of other stockholders (including beneficial and record owners) known by the proposing stockholder to support the nomination, and to the extent known, the class and number of all shares of the Corporation's capital stock owned beneficially or of record by such other stockholders, and
(8) any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for the election of directors in an Award grantedelection contest pursuant to Article 10.
2.35 “Performance Unit” means an Award granted pursuant to Article 11.
2.36 “Period of Restriction” means the period when Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture (based on the passage of time, the achievement of performance goals or upon the occurrence of other events as determined by the Committee,and in its discretion) as provided in Articles 8 and 9.
2.37 “Person” shall have the meaning ascribed to such term inaccordance with Section 3(a)(9)14(a) of the Exchange Act and usedthe rules and regulations promulgated thereunder; and
(9) any other information relating to such proposing stockholder and beneficial owner, if any, required to be disclosed in Sections 13(d)a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in an election contest pursuant to and 14(d)in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder.
In addition, the Corporation may require any proposed nominee to furnish such other information as the Corporation may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation.
Notwithstanding anything in the first paragraph of this Section 2.3 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation at the annual meeting is increased effective after the time period for which nominations would otherwise be due under the first paragraph of this Section 2.3 and there is no public disclosure by the Corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 2.3 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public disclosure is first made by the Corporation.
No person shall be eligible for election as a director of the Corporation at an annual meeting unless nominated in accordance with the procedures set forth in these Bylaws. The presiding officer of the meeting shall, if the facts warrant, determine and declare at the meeting that nomination was not made in accordance with the procedures prescribed by these Bylaws, and if the presiding officer should so determine, the presiding officer shall so declare at the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 2.3, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present a nomination, such nomination shall be disregarded and such nomination shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation.
Notwithstanding the foregoing provisions of this Section 2.3, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 2.3; provided, however, that any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations to be considered pursuant to this Section 2.3, and compliance with Section 2.3 shall be the exclusive means for a stockholder to make nominations at an annual meeting of stockholders.
Section 2.4. Special Meetings.
Except as otherwise required by law, special meetings of the stockholders for any purpose or purposes may be called only by resolution adopted by a majority of the entire Board of Directors. No other person or persons may call a special meeting. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting.
Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be selected pursuant to the notice of meeting (a) by or at the direction of the Board of Directors or any duly authorized committee thereof includingor, (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a “group”stockholder of record at the time the notice provided for in this Section 2.4 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 2.4. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as definedspecified in the Corporation’s notice of meeting, if the stockholder’s notice required by Section 2.3 of these Bylaws shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the close of business on the one hundred and twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public disclosure is first made of the date of the special meeting and of the nominees proposed by the board of directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
No person shall be eligible for election as a director of the Corporation at a special meeting unless nominated in accordance with the procedures set forth in these Bylaws. The presiding officer of the meeting shall, if the facts warrant, determine and declare at the meeting that the nomination was not made in accordance with the procedures prescribed by these Bylaws, and if the presiding officer should so determine, the presiding officer shall so declare at the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 2.4, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the special meeting of stockholders of the Corporation to present a nomination, such nomination shall be disregarded and such nomination shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation.
Notwithstanding the foregoing provisions of this Section 2.4, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 2.4; provided, however, that any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations to be considered pursuant to this Section 2.4, and compliance with Section 2.4 shall be the exclusive means for a stockholder to make nominations at a special meeting of stockholders.
Section 2.5. Notice of Meetings.
(a) General. Notice of the place, if any, date and hour of any stockholders’ meeting shall be given to each stockholder entitled to vote. The notice shall state the means of remote communications, if any, by which stockholders and proxy holders may be deemed present in person and vote at the meeting. If the voting list for the meeting is to be made available by means of an electronic network or if the meeting is to be held solely by remote communication, the notice shall include the information required to access the reasonably accessible electronic network on which the Corporation will make its voting list available either prior to the meeting or, in the case of a meeting held solely by remote communication, during the meeting. Notice of a special meeting shall also state the purpose or purposes for which the meeting has been called. Unless otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, notice shall be given not less than ten (10) nor more than sixty (60) days before the date of such meeting.
(b) Manner of Notice. Notices of meetings to stockholders may be given by mailing the same, addressed to the stockholder entitled thereto, at such stockholder’s mailing address as it appears on the records of the Corporation and such notice shall be deemed to be given when deposited in the U.S. mail, postage prepaid. Without limiting the manner by which notices of meetings otherwise may be given, any such notice may be given by electronic transmission in accordance with applicable law.
(c) Waiver of Notice. Notice of any meeting need not be given to any stockholder who shall, either before or after the meeting, submit a waiver of notice in accordance with Section 229 of the DGCL. Attendance of a stockholder at a meeting shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any meeting of the stockholders need to be specified in the waiver of notice unless so required by the Certificate of Incorporation or these Bylaws. Any stockholder so waiving notice of the meeting shall be bound by the proceedings of the meeting in all respects as if due notice thereof had been given.
(d) Affidavit of Notice. An affidavit of the Corporation’s Secretary, an assistant secretary or an agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
Section 2.6. Quorum. Except as otherwise provided by Delaware law, the Certificate of Incorporation or these Bylaws, the presence, in person or by proxy, of the holders of 33 1/3 percent (33.33%) in voting power of the shares of stock entitled to vote at the meeting shall constitute a quorum. Where a separate vote by a class or series or classes or series of stock is required at a meeting, the presence, in person or by proxy, of the holders of 33 1/3 percent (33.33%) in voting power of the shares of each such class or series of stock shall also be required to constitute a quorum. In the absence of a quorum, either the chairperson of the meeting or the holders of a majority of the voting power of the shares of stock present, in person or by proxy, and entitled to vote at the meeting may adjourn the meeting in the manner provided in Section 13(d) thereof.2.7 until a quorum is present or represented. A quorum, once established at a meeting, shall not be broken by the withdrawal of the holders of enough voting power to leave less than a quorum. If a quorum is present at an original meeting, a quorum need not be present at an adjourned session of that meeting.
2.38 “Plan” means Dakota Gold Corp. 2022 Stock Incentive Plan, asSection 2.7. Adjourned Meeting; Notice. Either the samechairperson of the meeting or the holders of a majority of the voting power of the shares of stock present, in person or by proxy, and entitled to vote at the meeting may be amendedadjourn any meeting of stockholders from time to time. At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting. Notice of an adjourned meeting need not be given if the time, place, if any, thereof and the means of remote communication, if any, are announced at the meeting at which the adjournment is taken. If the adjournment is for more than thirty (30) days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
2.39 “Restricted Stock”Section 2.8. List of Stockholders Entitled to Vote. At least 10 days before every meeting of the stockholders, the Secretary of the Corporation shall prepare a complete list of the stockholders entitled to vote at such meeting, arranged in alphabetical order and showing each stockholder’s address and number of shares registered in their name. The list need not include electronic mail addresses or other electronic contact information for any stockholder. For a period of at least ten (10) days ending on the day before the meeting date, such list shall be open to the examination of any stockholder for any purpose germane to the meeting (i) on a reasonably accessible electronic network (provided that the information required to gain access to such list is provided with the notice of the meeting) or (ii) during ordinary business hours at the Corporation’s principal place of business. If the list is made available on an electronic network, the Corporation may take reasonable steps to ensure that it is available only to stockholders. If the meeting is held at a place, the voting list shall be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. If the meeting is held solely by means an Award granted pursuantof remote communications, then the list shall also be open to Article 8.the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. In either case, any stockholder may inspect the voting list at any time during the meeting.
2.40 “Restricted Stock Unit” means an Award granted pursuant to Article 9.
2.41“Share” means a shareSection 2.9. Vote Required. Unless otherwise required by law or provided in the Certificate of common stock of the Company.
2.42 “Stock Appreciation Right” or “SAR” means an Award granted pursuant to Article 7.
2.43 “Subsidiary” means any corporation or other entity, whether domestic or foreign, in which the Company has or obtains, directly or indirectly, an interest of more than 50% by reason of stock ownership or otherwise.
2.44 “Third-Party Service Provider” means any consultant, agent, advisor or independent contractor who renders bona fide services to the Company or a Subsidiary that (a) are not in connection with the offer and sale of the Company’s securities in a capital raising transaction, and (b) do not directly or indirectly promote or maintain a market for the Company’s securities.
