Lakewood, COColorado 80401
(877) 705-9357
NOTICE OF CONSENT SOLICITATION
To our Stockholders:be held December 16, 2013
Dear Pershing Gold Corporation Stockholder:
NOTICE IS HEREBY GIVEN that an Annual and Special Meeting of the 2013 Equity Incentive Plan (the “2013 Plan”)Stockholders of Pershing Gold Corporation a Nevada corporation (the “Company” or “us” or “we” or “our”(“Pershing Gold”). On February 12, will be held on December 16, 2013 at 9:00 a.m., local time, at the offices of Davis Graham & Stubbs LLP located at 1550 Seventeenth Street, Suite 500, Denver, Colorado 80202. The Annual and Special Meeting will be held for the following purposes:
1.To elect three (3) directors to hold office until their successors are elected and qualified;
2.To approve, in an advisory (non-binding) vote, the compensation of the Company’s board of directors approvednamed executive officers (“say-on-pay”);
3.To conduct an advisory (non-binding) vote regarding the 2013 Plan, and the 2013 Plan became effective on that date. The Company’s board of directors has deemed it advisable to seek stockholder approvalfrequency of the 2013 Plan, as required under applicable lawsay-on-pay votes;
4.To consider and vote upon a proposal to preserve the intended tax consequences of the 2013 Plan and as otherwise deemed advisable by the board, and has decided to seek the written consent of stockholders through a consent solicitation process rather than holding a special meeting of stockholders, in order to eliminate the costs and management time involved in holding a special meeting. The 2013 Plan is described in more detail in the accompanying Consent Solicitation Statement.
5.To authorize the Board of Directors of Pershing Gold, Corporation, a Nevada corporation (the “Company” or “Pershing Gold” or “us” or “we” or “our”) with regardin the event the Reverse Split Proposal is approved and the reverse stock split is effected, to reduce the following proposal:
The boardBoard of directorsDirectors of Pershing Gold has decided to seek written consent rather than calling a special meeting of stockholders, in order to eliminate the costs and management time involved in holding a special meeting. Written consents are being solicited from all of our stockholders of record pursuant to Section 78.320(2) of the Nevada Revised Statutes and Section 8 of our Amended and Restated Bylaws.
The attached Proxy Statement, proxy card, the Company’s Annual Report to Stockholders (including financial statements) for the fiscal year ended December 31, 2012, and the Company’s financial statements for the nine months ended September 30, 2013 included in our Quarterly Report on Form 10-Q are available at http://viewproxy.com/pershinggold/2013amsm. As
By order of the Board of Directors, | |
/s/ Mindyjo Germann | |
Mindyjo Germann | |
Corporate Secretary |
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL AND SPECIAL MEETING OF STOCKHOLDERS, PLEASE SIGN, DATE, AND RETURN YOUR PROXY CARD OR SUBMIT YOUR PROXY AND/OR VOTING INSTRUCTIONS BY TELEPHONE OR THROUGH THE INTERNET SO THAT A QUORUM MAY BE REPRESENTED AT THE MEETING. STOCKHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON IF THEY SO DESIRE.
PERSHING GOLD CORPORATION
1658 Cole Boulevard
Building 6 - Suite 210
Lakewood, Colorado 80401
(877) 705-9357
PROXY STATEMENT
ANNUAL AND SPECIAL MEETING OF STOCKHOLDERS
December 16, 2013
This Proxy Statement is furnished to the Record Date, the Company had 273,292,027 shares of Common Stock outstanding of record, held by approximately 150 registered holders of record.
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on December 16, 2013:
The attached Proxy Statement, proxy card, the Company’s Annual Report to Stockholders (including financial statements) for the fiscal year ended December 31, 2012, and the Company’s financial statements for the nine months ended September 30, 2013 included in our Quarterly Report on Form 10-Q are available at http://viewproxy.com/pershinggold/2013amsm.
When was the Proxy Statement first mailed to stockholders?
The Proxy Statement was first mailed to stockholders on or about November 26, 2013.
Why am I receiving this Proxy Statement and proxy card?
You have received these proxy materials because the Board of Directors is soliciting your proxy to vote your common stock at the Annual and Special Meeting of Stockholders on December 16, 2013. This Proxy Statement describes matters on which we would like you to vote at our Annual and Special Meeting. It also provides you with information on these matters so that you may make an informed decision.
What is the purpose of the Annual and Special Meeting?
At our Annual and Special Meeting, stockholders will receive no additional compensation therefor.
(1)To elect three (3) directors to hold office until their successors are elected and qualified;
(2)To conduct an advisory say-on-pay resolution to approve our charter documents, holdersexecutive compensation;
(3)To conduct an advisory proposal regarding the frequency of future say-on-pay votes;
(4)To consider and vote upon a proposal to authorize the Board of Directors to effect a reverse stock split of the outstanding shares of our common stock at an exchange ratio of not less than 1-for-2 and no more than 1-for-25, with the Board of Directors having the discretion to determine (i) whether or not to effect any reverse stock split and (ii) the exact ratio of any reverse split, at a ratio of whole numbers within the above range (“Reverse Split Proposal”); and
(5)To authorize the Board of Directors of Pershing Gold, in the event the Reverse Split Proposal is approved and the reverse stock split is effected, to reduce the number of shares of common stock authorized to be issued by Pershing Gold to a number determined by the Board of Directors in its discretion, which number of shares of common stock authorized to be issued shall be not less than 100,000,000 shares or more than 250,000,000 shares.
Stockholders will also vote on such other matters as may properly come before the meeting or any postponement or adjournment thereof.
What are the Board of Director’s recommendations?
The Board of Directors recommends that you vote:
·FOR the election of each of the three (3) nominated directors (see “Proposal No. 1”)
·FOR the advisory say-on-pay resolution to approve our executive compensation (see “Proposal No. 2”)
·THREE YEARS for the advisory vote on the frequency of future say-on-pay votes (see “Proposal No. 3”)
·FOR the amendment to our Amended and Restated Articles of Incorporation to effect a reverse stock split of the outstanding share of our common stock at an exchange ratio of not less than 1-for-2 and no more than 1-for-25 (see “Proposal No. 4”)
·FOR the amendment to our Amended and Restated Articles of Incorporation to reduce the number of shares of common stock authorized to be issued by Pershing Gold (see “Proposal No. 5”)
With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board of Directors or, if no recommendation is given, in their own discretion.
What shares are entitled to dissenters’ rights or appraisal rights (i.e.,vote?
Each share of common stock as well as the rightSeries E preferred stock on an as-converted basis outstanding on the record date is entitled to seek a judicial determinationone vote on each matter. The record date for the meeting is November 15, 2013. Only stockholders of record at the close of business on that date are entitled to vote at the Annual and Special Meeting. As of the “fair value”record date, there were 273,292,027 shares of theircommon stock outstanding and 11,185 shares and to compelof Series E preferred stock outstanding.
What is the purchase of theirdifference between holding shares for cash in that amount) with respect to the proposals.
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.
Stockholder of Record. If your shares are registered directly in your name with our transfer agent, Action Stock Transfer Corp., you are considered, with respect to those shares, the stockholder of record, and we have sent the Notice directly to you. As the stockholder of record, you have the right to grant your voting proxy directly to the
named proxy holder or to vote in person at the meeting. You may vote by proxy by filling out the proxy card included with the materials or by calling the toll free number found on the proxy card.
Beneficial Owner. If your shares are held in a brokerage account, or by a bank or other holder of record, you are considered the beneficial owner of shares held in “street name,” and the proxy materials are being forwarded to you by that holder together with a voting instruction card. As the beneficial owner, you have the right to direct your broker, bank or other holder of record how to vote and are also invited to attend the Annual and Special Meeting.
Who may attend the meeting?
All stockholders as of the record date, or their duly appointed proxies, may attend the meeting. If you are not a stockholder of record but hold shares through a broker, bank or other holder of record (i.e., in street name) and wish to attend the meeting, you will need to provide proof of beneficial ownership on the record date, such an address wishes to receiveas your most recent account statement as of November 15, 2013, a separate copy of this Consent Solicitation Statementthe voting instruction card provided by your broker, bank or other holder of future consent solicitations (as applicable)record, or other similar evidence of ownership. Registration and seating will begin at 8:30 a.m., he or she may write to us at: Pershing Gold Corporation, 1658 Cole Boulevard, Building No. 6, Suite 210, Lakewood, Colorado 80401, Attention: Corporate Secretary. WeDenver time. Cameras, recording devices and other electronic devices will deliver separate copiesnot be permitted at the meeting.
If I am a stockholder of this Consent Solicitation Statement and form of Written Consent promptly upon written request. record, how do I vote?
If you are a stockholder of record, receiving multiple copiesyou may vote by proxy using the enclosed proxy card or in person at the Annual and Special Meeting. To ensure that your vote is counted, even if you plan to attend the Annual and Special Meeting, we recommend that you submit your proxy or voting instructions prior to the meeting as described below so that your vote will be counted if you later decide not to attend the meeting.
To vote your shares of our Consent Solicitation Statement and formcommon stock or preferred stock by using the enclosed proxy card, please fill out the proxy card included with the materials or call the toll free number found on the proxy card.
If I am a beneficial owner of Written Consent,share held in street name, how do I vote?
If you can request householding by contacting usare a beneficial owner of shares registered in the same manner. name of your broker, bank, or other agent, you should have received from that organization, rather than from Pershing Gold, a proxy card and voting instructions with these proxy materials. You may vote by proxy using the enclosed proxy card or in person at the Annual and Special Meeting. You may vote in person at the meeting only if you obtain a legal proxy from the broker, bank or other holder of record that holds your shares giving you the right to vote the shares. Even if you plan to attend the Annual and Special Meeting, we recommend that you submit your proxy or voting instructions prior to the meeting as described below so that your vote will be counted if you later decide not to attend the meeting.
If you owndo not plan to attend the Annual and Special Meeting, you may vote by submitting voting instructions to your broker, bank or other holder of record. For directions on how to vote, please refer to the instructions included in the Notice or, for shares held beneficially in street name, the voting instruction card provided by your broker, bank or other holder of record.
If you do not tell your broker or nominee how to vote your shares, throughyour shares will be counted in determining whether there is a bank,quorum, but the nominee is not permitted to vote your shares except on matters that are determined to be routine. If a proposal is a non-routine matter, a broker or other stockholder of record, you can request additional copies of this Consent Solicitation Statement and form of Written Consent or request householding by contactingnominee may not vote the stockholder of record.
May I change my vote or revoke my proxy after I return my proxy card?
Yes. Even 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 meeting by: (1) delivering a written notice of your revocation to our Corporate Secretary at our principal executive office located at 1658 Cole Blvd., Bldg. 6, Suite 210, Lakewood, CO 80401; (2) executing and delivering a later dated proxy card; or (3) by the Internet or telephone by following the
voting instructions provided in the Notice. In addition, the powers of the board of directorsproxy holders to vote your stock will be suspended if you attend the meeting in person and so request, although attendance at the executive officers of Pershing Gold havemeeting will not by itself revoke a substantial interestpreviously granted proxy.
What constitutes a quorum?
The presence at the meeting, in the 2013 Plan.
What vote is required to approve each item?
Election of Directors. In the election of directors, three (3) candidates will be elected by a plurality of affirmative votes present in person or by proxy at the Annual and Special Meeting and entitled to vote on the election of directors. That is, the three (3) candidates that receive the highest number of affirmative votes will be elected to serve on our Board of Directors. Abstentions and “broker non-votes” count as votes against the proposal.
Advisory Say-On-Pay Resolution. The advisory say-on-pay resolution to approve our executive compensation must receive the affirmative vote of a majority of the votes cast by stockholders present in person or by proxy at the Annual and Special Meeting and entitled to vote at the Annual and Special Meeting. Because your vote on this proposal is advisory, it will not be binding on the Board of Directors or the Company. However, the Board of Directors will review the voting results and take them into consideration when making future decisions regarding executive compensation. Abstentions and “broker non-votes” count as votes against the proposal.
