UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C
Amendment No. 2
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934
Check the appropriate box:
/X/ Preliminary Information Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
/ / Definitive Information Statement
BATTLE MOUNTAIN GOLD EXPLORATION CORP.
--------------------------------------
(Name of Registrant As Specified In Its Charter)
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/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
BATTLE MOUNTAIN GOLD EXPLORATION CORP.
One East Liberty Street, 6th Floor, Suite 9
Reno, Nevada 89504
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on November __, 2005
To the stockholders of Battle Mountain Gold Exploration Corp.:
Notice is hereby given that an Annual Meeting of stockholders of Battle
Mountain Gold Exploration Corp. (the "Company") will be held on November__,
2005 at 10:00 a.m., Pacific Standard Time, at Airport Plaza Hotel and Conference
Center, 1981 Terminal Way, Reno, Nevada, for the following purposes. The
shareholders holding a majority of our total issued and outstanding shares have
indicated verbally to management that they will either approve or ratify, as the
case may be, the following proposals:
1. To re-elect Anthony Crews, Wade A. Hodges, Mark Kucher, Brian Labadie,
and James E McKay as Directors.
2. To ratify the adoption of the 2004-2005 Non-Qualified Stock Option
Plan covering 3,500,000 shares of our Common Stock, as approved by the
Board of Directors, by unanimous vote, on December 15, 2004.
3. To ratify amendments to our Articles of Incorporation. The Board of
Directors and a majority of our then current shareholders approved an
amendment to our Articles of Incorporation via signed written consent
to action without a meeting on February 9, 2004, that was filed with
the State of Nevada on April 15, 2004. Our Majority Shareholders will
ratify the approval of the Certificate of Amendment to the Articles of
Incorporation to change our name to Battle Mountain Gold Exploration
Corp., to effect a 10:1 forward stock split, to increase the
authorized shares to 200,000,000 shares of common stock, to
reauthorize the par value of $.001 per share of common stock, and to
reauthorize 10,000,000 shares of preferred stock with a par value of
$.001 per share of preferred stock.
4. To ratify the appointment of Chisholm, Bierwolf & Nilson, LLC,
Certified Public Accountants, as the Company's independent auditors
for fiscal year 2006, as approved by the Board of Directors, by
unanimous vote, on January 12, 2005.
5. To transact such other business as may properly come before the Annual
Meeting.
Common stockholders of record on the close of business on October 3, 2005
are entitled to notice of the meeting. All stockholders are cordially invited to
attend the meeting in person.
By Order of the Board of Directors,
/s/ James E. McKay
---------------------
James E. McKay
Chief Executive Officer and Director
October 28, 2005
BATTLE MOUNTAIN GOLD EXPLORATION CORP.
One East Liberty Street, 6th Floor, Suite 9
Reno, Nevada 89504
INFORMATION STATEMENT
October __, 2005
This Information Statement is furnished by the Board of Directors (the
"Board") of Battle Mountain Gold Exploration Corp. (the "Company") to provide
notice of an Annual Meeting of stockholders of the Company which will be held on
November __, 2005 at 10:00 a.m., Pacific Standard Time, at the Airport Plaza
Hotel and Conference Center, 1981 Terminal Way, Reno, Nevada 89502.
The record date for determining stockholders entitled to receive this
Information Statement has been established as the close of business on October
3, 2005 (the "Record Date"). This Information Statement will be first mailed on
or about November __, 2005 to stockholders of record at the close of business on
the Record Date. As of the Record Date, there were issued and outstanding
41,030,000 shares of the Company's Common Stock and no shares of the Company's
Preferred Stock. The holders of all outstanding shares of Common Stock are
entitled to one vote per share of Common Stock registered in their names on the
books of the Company at the close of business on the Record Date.
The presence at the Annual Meeting of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum. The Board of Directors is not aware of any
matters that are expected to come before the Annual Meeting other than the
matters referred to in this Information Statement.
The matters scheduled to come before the Annual Meeting require the
approval of a majority of the votes cast at the Annual Meeting. Mark Kucher,
Julie Kucher, Bug River Trading Corp., Warrior Resource Corp., British Swiss
Investment Corp., James E. McKay, Wade A. Hodges, Kenneth Tullar, Paul Taufen,
Jay Egan, John Egan, Greg Hrycak, Roger Rosmus, Manjy Sidoo, Nick Demare, James
Buskard, Thomas Byrne, Dutchess Corporation, Bluemint Exploration, Inc. and St.
Georges Hill Trust (the "Majority Shareholders") beneficially own an aggregate
of 25,410,000 shares, or 61.9% of our Common Stock, and will be able to approve
the matters presented in this Information Statement. The Company is not
soliciting your vote as the Majority Shareholders will be present at the Annual
meeting and already have the votes in hand, based on their stock ownership, to
approve or ratify the proposals to come before the meeting.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
PROPOSAL 1
THE RE-ELECTION OF FIVE DIRECTORS
The five directors who are currently in office are to be re-elected to
serve until the next annual meeting of the shareholders and until their
successors are elected and shall have qualified. The Board of Directors has
nominated Anthony Crews, Wade A. Hodges, Mark Kucher, Brian Labadie, James E
McKay to serve as directors (the "Nominees," or individually the "Nominee").
The Nominees are currently serving as Directors of the Company. Mr. Kucher
currently serves as the Company's Principal Financial Officer. Mr. McKay
currently serves as the Company's President, Chief Executive Officer, Secretary
and Treasurer. The Board of Directors has no reason to believe that any Nominee
will be unable to serve or decline to serve as a director. Any vacancy
occurring between shareholders' meetings, including vacancies resulting from an
increase in the number of directors may be filled by the Board of Directors. A
director elected to fill a vacancy shall hold office until the next annual
shareholders' meeting.
Our Majority Shareholders have verbally indicated that they will approve
the re-election of all nominees named above to the Board of Directors.
Therefore, the Company is not asking for your proxy, and the Company requests
that you do not send a proxy, as no further shareholder approval is either
required or sought.
The following biographical information is furnished with respect to each of
the Nominees. The information includes the individual's present position with
the Company, period served as a director, and other business experience during
the past five years.
DIRECTORS
ANTHONY CREWS, has served as a Director of the Company since November 2004.