Article 3. Administration
3.1General. The Committee shall be responsible for administering this Plan, subject to this Article 3 and the other provisions of this Plan. The Committee may employ attorneys, consultants, accountants, agents and other individuals, any of whom may be an Employee, and the Committee, the Company, and its officers and DirectorsIncorporation, each stockholder shall be entitled to rely uponone vote for each share of capital stock held by such stockholder or by proxy for each share of the advice, opinionsstock having voting power held by such stockholder. Subject to express provisions of the DGCL or valuations of the Certificate of Incorporation requiring a different vote, any such individuals. All actions taken and all interpretations and determinations madematter, other than the election of directors, properly brought before any meeting at which a quorum is present shall be decided by the Committeeaffirmative vote of a majority of the voting power of the shares of stock present, in person or by proxy, at the meeting and entitled to vote on the matter. Unless otherwise required by law, the Certificate of Incorporation, or these Bylaws, directors shall be finalelected by a plurality of the voting power of the shares of stock present, in person or by proxy, at the meeting and binding uponentitled to vote on the Participants, the Company or Subsidiary, and all other interested individuals.matter.
3.2AuthoritySection 2.10. Conduct of the Committee. Subject to any express limitations set forth in the Plan, the Committee shall have full and exclusive discretionary power and authority to take such actions as it deems necessary and advisable with respect to the administration of the Plan including, but not limited to, the following:Business.
(a) ToChairperson; Secretary. The following people shall preside over any meeting of the stockholders: the chairperson of the Board of Directors (the “Chairperson”), if any, or, in the Chairperson’s absence, the President, or, in the absence of all of the foregoing persons, a chairperson designated by the Board of Directors, or, in the absence of a chairperson designated by the Board of Directors, a chairperson chosen by the stockholders at the meeting. In the absence of the Secretary and any assistant secretary, the chairperson of the meeting may appoint any person to act as secretary of the meeting.
(b) Rules of Conduct. The Board of Directors or the chairperson of the meeting may adopt such rules, regulations and procedures for the conduct of any meeting of the stockholders as it deems appropriate including, without limitation, rules, regulations and procedures regarding participation in the meeting by means of remote communication. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairperson of the meeting shall determine the order of business and the procedure at the meeting, including such matters as the regulation of the manner of voting and the conduct of business, as the chairperson of the meeting deems appropriate. The rules, regulations and procedures adopted may include, without limitation, rules that (i) establish an agenda or order of business, (ii) are intended to maintain order and safety at the meeting, (iii) restrict entry to the meeting after the time fixed for its commencement, and (iv) limit the time allotted to stockholder questions or comments. Unless otherwise determined by the Board of Directors or the chairperson of the meeting, meetings of the stockholders need not be held in accordance with the rules of parliamentary procedure.
Section 2.11. Inspector of Elections. In advance of any meeting of the stockholders, the Board of Directors shall appoint one or more inspectors, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and make a written report thereof. The Board of Directors may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of the inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of their ability. The inspectors shall have the duties prescribed by Section 231 of the DGCL and may appoint or retain other persons or entities to assist the inspector or inspectors in the performance of their duties.
Section 2.12. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action.
If the Board of Directors does not so fix a record date:
(a) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;
(b) The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent (including consent by electronic mail or other electronic transmission as permitted by law) is delivered to the Corporation; and
(c) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
Section 2.13. Action by Written Consent. Any action required or allowed to be taken at a meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, provided that a consent in writing setting forth the action so taken, is (i) signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and (ii) delivered to the Corporation in accordance with Section 228(a) of the DGCL, except that: (a) if any greater proportion of voting power is required for such action at a meeting, then the greater proportion of written consents is required; and (b) this provision for action by written consent does not supersede any specific provision for action by written consent contained in the DGCL.
Section 2.14. Proxies. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. The authorization of a person to act as proxy may be documented, signed, and delivered in accordance with Section 116 of DGCL, provided that such authorization shall set forth, or be delivered with, information enabling the Corporation to determine the identity of the stockholder granting such authorization. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or a new proxy bearing a later date. Any stockholder soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board of Directors.
ARTICLE III. DIRECTORS
Section 3.1. General Powers. Subject to the provisions of the DGCL and any limitation in the Certificate of Incorporation or these Bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors.
Section 3.2. Number of Directors. The Board of Directors shall consist of one or more members, the number thereof to be determined from time to time whichby resolution of the persons eligible underBoard of Directors.
Section 3.3. Term of Office. Each director shall hold office until his or her successor is elected and qualified or until his or her earlier death, resignation, disqualification or removal.
Section 3.4. Resignation. Any director may resign at any time by notice given in writing or by electronic transmission to the PlanCorporation. Such resignation shall be granted Awards, when and how each Awardtake effect at the date of receipt of such notice by the Corporation or at such later effective date or upon the happening of an event or events as is therein specified. A resignation that is conditioned on a director failing to receive a specified vote for reelection as a director may provide that it is irrevocable. A verbal resignation shall be granted, what type or combination of types of Awards shall be granted, the provisions of each Award granted (which need not be identical), includingdeemed effective until confirmed by the timedirector in writing or times when a person shall be permittedby electronic transmission to receive Shares pursuant to an Award and the number of Shares subject to an Award;Corporation.
(b) To construe and interpret the Plan and Awards granted under it, and to establish, amend, and revoke rules and regulations for its administration. The Committee, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in an Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective;
(c) To approve forms of Award Agreements for use under the Plan;
(d) To determine Fair Market Value of a Share in accordance with Section 2.20 of the Plan;
(e) To amend the Plan or any Award Agreement as3.5. Vacancies. Unless otherwise provided in the Plan;Certificate of Incorporation or these Bylaws, any vacancy in the Board of Directors, including a vacancy resulting from an enlargement of the Board of Directors, may be filled by a vote of the majority of the remaining directors, although less than a quorum, or by a sole remaining director. A director appointed by the Board of Directors shall hold office for the remainder of the term of the director he or she is replacing.
(f) To adopt sub-plans and/or special provisions applicable to stock awards regulated by the laws of a jurisdiction other than and outsideSection 3.6. Regular Meetings. Regular meetings of the United States. Such sub-plans and/or special provisions may take precedence over other provisionsBoard of the Plan, but unless otherwise superseded by the terms of such sub-plans and/or special provisions, the provisions of the Plan shall govern;
(g) To authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Board;
(h) To determine whether Awards will be settled in shares of common stock, cash or in any combination thereof;
(i) To determine whether Awards will provide for Dividend Equivalents;
(j) To establish a program whereby Participants designated by the Committee may reduce compensation otherwise payable in cash in exchange for Awards under the Plan;
(k) To authorize a program permitting eligible Participants to surrender outstanding Awards in exchange for newly granted Awards subject to any applicable shareholder approval requirements set forth in Section 21.1 of the Plan;
(l) To impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by a Participant or other subsequent transfers by a Participant of any Shares, including, without limitation, restrictions under an insider trading policy and restrictions as to the use of a specified brokerage firm for such resales or other transfers; and
(m) To provide, either at the time an Award is granted or by subsequent action, that an Award shall contain as a term thereof, a right, either in tandem with the other rights under the Award or as an alternative thereto, of the Participant to receive, without payment to the Company, a number of Shares, cash or a combination thereof, the amount of which is determined by reference to the value of Shares.
3.3Delegation. The Committee may delegate to one or more of its members or to one or more officers of the Company or any Subsidiary or to one or more agents or advisors such administrative duties or powers as it may deem advisable, and the Committee or any individuals to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with respect to any responsibility the Committee or such individuals may have under this Plan. To the extent permitted by applicable law, the Committee may, by resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as can the Committee: (a) designate Employees to be recipients of Awards; and (b) determine the size of any such Awards; provided , however , (i) the Committee shall not delegate such responsibilities to any such officer for Awards granted to an Employee who is considered an Insider; (ii) the resolution providing such authorization sets forth the total number of Awards such officer(s) may grant; and (iii) the officer(s) shall report periodically to the Committee regarding the nature and scope of the Awards granted pursuant to the authority delegated.
Article 4. Shares Subject to This Plan
4.1Number of Shares Authorized and Available for Awards. Subject to adjustment as provided under the Plan, the total number of Shares that are available for Awards under the Plan shall be 6,250,000 Shares. Such SharesDirectors may be authorizedheld without notice at such times and unissued Shares, treasury Shares, Shares purchased in the open market or in private transactions, orat such places, if any, combination of the foregoing, as may be determined from time to time by the Board of Directors.
Section 3.7. Special Meetings. Special meetings of the Board of Directors may be called by the Chairperson, the President or by any director. Notice of any special meeting shall be given to each director and shall state the Committee. Any oftime and place for the authorized Shares may be used for any type of Award under the Plan, and any or all of the Shares may be allocated to Incentive Stock Options.special meeting.
Section 3.8. Adjourned Meetings. A majority of the directors present at any meeting of the Board of Directors, including an adjourned meeting, whether or not a quorum is present, may adjourn and reconvene such meeting to another time and place. At least 24 hours’ notice of any adjourned meeting of the Board of Directors shall be given to each director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 3.11 hereof other than by mail, or at least three days’ notice if by mail. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.
