Exhibit 10.1
2007 STOCK COMPENSATION PLAN
OF
SUN RIVER ENERGY, INC.
SECTION 1. ESTABLISHMENT AND PURPOSE
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The Plan was established on August 20, 2007, effective August 20, 2007, to
offer directors, officers and employees, advisors and consultants an opportunity
to acquire a proprietary interest in the success of the Company to receive
compensation in the form of Shares of the Company's common stock. The Plan
provides for the direct issuance of shares.
The Plan is intended to comply in all respects with Rule 16b-3 (or its
successor) under the Exchange Act and shall be construed accordingly.
SECTION 2. DEFINITIONS.
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(A) "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company, as
constituted from time to time.
(B) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(C) "COMMITTEE" shall mean a committee of the Board of Directors, as described
in Section 3(a).
(D) "COMPANY" shall mean Sun River Energy, Inc., a Colorado corporation,
including its wholly owned subsidiary as they may come into existence.
(E) "EMPLOYEE" shall mean (i) any individual who is a common-law employee of
the Company or of a Subsidiary, (ii) an Outside Director, (iii) an
independent contractor who performs services for the Company or a
Subsidiary and who is not a member of the Board of Directors including
consultants and advisors that provide professional, technical, financial,
accounting, capital markets related and other services. Service as an
Outside Director or independent contractor shall be considered employment
for all purposes of the Plan, except as provided in Subsections (a) and (b)
of Section 4,
(F) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
(G) "EXERCISE PRICE" shall mean the amount for which one Share may be purchased
upon exercise of an Option, as specified by the Committee in the applicable
Stock Option Agreement.
(H) "FAIR MARKET VALUE" shall mean the market price of Stock, determined by the
Committee as follows:
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(i) If Stock was traded on a stock exchange on the date in question,
then the Fair Market Value shall be equal to the closing price reported for
such date by the applicable composite-transactions report;
(ii) If stock was traded over-the-counter on the date in question and
was traded on the Nasdaq system or the Nasdaq National Market, then the
Fair Market Value shall be equal to the last-transaction price quoted for
such date by the Nasdaq system or the Nasdaq National Market;
(iii) If Stock was traded over-the-counter on the date in question but
was not traded on the Nasdaq system or the Nasdaq National Market, then the
Fair Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted for such date by the principal
automated inter-dealer quotation system on which Stock is quoted or, if the
Stock is not quoted on any such system, by the "Pink Sheets" published by
the National Quotation Bureau, Inc.; and
(iv) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.
In all cases, the determination of Fair Market Value by the Committee
shall be conclusive and binding on all persons.
(I) "OFFEREE" shall mean an individual to whom the Committee has offered the
right to acquire Shares under the Plan (other than upon exercise of an
Option).
(J) COMMITTEE PROCEDURES. The Committee shall designate one of its members as
chairman. The Committee may hold meetings at such times and places as it
shall determine. The acts of a majority of the Committee members present at
meetings at which a quorum exists, or acts reduced to or approved in
writing by all Committee members, shall be valid acts of the Committee.
(K) COMMITTEE RESPONSIBILITIES. Subject to the provisions of the Plan, the
Committee shall have the authority and discretion to take the following
actions:
(i) To interpret the Plan and to apply its provisions;
(ii) To adopt, amend or rescind rules, procedures and forms relating
to the Plan;
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(iii) To authorize any person to execute, on behalf of the Company,
any instrument required to carry out the purposes of the Plan;
(iv) To determine when Shares are to be awarded or offered for sale
and when Options are to be granted under the Plan,
(v) To select the Offerees;
(vi) To determine the number of Shares to be offered to each Offeree
or to be made subject to each Option;
(vii) To prescribe the terms and conditions of each award or sale of
Shares, including (without limitation) the Purchase Price, and to specify
the provisions of the Stock Purchase Agreement relating to such award or
sale;
(viii) To amend any outstanding Stock Purchase Agreement, subject to
applicable legal restrictions and, to the extent such amendments adverse to
the Offeree's interest, to the consent of the Offeree who entered into such
agreement;
(ix) To prescribe the consideration for the grant of each Option or
other right under the Plan and to determine the sufficiency of such
consideration; and
(x) To take any other actions deemed necessary or advisable for the
administration of the Plan.
All decisions, interpretations and other actions of the Committee
shall be final and binding on all Offerees, and all persons deriving their
rights from an Offeree. No member of the Committee shall be liable for any
action that he or she has taken or has failed to take in good faith with
respect to the Plan, or any right to acquire Shares under the Plan.
SECTION 3. ELIGIBILITY.
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(A) GENERAL RULES. Only Employees (including, without limitation, independent
contractors who are not members of the Board of Directors) shall be
eligible for designation as recipients below.
(B) ATTRIBUTION RULES. For purposes of Subsection (c) above, in determining
stock ownership, an Employee shall be deemed to own the stock owned,
directly or indirectly, by or for such Employee's brothers, sisters,
spouse, ancestors and lineal descendants. Stock owned, directly or
indirectly, by or for a corporation, partnership, estate or trust shall be
deemed to be owned proportionately by or for its stockholders, partners or
beneficiaries. Stock with respect to which such Employee holds an option
shall not be counted.
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(C) OUTSTANDING STOCK. For purposes of Subsection (c) above, "outstanding
stock" shall include all stock actually issued and outstanding immediately
after the grant. "Outstanding stock" shall not include shares authorized
for issuance under outstanding options held by the Employee or by any other
person.
SECTION 4. STOCK SUBJECT TO PLAN.