Mr. Crews has owned and served as the Principal of both The Mines Group, Inc.
and Crews Engineering, Inc. since January 1997. Mr. Crews has over twenty-nine
(29) years of experience in Civil, Mining, and Environmental Engineering. Mr.
Crews holds a Bachelors degree in Civil Engineering from The University of the
Witwatersrand. Mr. Crews is a member of the following organizations: Society of
Mining and Metallurgical Engineers, USA; American Society of Civil Engineers,
USA; Aircraft Owners and Pilots Association, USA; Royal Ocean Racing Club,
London, UK; Nevada Mining Association; National Council of Examiners for
Engineering and Surveying. Mr. Crews is a Registered Professional Engineer in
California, Nevada, Arizona and Hawaii.
WADE A. HODGES, has served as a Director of the Company since September
2004. Mr. Hodges worked as a self-employed Consulting Exploration Geologist to
the gold mining industry since December 1996. Mr. Hodges has twenty-six (26)
years of successful, educational and professional, field-oriented exploration
experience. During the twelve (12) years from 1984 through 1996, Mr. Hodges
worked for Santa Fe Pacific Gold Corporation ("Santa Fe") in a number of
challenging staff and management positions as a valued member of various
national and international exploration and development teams, which were largely
responsible for the resulting growth of Santa Fe. Mr. Hodges holds a Bachelor of
Science degree in Geology and a Master of Science degree in Economic Geology
from Oregon State University. He has also participated in numerous other courses
and seminars directed primarily toward the discovery and development of economic
hydrothermal gold deposits. Mr. Hodges is a member of the Geological Society of
America, the Society for Economic Geologists, the Society for Mining,
Metallurgy, and Exploration, Inc., the Geological Society of Nevada, and the
American Institute of professional Geologists.
MARK KUCHER, has served as a Director of the Company and the Company's
Principal Financial Officer since April 2004. From April 2004 to September 2004,
he was also the Company's President, Chief Executive Officer, Secretary and
TreasurerSince January 1992, he has also served as an officer, director and
shareholder of British Swiss Investment Corp., a private Swiss corporation
acting on behalf of Swiss pension funds in the disposition of various resource
investments in Canada, predominantly in oil and gas and gold mining. Mr. Kucher
has commercial, business development and corporate finance experience with an
emphasis in the mining industry. Mr. Kucher has also had various positions with
investment banks and brokerage firms. Mr. Kucher holds an MBA from the
University of Western Ontario and a Bachelor of Commerce Degree from The
University of Manitoba.
BRIAN LABADIE, has served as a Director of the Company since November 2004.
Mr. Labadie has over three decades of metallurgical, mine development and
operations experience. In his career, he held many senior management roles with
Cominco (TSX-CLT), Echo Bay Mining (ASE-ECO) and currently, Miramar Mining
(TSX-MAE). Mr. Labadie is Miramar Mining's Executive Vice President and Chief
Operating Office and during his tenure, Mr. Labadie has successfully developed
and implemented environmental policies and management systems, budget and cost
control systems and long term mine planning processes. Mr. Labadie holds a
Bachelor of Applied Science in Geological Engineering from the University of
Toronto. In addition to bringing his extensive technical, quality control
monitoring and operational management experience to our Board, Mr. Labadie has a
key advisory role in Battle Mountain's strategy to partner and joint-venture
with major industry producers having existing gold resources in the Nevada.
JAMES E. MCKAY, began formally serving as the Company's President, Chief
Executive Officer, Secretary and Treasurer in September 2004. Mr. McKay had
assisted Mark Kucher in these capacities since June 2004. From July 1992 to May
2004, Mr. McKay was a Manager and Director of Miramar Mining Corporation's,
American Eagle Resources and managed the Golden Eagle Mine in Storey County,
Nevada. During the same period, Mr. McKay served as a director of Aurex, a
Canadian-Chilean partnership involved in acquisitions and the ownership and
management of an underground copper-gold mine in Chile. From February 1989 to
July 1993, Mr. McKay was a self-employed Consultant. Mr. McKay has over thirty
(30) years of foreign and North American exploration and operational experience.
His experience has included corporate directorships and exploration, operations
and reclamation management. In 1979, following six years as a field exploration
geologist in Africa, Colombia, Mexico, and North America, he was designated the
on-site manager of Homestake Mining Corporation's McLaughlin exploration
project, from its inception through the announcement of the discovery of the 3
million ounces gold deposit. Mr. McKay holds a Masters in Business
Administration and a Bachelor of Science degree in Geological Engineering both
from the University of Nevada.
All directors of the Company will hold office until the next annual meeting
of the shareholders, and until their successors have been elected and qualified.
Officers of the Company are elected by the Board of Directors and hold office at
the pleasure of the Board.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In September 2004, the Company entered into an Exchange with the former
shareholders of Battle Mountain pursuant to which Battle Mountain became a
wholly-owned subsidiary of the Company. The Company issued an aggregate of
11,640,000 shares of common stock to the former shareholders of Battle Mountain.
The Exchange was one share of the Company for each share of Battle Mountain.
Prior to the Exchange, Battle Mountain had sold an aggregate of 11,640,000
shares consisting of sales of an aggregate of 7,000,000 shares for $122,000 and
an aggregate of 4,640,000 shares for $358,000 in January 2004 and May 2004,
respectively. Battle Mountain sold the 7,000,000 shares to six (6) individuals,
three of whom became executive officers and/or directors of the Company, and
three (3) entities, all of which are affiliates of Mark Kucher, our Chief
Financial Officer and a Director. Battle Mountain sold the 4,640,000 shares to
two (2) individuals and three (3) entities, one (1) of which is an affiliate of
Mr. Kucher. No underwriters or agents were involved in the foregoing issuances
and no underwriting discounts or commissions were paid by the Company.
In October 2004, the Company sold an aggregate of 900,000 shares of common
stock to an unaffiliated entity for an aggregate of $425,000 (or $0.4722 per
share). The Company claims an exemption from registration afforded by Section
4(2) of the Act since the foregoing issuance did not involve a public offering,
the recipient had access to information that would be included in a registration
statement, took the shares for investment and not resale and the Company took
appropriate measures to restrict transfer. No underwriters or agents were
involved in the foregoing issuance and no underwriting discounts or
commissions were paid by the Company.