Frequency of Say-On-Pay Votes. The frequency of the advisory vote on the frequency of say-on-pay votes (every one year, every two years, or every three years) receiving the affirmative vote of a majority of the votes cast by stockholders present in person or by proxy at the Annual and Special Meeting and entitled to vote at the Annual and Special Meeting will be the frequency that stockholders approve. In the event that no option receives a majority of the votes cast, we will consider the option that receives the most votes to be the option selected by our stockholders. Because your vote on this proposal is advisory, it will not be binding on the Board of Directors or the Company. Although nonbinding, the Board of Directors will review and consider the voting results when making future decisions regarding the frequency of the advisory vote on executive compensation. Abstentions and “broker non-votes” count as votes against the proposal.
Reverse Stock Split. The amendment to our Amended and Restated Articles of Incorporation to effect a reverse stock split must receive the affirmative vote of a majority of the votes cast by stockholders present in person or by proxy at the Annual and Special Meeting and entitled to vote at the Annual and Special Meeting. Abstentions and “broker non-votes” count as votes against the proposal.
Reduce Number of Authorized Shares of Common Stock. The amendment to our Amended and Restated Articles of Incorporation to reduce the number of shares of common stock authorized to be issued by Pershing Gold must receive the affirmative vote of a majority of the votes cast by stockholders present in person or by proxy at the Annual and Special Meeting and entitled to vote at the Annual and Special Meeting. Abstentions and “broker non-votes” count as votes against the proposal.
How may I vote on each of the proposals?
In the election of directors, you may vote FOR any one or more, or all, of which are available for issuance pursuantthe nominees, or your vote may be WITHHELD with respect to “incentive stock options” (“ISOs”) under Section 422any one or more, or all, of the Internal Revenue Codenominees.
Table of 1986, as amended (the “Code”)Contents
For the advisory say-on-pay resolution to approve our executive compensation, you may vote FOR or asAGAINST the proposal, or you may indicate that you wish to ABSTAIN from voting on the proposal.
For the advisory say-on-pay resolution to approve our executive compensation, you may vote ONE YEAR, TWO YEARS, or THREE YEARS on the proposal, or you may indicate that you wish to ABSTAIN from voting on the proposal.
For the amendment to our Amended and Restated Articles of Incorporation to effect a reverse stock split, you may vote FOR or AGAINST the proposal, or you may indicate that you wish to ABSTAIN from voting on the proposal.
For the amendment to our Amended and Restated Articles of Incorporation to reduce the number of shares of common stock authorized, you may vote FOR or AGAINST the proposal, or you may indicate that you wish to ABSTAIN from voting on the proposal.
Who will count the proxy votes?
Votes will be tabulated by Alliance Advisors, LLC.
How will voting on any other typebusiness be conducted?
We do not expect any matters to be presented for a vote at the meeting other than the matters described in this Proxy Statement. If any matters are properly brought before the meeting, the persons named on the enclosed proxy card will vote on such matters in accordance with their best judgment.
What rights of awards. appraisal or similar rights of dissenters do I have with respect to any matter to be acted upon at the meeting?
Under Nevada law, stockholders of the Company do not have the right to dissent and obtain an appraisal of their shares with respect to the proposed actions described in this Proxy Statement.
Who will bear the cost of this proxy solicitation?
The Administratorcost of this proxy solicitation will be borne by Pershing Gold. In addition to solicitation by mail, our officers, directors and employees may adopt reasonable counting proceduressolicit proxies by telephone, email, or in person. We will also request banks and brokers to ensure appropriate counting, avoid double counting (as, for example,solicit their customers who have a beneficial interest in our common stock registered in the casenames of tandem or substitute awards)nominees, and make adjustmentswe will reimburse banks and brokers for their reasonable out-of-pocket expenses in so doing.
How can I find out the results of the voting at the Annual and Special Meeting?
Preliminary voting results will be announced at the Annual and Special Meeting. Final voting results will be published by the Company in a Current Report on Form 8-K, which will be filed with the U.S. Securities and Exchange Commission within the four business days following the Annual and Special Meeting.
PROPOSAL NO. 1—ELECTION OF DIRECTORS
The Board of Directors unanimously recommends that the Company’s stockholders vote FOR the election of the following three nominees:
Stephen Alfers
Barry Honig
Alex Morrison
The Board of Directors has nominated for election at the Annual and Special Meeting Messrs. Alfers, Honig, and Morrison to serve until their successors are elected and qualified. Each nominee is currently a director of Pershing Gold and has consented to being named as a nominee.
The following table sets forth the name, residence, age, and current positions of each nominee:
Name and Residence | Age | Position | ||
Stephen Alfers(1) | 67 | Director, Chairman of the Board of Directors | ||
Colorado, USA | ||||
Barry Honig | 42 | Director | ||
Florida, USA | ||||
Alex Morrison | 50 | Director | ||
Colorado, USA |
(1) Mr. Alfers also serves as our President and Chief Executive Officer.
Information regarding each nominee is set forth below, based upon information furnished to us by the nominee.
Nominees for Election
Stephen Alfers. Mr. Alfers was appointed as our Chief Executive Officer and Chairman on February 9, 2012. Mr. Alfers was appointed as our President on August 6, 2012. Mr. Alfers served as the President and Chief of U.S. Operations of Franco-Nevada Corporation from 2010 to 2011 and its Vice President (Legal) from 2007 to 2009. Mr. Alfers served as President of Franco-Nevada US Corporation, the wholly owned subsidiary of Franco-Nevada Corporation, from 2010 to 2011. Mr. Alfers is the founder and has been President of Alfers Mining Consulting since 2007, which performs consulting services from time to time for mining and exploration companies and investors in these industries. Mr. Alfers served as the President and Chief Executive Officer of NewWest Gold Corporation, a publicly-traded Canadian corporation listed on the Toronto Stock Exchange, from 2006 to 2007. Mr. Alfers also served on the Board of Directors of NewWest Gold Corporation from 2005 to 2007. Mr. Alfers served as President and Chief Executive Officer of the NewWest Resources Group from 2001 to 2005 and as President and Chief Executive Officer of NewWest Gold Corporation, a privately-held Delaware Corporation, from 2005 to 2006. Mr. Alfers was the founder and managing partner of Alfers & Carver LLC from 1995 to 2001, a boutique natural resources law firm. Mr. Alfers received a J.D. from the University of Virginia, an M.A. in Monetary Policy and Public Finance from the University of Denver and a B.A. in Economics from the University of Denver. Mr. Alfers was chosen to be a director of the Company based on his extensive mining industry and operational experience, and his mining industry legal expertise.
Barry Honig. Mr. Honig has served as a director of our company since September 29, 2010. Mr. Honig was appointed as our Co-Chairman on September 29, 2010 and served as our Chairman from September 2, 2011 to February 9, 2012. Since January 2004, Mr. Honig has been the President of GRQ Consultants, Inc., and is a private investor and consultant to early stage companies. Mr. Honig’s expertise includes early stage company capital restructuring, debt financing, capital introductions, and mergers and acquisitions. Mr. Honig sits on the board of several private companies. In addition, Mr. Honig has served as a director of Chromadex Corporation since October 2011 and served as the Co-Chairman of InterCLICK, Inc. from August 2007 through December 2011. Mr. Honig was appointed the co-Chairman of Chromadex Corp. on October 14, 2011. Mr. Honig was selected to serve as our
director due to his extensive knowledge of the capital markets, his judgment in assessing business strategies and accompanying risks, and his expertise with emerging growth companies.
Alex Morrison. Mr. Morrison has served as a director of our Company since November 19, 2012. Mr. Morrison is a mining executive, chartered accountant and certified public accountant with over 26 years of experience in the mining industry. He currently serves on the boards of Detour Gold Corporation and Taseko Mines Limited. Mr. Morrison has held senior executive positions at a number of mining companies, most recently serving as Vice President and Chief Financial Officer of Franco-Nevada Corporation from 2007 to 2010. From 2002 to 2007, Mr. Morrison held increasingly senior positions at Newmont Mining Corporation, including Vice President, Operations Services and Vice President, Information Technology. Prior to that, Mr. Morrison was Vice President and Chief Financial Officer of NovaGold Resources, Inc. and Vice President and Controller at Homestake Mining Company and held senior financial positions at Phelps Dodge Corporation and Stillwater Mining Company. In addition, periodically between 2007 and the present, Mr. Morrison has performed financial consulting services for mining companies. Mr. Morrison began his career with PricewaterhouseCoopers LLP after obtaining his Bachelor of Arts in Business Administration from Trinity Western University. Mr. Morrison was selected to serve as our director due to his extensive mining resource and business experience and his financial expertise.
PROPOSAL NO. 2— ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION
The Board of Directors unanimously recommends that the Company’s stockholders vote FOR the advisory say-on-pay resolution to approve our executive compensation.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), enacted in July 2010, requires that we provide our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in the Proxy Statement in accordance with the 2013 Plan. Shares shallcompensation disclosure rules of the SEC.
We urge stockholders to read the “Executive Compensation” beginning on page 18 of the Proxy Statement, which provide detailed information on the compensation of our named executive officers. Our compensation programs are designed to support its business goals and promote short- and long-term profitable growth of Pershing Gold. Our equity plans are intended to align compensation with the long-term interests of our stockholders.
In accordance with Section 14A(a)(1) of the Exchange Act, we are asking stockholders to approve the following advisory resolution at the Annual and Special Meeting of Stockholders:
RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402(m) through (r) of Regulation S-K, including the Executive Compensation section, compensation tables and narrative discussion, as set forth in the Company’s Definitive Proxy Statement on Schedule 14A.
This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Company or the Board of Directors. The say-on-pay proposal is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the executive compensation policies, practices, and plans described in the Proxy Statement. Although non-binding, the Board of Directors will carefully review and consider the voting results when making future decisions regarding our executive compensation program. Unless the Board of Directors modifies its policy on the frequency of holding say-on-pay advisory votes, the next say-on-pay advisory vote will occur in 2016.
PROPOSAL NO. 3—ADVISORY (NON-BINDING) VOTE ON THE
FREQUENCY OF “SAY-ON-PAY” VOTES
The Board of Directors unanimously recommends that the Company’s stockholders vote THREE YEARS for the advisory vote on the frequency of future say-on-pay votes.
The Dodd-Frank Act also provides that stockholders must be counted against those reservedgiven the opportunity to vote, on a non-binding, advisory basis, for their preferences as to how frequently we should seek advisory votes on the
compensation of our named executive officers as disclosed in accordance with the compensation disclosure rules of the SEC. By voting with respect to this Proposal No. 3, stockholders may indicate whether they would prefer that we conduct advisory votes on executive compensation every one, two, or three years. Stockholders also may, if they desire, abstain from casting a vote on this proposal.
After careful consideration of the various arguments supporting each frequency level, the Board of Directors has determined that holding an advisory “say-on-pay” vote every three years on our executive compensation is the most appropriate policy for the Company at this time, and recommends that stockholders vote for advisory “say-on-pay” votes on our executive compensation to occur once every three years.
In accordance with Section 14A(a)(1) of the Exchange Act, we are asking stockholders to approve the following advisory resolution at the Annual and Special Meeting of Stockholders:
RESOLVED, that the option of once every one year, two years, or three years that receives the affirmative vote of a majority of the votes cast by stockholders present in person or by proxy at the Annual and Special Meeting and entitled to vote at the Annual and Special Meeting will be the frequency that stockholders approve will be determined to be the preferred frequency with which the Company is to hold a stockholder vote to approve the compensation paid to the extentCompany’s named executive officers, as disclosed pursuant to Item 402(m) through (r) of Regulation S-K, including the Executive Compensation section, compensation tables and narrative discussion.
This vote is advisory and not binding on the Company or the Board of Directors in any way. Although non-binding, the Board of Directors will take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation. Notwithstanding the Board of Director’s recommendation and the outcome of the stockholder vote, the Board of Directors may in the future decide to conduct advisory votes on a more or less frequent basis and may vary its practice based on factors such as discussions with stockholders and the adoption of material changes to compensation programs.
The proxy card provides stockholders with the opportunity to choose among four options (holding the vote every one, two, or three years, or abstaining). Stockholders are not voting to approve or disapprove the Board of Director’s recommendation.