4.2Share Usage. The Committee shall determine the appropriate method for determining the numberSection 3.9. Notice of Shares available for grant under the Plan, subject to the following:Meetings.
(a) Any Shares relatedGeneral. Subject to an Award granted under this Plan that terminatesArticle III, whenever notice is required to be given to any director by expiration, forfeiture, cancellationapplicable law, the Certificate of Incorporation, or otherwise withoutthese Bylaws, such notice shall be deemed given effectively if (i) in person or by telephone to the issuancedirector at least twenty-four (24) hours in advance of the Shares, are settled in cash in lieu of Shares, or are exchanged with the Committee’s permission, priormeeting, (ii) by personally delivering written notice to the issuancedirector’s last known business or home address at least forty-eight (48) hours in advance of Shares,the meeting, (iii) by delivering an electronic transmission (including, without limitation, via electronic mail) to the director’s last known address for Awardsreceiving electronic messages at least forty-eight (48) hours in advance of the meeting, (iv) by depositing written notice with a reputable delivery service or overnight carrier addressed to the director’s last known business or home address for delivery to that address no later than the business day preceding the date of the meeting, or (v) by depositing written notice in the U.S. mail, postage prepaid, addressed to the director’s last known business or home address no later than the third business day preceding the date of the meeting. A notice of meeting need not involving Shares shall be available again for grant under this Plan.specify the purposes of the meeting.
(b) Any Shares tendered (by either actual deliveryWaiver of Notice. Whenever notice to directors is required by applicable law, the Certificate of Incorporation, or attestation) (i)these Bylaws, a waiver thereof, in writing signed by, or by electronic transmission by, the director entitled to pay the Option Pricenotice, whether before or after such notice is required, shall be deemed equivalent to notice. Attendance by a director at a meeting shall constitute a waiver of an Option granted under this Plannotice of such meeting except when the director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting was not lawfully called or Prior Planconvened. Neither the business to be transacted at, nor the purpose of, any Board of Directors or (ii) to satisfy tax withholding obligations associated with an Award granted under this Plan, shall become available again for grant under this Plan.committee meeting need be specified in any waiver of notice unless so required by the Certificate of Incorporation or these Bylaws.
(c) Any SharesSection 3.10. Quorum. At all meetings of the Board of Directors, a majority of the directors in office at the time shall constitute a quorum. Thereafter, a quorum shall be deemed present for purposes of conducting business and determining the vote required to take action for so long as at least a third (1/3) of the total number of directors is present. If a quorum is not present at any meeting of the Board of Directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
Section 3.11. Vote Required. The Board of Directors shall act by the vote of a majority of the directors present at a meeting at which a quorum is present. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that were subjectmeeting.
Section 3.12. Chairperson; Secretary. If the Chairperson and the President are not present at any meeting of the Board of Directors, or if no such officers have been elected, then the Board of Directors shall choose a director who is present at the meeting to an SAR granted underpreside over it. In the absence of the Secretary and any assistant secretary, the Chairperson may appoint any person to act as secretary of the meeting.
Section 3.13. Meetings by Telephone. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting in this Plan that were not issued uponmanner shall constitute presence in person at the exercisemeeting.
Section 3.14. Action by Written Consent. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all directors or members of such SARcommittee, as the case may be, consent thereto in writing or by electronic transmission and any consent may be documented, signed, and delivered in any manner permitted by Section 116 of the DGCL. After an action is taken, the consent or consents relating thereto shall become available againbe filed with the minutes of proceedings of the Board of Directors or committee in accordance with applicable law.
Section 3.15. Fees and Expenses. Directors shall receive such reasonable fees for grant under this Plan.their services on the Board of Directors and any committee thereof and such reimbursement of their actual and reasonable expenses as may be fixed or determined by the Board of Directors.
4.3ReservedSection 3.16. Committees of the Board of Directors.
4.4Adjustments The Board of Directors may designate one or more committees (including without limitation, an executive committee), each of which shall consist of one or more directors. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in Authorized Shares. Adjustmentplace of any such absent or disqualified member. Any such committee, to the extent permitted by applicable law, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it to the extent so authorized Shares availableby the Board of Directors. Unless the Board of Directors provides otherwise, at all meetings of such committee, a majority of the then authorized members of the committee shall constitute a quorum for issuance under the Plan or under an outstanding Awardtransaction of business, and adjustments in Annual Award Limitsthe vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be subjectthe act of the committee. Each committee shall keep regular minutes of its meetings and report to the following provisions:
(a) InBoard of Directors in such manner as the eventBoard of any corporate event or transaction such as a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend, stock split, reverse stock split, split up, spin-off, distribution of stock or property of the Company, combination of Shares, exchange of Shares, dividend in kind, extraordinary cash dividend or any other similar corporate event or transaction (“Corporate Transactions”), the Committee, in order to prevent dilution or enlargement of Participants’ rights under this Plan, shall substitute or adjust, as applicable, (1) the number and kind of Shares that may be issued under this Plan or under particular forms of Awards, (2) the number and kind of Shares subject to outstanding Awards, (3) the Option Price or Grant Price applicable to outstanding Awards, and (4) the Annual Award Limits and other value determinations applicable to outstanding Awards. The Committee, in its discretion, shall determine the methodology or manner of making such substitution or adjustment.
(b) In addition to the adjustments permitted under paragraph (a) above, the Committee, in its sole discretion, may make such other adjustments or modifications in the terms of any Awards that it deems appropriate to reflect any Corporate Transaction, including, but not limited to, modifications of performance goals and changes in the length of Performance Periods, subject to the limitations set forth in Section 14.4.
(c) The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under this Plan.
Article 5. Eligibility and Participation
5.1Eligibility to Receive Awards. Individuals eligible to participate in this Plan include all Employees, Directors and Third-Party Service Providers.
5.2 Participation in the Plan. Subject to the provisions of this Plan, the Committee may from time to time select from all individuals eligible to participatedetermine. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business. Unless otherwise provided in a resolution of the Board of Directors or in rules adopted by the committee, each committee shall conduct its business as nearly as possible in the Plan, those individuals to whom Awardssame manner as is provided in these Bylaws for the Board of Directors.
ARTICLE IV. OFFICERS
Section 4.1. Positions and Election. The officers of the Corporation shall be grantedchosen by the Board of Directors and shall determine,include a chief executive officer (the “Chief Executive Officer”), a president (the “President”), a chief financial officer (the “Chief Financial Officer”), a treasurer (the “Treasurer”), and a secretary (the “Secretary”). The Board of Directors, in its sole discretion, may also elect one or more vice presidents, assistant treasurers, assistant secretaries, and other officers in accordance with these by-laws. Any two or more offices may be held by the nature of any and all terms permissible by law and the amount of each Award.same person.
Article 6. Stock Options
6.1GrantSection 4.2. Term. Each officer of Options. Optionsthe Corporation shall hold office until such officer’s successor is elected and qualified or until such officer’s earlier death, resignation, or removal. Any officer elected or appointed by the Board of Directors may be granted to Participants in such number, and upon such terms, andremoved by the Board of Directors at any time with or without cause by the majority vote of the members of the Board of Directors then in office. The removal of an officer shall be without prejudice to such officer’s contract rights, if any. The election or appointment of an officer shall not of itself create contract rights. Any officer of the Corporation may resign at any time by giving notice of their resignation in writing, or by electronic transmission, to the President or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Should any vacancy occur among the officers, the position shall be filled for the unexpired portion of the term by appointment made by the Board of Directors.
Section 4.3. Chief Executive Officer. The Chief Executive Officer shall, subject to the provisions of these by-laws and the control of the Board of Directors, have general supervision, direction, and control over the business of the Corporation and over its officers. The Chief Executive Officer shall perform all duties incident to the office of the Chief Executive Officer, and any other duties as may be from time to time as shall be determinedassigned to the Chief Executive Officer by the Committee, in its sole discretion. Each grantBoard of an Option shall be evidenced by an Award Agreement which shall specify whether the Option is in the form of a Nonqualified Stock Option or an Incentive Stock Option.
6.2Option Price. The Option Price for each grant of an Option shall be determined by the Committee in its sole discretion and shall be specified in the Award Agreement evidencing such Option; provided , however , the Option Price must be at least equal to 100% of the Fair Market Value of a Share as of the Option’s Grant Date, subject to adjustment as provided for under Section 4.4.
6.3 Term of Option. The term of an Option granted to a Participant shall be determined by the Committee, in its sole discretion; provided, however, no Option shall be exercisable later than the tenth anniversary date of its grant. Notwithstanding the foregoing, for Nonqualified Stock Options granted to Participants outside the United States, the Committee has the authority to grant Nonqualified Stock Options that have a term greater than ten years.