In November 2004, the Company received private placement subscription
offers for an aggregate of 450,000 shares of restricted common stock from four
(4) individual investors for an aggregate total subscription of $450,000 (or
$1.00 per share). At the time of the subscription, the OTC Bulletin Board market
price for the Company's shares was approximately $1.35 per share. Shortly after
receipt of the respective subscription offers from the four (4) investors, and
prior to the Board of Directors' acceptance of the respective offers and
issuance of any shares, the market price of the Company's shares, which were
very thinly traded and had low trading volume, started dropping, and continued
to drop, to approximately $.60 per share by January 2005. Accordingly, since
their subscriptions had not been accepted or their shares issued to them, the
four (4) offerees were not bound to the price of their original subscription
offers and, therefore, requested that the price per share in their respective
subscription offers be amended to reflect the then-current market price of the
shares. Based thereon, on or about February 1, 2005, the Company agreed to
change the terms of the private placement sales to the four (4) subscribers to
provide for 900,000 shares for an aggregate of $450,004 (or approximately $0.50
per share).
This re-pricing of the private placement sale of shares of our Common Stock
was done to more accurately and consistently reflect actual market price and
conditions of our common shares, maintain the four (4) investors' interest in
the private placement and offer the investors what the Company believed was an
equitable investment opportunity. In April 2005, the Company agreed to accept
$100,000 less of an investment from one of the four (4) investors. As a result
of these changes in the original terms of the sale, the Company received
$350,004 for an aggregate of 700,000 shares. The spouse of Mark Kucher, the
Company's Chief Financial Officer and a Director of the Company, purchased
40,000 of these shares. The Company claims an exemption from registration
afforded by Section 4(2) of the Act since the foregoing issuances did not
involve a public offering, the recipients had access to information that would
be included in a registration statement, took the shares for investment and not
resale and the Company took appropriate measures to restrict transfer. The
Company also claims an exemption from registration afforded by Regulation S
under the Act. No underwriters or agents were involved in the foregoing issuance
and no underwriting discounts or commissions were paid by the Company.
In December 2004, the Company granted options to James E. McKay and Mark D.
Kucher pursuant to their employment agreements to purchase 500,000 shares of the
Company's common stock with an exercise price of $0.99 per share and a vesting
date of May 31, 2005. Mr. McKay serves as the Company's President pursuant to
his employment agreement. Mr. Kucher serves as the Company's Chief Executive
Officer and Chairman of the Company's board of directors pursuant to his
employment agreement. In December 2004, the Company granted options to James
Buskard to purchase 75,000 shares of the Company's common stock with an exercise
price of $0.99 per share and a vesting date of May 31, 2005. In April 2005, the
Company's board of directors amended the terms of their options to vest in their
entirety on April 15, 2005, at an amended exercise price of $0.40 per share.
In April 2005 the Company granted options to each member of the Board of
Directors (Mark Kucher, James McKay, Wade Hodges, Brian Labadie and Anthony
Crews) to purchase 300,000 shares of the Company's common stock with an exercise
price of $0.40 per share and a vesting date of April 15, 2005. In April 2005
the Company granted options to Kenneth Tullar to purchase 200,000 shares of the
Company's common stock with an exercise price of $0.40 per share and a vesting
date of April 15, 2005. In April 2005 the Company granted options to Paul
Taufen and James Buskard to purchase 50,000 shares of the Company's common stock
with an exercise price of $0.40 per share and a vesting date of April 15, 2005.
In April 2005 the Company granted options to Thomas Byrne to purchase 125,000
shares of the Company's common stock with an exercise price of $0.40 per share
and a vesting date of April 15, 2005.
Wade A. Hodges, a Director of the Company, owns a forty percent (40%)
membership interest in Nevada Gold Exploration Solutions, LLC, a Nevada limited
liability company ("NGXS"). Battle Mountain Gold Exploration, Inc., the
Company's wholly-owned subsidiary ("Battle Mountain"), has entered into a joint
venture agreement with NGXS. As contemplated by the joint venture agreement,
Battle Mountain and NGXS formed Pediment Gold, LLC ("Pediment") to explore the
Nevada great basin physiographic area using a proprietary water chemistry
database developed by NGXS. Mr. Hodges provides geological services to the
joint venture in consideration for $400 per day plus a per diem of $125 per day.
Mr. Hodges received an aggregate of $78,482. for services that he provided to
the joint venture as of March 1, 2005.
Mark Kucher has entered into an employment agreement with the Company
pursuant to which Mr. Kucher serves as the Company's Chief Financial Officer and
as a Director of the Company. The terms of the agreement provide that it is
retroactively effective on January 1, 2004. Mr. Kucher receives a base salary of
$7,500 per month, effective retroactively from January 2004 that is not payable
until the Company is fully vested in Pediment. Mr. Kucher has the option to
receive his salary in shares, at market value, at any time. Mr. Kucher also
receives three (3) weeks of paid vacation. The agreement provides for the grant
of an option to Mr. Kucher to purchase 500,000 shares of the Company's common
stock that vests one year after commencement of Mr. Kucher's employment with the
Company, provided that if the Company terminates Mr. Kucher's employment prior
to such time, the option will automatically vest in its entirety on the date of
such termination. On December 15, 2004, in satisfaction of the obligation to
grant an option to Mr. Kucher, the Company's Board of Directors granted Mark
Kucher an option to purchase 500,000 shares of the Company's common stock at an
exercise price of $0.99 per share, which option vests in its entirety on May 31,
2005, provided that if the Company terminates Mr. Kucher's employment prior to
May 31, 2005, the option will automatically vest in its entirety on the date of
termination. Although Mr. Kucher's employment commenced on January 1, 2004,
under the terms of the employment agreement, Mr. Kucher agreed to receive the
option with the later vesting date of May 31, 2005.
James E. McKay has entered into a consulting agreement with the Company
pursuant to which Mr. McKay serves as the Company's President. Mr. McKay
receives a base salary of $7,500 per month, three (3) weeks of paid vacation,
and an option to purchase 500,000 shares of the Company's common stock at an
exercise price of $0.99 per share that vests in its entirety on May 31, 2005.
As of May 31, 2005, the Company had notes payable to related parties of
$137,268, of which $127,500 was owed to Mr. Kucher and $9,768 was owed to Mr.