PROPOSAL NO. 4— APPROVAL TO EFFECT REVERSE STOCK SPLIT OF COMMON STOCK
The Board of Directors unanimously recommends that the Company’s stockholders vote FOR the approval of the proposal to authorize the Board of Directors to file an amendment to our Amended and Restated Articles of Incorporation to effect a reverse stock split of the outstanding shares of our common stock at an exchange ratio of not less than 1-for-2 and no more than 1-for-25.
General
The Board of Directors has approved and recommended a proposal to authorize the Board of Directors to effect a reverse stock split of all of our outstanding common stock at a ratio of not less than 1-for-2 and not more than 1-for-25, with the Board of Directors having the discretion as to whether or not the reverse split is to be effected, and with the exact ratio of any reverse split to be set at a whole number within the above range as determined by the Board of Directors in its sole discretion. The proposal provides that the Board of Directors will have been deliveredsole discretion pursuant to Section 78.390(5) of the Nevada Revised Statutes to elect, at any time before the first anniversary of the date of this meeting, as it determines to be in our best interest, whether or not to effect the reverse split, and, are no longer subject to a substantial risk of forfeiture. Accordingly, (i) to the extent that an award under the 2013 Plan, in whole or in part, is canceled, expired, forfeited, settled in cash, settled by delivery of fewer shares thanif so, the number of our shares underlying the award, or otherwise terminated without delivery of shares to the participant, the shares retained by or returned to the Company will not be deemed to have been delivered under the 2013 Plancommon stock between and including 1-for-2 and 1-for-25 that will be deemedcombined into one share of our common stock. The Board of Directors believes that this range of reverse split ratios will provide it with the flexibility to remain or to become available underimplement the 2013 Plan; and (ii) shares that are withheld from such an award or separately surrendered by the participant in payment of the exercise price or taxes relating to such an award shall be deemed to constitute shares not delivered and will be deemed to remain or to become available under the 2013 Plan. The foregoing adjustments to the share limit of the 2013 Plan are subject to any applicable limitations under Section 162(m) of the Code with respect to awards intended to qualify as performance-based compensation under Section 162(m).
·our financial condition and ability to execute our business plans;
·the historical trading price and trading volume of our common stock;
·the then prevailing trading price and trading volume of our common stock and the anticipated impact of the reverse split on the trading market for our common stock;
·our ability to have our shares of common stock listed on a stock dividend)U.S. national securities exchange such as The NASDAQ Stock Market or the NYSE MKT;
·the anticipated impact of the reverse split on our ability to raise additional financing;
·which split ratio, within the range described above, would result in the greatest overall reduction in our administrative costs; and
·prevailing general market and economic conditions.
If approved by stockholders and implemented by the Board of Directors, the Reverse Split will become effective on such date as may be determined by the Board of Directors upon the filing of the necessary amendments to our Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada (the “Effective Date”).
Reasons for the Reverse Stock Split
The Board of Directors believes that a reverse stock split or upon any merger, arrangement, combination, consolidation, or other reorganization, or upon any spin-off, split-up or similar extraordinary dividend distribution in respectcould be desirable for two reasons. First, the Board believes that a reverse stock split could improve the marketability and liquidity of our common stock. Second, the Board of Directors believes that a reverse stock split could facilitate the listing of our common stock on a U.S. national securities exchange such as the NYSE MKT or upon any exchangeThe NASDAQ Stock Market.
The Board of common stock or other securities ofDirectors believes that the Company, or upon any similar unusual or extraordinary corporate transaction in respect of the common stock.
If approved by stockholders and implemented by the Board of Directors, the reverse split would be intended, in part, to result in a price level for our common stock that would increase investor interest and eliminate the resistance of brokerage firms and institutional investors. On November 21, 2013, the closing bid price for our common stock, as reported by the OTCQB Market, was $0.48$0.37 per share. No assurances can be given that the market price for our common stock would increase in the same proportion as the reverse split or, if increased, that such price would be maintained. In addition, no assurances can be given that the reverse split would increase the price of our common stock to a level in excess of the five dollar threshold discussed above or otherwise to a level that is attractive to brokerage houses and institutional investors.
In order to list our common stock on a U.S. national securities exchange such as the NYSE MKT or The NASDAQ Stock Market, we must fulfill certain listing requirements. One of the listing standards requires stocks to have a minimum bid price. For example, the NYSE MKT requires minimum share prices between $2.00 and $3.00 per share and The NASDAQ Stock Market requires a minimum share price of $4.00 per share. A reverse stock split should initially result in an increase in the price per share of our total market capitalization was approximately $131,180,173.common stock and substantially reduce the risk that a U.S. national securities exchange would decline to list our common stock on the basis of failure to meet
such exchange’s minimum stock price. No assurances can be given that, even if we satisfy such listing requirements, we will apply to have our common stock listed on a U.S. national securities exchange, or that, if we do so apply, that our application will be administered byapproved, or that, if our common stock is listed on a U.S. national securities exchange, we will be able to satisfy the boardmaintenance requirements for continued listing.
Effects of directors (the “Board”) or by one or more committeesthe Reverse Split
If the reverse stock split is approved and implemented, the principal effect will be to proportionately decrease the number of directors appointedoutstanding shares of our common stock and to reduce the number of shares of common stock issuable upon conversion of the preferred stock, and exercise of stock options and warrants, based on the reverse stock split ratio selected by the Board (the “Administrator”). The Board may delegate different levels of authorityDirectors. We are subject to different committees with administrativethe periodic reporting and grant authority under the 2013 Plan. Any committee delegated administrative authority under the 2013 Plan may further delegate its authority under the Plan to another committee of directors, and any such delegate shall be deemed to be an Administrator of the 2013 Plan. Any Administrator may also, within its administrative authority under the 2013 Plan and in accordance with applicable law, delegate to one or more officers of the Company the ability to make awards to Eligible Persons (as defined below) under the 2013 Plan. It is anticipated that the Administrator (either generally or with respect to specific transactions) will be constituted so as to comply, as necessary or desirable, with theother requirements of Code Section 162(m) and Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended.
The reverse stock split would be effected simultaneously for all issued and outstanding shares of grant (or 110%common stock and the exchange ratio would be the same for all issued and outstanding shares of common stock. The reverse stock split would affect all of our stockholders uniformly and would not affect any stockholder’s percentage ownership interests in the Company, except for negligible amounts resulting from the rounding up of fractional shares. After the reverse stock split, the shares of our common stock would have the same voting rights and rights to dividends and distributions and would be identical in all other respects to our common stock now authorized. The reverse stock split would not affect us continuing to be subject to the periodic reporting requirements of the fair market value onExchange Act. The reverse stock split is not intended to be, and would not have the dateeffect of, grant, ina “going private transaction” covered by Rule 13e-3 under the caseExchange Act.
Proportionate voting rights and other rights and preferences of ISOs grantedthe holders of our common stock and preferred stock would not be affected by the proposed reverse stock split (except for negligible amounts resulting from the rounding up of fractional shares). For example, a holder of 2% of the voting power of the outstanding shares of our common stock immediately prior to certain ten percentthe effectiveness of the reverse stock split would generally continue to hold 2% of the voting power of the outstanding shares of our common stock immediately after the reverse stock split. Moreover, the number of stockholders of record would not be affected by the Company). Optionsreverse stock split.
If a reverse split is effected, and SAR awards shall become exercisable upon such conditions (which may include the passage of time or the attainment of certain performance criteria) as the Administrator may establish in its sole discretion. The exercise price of any option shall be paid in cash or by any of the methodsProposal No. 5, set forth below, underis approved, the heading “Consideration for Awards.” OptionBoard of Directors will reduce the number of our authorized shares from 500,000,000 to a lower number from 100,000,000 to 250,000,000 shares. The Board of Directors may implement a reduction in authorized common stock that is proportionately less than the reverse stock split such that, following the reverse split, the ratio of authorized common stock to issued and SAR awards are exercisable for a period established byoutstanding common stock would be higher than that in effect prior to the Administrator, which in no event shall exceed ten years from the date of grant (five years in the case of ISOs granted to certain ten percent stockholders of the Company).reverse split. If the Administrator doesBoard of Directors determines to implement a reverse split but not specify otherwiseto implement a proportionate reduction in an award agreement, upon termination ofauthorized common stock, we would, in effect, have authority, without further stockholder approval, to issue a participant’s employment or other service to the Company, option and SAR awards shall expire (1) three months after the last day that the participant is employed by or provides services to the Company or any subsidiary (provided; however, that in the event of the participant’s death during this period, those persons entitled to exercise the option or SAR pursuant to the laws of descent and distribution shall have one year following the date of death within which to exercise such option or SAR); (2) in the case of a participant whose termination of employment or services is due to death or disability (as defined in the applicable award agreement), 12 months after the last day that the participant is employed by or provides services to the Company or its subsidiary; and (3) immediately upon a participant’s termination for “cause”.
Board Discretion to Implement or Abandon Reverse Split
The reverse split would only be effected upon a determination by the Board of Directors that the reverse split (with an exchange ratio determined by the Board of Directors as described above) is in our best interest. Such determination shall be based upon certain factors, including, but not limited to, our ability to meet stock exchange listing requirements, existing and expected marketability and liquidity of our common stock, our financial condition and ability to execute our business plans, and the expense of effecting the reverse split. Notwithstanding approval of the reverse split by our stockholders, the Board of Directors may, in its sole discretion, abandon the proposal and determine, prior to the effectiveness of any filing with the Secretary of State of the State of Nevada, not to affect the reverse split. If the Board of Directors fails to implement the reverse split on or prior to the one year anniversary of this meeting, stockholder approval again would be required prior to implementing any reverse stock split.
Effective Date
If the amendment to the Amended and Restated Articles of Incorporation is approved by our stockholders and implemented by the Board of Directors, the reverse split would become effective upon the filing of an amendment to our Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada. Except as explained below with respect to fractional shares, on the Effective Date, shares of common stock (5) gross revenue, (6) revenue growth, (7) operating income (before or after taxes), (8) net earnings (before or after interest, taxes, depreciation and/or amortization), (9) returnissued and outstanding immediately prior thereto would be combined and converted, automatically and without any action on equity, (10) capital employed, or on assets or on net investment, (11) cost containment or reduction, (12) cash cost per ounce of production, (13) operating margin, (14) debt reduction, (15) resource amounts, (16) production or production growth, (17) resource replacement or resource growth, (18) successful completion of financings, or (19) any combinationthe part of the foregoing.
Fractional Shares Rounded Up
The reverse stock split would not alter any stockholder’s percentage interest in our Company’s equity, except for purposesnegligible amounts resulting from the rounding up of fractional shares. In lieu of any fractional shares to which a stockholder would otherwise be entitled as a result of the award in the circumstances.
Registered “Book-Entry” Holders of Common Stock (i.e. stockholders that are registered on the transfer agent’s books and records but do not hold stock certificates)
Certain of our registered holders of common stock may hold some or all of their shares electronically in book-entry form with the transfer agent. These stockholders do not have stock certificates evidencing their ownership of the common stock. They are, however, provided with a statement reflecting the number of shares otherwise deliverable pursuantregistered in their accounts.
Stockholders who hold shares electronically in book-entry form with the transfer agent will not need to the award; or
Exchange of Stock Certificates
As soon as practicable after the Administrator may adopt, pursuant to a “cashless exercise” with a third party who provides financing forEffective Date of the purposes of (or who otherwise facilitates) the purchase or exercise of awards.
Warrants and Options
All outstanding warrants and options to purchase shares of our common stock would be adjusted as a result of any reverse stock split to help qualify for stock exchange listing, as required by the Administrator,terms of those securities. In particular, the number of shares issuable upon the exercise of each instrument would be reduced, and the exercise price per share, if applicable, would be increased, in accordance with the terms of each instrument and based on the ratio of the reverse stock split to help qualify for stock exchange listing.
Series E Preferred Stock
The price at which the Series E preferred stock can be converted to common stock would be adjusted as a result of any shares delivered which were initially acquiredreverse stock split, as required by the participant fromterms of those securities. In particular, the Company (upon exercisenumber of shares issuable upon conversion of each Series E preferred stock would be reduced, and the conversion price per
share would be increased, in accordance with the terms of the Certificate of Designation of Series E Convertible Preferred Stock and based on the ratio of the reverse stock split.