6.4 Exercise of Option. An Option shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shallDirectors, in each instance approve, which terms and restrictions need not be the same for each grant or for each Participant.
6.5Payment of Option Price. An Option shall be exercised by the delivery of a notice of exercise to the Company or an agent designated by the Company in a form specified or accepted by the Committee, or by complying with any alternative procedures that may be authorized by the Committee, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. A condition of the issuance of the Shares as to which an Option shall be exercised shall be the payment of the Option Price. The Option Price of any exercised Option shall be payable to the Company in accordance with one of the following methods:
(a) In cash or its equivalent;
(b) By tendering (either by actual delivery or attestation) previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the Option Price;
(c) By a cashless (broker-assisted) exercise;
(d) By “net settlement” (i.e., the Company withholds Shares with a Fair Market Value equal to the aggregate Option Price in respect of the portion of the Option to be exercised from any Shares that would have otherwise been received by the Participant).
(e) By any combination of (a), (b), (c) and (d); or
(f) Any other method approved or accepted by the Committee in its sole discretion.
Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars or Shares, as applicable.
6.6Special Rules Regarding ISOs. Notwithstanding any provision of the Plan to the contrary, an Option granted in the form of an ISO to a Participant shall becase subject to the following rules:control of the Board of Directors.
(a) Special ISO definitions:
(i) “Parent Corporation” shall mean as of any applicable date a corporation in respect of the Company that is a parent corporation within the meaning of Code Section 424(e).
(ii) “ISO Subsidiary” shall mean as of any applicable date any corporation in respect of the Company that is a subsidiary corporation within the meaning of Code Section 424(f).
(iii) A “10% Owner” is an individual who owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or its Parent Corporation or any ISO Subsidiary.
(b) Eligible employees. An ISO may be granted solely to eligible Employees of the Company, Parent Corporation, or ISO Subsidiary.
(c) Specified as an ISO. An Award Agreement evidencing the grant of an ISO shall specify that such grant is intended to be an ISO.
(d) Option price4.4. President. The Option Price for each grant of an ISOPresident shall report and be determined byresponsible to the Committee in its sole discretion and shall be specified in the Award Agreement; provided, however, the Option Price must be at least equal 100% of the Fair Market Value of a Share as of the ISO’s Grant Date (in the case of 10% owners, the Option Price may not be not less than 110% of such Fair Market Value), subject to adjustment provided for under Section 4.4.
(e) Right to exercise. Any ISO granted to a Participant shall be exercisable during his or her lifetime solely by such Participant.
(f) Exercise period.Chief Executive Officer. The period during which a Participant may exercise an ISO shall not exceed ten years (five years in the case of a Participant who is a 10% owner) from the date on which the ISO was granted.
(g) Termination of employment. In the event a Participant terminates employment due to death or Disability, the Participant (or, in the case of death, the person(s) to whom the Option is transferred by will or the laws of descent and distribution)President shall have the right to exercise the Participant’s ISO award during the period specified in the applicable Award Agreement solely to the extent the Participant had the right to exercise the ISO on the date of his death or Disability;such powers and perform such duties as applicable, provided, however, that such period may not exceed one year from the date of such termination of employment or if shorter, the remaining term of the ISO. In the event a Participant terminates employment for reasons other than death or disability, the Participant shall have the right to exercise the Participant’s ISO during the period specified in the applicable Award Agreement solely to the extent the Participant had the right to exercise the ISO on the date of such termination of employment; provided, however, that such period may not exceed three months from the date of such termination of employment or if shorter, the remaining term of the ISO.
(h) Dollar limitation. To the extent that the aggregate Fair Market Value of (a) the Shares with respect to which Options designated as Incentive Stock Options plus (b) the shares of stock of the Company, Parent Corporation and any ISO Subsidiary with respect to which other Incentive Stock Options are exercisable for the first time by a holder of such Incentive Stock Options during any calendar year under all plans of the Company and ISO Subsidiary exceeds $100,000, such Options shall be treated as Nonqualified Stock Options. For purposes of the preceding sentence, (a) Options shall be taken into account in the order in which they were granted, and (b) the Fair Market Value of the Shares shall be determined as of the time the Option or other incentive stock option is granted.
(i) Duration of plan. No ISO may be granted more than ten years after the earlier of (a) adoption of this Plan by the Board and (b) the Effective Date.
(j) Notification of disqualifying disposition. If any Participant shall make any disposition of Shares issued pursuant to the exercise of an ISO, such Participant shall notify the Company of such disposition within 30 days thereof. The Company shall use such information to determine whether a disqualifying disposition as described in Code section 421(b) has occurred.
(k) Transferability. No ISO may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution; provided , however , that at the discretion of the Committee, an ISO may be transferred to a grantor trust under which Participant making the transfer is the sole beneficiary.
Article 7. Stock Appreciation Rights
7.1Grant of SARs. SARs may be granted to Participants in such number, and upon such terms, and at any time and from time to time may be assigned or delegated to the President by the Board of Directors or the Chief Executive Officer or that are incident to the office of president.
Section 4.5. Secretary. The Secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings, and shall perform like duties for committees of the Board of Directors when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Chairperson or the Chief Executive Officer. The Secretary shall keep in safe custody the seal of the Corporation and have authority to affix the seal to all documents requiring it and attest to the same.
Section 4.6. Chief Financial Officer. The Chief Financial Officer shall be determinedthe principal financial officer of the Corporation and shall have such powers and perform such duties as may be assigned by the Committee, in its sole discretion. Each grantBoard of SARs shall be evidenced by an Award Agreement.Directors, the Chairperson or the Chief Executive Officer.
7.2Grant PriceSection 4.7. Treasurer. The Grant Price for each grantTreasurer of an SARthe Corporation shall be determinedhave the custody of the Corporation’s funds and securities, except as otherwise provided by the CommitteeBoard of Directors, and shall be specifiedkeep full and accurate accounts of receipts and disbursements in records belonging to the Corporation and shall deposit all moneys and other valuable effects in the Award Agreement evidencingname and to the SAR; provided , however , the Grant Price must be at least equal to 100%credit of the Fair Market Value of a ShareCorporation in such depositories as of the Grant Date, subject to adjustment as provided for under Section 4.4.
7.3Term of SAR. The term of an SAR granted to a Participant shallmay be determined by the Committee, in its sole discretion; provided, however, no SAR shall be exercisable later than the tenth anniversary date of its grant. Notwithstanding the foregoing, for SARs granted to Participants outside the United States, the Committee has the authority to grant SARs that have a term greater than ten years.
7.4Exercise of SAR. An SAR shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which terms and restrictions need not be the same for each grant or for each Participant.
7.5Notice of Exercise. An SAR shall be exercised by the delivery of a notice of exercise to the Company or an agent designated by the Company in a form specified or acceptedBoard of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Committee,Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer and the President and the directors, at the regular meetings of the Board of Directors, or by complying with any alternative procedures thatwhenever they may be authorized byrequire it, an account of all of the Committee, setting forthTreasurer’s transactions as Treasurer and of the numberfinancial condition of Shares with respect to which the SAR is to be exercised.Corporation.
7.6SettlementSection 4.8. Other Officers. Such other officers as the Board of SARs. Upon the exercise of an SAR, pursuant to a notice of exercise properly completedDirectors may choose shall perform such duties and submitted to the Company in accordance with Section 7.5, a Participant shall be entitled to receive payment from the Company in an amount equal to the product of (a) and (b) below:
(a) The excess of the Fair Market Value of a Share on the date of exercise over the Grant Price.
(b) The number of Shares with respect to which the SAR is exercised.
Payment shall be made in cash, Shares or a combination thereofhave such powers as provided for under the applicable Award Agreement.
Article 8. Restricted Stock
8.1Grant of Restricted Stock. Restricted Stock may be granted to Participants in such number, and upon such terms, and at any time and from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.
Section 4.9. Duties of Officers May Be Delegated. In case any officer is absent, or for any other reason that the Board of Directors may deem sufficient, the Chief Executive Officer or the President or the Board of Directors may delegate for the time being the powers or duties of such officer to any other officer or to any director.
ARTICLE V. STOCK
Section 5.1. Stock Certificates. Shares of the Corporation’s stock may be certified or uncertified, as provided under Delaware law, and shall be determined byentered in the Committee, in its sole discretion. Each grant of Restricted Stock shall be evidenced by an Award Agreement.