McKay. The notes payable to related parties are due on demand and do not bear
interest. The amount owed to Mr. Kucher includes $127,500 of accrued base
compensation as of such date.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and persons who own more than 10% of
a class of the Company's equity securities which are registered under the
Exchange Act to file with the Securities and Exchange Commission (the
"Commission" or the "SEC") initial reports of ownership and reports of changes
of ownership of such registered securities. Such executive officers, directors
and greater than 10% beneficial owners are required by Commission regulation to
furnish the Company with copies of all Section 16(a) forms filed by such
reporting persons.
Based on stockholder filings with the SEC, Anthony Crews, Wade A. Hodges,
Mark Kucher, Brian Labadie, and James E. McKay are subject to Section 16(a)
filing requirements. To the Company's knowledge, based solely on a review of
the copies of such reports furnished to the Company and on representations that
no other reports were required, no person required to file such a report failed
to file on a timely basis during the Company's most recent fiscal year.
MEETINGS, ATTENDANCE AND CONSENT OF THE BOARD OF DIRECTORS
During the period from August 1, 2003 to July 31, 2004, and the period from
August 31, 2004 to December 31, 2004, and the period from December 31, 2004 to
March 31, 2005 all of the Directors of the Board of Directors executed two (2),
eight (8) and written consents, respectively. The Board of Directors held one
(1) meeting on December 15, 2004, (at which meeting all of five (5) of the
Directors were present), one (1) meeting on January 12, 2005 (at which meeting
four Directors were present and the fifth, Brian Labadie, participated by
conference call), one (1) meeting on February 17, 2005 (at which meeting three
Directors were present, a fourth, Brian Labadie, participated by conference
call, and the fifth, Mark Kucher was not in attendance), and one (1) meeting on
April 27, 2005 (at which meeting three Board members were present and the fourth
and fifth, Brian Labadie and Mark Kucher, participated by conference call.
NO STANDING AUDIT, NOMINATING OR COMPENSATION COMMITTEE
We have no standing audit, nominating, compensation committee, or any other
committees of the Board of Directors and, therefore, there were no committee
meetings. Our Board of Directors believes that it is appropriate for us not to
have a nominating committee because our Majority Shareholders make such
nominations and have the ability, voting solely their shares of Common Stock, to
have such nominations approved at an annual or special meeting, or by written
consent to action, of our stockholders.
SECURITY HOLDER COMMUNICATIONS WITH OUR BOARD OF DIRECTORS
Our Board of Directors accepts all written communications from security
holders. Security holders wishing to communicate with our Board of Directors
may send written communications directly to James E. McKay, Director, at One
East Liberty Street, 6th Floor, Suite 9, Reno, Nevada 89504.
EXECUTIVE COMPENSATION
Compensation paid to Officers and Directors is set forth in the Summary
Compensation Table below. The Company may reimburse its Officers and Directors
for any and all out-of-pocket expenses incurred relating to the business of the
Company.
SUMMARY COMPENSATION TABLE(1)
Annual Compensation
-------------------
Other Annual
Name & Principal Position Year Salary ($) Bonus ($) Compensation
- ------------------------------- ---- ----------- ---------- -------------
James E. McKay 2004 $52,500 (2) $0 $0
CEO, President, Secretary,
Treasurer and Director
Mark Kucher 2004 $90,000 (3) $0 $0
Principal Financial Officer and
Director
Dana Neill Upton 2004 $0 $0 $0
Former CEO and 2003 $0 $0 $0
Director 2002 $0 $0 $0
<FN>
(1) The Company does not provide any fringe benefits other than vacation pay
and stock options pursuant to a consulting agreement with James E. McKay
and an employment agreement with Mark Kucher, both of which are discussed
in more detail below.
(2) Includes seven (7) months of salary at $7,500 per month pursuant to a
consulting agreement that became effective June 1, 2004. The terms of the
consulting agreement are discussed above under the heading "Certain
Relationships and Related Transactions."
(3) Includes twelve (12) months of accrued salary at $7,500 per month pursuant
to an employment agreement which was entered into in January 2005, but
which became retroactively effective to January 1, 2004. The terms of the
employment agreement are discussed above under the heading "Certain
Relationships and Related Transactions."
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS
The following table sets forth information as of May 31, 2005, with respect
to the beneficial ownership of the common stock by (i) each director and officer
of the Company, (ii) all directors and officers as a group and (iii) each person
known by the Company to own beneficially 5% or more of the common stock:
Name and Address Shares of Common Stock Beneficially Owned(1)
of Beneficial Owners Number Percent
- -------------------- ------- -------
Mark Kucher 8,550,000 (2) 20.8%
1725 Knox Road
Vancouver, B.C. V6T 1S4
James E. McKay 4,700,000 (3) 11.5%
One East Liberty Street, 6th Floor
Reno, Nevada 89504
Wade A. Hodges 2,100,000 (4) 5.1%
14370 Riata Circle
Reno, Nevada 89521
Kenneth Tullar 2,100,000 (5) 5.1%
101 Brownstone Drive
Reno, Nevada 89512
All officers and directors 15,350,000 (2) 37.4%
as a group (3 people)
<FN>
(1) The number of shares of common stock owned are those "beneficially
owned" as determined under the rules of the Commission, including any
shares of common stock as to which a person has sole or shared voting or
investment power and any shares of common stock which the person has the
right to acquire within 60 days through the exercise of any option, warrant
or right. As of June 10, 2005, there were 41,030,000 shares of common stock
outstanding.
(2) Includes 3,160,000, 1,000,000, 1,000,000 and 40,000 shares of common
stock owned by Bug River Trading Corp. ("Bug River"), British Swiss
Investment Corp. ("British Swiss"), Warrior Resources and Mr. Kucher's
spouse, respectively. Mark Kucher is a Director and shareholder of Bug
River, British Swiss and Warrior Resources. Mr. Kucher has options to
purchase an additional 800,000 shares.
(3) Mr. McKay has options to purchase an additional 800,000 shares.
(4) Mr. Hodges has an option to purchase an additional 300,000 shares.
(5) Mr. Tullar has an option to purchase an additional 200,000 shares.