Federal Income Tax Consequences of the Reverse Stock Split
The following is a discussion of federal income tax consequences to holders of our common stock option or otherwise) must have been owned bywho receive shares of our common stock as a result of the participant at least six monthsreverse stock split. The discussion is based on the U.S. Internal Revenue Code of 1986, as amended (“Code”), and laws, regulations, rulings and decisions in effect as of the date of delivery. Shares of common stock used to satisfy the exercise price of an option are valued at their fair market value on the date of exercise. The Company will not be obligated to deliver any shares unless and until it receives full payment of the exercise or purchase price for the shares and any related withholding obligations and any other conditions to exercise or purchase, as established from time to time by the Administrator, have been satisfied. Unless otherwise expressly provided in the applicable award agreement, the Administrator may at any time eliminate or limit a participant’s ability to pay the purchase or exercise price of any award or shares by any method other than cash payment to the Company.
This summarydiscussion does not purport to be a complete anddiscussion or analysis of all potential tax consequences that may apply to a stockholder. Also, this discussion does not discuss state, local or non-U.S.address the tax consequences.
This discussion is not binding on the Internal Revenue Service (“IRS”) or the courts and there can be no assurance that the IRS, or a court in the event of an IRS challenge, will agree with the conclusions stated herein.
For U.S. federal income tax purposes, the reverse stock option under the 2013 Plansplit generally will not result in any federal incomethe recognition of gain or loss by a stockholder who receives solely a reduced number of shares of our common stock as a result of the reverse stock split. A stockholder’s aggregate adjusted tax consequencesbasis of the post-reverse stock split shares of our common stock will be the same as the aggregated adjusted tax basis of the pre-reverse stock split shares of our common stock exchanged therefor. In addition, a stockholder’s holding period of the post-reverse stock split shares of our common stock will include the stock holder’s holding period for the pre-reverse stock split shares of our common stock exchanged therefor. A stockholder that holds their pre-reverse stock split shares of our common stock with differing bases or holding periods should consult their tax advisors with regard to identifying the bases or holding periods of the particular post-reverse stock split shares of our common stock received in the reverse stock split.
Interests of Directors and Executive Officers
Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this reverse split proposal except to the participant orextent of their ownership of shares of our common stock.
No Dissenters’ Rights
Under Nevada law, stockholders of our Company do not have the right to dissent and obtain an appraisal of their shares with respect to the Company. Uponcorporate actions described in this Proxy Statement.
PROPOSAL NO. 5— APPROVAL TO REDUCE NUMBER OF AUTHORIZED SHARES
The Board of Directors unanimously recommends that the Company’s stockholders vote FOR the approval of the proposal to authorize the Board of Directors, in the event the Reverse Split Proposal is approved and the reverse split is effected, to file an amendment to our Amended and Restated Articles of Incorporation to reduce the number of shares of common stock authorized to be issued by the Company to a number determined by the Board of Directors in its discretion, which number of shares of common stock authorized to be issued shall be not less than 100,000,000 shares or more than 250,000,000 shares.
In the event the Board of Directors, pursuant to stockholder authority, determines to effect a reverse split, as discussed in Proposal No. 4 above, and this Proposal No. 5 is approved by the stockholders, the Board of Directors will reduce the number of shares of common stock authorized to a number which shall be not less than 100,000,000 shares or more than 250,000,000 shares. The number of shares of common stock that were issued and outstanding as of November 21, 2013 was 273,292,027. The number of shares of common stock that we are currently authorized to issue is 500,000,000.
The proposal being submitted to the stockholders provides that, in the event a reverse split is effected, the Board of Directors will reduce the number of our authorized shares to a lower number between 100,000,000 and 250,000,000 shares. Accordingly, assuming that the Board of Directors determines to implement a reverse split, the Board of Directors will reduce our authorized common stock. The Board of Directors will have the sole discretion to determine the amount of the reduction in authorized common stock in connection with the reverse split, within the range from 100,000,000 and 250,000,000 shares described above. The Board of Directors will have the sole discretion to implement a reduction in authorized common stock such that, following the reverse split, the ratio of authorized common stock to issued and outstanding common stock would be higher than that in effect prior to the reverse split. Therefore, if the Board of Directors determines to implement a reverse split but not to implement a proportionate reduction in authorized common stock, we would, in effect, have authority, without further stockholder approval, to issue a greater number of shares of common stock, or proportionately more common stock, with a greater dilutive effect on existing shareholders than prior to the reverse split. Further, such increased proportion of unissued authorized shares may be construed to have an anti-takeover effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of the Board of Directors or contemplating a tender offer or other transaction for the combination of us with another company) or may have the effect of diluting the earnings per share and book value per share, as well as the stock ownership and voting rights of the currently outstanding shares of our common stock. There are no written or oral plans, agreements, arrangements or understandings with respect to the issuance of any such additional common stock.
Meetings and Committees of the Board of Directors
During 2012, our Board of Directors held one formal meeting. During 2013, our Board of Directors has held 13 formal meetings through November 21, 2013.
We currently do not maintain any committees of the Board of Directors. Given our size and the development of our business to date, we believe that the Board of Directors through its meetings can perform all of the duties and responsibilities which might be contemplated by a committee.
Board Committees
Audit Committee. If we satisfy the initial listing standards for listing our common stock on the NYSE MKT or The NASDAQ Stock Market or another U.S. national securities exchange, we will establish an audit committee of the Board of Directors. The audit committee will consist of independent directors, of which at least one director will qualify as a qualified financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. The audit committee’s duties will be to recommend to our Board of Directors the engagement of independent auditors, to audit our financial statements and to review our accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent public accountants, including their recommendations to improve the system of accounting and internal controls. The audit committee will at all times be composed exclusively of directors who are, in the opinion of our Board of Directors, free from any relationship that would interfere with the exercise of independent judgment as a nonqualifiedcommittee member and who possess an understanding of financial statements and generally accepted accounting principles.
Compensation Committee. If we satisfy the initial listing standards for listing our common stock option,on the participantNYSE MKT or The NASDAQ Stock Market or another U.S. national securities exchange, we will recognize ordinaryestablish a compensation income equalcommittee of the Board of Directors. The compensation committee will review and approve our salary and benefits policies, including compensation of executive officers. The compensation committee will also administer our equity incentive plans and recommend and approve grants under such plans. Our Board of Directors, Stephen Alfers, Alex Morrison, and Barry Honig currently participate in the consideration of executive officer and director compensation.
Corporate Governance and Nominating Committee. If we satisfy the initial listing standards for listing our common stock on the NYSE MKT or The NASDAQ Stock Market or another U.S. national securities exchange, we will establish a corporate governance and nominating committee of the board of directors. The corporate governance and nominating committee will be responsible for overseeing and evaluating the board’s performance, selecting and evaluating prospective director nominees and reviewing board and board committee compensation. The corporate governance and nominating committee will also oversee and provide advice to the excessboard of directors regarding corporate governance policies, practices and procedures. Our Board of Directors, Stephen Alfers, Alex Morrison, and Barry Honig currently consider any director nominees.
Board Leadership Structure and Role in Risk Oversight
Although we have not adopted a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined, we have traditionally determined that it is in the best interests of the Company and its stockholders to have these two positions overlap due to the small size of the Company.
Our Board of Directors is primarily responsible for overseeing our risk management processes. The Board of Directors receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding our company’s assessment of risks. The Board of Directors focuses on the most significant risks facing our company and our company’s general risk management strategy, and also ensures that risks undertaken by our company are consistent with the Board of Director’s appetite for risk. While the Board of Directors oversees our company, our company’s management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our Board of Directors leadership structure supports this approach.
Board Independence
We currently have three directors serving on our Board of Directors: Mr. Morrison, Mr. Honig and Mr. Alfers. We are not listed on a U.S. national securities exchange and, as such, are not subject to any director independence standards. Using the definition of independence set forth in the rules of the NYSE MKT, one of our directors, Mr. Morrison, would be considered an independent director of the Company.
Stockholder Nominations
Except as may be provided in our bylaws, we do not currently have specified procedures in place pursuant to which whereby security holders may recommend nominees to the Board of Directors.
Communication with the Board
We have established a process for stockholders to communicate with the Board of Directors. Stockholders wishing to communicate with the Board of Directors of Pershing Gold should send an email, write or telephone Mindyjo Germann, Executive Administrator and Corporate Secretary, at:
Pershing Gold Corporation
1658 Cole Blvd., Building 6
Suite 210
Lakewood, Colorado 80401
Telephone: (877) 705-9357
Facsimile: (303) 839-5907
Email: investors@pershinggold.com
Any such communication must state the type and amount of Pershing Gold securities held by the stockholder and must clearly state that the communication is intended to be shared with the Board of Directors. Ms. Germann will forward any such communication to the members of the Board of Directors.
Director Attendance at the Annual Meeting
All members of the Board of Directors are encouraged, but not required, to attend annual meetings, if any, of stockholders.
Compensation Committee Interlocks and Insider Participation
We currently do not maintain a compensation committee of the Board of Directors or other committee performing equivalent functions. During the fiscal year ended December 31, 2012, our Board of Directors, Stephen Alfers, Alex Morrison, and Barry Honig participated in deliberations concerning executive officer compensation.
Director or Officer Involvement in Certain Legal Proceedings
Our directors and executive officers were not involved in any legal proceedings as described in Item 401(f) of Regulation S-K in the past ten years.
Code of Ethics
We have not adopted a Code of Ethics. If we satisfy the initial listing standards for listing our common stock on the NYSE MKT or another U.S. national securities exchange, we will adopt a Code of Ethics.
Board Diversity
While we do not have a formal policy on diversity, our Board of Directors considers diversity to include the skill set, background, reputation, type and length of business experience of our Board members as well as a particular nominee’s contributions to that mix. Although there are many other factors, the Board of Directors seeks
individuals with experience on public company boards as well as experience in the mining industry and in finance and accounting.
Family Relationships
There are no family relationships among the executive officers and directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors, executive officers, and persons who own more than 10% of our common stock to file reports of ownership and changes in ownership of our common stock with the SEC. Based on the information available to us during 2012, we believe that all applicable Section 16(a) filing requirements were met on a timely basis except that Mr. Honig had five late reports and six transactions that were not reported on a timely basis.
Director Compensation
The following table sets forth with respect to our non-employee directors, compensation information inclusive of equity awards and payments made in the year end December 31, 2012. All compensation paid to Stephen Alfers, our Chief Executive Officer and Chairman of the Board of Directors and David Rector, our former President, is included in the summary compensation table under “Executive Compensation” below.
Name |
| Fees Earned |
| Stock Awards |
| Option |
| Non-Equity |
| Change in Pension |
| All Other |
| Total ($) |
| |||||||
Barry Honig |
| $ | — |
| $ | 1,020,000 |
| $ | 4,909,900 |
| $ | — |
| $ | — |
| $ | — |
| $ | 5,929,900 |
|
Alex Morrison |
| $ | 5,168 | (2) | — |
| — |
| — |
| — |
| — |
| $ | 5,168 |
| |||||
(1)Amounts represent the aggregate grant date fair value for fiscal year 2012 of stock options granted in 2012 under ASC Topic 718. For information regarding assumptions used to compute grant date fair market value with respect to the option grants, see Note 2 to our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012. The actual value realized by the director with respect to option awards will depend on the difference between the market value of our common stock on the date the option is exercised and the exercise price.
(2)The fee amount shown is pro-rated portion of Mr. Morrison’s 2012 annual retainer fee of $25,000 and also includes $1,000 earned for a December 15, 2012 Board of Director’s Meeting.
Except for the compensation described above, we have not had formal compensation arrangements in place for members of our Board of Directors. We may develop formal compensation plans for our directors in order to attract qualified persons and to retain them. We expect that the formal compensation arrangements may be comprised of a combination of cash and equity awards.
On October 1, 2010, we granted to Mr. Honig options to purchase 400,000 shares of common stock at the timean exercise price of exercise over the option exercise price. If the participant is an employee, this income is subject to withholding for federal income and employment tax purposes.$0.60 per share. The Company is entitled to an income tax deductionoptions vest in the amountthree equal installments on each of the 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 dispositionfirst, second and third anniversary of the shares will be treated as long-term or short-term capital gain or loss, depending ongrant date.