8.2Nature of Restrictions. Each grant of Restricted Stock shall be subject to a Restriction Period that shall lapse upon the satisfaction of such conditions and restrictions as are determined by the Committee in its sole discretion and set forth in an applicable Award Agreement. Such conditions or restrictions may include, without limitation, one or morebooks of the following:
(a) Restrictions based upon the achievement of specific performance goals;
(b) Time-based restrictions on vesting following the attainment of the performance goals;
(c) Time-based restrictions;
(d) Restrictions under applicable lawsCorporation and restrictions under the requirements of any stock exchange or market on which such Sharesregistered as they are listed or traded; and
(e) A requirement that a Participant pay a stipulated purchase price for each Share of Restricted Stock.
8.3Issuance of Shares. To the extent deemed appropriate by the Committee, the Company may retain the certificates representing Shares of Restricted Stock in the Company’s possession until such time as all conditions or restrictions applicable to such Shares have been satisfied or lapse. Shares of Restricted Stock covered by each Restricted Stock grant shall become freely transferable by the Participant after all conditions and restrictions applicable to such Shares have been satisfied or lapsed (including satisfaction of any applicable tax withholding obligations).
8.4 Certificate Legend. In addition to any legends placed on certificates pursuant to Section 8.2, each certificate representing Shares of Restricted Stock granted pursuant to this Plan may bear a legend such as the following or as otherwise determined by the Committee in its sole discretion: The sale or transfer ofissued. Shares of stock represented by this certificate, whether voluntary, involuntarycertificates shall be in such form as shall be approved by the Board of Directors. The certificates representing shares of stock shall be signed by, or by operation of law, is subject to certain restrictions on transfer as set forth in the Dakota Gold Corp. 2022name of, the Corporation by any two authorized officers of the Corporation. Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who signed or whose facsimile signature has been placed upon a certificate shall have ceased to be an officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
Section 5.2. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
Section 5.3. Stockholder Addresses. It shall be the duty of each stockholder to notify the Corporation of its address.
Section 5.4. Transfers of Stock Incentive Plan,. Stock of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of stock shall be made on the books administered by or on behalf of the Corporation only by the direction of the registered holder thereof or such person’s attorney, lawfully constituted in writing, and, in the associated Award Agreement. A copycase of this Plancertificated shares, upon the surrender to the Corporation or its transfer agent or other designated agent of the certificate thereof, which shall be cancelled before a new certificate or uncertificated shares shall be issued. The Board of Directors may make further rules and regulations concerning the transfer and registration of shares of stock and, in the case of certificated shares, the certificates representing them.
Section 5.5. Transfer Agents and Registrars. The Board of Directors may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars.
Section 5.6. Lost, Stolen, Destroyed or Mutilated Certificates. The Corporation may direct a new stock certificate or uncertificated shares to be issued in the place of any certificate theretofore issued by it alleged to have been lost, stolen, destroyed or mutilated upon the making of an affidavit of that fact by the owner of the allegedly lost, stolen, or destroyed certificate. When authorizing such Award Agreementissue of a new certificate or uncertificated shares, the Board of Directors or the Secretary may, in its discretion and as a condition precedent to the issuance thereof, require the owner of the lost, stolen, or destroyed certificate, or the owner’s legal representative to give the Corporation a bond sufficient to indemnify it against any claim that may be obtained from Dakota Gold Corp.
8.5Voting and Dividend Rights. Unless otherwise determined bymade against the Committee and set forth in a Participant’s applicable Award Agreement, to the extent permitted or required by law, as determined by the Committee, a Participant holding Shares of Restricted Stock granted hereunder shall be granted the right to exercise full voting rightsCorporation with respect to those Shares and the rightcertificate alleged to receive dividends declared on those Shares duringhave been lost, stolen, or destroyed or the Periodissuance of Restriction. Notwithstandingsuch new certificate or uncertificated shares.
ARTICLE VI. GENERAL PROVISIONS
Section 6.1. Fiscal Year. The fiscal year of the foregoing, the Committee may require that any dividends on such Shares of Restricted StockCorporation shall be automatically deferredfixed by resolution of the Board of Directors and reinvested in additional Restricted Stock subject tomay be changed by the Board of Directors.
Section 6.2. Corporate Seal. The Corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board of Directors, and may use the same restrictions on vesting asby causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
Section 6.3. Checks, Notes, Drafts, Etc. All checks, notes, drafts, or other orders for the underlying Award, or may require that dividends and other distributions on Restricted Stockpayment of money of the Corporation shall be paid tosigned, endorsed, or accepted in the Company for the accountname of the Participant and held pending and subject to the same restrictions on vestingCorporation by such officer, officers, person, or persons as the underlying Award; provided, however, that to the extent that any dividends are deferred, reinvested or otherwise not paid when such dividends would otherwise normally be paid, (i) all terms and conditions for such delayed payment shall be included in the Agreement, and (ii) such deferral, reinvestment or delay in payment of the dividends shall only be allowed to the extent it complies with, or is exempt from, the requirements of Code section 409A.
Article 9. Restricted Stock Units
9.1Grant of Restricted Stock Units. Restricted Stock Units may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee, in its sole discretion. A grant of a Restricted Stock Unit or Restricted Stock Units shall not represent the grant of Shares but shall represent a promise to deliver a corresponding number of Shares or the value of each Share based upon the completion of service, performance conditions, or such other terms and conditions as specified in the applicable Award Agreement over the Restriction Period. Each grant of Restricted Stock Units shall be evidenced by an Award Agreement.
9.2 Nature of Restrictions. Each grant of Restricted Stock Units shall be subject to a Restriction Period that shall lapse upon the satisfaction of such conditions and restrictions as are determined by the Committee in its sole discretion and set forth in an applicable Award Agreement. Such conditions or restrictions may include, without limitation, one or more of the following:
(a) Restrictions based upon the achievement of specific performance goals;
(b) Time-based restrictions on vesting following the attainment of the performance goals;
(c) Time-based restrictions;
(d) Restrictions under applicable laws and restrictions under the requirements of any stock exchange or market on which such Shares underlying the Restricted Stock Unit are listed or traded; and
(e) A requirement that a Participant pay a stipulated purchase price for each Restricted Stock Unit.
9.3Voting Rights. A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder or the Shares corresponding to any Restricted Stock Units granted hereunder.
9.4 Settlement and Payment Restricted Stock Units. Unless otherwise elected by the Participant or otherwise provided for in the Award Agreement, Restricted Stock Units shall be settled upon the date such Restricted Stock Units vest. Such settlement may be made in Shares, cash or a combination thereof, as specified in the Award Agreement.
Article 10. Performance Shares
10.1Grant of Performance Shares. Performance Shares may be granted to Participants in such number, and upon such terms and at any time and from time to time as shall be determined by the Committee, in its sole discretion. Each grant of Performance Shares shall be evidenced by an Award Agreement.
10.2 Value of Performance Shares. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the Grant Date. The Committee shall set performance goals in its discretion that, depending on the extent to which they are met over the specified Performance Period, shall determine the number of Performance Shares that shall be paid to a Participant.
10.3Earning of Performance Shares. After the applicable Performance Period has ended, the number of Performance Shares earned by the Participant over the Performance Period shall be determined as a function of the extent to which the applicable corresponding performance goals have been achieved. This determination shall be made solely by the Committee.
10.4Form and Timing of Payment of Performance Shares. The Committee shall pay at the close of the applicable Performance Period, or as soon as practicable thereafter, any earned Performance Shares in the form of cash or in Shares or in a combination thereof, as specified in a Participant’s applicable Award Agreement. Any Shares paid to a Participant under this Section 10.4 may be subject to any restrictions deemed appropriate by the Committee.
Article 11. Performance Units
11.1Grant of Performance Units. Subject to the terms and provisions of this Plan, Performance Units may be granted to a Participant in such number, and upon such terms and at any time and from time to time as shall be determined by the Committee, in its sole discretion. Each grant of Performance Units shall be evidenced by an Award Agreement.
11.2Value of Performance Units. Each Performance Unit shall have an initial notional value equal to a dollar amount determined by the Committee, in its sole discretion. The Committee shall set performance goals in its discretion that, depending on the extent to which they are met over the specified Performance Period, will determine the number of Performance Units that shall be settled and paid to the Participant.
11.3Earning of Performance Units. After the applicable Performance Period has ended, the number of Performance Units earned by the Participant over the Performance Period shall be determined as a function of the extent to which the applicable corresponding performance goals have been achieved. This determination shall be made solely by the Committee.
11.4Form and Timing of Payment of Performance Units. The Committee shall pay at the close of the applicable Performance Period, or as soon as practicable thereafter, any earned Performance Units in the form of cash or in Shares or in a combination thereof, as specified in a Participant’s applicable Award Agreement. Any Shares paid to a Participant under this Section 11.4 may be subject to any restrictions deemed appropriate by the Committee.