CHANGE IN CONTROL SINCE THE BEGINNING OF THE COMPANY'S LAST FISCAL YEAR
On September 9, 2004, Mark Kucher, Bug River, Warrior Resource Corp.,
British Swiss, James E. McKay, Wade A. Hodges, Kenneth Tullar, Paul Taufen, Jay
Egan, Manjy Sidoo, Nick Demare, Dutchess Corporation, and St. Georges Hill Trust
(the "Former Battle Mountain Shareholders") obtained control over the Company
pursuant to an Exchange Agreement (the "Exchange") in which the Company acquired
100% of the issued and outstanding shares of Battle Mountain in exchange for an
aggregate of 11,640,000 shares of the Company's common stock that were issued to
the Former Battle Mountain Shareholders. Along with the Exchange, James E.
McKay, Ken Tullar and Wade A. Hodges executed stock purchase agreements to
purchase 3,700,000, 1,900,000 and 1,900,000 shares, respectively, or an
aggregate of 7,500,000 shares, of the Company's common stock from Nikoloas
Brekropoulos, a former Director of the Company. Additionally Bug River, Mark
Kucher and Paul Taufen executed stock purchase agreements to purchase 2,000,000,
1,000,000 and 500,000 shares, respectively, or an aggregate of 3,500,000, shares
of the Company's common stock from Dana Neill Upton, the Company's former
President, Secretary, Treasurer and Director. The purchasers paid nominal cash
for the shares, which cash came from their personal funds. The Former Battle
Mountain Shareholders currently own 55% of the Company's Common Stock. Prior to
these transactions, Nikoloas Brekropoulos and Dana Neill Upton controlled the
Company.
PROPOSAL 2
APPROVAL OF THE 2004-2005 NON-QUALIFIED STOCK OPTION PLAN
WHAT ARE THE MAJORITY SHAREHOLDERS APPROVING?
On December 15, 2004, the Company's Board of Directors adopted, subject to
the approval of our Majority Shareholders, the 2004-2005 Non-Qualified Stock
Option Plan (the "Amended NQSO Plan" or the "Plan") in a form substantially
similar to the attached Appendix A. This compensation plan was in effect at the
end of registrant's last completed fiscal year, but was not yet approved by
security holders. The security holders are being asked to approve the Plan at
the Annual Meeting. The following is a summary of the material features of the
Plan.
WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to promote the financial success and interests
of the Company and materially increase shareholder value by giving incentives to
officers and other employees and directors of, and consultants and advisors to,
the Company and any present or future subsidiaries of the Company by providing
opportunities to acquire stock of the Company.
WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
The Plan will provide an opportunity for any employee, officer or director
of, or consultant or advisor to the Company or any related corporation (the
"Participants") to receive a grant of options to purchase shares of our Common
Stock ("Options") or a grant of awards of our Common Stock ("Awards) as well as
opportunities for such persons to purchase shares of our Common Stock
("Purchases"). We currently have two (2) full-time employees (including our
officers and two directors), three (3) additional directors, and two(2)
part-time consultants who would be eligible to participate in the Plan. We use
various consultants and advisors, the approximate number of which we cannot
determine, who would also be eligible to participate in the Plan. There are no
other eligibility requirements such as length of service or full-time commitment
to be eligible to participate in the Plan.
Pursuant to the Plan, Mark Kucher, our Principal Financial Officer and a
Director, and James E. McKay, our President, Chief Executive Officer, Secretary,
Treasurer and a Director, have each received an Option to purchase 500,000
shares of Common Stock at an exercise price of $0.99 per share, which vested in
its entirety on May 31, 2005. In December 2004, the Company granted options to
James Buskard to purchase 75,000 shares of the Company's common stock with an
exercise price of $0.99 per share and a vesting date of May 31, 2005. In April
2005, the Company's board of directors amended the terms of their options to
vest in their entirety on April 15, 2005, at an amended exercise price of $0.40
per share. In April 2005 the Company granted options to each member of the Board
of Directors (Mark Kucher, James McKay, Wade Hodges, Brian Labadie and Anthony
Crews) to purchase 300,000 shares of the Company's common stock with an exercise
price of $0.40 per share and a vesting date of April 15, 2005. In April 2005 the
Company granted options to Kenneth Tullar to purchase 200,000 shares of the
Company's common stock with an exercise price of $0.40 per share and a vesting
date of April 15, 2005. In April 2005 the Company granted options to Paul Taufen
and James Buskard to purchase 50,000 shares of the Company's common stock with
an exercise price of $0.40 per share and a vesting date of April 15, 2005. In
April 2005 the Company granted options to Thomas Byrne to purchase 125,000
shares of the Company's common stock with an exercise price of $0.40 per share
and a vesting date of April 15, 2005. It is not possible at this time to
determine the benefits or amounts that will be received by or allocated to other
specific persons or classes of persons under the Plan.
Options, Awards and Purchases under the Plan will not qualify for deferred
compensation under the Internal Revenue Code of 1986, as amended from time to
time (the "Code"). As such, the value of any Awards and the exercise or vesting
of any Options or Purchases for an amount less than the fair market value
thereof, as determined by our Board of Directors, or designated by a Committee
formed by the Board, in its sole discretion, will be considered to be
compensation with respect to which the Company reserves the right to withhold
income taxes.
WHO WILL ADMINISTER THE PLAN?
Our Board of Directors or a Committee appointed by our Board of Directors
will, in its sole discretion, administer the Plan. The members of any Committee
appointed by our Board of Directors may be employees or non-employees. In
making determinations to grant Options or Awards or authorize Purchases, the
Board and/or the Committee may take into account the nature of the services
rendered by such person, his or her present and potential contribution to the
Company's success and such other factors as the Board and/or Committee in its
discretion shall deem relevant.
HOW MUCH COMMON STOCK IS SUBJECT TO THE PLAN?
The maximum aggregate number of shares of our Common Stock reserved for
Options, Awards and Purchases under the Plan will be 3,500,000 shares. The
market value of the Common Stock is approximately $0.44 per share based on the
last sale price as reported on the over-the-counter Bulletin Board, as of June
10, 2005. The Company will receive services as consideration for the grant of
Options and Awards or the authorization of Purchases.
WHAT IS THE EXERCISE PRICE AND EXPIRATION DATE OF OPTIONS AND PURCHASES UNDER
THE PLAN?