On April 6, 2012, we entered into a consulting agreement with Mr. Honig pursuant to which Mr. Honig would provide certain consulting services relating to business development, corporate structure, strategic and business planning, selecting management and other functions reasonably necessary for advancing 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.
·A ten-year option (to purchase 12,000,000 shares of the sharesour common stock, exercisable at exercise and the exercise price—is classified as an item of adjustment$0.35 per share which shall be vested 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.
·On such date that we receive minimum gross proceeds of the stock over the amount paid for such stock. 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 lossat least $5,000,000 due to the recipient. The Section 83(b) Election must be made within 30 days fromoccurrence of a Triggering Event (as defined in the timeConsulting Agreement) or the restricted stock is issued.
Other Awards.· Other awards (such as restricted stock units) are generally treated as ordinary compensation income as and when common stock or cash are paid toUpon a Change in Control (as defined in the participant upon vesting or settlement of such awards. If 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 recognized by the recipient, subject to possible limitations imposed by the Code, including Section 162(m) thereof.
On June 18, 2012, we issued options to purchase 1,000,000 shares of Common Stock at an exercise price of $0.34 per share to Mr. Honig, which is contingentvested in full upon the satisfaction of certain stockholder approved performance goals. The Company intends that the 2013 Plan allow for theissuance. Additionally, on June 18, 2012, we issued a restricted stock grant of options and stock appreciation rights that may be treated as “qualified performance based compensation” that is exempt3,000,000 shares of Common Stock to Mr. Honig, which vest in three equal annual installments beginning one year from the limitationsdate of Code Section 162(m),issuance, subject to acceleration under certain events, including a change of control.
Since joining the Board of Directors on November 19, 2012, Mr. Morrison has received an annual retainer fee of $25,000 and a $1,000 fee for the grant of other performance-based awards that may be treated as “qualified performance based compensation,” but it makesevery meeting Mr. Morrison attends. There is no assurance that either such type of award will be so treated.
On February 12, 2013, the board of directors approved a grant ofwe granted Mr. Morrison 1,000,000 shares of restricted stock, each to Eric Alexander, our Vice President Finance and Controller, and Alex Morrison, our director. The vesting schedule for each grant is as follows: 333,334 shares on February 12, 2014, 333,333 shares on February 12, 2015 and 333,333 shares on February 12, 2016, subject to acceleration or forfeiture in certain circumstances. Total amountscircumstances, including upon a change of control.
Executive Officers of Pershing Gold
Name | Age | Position | ||
Stephen Alfers | 67 | Chief Executive Officer, President and Chairman | ||
Eric Alexander | 47 | Vice President of Finance and Controller | ||
Debra Struhsacker | 60 | Corporate Vice President |
Stephen Alfers. Mr. Alfers was appointed as our Chief Executive Officer and Chairman on February 9, 2012. Mr. Alfers was appointed as our President on August 6, 2012. Mr. Alfers served as the President and Chief of U.S. Operations of Franco-Nevada Corporation from 2010 to 2011 and its Vice President (Legal) from 2007 to 2009. Mr. Alfers served as President of Franco-Nevada US Corporation, the wholly owned subsidiary of Franco-Nevada Corporation, from 2010 to 2011. Mr. Alfers is the founder and has been President of Alfers Mining Consulting since 2007, which performs consulting services from time to time for mining and exploration companies and investors in these industries. Mr. Alfers served as the President and Chief Executive Officer of NewWest Gold Corporation, a publicly-traded Canadian corporation listed on the Toronto Stock Exchange, from 2006 to 2007. Mr. Alfers also served on the Board of Directors of NewWest Gold Corporation from 2005 to 2007. Mr. Alfers served as President and Chief Executive Officer of the NewWest Resources Group from 2001 to 2005 and as President and Chief Executive Officer of NewWest Gold Corporation, a privately-held Delaware Corporation, from 2005 to 2006. Mr. Alfers was the founder and managing partner of Alfers & Carver LLC from 1995 to 2001, a boutique natural resources law firm. Mr. Alfers received a J.D. from the University of Virginia, an M.A. in Monetary Policy and Public Finance from the University of Denver and a B.A. in Economics from the University of Denver. Mr. Alfers was chosen to be granteda director of the Company based on his extensive mining industry and operational experience, and his mining industry legal expertise.
Eric Alexander. Mr. Alexander was appointed Vice President of Finance and Controller in September 2012. Prior to Ericthe joining the Company, Mr. Alexander was the Corporate Controller for Sunshine Silver Mines Corporation, a privately held mining company with exploration and Alex Morrisonpre-development properties in Idaho and Mexico, from March 2011 to August 2012. He was a consultant to Hein & Associates LLP from August 2012 to September 2012 and a Manager with Hein & Associates LLP from July 2010 to March 2011. He served from July 2007 to May 2010 as the Corporate Controller for Golden Minerals Company (and its predecessor, Apex Silver Mines Limited), a publicly traded mining company with operations and exploration activities in South America and Mexico. He has over 23 years of corporate, operational and business experience, and eight years of mining industry experience. In addition to working in the future underindustry he also held the 2013 Plan cannot be determinedposition of Senior Manager with the public accounting firm KPMG LLP, focusing on mining and energy clients. Mr. Alexander has a B.S. in Business Administration (concentrations in Accounting and Finance) from the State University of New York at this time. In addition, amountsBuffalo and is also a licensed CPA.
Debra Struhsacker. Ms. Struhsacker was appointed Corporate Vice President in September 2013. From June 2006 until joining the Company, Ms. Struhsacker was the principal of her own consulting business, providing management and coordination of environmental permitting strategies and execution and other environmental, regulatory, governmental and community relations issues to be grantedmining companies. She has provided consulting services to other executive officersthe Company at the Relief Canyon Project since 2011. She served as Vice President, U.S. Governmental and directorsRegulatory Affairs for Kinross Gold USA, Inc., a subsidiary of Kinross Gold Corporation, from July 2003 to May 2006, and was engaged in her own consulting business from April 1991 until June 2003. Ms. Struhsacker has over 25 years of experience in hardrock mining and environmental issues, including related public policy issues, permitting and reclamation. She has a B.A. in Geology and French from Wellesley College and a M.S. in Geology from the future cannot be determined at this time.
Summary Compensation Table
The following table sets forth information concerning our equitysummarizes the overall compensation plans asearned over each of the past two fiscal years ended December 31, 2012 by each of our named executive officers during fiscal 2012. The value attributable to any Option Awards and Stock Awards reflects the grant date fair values of stock awards calculated in accordance with FASB Accounting Standards Codification Topic 718.
Name and |
| Year |
| Salary ($) |
| Bonus ($) |
| Option |
| Stock |
| All Other |
| Total ($) |
|
Stephen Alfers (2) |
| 2011 |
| — |
| — |
| — |
| — |
| — |
| — |
|
Chief Executive Officer, President and Chairman |
| 2012 |
| 229,163 |
| — |
| 5,920,500 |
| 7,580,000 |
| 500,000 |
| 14,499,663 |
|
Eric Alexander(3) |
| 2011 |
| — |
| — |
| — |
| — |
| — |
| — |
|
Vice President of Finance and Controller |
| 2012 |
| 47,115 |
| — |
| — |
| 70,920 |
| — |
| 118,035 |
|
David Rector (4) |
| 2011 |
| 87,500 |
| 20,000 |
| — |
| — |
| — |
| 107,500 |
|
Former President and director |
| 2012 |
| 179,340 |
| — |
| 138,350 |
| 340,000 |
| — |
| 657,690 |
|
Adam Wasserman (5) |
| 2011 |
| — |
| — |
| — |
| — |
| 72,000 |
| 72,000 |
|
Former Chief Financial Officer |
| 2012 |
| — |
| — |
| — |
| — |
| 99,256 |
| 99,256 |
|
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||||
| Equity compensation plans approved by security holders | 27,981,715 | 0.43 | 0 | |||||||||
| Equity compensation plans not approved by security holders | 7,166,293 | (1) | 0.58 | — | ||||||||
| Total | 35,148,008 | 0.46 | 0 | (2) | ||||||||
(1) Represents (i) sharesReflects the grant date fair values of stock awards calculated in accordance with FASB Accounting Standards Codification Topic 718 except that arethe amount shown assumes no forfeitures. For information regarding assumptions used to compute grant date fair market value with respect to the option grants, see Note 2 to our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012. The actual value realized by each officer with respect to option awards will depend on the difference between the market value of our common stock on the date the option is exercised and the exercise price.
(2)Mr. Alfers was appointed Chief Executive Officer and Chairman on February 29, 2012 and President on March 6, 2012. The salary amount shown is pro-rated portion of his 2012 annual salary of $250,000.
(3)Mr. Alexander was appointed Vice President of Finance and Controller on November 21, 2012. The salary amount shown is pro-rated portion of his 2012 annual salary of $175,000 from Mr. Alexander’s start date on September 24, 2012.
(4)Mr. Rector served as our President from May 12, 2011 to March 6, 2012 and as a director from August 8, 2011 to November 20, 2012.
(5)Mr. Wasserman served as our Chief Financial Officer from November 11, 2010 to November 19, 2012. Since Mr. Wasserman was a consultant, he did not receive salary.
Agreements with Executive Officers
Stephen Alfers
We entered into an employment agreement with Stephen Alfers on February 9, 2012 which was amended on February 8, 2013, pursuant to which Mr. Alfers shall serve as our Chief Executive Officer until December 31, 2015, subject to renewal. Pursuant to the terms of his employment agreement, Mr. Alfers is entitled to a base salary of $250,000 per year and was issued (i) 12,000,000 shares of the Company’s restricted common stock and (ii) an option to purchase 10,000,000 shares of the Company’s common stock with a term of ten years and an exercise price of $0.49 per share.
The 12,000,000 shares of the Company’s restricted common stock vest as follows: 3,000,000 shares two years from the date of the employment agreement; 6,000,000 shares on March 14, 2014; and 3,000,000 shares three
years from the date of the employment agreement. Vesting accelerates upon certain events, including a change in control of the Company, as described below.
Mr. Alfers also received a one-time bonus of $500,000 at the time of entering into the employment agreement. Also under his employment agreement, Mr. Alfers is entitled to receive an annual bonus if the Company meets or exceeds certain criteria adopted by the Board of Directors. The “Target Bonus” for Mr. Alfers equals 100% of his annualized base salary for that year if target levels of performance for that year are achieved, with greater or lesser amounts paid for performance above and below the target.
Certain amounts payable to Mr. Alfers as compensation are subject to claw-back rights in the event of restatements of our financial information for a period of three years after termination.
Upon Mr. Alfers’ termination without Cause (as defined in the employment agreement), within six months prior to or 24 months following a Change in Control (a “Change in Control Period”) or upon Mr. Alfers’ Resignation for Good Reason (as defined in the employment agreement) during a Change in Control Period, we are required to pay to Mr. Alfers (in addition to any Accrued Obligations as defined in the employment agreement), a lump sum in an amount equal to (x) three times (y) the sum of (i) Mr. Alfers’ then in effect base salary plus (ii) Mr. Alfers’ Target Bonus (as defined in the employment agreement) for the year in which the Change in Control occurs. Additionally, any unvested equity awards that were granted prior to the Change in Control, including the awards described herein, fully and immediately vest on the Change in Control.
Upon Mr. Alfers’ termination without Cause or upon Mr. Alfers’ Resignation for Good Reason in the absence of a Change in Control (as such terms are defined in the employment agreement), we are required to pay to Mr. Alfers (in addition to any Accrued Obligations as defined in the employment agreement), a lump sum in an amount equal to (x) two times (y) the sum of (i) Mr. Alfers’ then in effect base salary plus (ii) the average of Mr. Alfers’ bonuses payable with respect to the two prior fiscal years. Additionally, the initial equity grant shall fully and immediately vest. Except for the initial equity grant, any unvested equity grants are forfeited as of the date of termination, and any vested equity awards are treated as specified in the applicable equity plan and award agreement.