Article 12. Other Stock-Based Awards and Cash-Based Awards
12.1Grant of Other Stock-Based Awards and Cash-Based Awards.
(a) The Committee may grant Other Stock-Based Awards not otherwise described by the terms of this Plan, including, but not limited to, the grant or offer for sale of unrestricted Shares and the grant of deferred Shares or deferred Share units, in such amounts and subject to such terms and conditions, as the Committee shall determine, in its sole discretion. Such Awards may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares.
(b) The Committee, at any time and from time to time may grant Cash-Based Awardsbe designated by the Board of Directors or by an officer or officers authorized by the Board of Directors to a Participant inmake such amounts and upon such terms as the Committee shall determine, in its sole discretion.designation.
(c) Each grantSection 6.4. Execution of Other Stock-Based AwardsCorporate Contracts and Cash-Based AwardsInstruments. The Board of Directors, except as otherwise provided in these Bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall be evidencedhave any power or authority to bind the Corporation by an Award Agreement.any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
12.2ValueSection 6.5. Books and Records. Any records administered by or on behalf of Other Stock-Based Awardsthe Corporation in the regular course of its business, including its stock ledger, books of account, and Cash-Based Awards.
(a) Each Other Stock-Based Award shallminute books, may be expressed in terms of Sharesmaintained on any information storage device, method, or units based on Shares, as determined byone or more electronic networks or databases (including one or more distributed electronic networks or databases); provided that the Committee, in its sole discretion.
(b) Each Cash-Based Award shall specifyrecords so kept can be converted into clearly legible paper form within a payment amount or payment range as determined by the Committee, in its sole discretion. If the Committee exercises its discretion to establish performance goals, the value of Cash-Based Awards that shall be paid to the Participant will depend on the extent to which such performance goals are met.
12.3Payment of Other Stock-Based Awardsreasonable time, and, Cash-Based Awards. Payment, if any, with respect to Cash-Based Awards and Other Stock-Based Award shall be made in accordancethe stock ledger, the records so kept comply with the termsSection 224 of the DGCL. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to applicable Award Agreement, in cash, Shares or a combination of both as determined by the Committee in its sole discretion.law.
Article 13. Restrictions on TransferabilitySection 6.6. Construction; Definitions. Unless the context requires otherwise, the general provisions, rules of Awardsconstruction, and Shares
13.1Transferabilitydefinitions in the DGCL shall govern the construction of Awards. Except as provided in Section 13.2, during a Participant’s lifetime, Options and SARs shall be exercisable only bythese Bylaws. Without limiting the Participant. Awards shall not be transferable other than by will or the laws of descent and distribution or, subject to the consent of the Committee, pursuant to a domestic relations order entered into by a court of competent jurisdiction; no Awards shall be subject, in whole or in part, to attachment, execution or levy of any kind; and any purported transfer in violationgenerality of this Section 13.1 shall be null and void. The Committee may establish such procedures as it deems appropriate for a Participant to designate a beneficiary to whom any amounts payable or Shares deliverable inprovision, the event of, or following, the Participant’s death may be provided.
13.2 Committee Action. Except as provided in Section 6.6(k), the Committee may, in its discretion, determine that notwithstanding Section 13.1, any or all Awards shall be transferable, without compensation to the transferor, to and exercisable by such transferees, and subject to such terms and conditions, as the Committee may deem appropriate; provided , however , no Award may be transferred for value without shareholder approval.
13.3 Restrictions on Share Transferability. The Committee may impose such restrictions on any Shares acquired by a Participant under the Plan as it may deem advisable, including, without limitation, minimum holding period requirements, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed or traded or under any blue sky or state securities laws applicable to such Shares.
Article 14. Reserved
Article 15. Nonemployee Director Awards
15.1Awards to Nonemployee Directors.The Board or Committee shall determine and approve all Awards to Nonemployee Directors. The terms and conditions of any grant of any Award to a Nonemployee Director shall be set forth in an Award Agreement.
15.2 Awards in Lieu of Fees. The Board or Committee may permit a Nonemployee Director the opportunity to receive an Award in lieu of payment of all or a portion of future director fees (including but not limited to cash retainer fees and meeting fees) or other type of Awards pursuant to such terms and conditions as the Board or Committee may prescribe and set forth in an applicable sub-plan or Award Agreement, provided that if the Nonemployee Director is permitted to elect an Award that constitutes deferred compensation that is subject to Code Section 409A, such election shall be made no later than the applicable deadline for such an election under Code Section 409A.
Article 16. Effect of a Change in Control
Notwithstanding any other provision of this Plan to the contrary, the provisions of this Article 16 shall apply in the event of a Change in Control, unless otherwise determined by the Committee in its sole discretion, and set forth in the applicable Award Agreement:
(a) Outstanding Options and SARs. Upon a Change in Control, a Participant’s then-outstanding Options and SARs that are not vested shall immediately become fully vested (and, to the extent applicable, all performance conditions shall be deemed satisfied) and exercisable over the exercise period set forth in the applicable Award Agreement.
(b) Outstanding Awards, other than Options and SARs, Subject Solely to a Service Condition. Upon a Change in Control, a Participant’s then-outstanding Awards, other than Options and SARs, that are not vested and as to which vesting depends solely on the satisfaction of a service obligation by the Participant to the Company or any Subsidiary shall become fully vested and shall be settled in cash, Shares or a combination thereof as provided for under the applicable Award Agreement as soon as practicable following such Change in Control.
(c) Outstanding Awards, other than Options and SARs, Subject to a Performance Condition. Upon a Change in Control, a Participant’s then-outstanding Awards, other than Options and SARs, that are not vested and as to which vesting depends upon the satisfaction of one or more performance conditions shall immediately vest and all performance conditions shall be deemed satisfied as if target performance was achieved and shall be settled in cash, Shares or a combination thereof as provided for under the applicable Award Agreement as soon as practicable following such Change in Control; notwithstanding that the applicable performance period, retention period or other restrictions and conditions have not been completed or satisfied.
(d) Other Awards. Upon a Change in Control, the treatment of a Participant’s then-outstanding Awards that are not vested and that are not subject to paragraphs (a), (b) or (c) above shall be determined in accordance with the applicable Award Agreements or, if not specified in the Award Agreements, shall be determined by the Committee.
Article 17. Dividend Equivalents
The Committee may grant Dividend Equivalents to a Participant based on the dividends declared on Shares that are subject to any Award granted to the Participant, except for Options, SARs and Restricted Stock, with such Dividend Equivalents credited to the Participant as of the applicable dividend payment dates that occur during a period determined by the Committee. Such Dividend Equivalents shall be converted to and paid in cash or additional Shares or Awards by such formula and at such time and subject to such limitations as may be determined by the Committee; provided that in the case of an Award as to which vesting depends upon the satisfaction of one or more performance conditions, the right to Dividend Equivalents shall be subject to the same restrictions on vesting and payout as the underlying Award.
Article 18. Beneficiary Designation
Each Participant under this Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Plan is to be paid in case of his death before he receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such beneficiary designation, benefits remaining unpaid or rights remaining unexercised at the Participant’s death shall be paid to or exercised by the Participant’s executor, administrator or legal representative.
Article 19. Rights of Participants
19.1Employment. Nothing in this Plan or an Award Agreement shall (a) interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s employment with the Company or any Subsidiary at any time or for any reason not prohibited by law or (b) confer upon any Participant any right to continue his employment or service as a Director or Third-Party Service Provider for any specified period of time. Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company or any Subsidiary and, accordingly, subject to Articles 3 and 20, this Plan and the benefits hereunder may be amended or terminated at any time in the sole and exclusive discretion of the Board without giving rise to any liability on the part of the Company, any Subsidiary, the Committee or the Board.
19.2Participation. No individual shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award.
19.3Rights as a Shareholder. Except as otherwise provided herein, a Participant shall have none of the rights of a shareholder with respect to Shares covered by any Award until the Participant becomes the record holder of such Shares.
Article 20. Amendment and Termination
20.1Amendment and Termination of the Plan and Awards.
(a) Subject to subparagraphs (b) and (c) of this Section 20.1 and Section 20.3 of the Plan, the Board may at any time amend or terminate the Plan or amend or terminate any outstanding Award.
(b) Except as provided for in Section 4.4, the terms of an outstanding Award may not be amended, without prior shareholder approval, to:
(i) reduce the Option Price of an outstanding Option or to reduce the Grant Price of an outstanding SAR,
(ii) cancel an outstanding Option or SAR in exchange for other Options or SARs with an Option Price or Grant Price, as applicable, that is less than the Option Price of the cancelled Option or the Grant Price of the cancelled SAR, as applicable, or
(iii) cancel an outstanding Option with an Option Price that is less than the Fair Market Value of a Share on the date of cancellation or cancel an outstanding SAR with a Grant Price that is less than the Fair Market Value of a Share on the date of cancellation in exchange for cash or another Award.