The Board of Directors, in its sole discretion, shall determine the
exercise price of any Options granted or Purchases authorized under the Plan
which exercise price shall be set forth in the agreement evidencing the Option
or Purchase. Such exercise price shall in no event be less than the $.001 par
value per share of the Company's Common Stock. The Options expire on terms set
by the Board at the time of granting the respective Option. The Plan expires on
December 14, 2014.
WHAT EQUITABLE ADJUSTMENTS WILL BE MADE IN THE EVENT OF CERTAIN CORPORATE
TRANSACTIONS?
In the event of a merger, consolidation, sale of all or substantially all
of the assets of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction involving our Common Stock, the administrator will make
appropriate equitable adjustments, if any, to the shares of Common Stock
authorized for issuance under the Plan, the shares of Common Stock subject to
any then outstanding Options under the Plan, and the purchase price of such
shares of Common Stock as to which Options are outstanding.
WHAT HAPPENS TO OPTIONS UPON TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIPS?
Upon termination of employment or other relationships with the Company or a
related company for any reason including death, the Board of Directors or a
Committee appointed by our Board of Directors will determine the period of time
during which an Option may be exercised, which period will be set forth in the
agreement evidencing the Option. The Options issued to Mark Kucher and James E.
McKay, respectively, provide that, in such events of termination of employment
(with the exception of termination for cause) or other relationship with the
Company, each may exercise or hold his Option.
MAY THE PLAN BE MODIFIED, AMENDED OR TERMINATED?
The Board may at any time, and from time to time, modify, amend or
terminate the Plan. No such modification, amendment or termination may
adversely affect outstanding Options.
The description of the Plan is qualified in all respects by the actual
provisions of the Plan, which is attached to this information statement as
Appendix A.
IS THE COMPANY ASKING FOR MY PROXY?
Our Majority Shareholders have verbally indicated that they will approve
the adoption of the 2004-2005 Non-Qualified Stock Option Plan covering 3,500,000
shares of our Common Stock. Therefore, the Company is not asking for your proxy,
and the Company requests that you do not send a proxy, as no further shareholder
approval is either required or sought.
PROPOSAL 3
RATIFICATION OF AMENDMENT OF THE ARTICLES OF INCORPORATION TO CHANGE NAME AND
INCREASE THE AUTHORIZED COMMON STOCK
WHAT ARE THE MAJORITY SHAREHOLDERS RATIFYING?
Our Majority Shareholders will ratify an amendment to our Articles of
Incorporation that became effective upon filing with the Secretary of State of
the State of Nevada on April 15, 2004, to change our name to Battle Mountain
Gold Exploration Corp., to affect a 10:1 forward stock split, to increase the
authorized shares to 200,000,000 shares of common stock, to reauthorize the par
value of $.001 per share of common stock, and to reauthorize 10,000,000 shares
of preferred stock with a par value of $.001 per share of preferred stock. A
copy of the Certificate of Amendment is attached hereto as Appendix B.
WHAT WAS THE PURPOSE OF THE AMENDMENT?
The name change to Battle Mountain Gold Exploration Corp. was done so that
our name would coincide with Battle Mountain, which we acquired in September
2004, and the forward stock split was intended to assist us in creating a market
for our common stock.
The increase in authorized common stock was intended to enhance flexibility
in the event the Board of Directors determines that it is necessary or
appropriate to raise additional capital through the sale of securities, to
acquire other companies or their businesses or assets, to establish strategic
relationships with corporate partners, to attract, or to retain and motivate key
employees. The Board of Directors believed that it was in our best interest to
authorize the Board to issue 200,000,000 shares of Common Stock in order to have
additional authorized but unissued shares available for issuance to meet the
aforementioned business needs as they arise without the expense and delay of a
special meeting of stockholders. The Company issued 11,640,000 shares of Common
Stock to the Former Battle Mountain Shareholders to acquire Battle Mountain, as
discussed in "Proposal 1" under the heading "Change in Control Since the
Beginning of the Company's Last Fiscal Year." The Board of Directors believes
that the availability of additional shares would provide us with continued
flexibility to issue Common Stock for proper corporate purposes. The Company has
no current plans, proposals or arrangements, written or otherwise, to issue any
additional shares of common stock at this time.
The forward split was effected in April 2004 to increase the number of
shares in the public float, as the Board believed this may facilitate increased
interest and attract more investors into the market for the Company's
securities.
The amendment of the par value to $.001 was originally effected in April
2004 in order to set the par value at a level consistent with other smaller
issuers.
The creation of preferred shares was originally effected in April 2004 in
order to provide the Board of Directors with shares that would have preferred
rights over common shares in order to have increased flexibility if and when the
Company seeks additional financing or acquisition targets. The Company has no
current plans, proposals or arrangements, written or otherwise, to issue any
shares of preferred stock at this time.
WHEN WERE WE REQUIRED TO PROVIDE YOU WITH INFORMATION CONCERNING THIS PROPOSAL
3?
Although we failed to do so, SEC Rule 14c-2(b) required that we send you an
information statement on Schedule 14C at least twenty (20) calendar days prior
to the earliest date on which our management took action pursuant to
stockholders' consent. Our Directors approved matters addressed in this
Proposal 3 on February 9, 2004, via signed written consent pursuant to Section
78.315 of the Nevada Revised Statutes ("Nevada Law") and Article Two, Section
2.01 of our Bylaws. On that same date, a majority of our shareholders approved
the matters addressed in this Proposal 3 via signed written consent pursuant to
Nevada Law, Section 78.320 and our Bylaws, Article Three, Section 3.01. Acting
on its own behalf, our management verbally solicited the consents of a majority
of our shareholders. Our Articles of Incorporation do not limit foregoing
written consents. The number of shares of the Company outstanding at the time
of adoption of the matters addressed in this Proposal 3 was 26,870,000 and the
number of shares entitled to vote thereon was the same. The number of shares
consenting to the action was 15,400,000 (or 57%). Our management took immediate
action pursuant to the foregoing consents. Our Majority Shareholders will
ratify this Proposal 3 at the Annual Meeting.
WHAT IS THE EFFECT OF NONCOMPLIANCE AND RATIFICATION?
The Company's failure to comply with Section 14 of the Exchange Act and
Rule 14c-2(b) did not prevent the name change, the forward stock split, the
increase in our authorized shares or the reauthorizations under Nevada law.