On June 18, 2012, we issued options to purchase 5,000,000 shares of common stock at an exercise price of $0.34 per share to Mr. Alfers, which vested in full upon issuance. Additionally, on June 18, 2012, we issued a restricted stock grant of 5,000,000 shares of common stock to Mr. Alfers, pursuant to a restricted stock agreement which was amended on February 8, 2013. The 5,000,000 shares of restricted stock were granted in two separate awards: (i) 1,107,490 shares of restricted stock were granted to Mr. Alfers pursuant to the Company’s 2012 Equity Incentive Plan and (ii) 3,892,510 shares of restricted stock were granted to Mr. Alfers pursuant to an individual equity incentive plan, but subject to the same terms of the Company’s 2012 Equity Incentive Plan. The 5,000,000 shares of restricted stock vest as follows: 33.33% on March 14, 2014, 33.33% on June 18, 2014, and 33.34% on June 18, 2015, subject to acceleration under certain events, including a change of control, as described above.
Eric Alexander
We entered into a revised offer letter with Mr. Alexander on November 21, 2012, amended on February 8, 2013, pursuant to which Mr. Alexander has an annual salary of $175,000. In addition, in connection with his appointment, the Company granted Mr. Alexander 200,000 shares of the Company’s restricted stock. The 200,000 shares of restricted stock were granted in two separate awards: (i) 44,300 shares of restricted stock were granted to Mr. Alexander pursuant to the Company’s 2012 Equity Incentive Plan and (ii) 155,700 shares of restricted stock were granted to Mr. Alexander pursuant to an individual equity incentive plan, but subject to the same terms of the Company’s 2012 Equity Incentive Plan. The 200,000 shares of restricted stock vest as follows: 33.33% on March 14, 2014, 33.33% on November 30, 2014, and 33.34% on November 30, 2015, subject to acceleration under certain events, including a change of control.
In connection with the offer letter we entered into with Eric Alexander, we also entered into a severance compensation agreement with Mr. Alexander on November 21, 2012. Upon a Qualifying Termination (as defined in the severance compensation agreement) occurring on or within twelve months following a Change of Control (as defined in severance compensation agreement), we are required to pay Mr. Alexander a lump-sum severance payment equal to one and a half times the sum of (i) Mr. Alexander’s base salary, plus (ii) the greater of Mr.
Alexander’s Annual Bonus Amount or Mr. Alexander’s Assumed Bonus Amount (both as defined in the severance compensation agreement).
We granted Mr. Alexander 1,000,000 shares of restricted stock on February 12, 2013, vesting as follows: 333,334 shares on February 12, 2014, 333,333 shares on February 12, 2015 and 333,333 shares on February 12, 2016, subject to acceleration or forfeiture in certain circumstances, including a change of control.
Debra Struhsacker
We entered into an offer letter with Ms. Struhsacker on September 23, 2013 pursuant to which Ms. Struhsacker serves as the Company’s Corporate Vice President and has an annual salary of $200,000.
In connection with the offer letter we entered into with Ms. Struhsacker, we also entered into a severance compensation agreement with Ms. Struhsacker on September 23, 2013. Upon a Qualifying Termination (as defined in the severance compensation agreement) occurring on or within twelve months following a Change of Control (as defined in severance compensation agreement), we are required to pay Ms. Struhsacker a lump-sum severance payment equal to one and a half times the sum of (i) Ms. Struhsacker’s base salary, plus (ii) the greater of Ms. Struhsacker’s Annual Bonus Amount or Ms. Struhsacker’s Assumed Bonus Amount (both as defined in the severance compensation agreement).
Prior to Ms. Struhsacker’s election as Corporate Vice President, we granted Ms. Struhsacker 750,000 shares of restricted stock on February 12, 2013, vesting as follows: 250,000 shares on February 12, 2014, 250,000 shares on February 12, 2015, and 250,000 shares on February 12, 2016, subject to acceleration or forfeiture in certain circumstances, including a change of control.
In addition, prior to Ms. Struhsacker’s election, the Company granted Ms. Struhsacker 400,000 stock options on March 6, 2012, vesting as follows: 100,000 options on the date of issuance, 100,000 options December 31, 2012, 100,000 options on December 31, 2013 and 100,00 options on December 31, 2014. The Company granted Ms. Struhsacker 88,600 stock options on June 18, 2012, vesting as follows: 22,150 options on the date of issuance, 22,150 options December 31, 2012, 22,150 options December 31, 2013 and 22,150 options December 31, 2014. The Company also granted Ms. Struhsacker 311,400 stock options on June 18, 2012, vesting as follows: 77,850 options on the date of issuance, 77,850 options December 31, 2012, 77,850 options December 31, 2013 and 77,850 options December 31, 2014. All vesting schedules are subject to acceleration under certain events, including a change of control.
Adam Wasserman
We entered into an engagement letter with Adam Wasserman in September 2010. Pursuant to the terms of this engagement letter, Mr. Wasserman was paid a monthly retainer fee of $4,000 for accounting services performed beginning October 2010 and a onetime fee of 20,000 shares of common stock upon execution of the engagement letter. We valued the common stock at the fair market value on the date of grant at $0.60 per share. On March 1, 2011, the retainer fee was increased to $6,000 per month. Mr. Wasserman agreed to act as our Chief Financial Officer. During the fiscal year ended December 31, 2011 and 2012, fees amounted to $72,000 and $99,256, respectively. Mr. Wasserman resigned on November 19, 2012.
David Rector
David Rector served as our President from May 12, 2011 to February 9, 2012. Mr. Rector served as the Vice President of Finance and Administration from February 9, 2012 to November 20, 2012. Mr. Rector is not party to an employment agreement with us. Under the terms of an oral agreement, we made periodic payments to Mr. Rector as compensation for his services to us as an officer and director. The amount of this compensation was determined from time to time by our Board of Directors, of which he was a member. From February 9, 2012 through his resignation on November 20, 2012, we paid Mr. Rector $15,417 per month for his services. Mr. Rector remained as an employee of the Company to assist with transition matters and other projects until the end of 2012.
Indemnification Agreements
In February 2013, the Company entered into indemnification agreements with our directors and executive officers, providing for indemnification against all expenses, judgments, fines and amounts paid in settlement incurred by such indemnitee in connection with any threatened, pending or completed action, suit, alternative dispute resolution mechanism or proceeding to which indemnitee was or is a party or is threatened to be made a party by reason of the fact that indemnitee is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another enterprise, to the fullest extent permitted by Nevada law. The indemnification agreements also provide for the advancement of expenses (including attorneys’ fees) incurred by the indemnitee in connection with any action, suit, alternative dispute resolution mechanism or proceeding (subject to the terms and conditions set forth therein). The indemnification agreements contain certain exclusions, including proceedings initiated by the indemnitee unless such advancement is specifically approved by a majority of our disinterested directors.
Outstanding Equity Awards at Fiscal Year-End
The following table provides information on the holdings of equity awards of our named executive officers at December 31, 2012. This table includes unexercised and unvested options and equity awards. Each outstanding award is shown separately for each named executive officer.
Option awards |
|
|
| Stock awards |
| ||||||||||||||||||
Name |
| Number |
| Number |
| Equity |
| Option |
| Option |
| Number |
| Market |
| Equity |
| Equity |
| ||||
Stephen Alfers |
| 10,000,000 | (1) | 0 |
| 0 |
| 0.49 |
| 2/9/22 |
| 0 |
| 0 |
| 0 |
| 0 |
| ||||
Stephen Alfers |
| 0 |
| 0 |
| 0 |
| — |
| — |
| 0 |
| 0 |
| 12,000,000 | (2) | $ | 5,880,000 |
| |||
Stephen Alfers |
| 5,000,000 | (3) | 0 |
| 0 |
| 0.34 |
| 6/18/22 |
| 0 |
| 0 |
| 0 |
| 0 |
| ||||
Stephen Alfers |
| 0 |
| 0 |
| 0 |
| — |
| — |
| 0 |
| 0 |
| 1,107,490 | (4) | $ | 376,547 |
| |||
Stephen Alfers |
| 0 |
| 0 |
| 0 |
| — |
| — |
| 0 |
| 0 |
| 3,892,510 | (5) | $ | 1,323,453 |
| |||
Eric Alexander |
| 0 |
| 0 |
| 0 |
| — |
| — |
| 0 |
| 0 |
| 44,300 | (6) | $ | 15,505 |
| |||
Eric Alexander |
| 0 |
| 0 |
| 0 |
| — |
| — |
| 0 |
| 0 |
| 155,700 | (7) | $ | 54,495 |
| |||
David Rector |
| 500,000 | (8) | 0 |
| 0 |
| 0.34 |
| 6/18/22 | (8) | 0 |
| 0 |
| 0 |
| 0 |
| ||||
(1)Options granted under executive employment agreement dated February 9, 2012. The options vested in full upon issuance.
(2)Restricted shares granted under executive employment agreement dated February 9, 2012. The shares vest as follows: (i) 3,000,000 shares of restricted stock vest on February 9, 2014, (ii) 6,000,000 shares of restricted stock vest on March 14, 2014, and (iii) 3,000,000 shares of restricted stock vest on February 9, 2015, subject to acceleration under certain events, including a change of control.
(3)Options granted on June 18, 2012. The options vested in full upon issuance.
(4)Restricted stock granted on June 18, 2012. The 1,107,490 shares of restricted stock were granted to Mr. Alfers pursuant to the Company’s 2012 Equity Incentive Plan. The shares vest as follows: (i) 33.33% on March 14, 2014, (ii) 33.33% on June 18, 2014, and (iii) 33.34% on June 18, 2015, subject to acceleration under certain events, including a change of control.
(5)Restricted stock granted on June 18, 2012. The 3,892,510 shares of restricted stock were granted to Mr. Alfers pursuant to an individual equity incentive plan, but subject to the same terms of the Company’s 2012 Equity Incentive Plan. The shares vest as follows: (i) 33.33% on March 14, 2014, (ii) 33.33% on June 18, 2014, and (iii) 33.34% on June 18, 2015, subject to acceleration under certain events, including a change of control.
(6)Restricted stock granted under revised offer letter dated November 21, 2012. The 44,300 shares of restricted stock were granted to Mr. Alexander pursuant to the Company’s 2012 Equity Incentive Plan. The shares vest as follows: (i) 33.33% on March 14, 2014, (ii) 33.33% on November 30, 2014, and (iii) 33.34% on November 30, 2015, subject to acceleration under certain events, including a change of control.
(7)Restricted stock granted under revised offer letter dated November 21, 2012. The 155,700 shares of restricted stock were granted to Mr. Alexander pursuant to an individual equity incentive plan, but subject to the same terms of the Company’s 2012 Equity Incentive Plan. The shares vest as follows: (i) 33.33% on March 14, 2014, (ii) 33.33% on November 30, 2014, and (iii) 33.34% on November 30, 2015, subject to acceleration under certain events, including a change of control.
(8)Options granted on June 18, 2012. The options vested on December 31, 2012. The expiration date of the stock options is June 18, 2022; however, pursuant to the Amendment to Non-Qualified Stock Option Agreement March 28, 2013, the post-termination exercise period expires on December 31, 2013.
Company Equity Incentive Plans
Our Board of Directors and stockholders have adopted three equity incentive plans: (i) the 2010 Equity Incentive Plan, butadopted September 29, 2010, pursuant to which 2,800,000shares of our common stock were not granted under the plan: two individuals were granted a totalreserved for issuance as awards, and as of 1,600,000 options at an exercise price of $1.423, that are fully vested, andNovember 21, 2013, 650,000 shares remain available for issuance; (ii) shares that are subject to the terms of the 2012 Equity Incentive Plan, but were not granted under the plan: eight individuals were granted a total of 4,566,290 options with an exercise price of $0.34, with a vesting schedule of 25% on June 18,adopted February 9, 2012, 25% on December 31, 2012, 25% on December 31, 2013, and 25% on December 31, 2014 (these individuals included 3,650,000 options grantedpursuant to our Chief Executive Officer Stephen Alfers), and our director Barry Honig was granted 1,000,000 options with an exercise price of $0.34 that are fully vested.