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BASIC LIMITATION. Shares offered under the Plan shall be authorized but
unissued Shares or treasury Shares. The aggregate number of Shares which may be
issued under the Plan (upon exercise of Options or other rights to acquire
Shares) shall not exceed 15% of Shares outstanding, subject to adjustment
pursuant to Section 9. The number of Shares which are subject to Options or
other rights outstanding at any time under the Plan shall not exceed the number
of Shares which then remain available for issuance under the Plan. The Company,
during the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan.
SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES.
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(A) AGREEMENT. Each award or sale of Shares under the Plan shall be evidenced
by an Agreement between the Offeree and the Company. Such award or sale
shall be subject to all applicable terms and conditions of the Plan and may
be subject to any other terms and conditions which are not inconsistent
with the Plan and which the Committee deems appropriate for inclusion in an
Agreement. The provisions of the various Agreements entered into under the
Plan need not be identical.
(B) DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHTS. Any right to acquire
Shares under the Plan (other than an Option) shall automatically expire if
not exercised by the Offeree within 30 days after the grant of such right
was communicated to the Offeree by the Committee. Such right shall not be
transferable and shall be exercisable only by the Offeree to whom such
right was granted, except as to individuals who are principals of a
contractor.
(C) PURCHASE PRICE. The Purchase Price of Shares to be offered under the Plan
shall not be less than 90 percent of the Fair Market Value of such Shares.
Subject to the preceding sentence, the Purchase Price shall be determined
by the Committee at its sole discretion. The Purchase Price shall be
payable in a form described in Section 8.
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(D) WITHHOLDING TAXES. As a condition to the award, sale or vesting of Shares,
the Offeree shall make such arrangements as the Committee may require for
the satisfaction of any federal, state, local or foreign withholding tax
obligations that arise in connection with such Shares. The Committee may
permit the Offeree to satisfy all or part of his or her tax obligations
related to such Shares by having the Company withhold a portion of any
Shares that otherwise would be issued to him or her or by surrendering any
Shares that previously were acquired by him or her. The Shares withheld or
surrendered shall be valued at their Fair Market Value on the date when
taxes otherwise would be withheld in cash. The payment of taxes by
assigning Shares to the Company, if permitted by the Committee, shall be
subject to such restrictions as the Committee may impose, including any
restrictions required by rules of the Securities and Exchange Commission.
(E) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares awarded or sold under the
Plan shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the
applicable Stock Purchase Agreement and shall apply in addition to any
general restrictions that may apply to all holders of Shares.
SECTION 6. PAYMENT FOR SHARES.
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(A) GENERAL RULE. The entire Purchase Price or Exercise Price of Shares issued
under the Plan shall be payable services of the United States of America at
the time when such Shares are purchased, pursuant to specific contracts or
to employees.
(B) SERVICES RENDERED. To the extent that this Subsection (e) is applicable,
Shares may be awarded under the Plan in consideration of services rendered
to the Company or a Subsidiary. If Shares are awarded without the payment
of a Purchase Price in cash, the Committee shall make a determination (at
the time of the award) of the value of the services rendered by the Offeree
and the sufficiency of the consideration to meet the requirements of
Section 6(c).
SECTION 7. ADJUSTMENT OF SHARES.
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(A) GENERAL. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend
payable in a form other than Shares in an amount that has a material effect
on the value of Shares, a combination or consolidation of the outstanding
Stock (by reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spinoff or a similar occurrence, the Committee shall
make appropriate adjustments in the number of Shares available for future
grants.
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(B) REORGANIZATIONS. In the event that the Company is a party to a merger or
other reorganization, outstanding Options shall be subject to the agreement
of merger or reorganization. Such agreement may provide, without
limitation, for the assumption of outstanding Options by the surviving
corporation or its parent, for their continuation by the Company (if the
Company is a surviving corporation), for payment of a cash settlement equal
to the difference between the amount to be paid for one Share under such
agreement and the Exercise Price, or for the acceleration of their
exercisability followed by the cancellation of Options not exercised, in
all cases without the Optionees' consent. Any cancellation shall not occur
until after such acceleration is effective and Optionees have been notified
of such acceleration. In the case of Options that have been outstanding for
less than 12 months, a cancellation need not be preceded by acceleration.
(C) RESERVATION OF RIGHTS. Except as provided in this Section 9, an Optionee or
Offeree shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend or any other
increase or decrease in the number of shares of stock of any class. Any
issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to; the number or
Exercise Price of Shares subject to an Option. The grant of an Option
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or
assets.
SECTION 8. SECURITIES LAWS.
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Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange on which the Company's
securities may then be listed.
SECTION 9. NO RETENTION RIGHTS.
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Neither the Plan nor any Option shall be deemed to give any individual a
right to remain an employee, consultant or director of the Company or a
Subsidiary. The Company and its Subsidiaries reserve the right to terminate the
service of any employee, consultant or director at any time, with or without
cause, subject to applicable laws, the Company's certificate of incorporation
and by-laws and a written employment agreement (if any).
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SECTION 10. DURATION AND AMENDMENTS.
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(A) TERM OF THE PLAN. The Plan, as set forth herein, shall become effective as
of August 20, 2007. The Plan shall terminate automatically one year after
its initial adoption by the Board of Directors, and may be terminated on
any earlier date pursuant to Subsection (b) below.
(B) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may, subject
to applicable law, amend, suspend or terminate the Plan at any time and for
any reason. An amendment to the Plan shall require stockholder approval
only to the extent required by applicable law.
(C) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or sold under
the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any
amendment thereto shall not affect any Share previously issued or any
Option previously granted under the Plan.
SECTION 11. EXECUTION.
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To record the adoption of the Plan by the Board of Directors on August 20,
2007, the Company has caused its authorized officer to execute the same.
Sun River Energy, Inc.
By: /s/Wesley F. Whiting
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Wesley F. Whiting
President and CEO
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