Stockholders of a Nevada corporation may approve an amendment to the articles of
incorporation via written consent pursuant to Nevada Law, Section 78.320 without
a meeting of such stockholders, without prior notice and without a vote.
The Company is not subject to any liability under Nevada Law for failing to
comply with Section 14 of the Exchange Act and Rule 14c-2(b). The Company may,
however, be subject to liability under federal law. The Company may be subject
to SEC investigation, injunction and/or civil penalty pursuant to Section 21 of
the Exchange Act. In the event that the Company is liable under any provision
of the Exchange Act, the Company's officers, directors and significant
stockholders would be jointly and severally liable to the same extent as the
Company pursuant to Section 20(a) of the Exchange Act.
Ratification by our Majority Stockholders will not affect the Company's
prior lack of compliance with Section 14 of the Exchange Act or Rule 14c-2(b).
Ratification will not affect the Company's liability under Section 21, or joint
and several liability of the Company's officers, directors and significant
stockholders under Section 20(a), of the Exchange Act.
IS THE COMPANY ASKING FOR MY PROXY?
Although we have no written consents of any shareholders approving this
proposal, the Majority Shareholders have verbally indicated their intent to
approve and ratify the Amendment to our Articles of Incorporation, filed April
15, 2004, changing our name to Battle Mountain Gold Exploration Corp., effecting
a 10:1 forward stock split, increasing the authorized shares to 200,000,000
shares of common stock, reauthorizing the par value of $.001 per share of common
stock, and reauthorizing 10,000,000 shares of preferred stock with a par value
of $.001 per share of preferred stock. Therefore, the Company is not asking for
your proxy, and the Company requests that you do not send a proxy, as no further
shareholder approval is either required or sought.
PROPOSAL 4
RATIFICATION OF THE APPOINTMENT OF CHISHOLM, BIERWOLF & NILSON, LLC
AS THE COMPANY'S INDEPENDENT AUDITORS
The Board of Directors has ratified our officers' selection of Chisholm,
Bierwolf & Nilson, LLC, Certified Public Accountants ("Chisholm"), as
independent auditors for the Company for fiscal year 2006. Our Majority
Shareholder will ratify such appointment. Chisholm has served as the Company's
independent auditors since January 4, 2005, after succeeding Morgan & Company,
Chartered Accountants ("Morgan"). Morgan audited the Company's financial
statements for the fiscal years ended July 31, 2003 and July 31, 2004. As a
result of the reverse merger with Battle Mountain, the accounting acquirer for
financial reporting purposes, the Company's new fiscal year end is December 31.
The period from January 7, 2004 (the date of inception of Battle Mountain) to
December 31, 2004, has been audited.
The Company does not anticipate that a representative from Chisholm or
Morgan will be present at the annual shareholders meeting. In the event that a
representative of Chisholm or Morgan is present at the annual meeting, the
representative will have the opportunity to make a statement if he/she desires
to do so and the Company will allow such representative to be available to
respond to appropriate questions.
Effective January 4, 2005, the client-auditor relationship between the
Company and Morgan ceased as the former accountant was dismissed. On that same
date, the Company's Board of Directors approved a change of accountants and the
Company's management engaged Chisholm as its principal independent public
accountant for the fiscal year ended December 31, 2004.
Morgan's report on the financial statements of the Company for the fiscal
years ended July 31, 2003 and July 31, 2004, and any later interim period,
including the interim period up to and including the date the relationship with
Morgan ceased did not contain any adverse opinion or disclaimer of opinion and
was not qualified or modified as to uncertainty, audit scope or accounting
principles except for concerns about the Company's ability to continue as a
going concern.
In connection with the audit of the Company's fiscal years ended July 31,
2003 and July 31, 2004, and any later interim period, including the interim
period up to and including the date the relationship with Morgan ceased, there
have been no disagreements with Morgan on any matters of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure,
which disagreement(s), if not resolved to the satisfaction of Morgan would have
caused Morgan to make reference to the subject matter of the disagreement(s) in
connection with its report on the Company's financial statements. There have
been no reportable events as defined in Item 304(a)(1)(iv)(B) of Regulation S-B
during the Company's fiscal years ended July 31, 2003 and July 31, 2004, and any
later interim period, including the interim period up to and including the date
the relationship with Morgan ceased.
The Company authorized Morgan to respond fully to any inquiries of any new
auditors hired by the Company relating to their engagement as the Company's
independent accountant. The Company requested that Morgan review the disclosure
and Morgan was given an opportunity to furnish the Company with a letter
addressed to the Commission stating whether it agreed with the statements made
by the Company in the report of Form 8-K filed with the Commission on January 7,
2005, and the report of Form 8-K/A filed with the Commission on January 11,
2005. Morgan furnished a letter which was filed as Exhibit 16.1 to such report
on Form 8-K/A.
The Company had not previously consulted with Chisholm regarding either (i) the
application of accounting principles to a specified transaction, either
completed or proposed; or (ii) the type of audit opinion that might be rendered
on the Company's financial statements; or (iii) any matter that was either the
subject matter of a disagreement (as defined in Item 304(a)(1)(iv)(A) of
Regulation S-B) between the Company and Morgan, the Company's previous principal
independent accountant, as there were no such disagreements, or an other
reportable event (as defined in Item 304(a)(1)(iv)(B) of Regulation S-B) during
the Company's fiscal years ended July 31, 2003 and July 31, 2004, and any later
interim period, including the interim period up to and including the date the
relationship with Morgan ceased. Neither has the Company received any written
or oral advice concluding there was an important factor to be considered by the
Company in reaching a decision as to an accounting, auditing, or financial
reporting issue.
Chisholm reviewed the Company's disclosure required by Item 304 of
Regulation S-B before it was filed with the Commission and was provided an
opportunity to furnish the Company with a letter addressed to the Commission
containing any new information, clarification of the Company's expression of its
views, or the respects in which it did not agree with the statements made by the
Company in response to Item 304. Chisholm did not furnish a letter to the
Commission.
AUDIT FEES
The aggregate fees billed by Morgan for professional services rendered for
the audit of the Company's annual financial statements for, and the reviews of
the Company's financial statements included in the Company's Forms 10-QSB
during, the fiscal years ended July 31, 2004 and July 31, 2003, were $4,455. and
$4,100, respectively.