The purpose of the 2010 and 2012 Equity Incentive Plan. Both equityPlans is to provide an incentive plansto attract and retain directors, officers, consultants, advisors and employees whose services are described below under “considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in our development and financial success. The purpose of the 2013 Equity Incentive Plan is to promote the success of the Company and to increase stockholder value by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons.
The Equity Incentive Plans provide for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to our employees, officers, directors and consultants. The Equity Incentive Plans are administered by either our Board of Directors or a committee appointed by the Board of Directors.
Executive Compensation.”
The following table sets forth information with respect to the beneficial ownership of our voting securities as of February 15,November 21, 2013 by:
·each person known by us to beneficially own more than 5.0% of any class of our voting securities;
·each of our directors;
·each of our named executive officers; and
·all of our directors and executive officers as a group.
The percentages of common stock beneficially owned are reported on the basis of regulations of the Securities and Exchange Commission governing the determination of beneficial ownership of securities. Under the rules of the Securities and Exchange Commission, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of the security, or dispositive power, which includes the power to dispose of or to direct the disposition of the security. Except as indicated in the footnotes to this table, each beneficial owner named in the table below has sole voting and sole investment power with respect to all shares beneficially owned.
As of February 15,November 21, 2013, we had 273,292,027 shares outstanding.
|
| Common Stock (1) |
| ||
Name of Beneficial Owner(2) |
| Shares |
| Percent of |
|
5% Owners |
|
|
|
|
|
Frost Gamma Investments Trust(3) |
| 53,031,350 |
| 19.40 | % |
Executive Officers and Directors |
|
|
|
|
|
Stephen Alfers |
| 32,420,000 | (4) | 11.23 | % |
Eric Alexander |
| 1,200,000 | (5) | * | % |
Debra Struhsacker |
| 1,350,000 | (6) | * | % |
Barry Honig |
| 69,581,634 | (7)(8) | 22.09 | % |
Alex Morrison |
| 1,000,000 | (9) | * | % |
Executive Officers and Directors as a Group (Five persons) |
| 105,551,634 |
| 31.88 | % |
| Common Stock (1) | ||||||||
| Name of Beneficial Owner | Shares Beneficially Owned | Percent of Class | ||||||
| 5% Owners | ||||||||
| Continental Resources Group, Inc. (2) | 76,095,215 | 27.8 | ||||||
| Frost Gamma Investments Trust (3) | 46,915,077 | 17.6 | ||||||
| Executive Officers and Directors(4) | ||||||||
| Stephen Alfers | 15,000,000 | (5) | 5.2 | |||||
| Eric Alexander | 0 | (6) | 0.0 | |||||
| Barry Honig | 25,867,542 | (7) | 9.0 | |||||
| Alex Morrison | 0 | (8) | 0.0 | |||||
| Executive Officers and Directors as a Group (Four persons) | 40,867,542 | 14.2 | ||||||
*Less than one percent (1.0%). (1) Shares of common stock beneficially owned and the respective percentages of beneficial ownership of common stock assumes the exercise of all options, warrants and other securities convertible into common stock beneficially owned by such person or entity currently exercisable or exercisable within 60 days of November 21, 2013. In computing the number of shares beneficially owned and the percentage ownership, shares of common stock that may be acquired within 60 days of November 21, 2013 pursuant to the exercise of options, warrants or other securities convertible into common stock are deemed to be outstanding for that person. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. (2) The address of these persons, unless otherwise noted, is c/o Pershing Gold Corporation, 1658 Cole Blvd., Bldg. 6, Suite 210, Lakewood, CO 80401. (3) The address of Frost Gamma Investments Trust is 4400 Biscayne Blvd., Miami, FL 33137. Dr. Philip Frost is the trustee of Frost Gamma Investments Trust and, in such capacity, has voting and dispositive power over the securities held for the account of Frost Gamma Investments Trust. This information is based upon a Form 4 which was filed with the SEC on June 25, 2013. (4) Includes (i) 17,000,000 shares of restricted stock which has not vested but over which Mr. Alfers holds voting power, (ii) options to purchase 10,000,000 | |
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($)(1) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | |||||||||||||
| Stephen Alfers (2) | 2011 | — | — | — | — | — | — | |||||||||||||
| Chief Executive Officer, President and Chairman | 2012 | 229,163 | — | 5,920,500 | 7,580,000 | 500,000 | 14,499,663 | |||||||||||||
| Eric Alexander (3) | 2012 | 45,396 | — | — | 70,000 | — | 115,396 | |||||||||||||
| Vice President Finance and Controller | ||||||||||||||||||||
| David Rector (4) | 2011 | 87,500 | 20,000 | — | — | — | 107,500 | |||||||||||||
| Former President and director | 2012 | 179,340 | — | 138,350 | 340,000 | — | 657,690 | |||||||||||||
| Adam Wasserman (5) | 2011 | — | — | — | — | 72,000 | 72,000 | |||||||||||||
| Former Chief Financial Officer | 2012 | — | — | — | — | 99,256 | 99,256 | |||||||||||||
(5) Includes 1,200,000 shares of restricted stock which has not vested but over which Mr. Alexander exercises voting power.
(6) Includes (i) 750,000 shares of restricted stock which has not vested but over which Ms. Struhsacker exercises voting power, (ii) options to purchase 300,000 shares of common stock with an exercise price of $0.45 per share, which are fully vested, and (iii) options to purchase 300,000 shares of common stock with an exercise price of $0.34 per share, which are fully vested. Does not include options to Mr. Alfers, which vested in full upon issuance. Additionally, on June 18, 2012, we issued a restricted stock grant of 5,000,000purchase 200,000 shares of Common Stock to Mr. Alfers,common stock which will not vest within 60 days of November 21, 2013.
(7) Includes:
(i) 33.33% on March 14, 2014, (ii) 33.33% on June 18, 2014, and (iii) 33.34% on June 18, 2015. The vesting schedule15,584,662 shares of this restrictedcommon stock, was amended in February 2013. The original vesting schedule of the2,000,000 shares of restricted stock which has not vested but over which Mr. Honig exercises voting power, options to purchase 13,400,000 shares of common stock, which are fully vested, 1,956,000 shares of common stock issuable upon conversion of the Series E Convertible Preferred Shares, and 782,400 shares of common stock issuable upon exercise of warrants received in connection with the issuance of the Series E Convertible Preferred Stock, all of which are held directly by Mr. Honig;
(ii) 8,531,243 shares of common stock, 10,227,000 shares of common stock issuable upon conversion of the Series E Convertible Preferred Shares, and 4,999,637 shares of common stock issuable upon exercise of warrants (3,636,000 of which were received in connection with the issuance of the Series E Convertible Preferred Stock), all of which are held by GRQ Consultants, Inc. 401K (“GRQ 401K”);
(iii) 993,692 shares of common stock held by GRQ Consultants, Inc. (“GRQ Consultants”);
(iv) 530,000 shares of common stock, 6,210,000 shares of common stock issuable upon conversion of the Series E Convertible Preferred Shares, and 1,726,800 shares of common stock issuable upon exercise of warrants received in connection with the issuance of the Series E Convertible Preferred Stock, all of which are held by GRQ Consultants, Inc. Roth 401K FBO Barry Honig (“GRQ Roth 401K”); and
(v) 200,000 shares of common stock, 1,743,000 shares of common stock issuable upon conversion of the Series E Convertible Preferred
Shares and 697,200 shares of common stock issuable upon exercise of warrants received in connection with the issuance of the Series E Convertible Preferred Stock, all of which are held by GRQ Consultants, Inc. Defined Benefit Plan (“GRQ Defined”).
(vi) Mr. Honig is the trustee of GRQ 401K, GRQ Roth 401K and GRQ Defined and President of GRQ Consultants, and, in such capacities, has voting and dispositive power over the securities held by GRQ 401K, GRQ 401K, GRQ Defined and GRQ Consultants.
(8) Excludes 1,628,000 shares of common stock held by ALAN S HONIG C/F HARRISON JAMES HONIG UTMA FL, 400,000 shares of common stock held by ALAN S HONIG C/F RYAN HONIG UTMA FL, 400,000 shares of commons stock held by ALAN HONIG C/F CAMERON HONIG UTMA FL, and 400,000 shares of common stock held by ALAN S HONIG C/F JACOB HONIG UTMA FL, all of which Mr. Honig’s father, as custodian, has voting and dispositive power over shares held by such accounts. Mr. Honig exercises no investment or voting power and disclaims beneficial ownership of the shares owned by accounts for which his father is custodian.
(9) Represents 1,000,000 shares of restricted stock which has not vested but over which Mr. Morrison exercises voting power.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Review of Related Person Transactions
We do not have a formal written policy for the review and approval of transactions with related parties. Our Board of Directors is responsible for reviewing and approving or ratifying related-persons transactions. 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 the transaction were to present a conflict of interest, the Board of Directors would determine the appropriate response.
Related Person Transactions
We have entered into agreements and arrangements with our executive officers and directors that are more fully described above under “Executive Compensation — Agreements with Executive Officers”, Executive Compensation — Indemnification Agreements”, and “Director Compensation”.
Transactions with Frost Gamma
On February 23, 2012, we issued 600,000 shares of our Series D Convertible Preferred Stock and warrants to purchase an aggregate of 5,250,000 shares of our common stock at an exercise price of $0.40 per share for an aggregate purchase price of $600,000 to Frost Gamma.
On March 29, 2012, Frost Gamma exercised certain warrants on a cashless basis and received 2,967,143 shares of our common stock (using a VWAP (as defined in such warrants) of $0.919 for this calculation) sixty one (61) days from the date of exercise.
On March 30, 2012, Frost Gamma fully converted certain indebtedness in the then current principal amount of $4,515,604 and accrued and unpaid interest thereon and received 4,546,345 shares of our Series D Convertible Preferred Stock. The conversion price was as follows: (i) 33.33% onat $1.00 per share (the stated value of the Series D Convertible Preferred Stock). As an inducement to fully convert such indebtedness, Frost Gamma also received an additional 940,623 shares of our Series D Convertible Preferred Stock.
On March 30, 2012, Frost Gamma fully converted certain indebtedness in the then current principal amount of $4,515,604 and accrued and unpaid interest thereon and received 4,546,345 shares of our Series D Convertible Preferred Stock. The conversion price was at $1.00 per share (the stated value of the Series D Convertible Preferred
Stock). As an inducement to fully convert such indebtedness, Frost Gamma also received an additional 940,623 shares of our Series D Convertible Preferred Stock.
On June 18, 2013, (ii) 33.33% on June 18, 2014, and (iii) 33.34% on June 18, 2015.
On June 19, 2012, we entered into a Severance CompensationConversion Agreement with Mr. Alexander pursuantFrost Gamma whereby Frost Gamma agreed to which Mr. Alexander would be entitled to separation benefits if he incur were to incur a “Qualifying Termination”, which is a separation from service from the Company that is (a) initiated by the Company for any reason other than cause, death, or disability or (b) initiated by him for good reason (as such terms are defined in the agreement). If a Qualifying Termination occurs prior to a change in control, and Mr. Alexander executes a release of claims, he will receive a lump sum payment equal to one time the sum of base salary and the annual bonus amount. The annual bonus amount would be the averageconvert 3,284,396 shares of the actual regular annual cash bonuses paid or payable to Mr. Alexanderour Series C Preferred Stock (representing 100% of our Series C Preferred Stock outstanding) into 10,263,738 shares of Common Stock and 6,086,968 shares of Series D Preferred Stock (representing 100% of our issued and outstanding Series D Preferred Stock) into 19,021,775 shares of Common Stock. In connection with, respectand as further consideration for, the foregoing conversion, we issued Frost Gamma an additional 3,000,000 shares of Common Stock. The Series C Preferred Stock and Series D Preferred Stock are governed by certain beneficial ownership blockers preventing the holder from converting such securities to the two fiscal yearsextent such conversion would cause the holder to beneficially hold in excess of the Company immediately preceding the fiscal year in which the date9.99% of termination occurs, or if an annual bonus has not been paid, an amount equal to 80% of base salary. If a Qualifying Termination occurs after a change in control,our issued and Mr. Alexander executes a release of claims, he will receive a lump sum payment equal to one and a half times the sum of base salary and the annual bonus amount. The Severance Compensation Agreement contains a one year non-competition and a one year non-solicitation restrictive covenant.