(c) Notwithstanding the foregoing, no amendment of this Plan shall be made without shareholder approval if shareholder approval is required pursuant to rules promulgated by any stock exchange or quotation system on which Shares are listed or quoted or by applicable U.S. state corporate laws or regulations, applicable U.S. federal laws or regulations and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.
20.2Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. Subject to Section 14.4, the Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4.4) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under this Plan. By accepting an Award under this Plan, a Participant agrees to any adjustment to the Award made pursuant to this Section 20.2 without further consideration or action.
20.3 Awards Previously Granted. Notwithstanding any other provision of this Plan to the contrary, other than Sections 20.2, 20.4 and 22.14, no termination or amendment of this Plan or an Award Agreement shall adversely affect in any material way any Award previously granted under this Plan, without the written consent of the Participant holding such Award.
20.4 Amendment to Conform to Law. Notwithstanding any other provision of this Plan to the contrary, the Committee may amend the Plan or an Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan or an Award Agreement to any law relating to plans of this or similar nature, and to the administrative regulations and rulings promulgated thereunder. By accepting an Award under this Plan, a Participant agrees to any amendment made pursuant to this Section 20.4 to the Plan and any Award without further consideration or action.
Article 21. Tax Withholding
21.1Minimum Tax Withholding. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, the minimum statutory amount to satisfy applicable federal, state and local tax withholding requirements, domestic or foreign, with respect to any taxable event arising as a result of this Plan but in no event shall such deduction or withholding or remittance exceed the minimum statutory withholding requirements.
21.2 Share Withholding. With respect to withholding required upon the exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock, upon the settlement of Restricted Stock Units, or upon the achievement of performance goals related to Performance Shares, or any other taxable event arising as a result of an Award granted hereunder (collectively and individually referred to as a “Share Payment”), a Participant may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold from a Share Payment thesingular number of Shares having a Fair Market Value on the date the withholding is to be determined equal to the minimum statutory withholding requirement but in no event shall such withholding exceed the minimum statutory withholding requirement. All such elections shall be irrevocable, made in writing, and signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.
Article 22. General Provisions
22.1 Forfeiture Events.
(a) In addition to the forfeiture events specified in Section 22.1(b), the Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting of an Award.
(b) A Participant’s termination of employment for Cause shall result in the forfeiture of the Participant’s outstanding Awards in accordance with the following:
(i) Any outstanding and nonvested Options, SARs, Restricted Stock, RSUs, Performance Shares, Performance Units, Cash-Based Awards and Other Stock-Based Awards granted to the Participant shall be forfeited as of the date immediately preceding the Participant’s Termination of Employment; and
(ii) Any vested and unexercised Options and SARs, vested but not settled RSUs, earned but not settled Performance Shares or Performance Units, and earned and/or vested Cash-Based Awards and Other Stock-Based Awards granted to the Participant shall be forfeited as of the date immediately preceding the Participant’s Termination of Employment.
22.2Legend. The certificates for Shares may include any legend that the Committee deems appropriate to reflect any restrictions on transfer of such Shares.
22.3Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine,includes the plural, shall includethe plural number includes the singular, and the singular shall include the plural.term “person” includes both a Corporation and a natural person.
22.4SeverabilitySection 6.7. Amendments. The Bylaws of the Corporation may be adopted, amended or repealed by the stockholders entitled to vote; provided, however, that the Corporation may, in its Certificate of Incorporation, confer the power to adopt, amend or repeal these Bylaws upon the Board of Directors. The fact that such power has been so conferred upon the Board of Directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal Bylaws.
Section 6.8. Conflicts with Certificate of Incorporation. In the event any provision of this Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
22.5Requirements of Law.The granting of Awards and the issuance of Shares under this Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
22.6Delivery of Title.The Company shall have no obligation to issue or deliver evidence of title for Shares issued under this Plan prior to:
(a) Obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and
(b) Completion of any registration or other qualification of the Shares under any applicable national or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable.
22.7Inability to Obtain Authority.The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
22.8Investment Representations.The Committee may require any individual receiving Shares pursuant to an Award under this Plan to represent and warrant in writing that the individual is acquiring the Shares for investment and without any present intention to sell or distribute such Shares.
22.9Employees Based Outside of the United States. Notwithstanding any provision of this Plan to the contrary, in order to comply with the laws in other countries in which the Company or any Subsidiaries operate or have Employees, Directors or Third-Party Service Providers, the Committee, in its sole discretion, shall have the power and authority to:
(a) Determine which Subsidiaries shall be covered by this Plan;
(b) Determine which Employees, Directors or Third-Party Service Providers outside the United States are eligible to participate in this Plan;
(c) Modify the terms and conditions of any Award granted to Employees, Directors or Third-Party Service Providers outside the United States to comply with applicable foreign laws;
(d) Establish sub-plans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable. Any sub-plans and modifications to Plan terms and procedures established under this Section 22.9 by the Committee shall be attached to this Plan document as appendices; and
(e) Take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals.
Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate applicable law.
22.10Uncertificated Shares. To the extent that this Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.
22.11Unfunded Plan.Participants shall have no right, title or interest whatsoever in or to any investments that the Company or any Subsidiaries may make to aid it in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative or any other individual. To the extent that any individual acquires a right to receive payments from the Company or any Subsidiary under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company or the Subsidiary, as the case may be. All payments to be made hereunder shall be paid from the general funds of the Company, or the Subsidiary, as the case may be, and no special or separate fund shall be established, and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in this Plan.
22.12No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to this Plan or any Award. The Committee shall determine whether cash, Awards or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.
22.13Retirement and Welfare Plans. Neither Awards made under this Plan nor Shares or cash paid pursuant to such Awards may be included as “compensation” for purposes of computing the benefits payable to any Participant under the Company’s or any Subsidiary’s retirement plans (both qualified and nonqualified) or welfare benefit plans unless such other plan expressly provides that such compensation shall be taken into account in computing a Participant’s benefit.
22.14Deferred Compensation. To the extent applicable, this Plan and all Awards granted hereunder are intended to comply with or be exempt from Code section 409A and will be interpreted in a manner intended to comply with Code section 409A. To the extent there is a conflict between the provisions of the Plan relating to compliance with Code section 409ACorporation’s Certificate of Incorporation and the provisions of any Agreement issued under the Plan,these Bylaws, the provisions of the Plan control. Moreover, any discretionary authority that the Committee may have pursuant to the PlanCertificate of Incorporation shall not be applicable to an Award not exempt from Code govern.
ARTICLE VII. INDEMNITY
Section 409A to the extent such discretionary authority would conflict with Code section 409A. In addition, to the extent required to avoid a violation of the applicable rules under Code section 409A by reason of Code section 409A(a)(2)(B)(i), any payment under an Award shall be delayed until the earliest date of payment that will result in compliance with the rules of Code section 409A(a)(2)(B)(i) (regarding the required six-month delay for distributions to specified employees that are related to a separation from service)7.1. Indemnification. To the extent that an Award not exempt from Code Section 409A provides for payment upon the recipient’s termination of employment as an employee or cessation of service as a Non-Employee Director or Third-Party Service Provider, such Award shall be deemed to require payment upon the individual’s “separation from service” within the meaning of Code section 409A. In the event that an Award shall be deemed not to comply with Code section 409A, then neither the Company, the Board of Directors, the Committee nor its or their designees or agents, nor any of their affiliates, assigns or successors (each a “protected party”) shall be liable to any Award recipient or other person for actions, inactions, decisions, indecisions or any other role in relation to the Plan by a protected party if made or undertaken in good faith or in reliance on the advice of counsel (who may be counsel for the Company), or made or undertaken by someone other than a protected party.
22.15Nonexclusivity of this Plan. The adoption of this Plan shall not be construed as creating any limitations on the power of the Board or Committee to adopt such other compensation arrangements as it may deem desirable for any Participant.
22.16No Constraint on Corporate Action. Nothing in this Plan shall be construed to: (i) limit, impair, or otherwise affect the Company’s or a Subsidiary’s right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell or transfer all or any part of its business or assets; or, (ii) limit the right or power of the Company or a Subsidiary to take any action that such entity deems to be necessary or appropriate.
22.17Governing Law. The Plan and each Award Agreement shall be governed by the laws of the State of Nevada excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan to the substantive law of another jurisdiction.