Transactions or Relationships with or involving Mr. Honig
As of December 31, 2012, Continental Resources Group, Inc. owned 76,095,215 shares, or approximately 28.58% of our common stock. From time to time since August 2011, we advanced an aggregate of $350,000 to Continental for its operating expenses. As of the date hereof, Continental has been liquidated and approximately $518,000 of this engagement letter,debt remains outstanding. Mr. WassermanHonig, a member of our Board of Directors, was paid a monthly retainer feethe largest shareholder of $4,000Continental and beneficially owned 12,194,236 shares, or 12.8%, of Continental prior to its liquidation in March 2013. In addition, 3,535,000 shares of Continental were owned by various Uniform Transfer to Minor Act accounts for accounting services performed beginningwhich Mr. Honig’s father is custodian. Mr. Honig exercised no investment or voting power and disclaimed beneficial ownership of the shares owned in the name of his father or by accounts for which his father is custodian. Although Mr. Honig disclaimed beneficial ownership of such shares, if aggregated, the percent of class represented by the aggregate amount beneficially owned and the excluded shares would have totaled 16.69% of Continental Resources Group, Inc.’s issued and outstanding shares.
In October 20102012, the Company entered into an Assignment of Rights and a onetime feeAssumption of 20,000Obligation Agreement with Mr. Honig whereby the Company assigned and transferred the rights arising under the Separation Agreement and General Release executed on March 28, 2011 and Agreement for Payment of Future Proceeds executed in April 2011 (collectively the “Separation Agreements”). The Separation Agreements were executed in connection with debts and obligations owed by Gregory Cohen, the former President of the Company. In consideration for the assumption by Mr. Honig of all obligations owned by the Company under the Separation Agreements, Mr. Honig reduced the Company’s outstanding principal note due to him by $33,500. The Company’s outstanding principal note due to Mr. Honig has since been exchanged for 652 shares of Series E preferred stock and warrants to purchase 782,400 shares of common stock upon execution of this agreement. We valued these common shares at the fair market value on the date of grant at $0.60 per share. in August 2013, as discussed below.
On March 1, 2011, the retainer fee was increased to $6,000 per month. Mr. Wasserman agreed to act as our Chief Financial Officer. During fiscal year ended December 31, 2011 and 2012, fees amounted to $72,000 and $99,256, respectively. Mr. Wasserman resigned on November 19, 2012.
Option awards | Stock awards | ||||||||||||||||||||||||||||||||||
Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) | ||||||||||||||||||||||||||
| Stephen Alfers | 10,000,000 | (1) | 0 | 0 | 0.49 | 2/9/22 | 0 | 0 | 12,000,000 | (2) | $ | 5,880,000 | |||||||||||||||||||||||
| Stephen Alfers | 5,000,000 | (3) | 0 | 0 | 0.34 | 6/18/22 | 3,892,510 | (4) | 0 | 1,107,490 | (4) | $ | 1,700,000 | ||||||||||||||||||||||
| Eric Alexander | 0 | 0 | 0 | --- | --- | 155,700 | (5) | 0 | 44,300 | (5) | $ | 70,000 | |||||||||||||||||||||||
| David Rector | 500,000 | (6) | 0 | 0 | 0.34 | 6/18/22 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
| Barry Honig | $ | — | $ | 1,020,000 | $ | 4,909,900 | $ | — | $ | — | $ | — | $ | 5,929,900 | ||||||||||||||
| Alex Morrison | — | — | — | — | — | — | — | |||||||||||||||||||||
In August 2013, we sold 5,050 shares of Series E preferred stock and warrants to purchase 6,060,000 shares of common stock to Mr. Honig in a private placement for a purchase price of $4,999,500. We also exchanged with Mr. Honig 652 shares of Series E preferred stock and warrants to purchase 782,400 shares of common stock for the first, secondoutstanding principal and third anniversaryaccrued interest of the grant date.
Transactions with Debra Struhsacker
Ms. Struhsacker was a consultant of the Company.Company from August 2011 until she joined the Company as Corporate Vice President in September 2013. We paid Ms. Struhsacker approximately $40,000 in 2011, approximately $200,000 in 2012, and approximately $140,000 in 2013 for her consulting services.
INDEPENDENT PUBLIC ACCOUNTANTS
KBL, LLP has served as our independent registered public accounting firm since 2010. The Consulting Agreement has an initial term of three years, subjectCompany is not submitting to renewal. In considerationits stockholders for election a principal accountant for the Services, we agreed to pay Mr. Honig2014 fiscal year. The Company will evaluate its principal accountant and make a decision in the Company’s best interests. We do not anticipate that representatives of KBL, LLP will be present at the Annual and Special Meeting of Stockholders.
The following consideration:
|
| Fiscal Year Ended |
| ||||
|
| 2012 |
| 2011 |
| ||
Audit Fees(1) |
| $ | 72,500 |
| $ | 40,000 |
|
Audit Related Fees |
| — |
| — |
| ||
Tax Fees |
| — |
| — |
| ||
All Other Fees |
| — |
| — |
| ||
Total Fees |
| $ | 72,500 |
| $ | 40,000 |
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(1) Audit fees include fees for services rendered for the Mr. Rector’s employment by,audit of our annual financial statements and services as a directorreviews of the Corporation without cause, or for reasons other than death, disability, normal or early retirement or good reason, in which case the options granted to Mr. Rector shall vest as of the later of the dates of his termination of employment by the Corporation and his termination of services as a director of the Corporation. Additionally, on June 18, 2012, we issued a restricted stock grant of 1,000,000 shares of Common Stock to Mr. Rector, which vested on December 31, 2012. Mr. Rector resigned from his position as a director of the Company on November 20, 2012 and as an employee of the Company on December 31, 2012, causing Mr. Rector’s options to vest.
Stockholder Proposals
There are no proposals by any security holderstockholder which are or could have been included within this consent solicitation.
We did not hold an annual meeting of stockholders for the fiscal year ended December 31, 20122011 and, as such, in order for any stockholder proposal to be included in our proxy materials for our next annual meeting of stockholders, the deadlinestockholder must meet the eligibility and procedural requirements of Rule 14a-8 of the Exchange Act and the proposal must be received by us a reasonable time before we begin to print and mail our proxy materials to stockholders. If a stockholder intends to present a matter for a vote at the next annual meeting, other than by submitting stockholder proposalsa proposal for inclusion in our proxy statement for our next annualthat meeting, willthe stockholder must give us timely notice in accordance with applicable SEC rules. To be timely, the stockholder’s notice must be received by us a reasonable time before we begin printingto print and distributingmail our proxy materials for our next annual meeting.to stockholders.
All stockholder proposals should be submitted to the attention of ourto: Pershing Gold Corporation, 1658 Cole Blvd., Bldg. 6, Suite 210, Lakewood, CO 80401, Attention: Corporate Secretary at the address of our principal executive offices.Secretary. We urge you to submit any such proposal by a means which will permit proof of the date of delivery, such as certified mail, return receipt requested.
1.1Householding
The purpose of this 2013 Equity Incentive Plan (this “Plan”) of Pershing Gold Corporation, a Nevada corporation (the “Corporation”), is to promote the success of the Corporation and to increasebank, broker or other nominee for any stockholder value by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons.
Furnishing of performance periodsProxy Materials
The Proxy Statement is accompanied by a copy of less than oneour Annual Report to Stockholders (including financial statements) for the fiscal year in no event after 25% or more of the performance period has elapsed) and while performance relating to such target(s) remains substantially uncertain within the meaning of Section 162(m) of the Code. Performance targets shall be adjusted to mitigate the unbudgeted impact of material, unusual or nonrecurring gains and losses, accounting changes or other extraordinary events not foreseen at the time the targets were set unless the Administrator provides otherwise at the time of establishing the targets; provided that the Administrator may not make any adjustment to the extent it would adversely affect the qualification of any compensation payable under such performance targets as “performance-based compensation” under Section 162(m) of Code. The applicable performance measurement period may not be less than 3 months nor more than 10 years.
The following information from our Annual Report is hereby incorporated by delivering shares of Common Stock previously owned by such participant and unless otherwise expressly provided by the Administrator, any shares delivered which were initially acquired by the participant from the Corporation (upon exercise of a stock option or otherwise) must have been owned by the participant at least six monthsreference into this Proxy Statement: our consolidated financial statements as of the date of delivery (or such other period as may be required by the Administrator in order to avoid adverse accounting treatment). Shares of Common Stock used to satisfy the exercise price of an option shall be valued at their Fair Market Value on the date of exercise. The Corporation will not be obligated to deliver any shares unlessDecember 31, 2012 and until it receives full payment of the exercise or purchase price therefor and any related withholding obligations under Section 8.5 and any other conditions to exercise or purchase, as established from time to time by the Administrator, have been satisfied. Unless otherwise expressly provided in the applicable award agreement, the Administrator may at any time eliminate or limit a participant’s ability to pay the purchase or exercise price of any award by any method other than cash payment to the Corporation.
The following information from our Form 10-Q Financials is no longer listed or is no longer actively traded on the OTC Markets or listed on a principal stock exchangehereby incorporated by reference into this Proxy Statement: our consolidated financial statements as of the applicable date, the Fair Market Value of the Common Stock shall be the value as reasonably determined by the Administrator for purposes of the award in the circumstances.
Our management and the express authorization of the Administrator.
You are urged to execute and deliver counterparts is immaterial so long as the holders of a majority of the voting power of the outstanding shares of
By order of the Board of Directors, | |
/s/ Mindyjo Germann | |
Mindyjo Germann |
Our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as amended, filed with the Securities and Exchange Commission (including exhibits) and our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 filed with the Securities and Exchange Commission (including exhibits) will be provided at no charge to any stockholder entitled to vote at the Annual and Special Meeting by facsimile to 973-338-1430.
| . FOLD AND DETACH HERE AND READ THE REVERSE SIDE . PROXY PERSHING GOLD CORPORATION 1658 Cole Blvd., Building 6, Suite 210 Lakewood, Colorado 80401 PROXY FOR THE ANNUAL AND SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 16, 2013 PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned stockholder hereby appoints Stephen Alfers, Eric Alexander, and Mindyjo Germann as attorney and proxy for the undersigned, each with the power to appoint his or her substitute, to represent and to vote all the shares of common stock of Pershing Gold Corporation (the “Company”), which the undersigned would be entitled to vote, at the Company’s Annual and Special Meeting of Stockholders to be held at the offices of Davis Graham & Stubbs LLP located at 1550 Seventeenth Street, Suite 500, Denver, Colorado 80202, on Monday, December 16, 2013, at 9:00 a.m. local time, and at any postponements or adjournments thereof, subject to the directions indicated on the reverse side hereof. In their discretion, the Proxy is authorized to vote upon any other matter that may properly come before the meeting or any adjournments thereof. This proxy, when properly executed, will be voted in the manner directed on the reverse side by the undersigned stockholder. If no direction is made, this proxy will be voted FOR the election of the named nominees as directors, FOR Proposals 2, 4, 5 and for “THREE YEARS” on Proposal 3. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. Important Notice Regarding the Availability of Proxy Materials for the Annual and Special Meeting of Stockholders to be held December 16, 2013. The Proxy Statement, our Annual Report to Stockholders for the fiscal year ended December 31, 2012 and our financial statements for the nine months ended September 30, 2013 included in our Quarterly Report on Form 10-Q are available at: http://viewproxy.com/pershinggold/2013amsm. IMPORTANT: PLEASE SIGN AND DATE ON THE REVERSE SIDE. (Continued, and to be marked, dated and signed, on the other side) |
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DO NOT PRINT IN THIS AREA (Shareholder Name & Address Data) . FOLD AND DETACH HERE AND READ THE REVERSE SIDE . PROXY VOTING INSTRUCTIONS Please have your 11 digit control number ready when voting by Internet or Telephone INTERNET Vote Your Go to www.cesvote.com Have your |  TELEPHONE Vote Your Use any touch-tone telephone to vote your |  MAIL Vote Your Mark, sign, and date your |