22.18Delivery and Execution of Electronic Documents. To thefullest extent permitted by applicable law, the Company may (i) deliver by email or other electronic means (including posting on a website maintained by the Company or by a third party under contract with the Company) all documents relating to the Plan orCorporation shall indemnify and hold harmless any Award thereunder (including without limitation, prospectuses required by the Commission) and all other documents that the Company is required to deliver to its security holders (including without limitation, annual reports and proxy statements) and (ii) permit Participant’s to electronically execute applicable Plan documents (including, but not limited to, Award Agreements) in a manner prescribed to the Committee.
22.19No Representations or Warranties Regarding Tax Effect. Notwithstanding any provision of the Plan to the contrary, the Company, Subsidiaries, the Board and the Committee neither represent nor warrant the tax treatment under any federal, state, local or foreign laws and regulations thereunder (individually and collectively referred to as the “Tax Laws”) of any Award granted or any amounts paid to any Participant under the Plan including, but not limited to, when and to what extent such Awards or amounts may be subject to tax, penalties and interest under the Tax Laws.
22.20 Indemnification.Subject to requirements of the laws of the state of Nevada, each individualperson who is or shall have beenwas made or threatened to be made a member of the Board,party or a Committee appointed by the Board, or an officer of the Company to whom authority was delegatedit otherwise involved in accordance with Article 3, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit or proceeding, to which hewhether civil, criminal, administrative or she may be a party or in which he or she may be involvedinvestigative (an “Action”), by reason of any action takenthe fact that such person, or failurea person for whom such person is the legal representative, is or was a director or officer agent of the Corporation or, while a director or officer, is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to actemployee benefit plans (each, an “Indemnified Person”), against all liability and loss suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement or other disposition that the Indemnified Person actually and reasonably incurs in connection with the Action and shall reimburse each such person for all legal fees and expenses reasonably incurred by such person in seeking to enforce its rights to indemnification under this PlanArticle (by means of legal action or otherwise). Notwithstanding the preceding sentence, the Corporation shall be required to indemnify a person in connection with an Action (or part thereof) commenced by such person only if the commencement of such Action (or part thereof) by the person was authorized in the specific case by the Board of Directors.
Section 7.2. Advancement of Expenses. Upon written request from an Indemnified Person, the Corporation shall pay the expenses (including attorneys’ fees) actually and against and fromreasonably incurred by such Indemnified Person in connection with any and all amounts paidAction in advance of its final disposition upon receipt of an undertaking by him or heron behalf of the Indemnified Person to repay such amount if it shall ultimately be determined that they are not entitled to be indemnified by the Corporation as authorized in settlement thereof, with the Company’s approval, or paid by him or herthis Article VII.
Section 7.3. Non-Exclusivity of Rights. The rights contained in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his/her own behalf, unless such loss, cost, liability or expense is a result of his/her own willful misconduct or except as expressly provided by statute. The foregoing right of indemnificationthis Article VII shall not be exclusive of any other rights of indemnification toright which such individualsperson may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these Bylaws, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in their official capacity and as to action in another capacity while holding office. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees, or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL.
Section 7.4. Other Indemnification. The Corporation’s obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, employee, or agent of another Corporation, partnership, joint venture, trust, enterprise, or nonprofit entity shall be entitledreduced by any amount such person may collect as indemnification from such other Corporation, partnership, joint venture, trust, enterprise, or nonprofit entity.
Section 7.5. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of Corporation as a director, officer, employee, or agent of another Corporation, partnership, joint venture, trust, enterprise, or nonprofit entity against any liability asserted against them and incurred by them in any such capacity, or arising out of their status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the Company’s Articlesprovisions of the DGCL.
Section 7.6. Repeal, Amendment, or Modification. Neither the amendment, modification or repeal of this Article nor the adoption of any provision in these Bylaws inconsistent with this Article shall adversely affect any right or protection of an Indemnified Person with respect to any act or omission that occurred prior to the time of such amendment, modification, repeal or adoption.
ARTICLE VIII. EXCLUSIVE FORUM
Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner of stock) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of, or claim based on, breach of a fiduciary duty owed by, or other wrongdoing by, any director, officer, or other employee of the Corporation to the Corporation or the Corporation’s stockholders (including a beneficial owner of stock), (iii) any action asserting a claim against the Corporation arising pursuant to any provision of the DGCL, the Corporation’s Certificate of Incorporation or these Bylaws, or (iv) any action to interpret, apply, enforce or determine the validity of the Corporation’s Certificate of Incorporation or Bylaws, asor (v) any action asserting a claim against the Corporation governed by the internal affairs doctrine. If any action the subject matter of lawwhich is within the scope of this Article VIII is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to: (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce this Article VIII (an “Enforcement Action”); and (ii) having service of process made upon such stockholder in any such Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder. Any person or entity purchasing or otherwise oracquiring any power thatinterest in shares of stock of the Company mayCorporation shall be deemed to have notice of and consented to indemnify them or hold them harmless.the provisions of this Article VIII.
22.21 Successors. All obligations of the Company under this Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.Adopted: [●], 2024
| DAKOTA GOLD CORP. Form of Proxy – Annual Meeting to be held on August 22, 2022 United Kingdom Building 350 – 409 Granville St Vancouver, BC V6C 1T2 Appointment of Proxyholder I/We being the undersigned holder(s) of Dakota Gold Corp. hereby appoint Robert Quartermain or failing this person, Shawn Campbell or failing this person, Daniel Cherniak (collectively, the “Management Nominees”). OR Print the name of the person you are appointing if this person is someone other than the Management Nominees listed herein: as my/our proxyholder with full power of substitution and to attend, act, and to vote for and on behalf of the holder in accordance with the following direction (or if no directions have been given, as the proxyholder sees fit) and all other matters that may properly come before the Annual Meeting of Dakota Gold Corp. to be held at 106 Glendale Drive, Suite A, Lead, South Dakota at 8:00 a.m. Mountain Time or at any adjournment thereof. 1. Election of Directors. For Withhold For Withhold For Withhold a. Robert Quartermain b. Stephen O’Rourke c. Jonathan Awde d. Gerald Aberle e. Jennifer S. Grafton f. Amy K. Koenig 2. Ratification of the Appointment of Independent Registered Accounting Firm. To ratify the appointment of Ham, Langston & Brezina, L.L.P. (“Ham, Langston & Brezina”) to serve as independent registered public accounting firm for the fiscal year ending March 31, 2023 as more particularly described in the proxy materials. For Against Abstain 3. Approval of the 2022 Stock Incentive Plan. To approve the Dakota Gold Corp. 2022 Stock Incentive Plan as more particularly described in the proxy materials. For Against Abstain Authorized Signature(s) – This section must be completed for your instructions to be executed. I/we authorize you to act in accordance with my/our instructions set out above. I/We hereby revoke any proxy previously given with respect to the Meeting. If no voting instructions are indicated above, this Proxy will be voted as recommended by Management. Signature(s): Date / / MM / DD / YY
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| This form of proxy is solicited by and on behalf of Management. Proxies must be received by 8:00 a.m., Mountain Time, on August 18, 2022. Notes to Proxy 1. Each holder has the right to appoint a person, who need not be a holder, to attend and represent him or her at the Annual Meeting. If you wish to appoint a person other than the persons whose names are printed herein, please insert the name of your chosen proxyholder in the space provided on the reverse. 2. If the securities are registered in the name of more than one holder (for example, joint ownership, trustees, executors, etc.) then all of the registered owners must sign this proxy in the space provided on the reverse. If you are voting on behalf of a corporation or another individual, you may be required to provide documentation evidencing your power to sign this proxy with signing capacity stated. 3. This proxy should be signed in the exact manner as the name appears on the proxy. 4. If this proxy is not dated, it will be deemed to bear the date on which it is mailed by Management to the holder. 5. The securities represented by this proxy will be voted as directed by the holder; however, if such a direction is not made in respect of any matter, this proxy will be voted as recommended by Management. 6. The securities represented by this proxy will be voted or withheld from voting, in accordance with the instructions of the holder, on any ballot that may be called for and, if the holder has specified a choice with respect to any matter to be acted on, the securities will be voted accordingly. 7. This proxy confers discretionary authority in respect of amendments to matters identified in the Notice of Meeting or other matters that may properly come before the meeting. 8. This proxy should be read in conjunction with the accompanying documentation provided by Management. INSTEAD OF MAILING THIS PROXY, YOU MAY SUBMIT YOUR PROXY USING SECURE ONLINE VOTING AVAILABLE ANYTIME: To Vote Your Proxy Online please visit: https://login.odysseytrust.com/pxlogin You will require the CONTROL NUMBER printed with your address to the right. If you vote by Internet, do not mail this proxy. To request the receipt of future documents via email and/or to sign up for Securityholder Online services, you may contact Odyssey Trust Company at www.odysseycontact.com. Voting by mail may be the only method for securities held in the name of a corporation or securities being voted on behalf of another individual. A return envelope has been enclosed for voting by mail.
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