The aggregate fees billed by Chisholm for professional services rendered
for the audit of the Company's annual financial statements for the Company's
Form 10-KSB for the fiscal year ended December 31, 2004, and the review of the
Company's financial statements included in the Form 10-QSB for the period ended
March 31, 2005, were $10,612.50 and $7,720.00, respectively.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Morgan did not render any professional services to the Company for
financial information systems design and implementation, as described in
Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X, during the fiscal years
ended July 31, 2004 and July 31, 2003.
ALL OTHER FEES
There were no fees billed by Morgan or Chisholm other than those fees
discussed in Audit Fees.
IS THE COMPANY ASKING FOR MY PROXY?
Our Majority Shareholders have verbally indicated they will ratify the
appointment of Chisholm, Bierwolf & Nilson, LLC, Certified Public Accountants,
as independent accounts for the Company for fiscal year 2004. Therefore, the
Company is not asking for your proxy, and the Company requests that you do not
send a proxy, as no further shareholder approval is either required or sought.
OTHER MATTERS
The Board of Directors does not intend to bring any other matters before
the Annual Meeting and has not been informed that any other matters are to be
presented by others.
By Order of the Board of Directors
/s/ James E. McKay
-------------------
James E. McKay
Director
October 28, 2005
APPENDIX A
BATTLE MOUNTAIN GOLD EXPLORATION CORP.
2004 - 2005 NON-QUALIFIED STOCK OPTION PLAN
1. Purpose. This 2004 Non-Qualified Stock Option Plan (the "Plan") is
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intended to promote the financial success and interests of Battle Mountain Gold
Exploration Corp. (the "Company") and materially increase shareholder value by
giving incentives to the eligible officers and other employees and directors of,
and consultants and advisors to, the Company, its parent (if any) and any
present or future subsidiaries of the Company (collectively, "Related
Corporations") through providing opportunities to acquire stock in the Company.
As used herein, the terms "parent" and "subsidiary" mean "parent corporation"
and "subsidiary corporation", respectively, as those terms are defined in
Sections 424(e) and 424(f) or successor provisions of the Internal Revenue Code
of 1986 as amended from time to time (the "Code"). Any proceeds of cash or
property received by the Company for the sale of Battle Mountain Gold
Exploration Corp. Common Stock pursuant to options granted under this Plan will
be used for general corporate purposes.
2. Structure of the Plan. The Plan permits the following separate
------------------------
types of grant:
A. Options may be granted hereunder to purchase shares of common stock of
the Company. These options will not qualify as Incentive Stock Options. The
Non-Qualified Options are sometimes referred to hereinafter as "Options".
B. Awards of stock in the Company ("Awards") may be granted.
C. Opportunities to make direct purchases of stock in the Company
("Purchases") may be authorized.
Options, Awards and authorizations to make Purchases are sometimes referred to
hereinafter as "Stock Rights".
3. Administration of the Plan.
-----------------------------
A. The Plan shall be administered by the Board of Directors of the Company
(the "Board"). The Board may in its sole discretion grant Options, authorize
Purchases and grant Awards, as provided in the Plan. The Board shall have full
power and authority, subject to the express provisions of the Plan, to construe
and interpret the Plan and all Option agreements, Purchase authorizations and
Award grants thereunder, to establish, amend and rescind such rules and
regulations as it may deem appropriate for the proper administration of the
Plan, to determine in each case the terms and provisions which shall apply to a
particular Option agreement, Purchase authorization, or Award grant, and to make
all other determinations which are, in the Board's judgment, necessary or
desirable for the proper administration of the Plan. The Board may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or in any
Option agreement, Purchase authorization or Award grant in the manner and to the
extent it shall, in its sole discretion, consider expedient. Decisions of the
Board shall be final and binding on all parties who have an interest in the Plan
or any Option, Purchase, Award, or stock issuance thereunder. No director or
person acting pursuant to authority delegated by the Board shall be liable for
any action or determination under the Plan made in good faith.
B. The Board may, to the full extent permitted by and consistent with
applicable law and the Company's By-laws, and subject to Subparagraph D
herein below, delegate any or all of its powers with respect to the
administration of the Plan to a committee (the "Committee") appointed by the
Board. If a Committee has been appointed, all references in this Plan to the
Board shall mean and relate to that Committee.
C. Those provisions of this Plan which make express reference to Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or any successor rule ("Rule 16b-3"), or which are required in order for
certain option transactions to qualify for exemption under Rule 16b-3, shall
apply only to those persons required to file reports under Section 16(a) of the
Exchange Act (a "Reporting Person").
D. If the Company registers any class of equity security under Section 12
of the Exchange Act, the selection of a director or an officer (as the terms
"director" and "officer" are defined for purposes of Rule 16b-3) as a recipient
of an option, the timing of the option grant, the exercise price of the option
and the number of shares subject to the option shall be determined either (i) by
the Board, if all of the Board members are disinterested persons within the
meaning of Rule 16(b)(3), or (ii) by two or more directors having full authority
to act in the matter, each of whom shall be such a disinterested person.
4. Eligible Employees and Others. Non-Qualified Options, Awards, and
--------------------------------
authorizations to make Purchases may be granted to any employee, officer or
director of, or consultant or advisor to the Company or any Related Corporation,
except for instances where services are in connection with the offer or sale of
securities in a capital-raising transaction, or they directly or indirectly
promote or maintain a market for the Company's securities. In making such
determinations, the Board and/or the Committee may take into account the nature
of the services rendered by such person, his or her present and potential
contribution to the Company's success, and such other factors as the Board
and/or Committee in its discretion shall deem relevant. The granting of any
Stock Right to any individual or entity shall neither entitle that individual or
entity to, nor disqualify him from, participation in any other grant of Stock
Rights.
5. Stock. The stock subject to Options, Awards and Purchases shall be
-----
authorized but unissued shares of common stock of the Company ("Common Stock"),
or shares of Common Stock reacquired by the Company in any manner. The
aggregate number of shares which may be issued under the Plan is 3,500,000 (less
than 10%), subject to adjustment as provided in Paragraph 13. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part, or if the Company shall reacquire any nonvested shares issued
pursuant to Awards or Purchases, the unpurchased shares subject to such Option,
or such nonvested shares so reacquired shall again be available for grants of
Stock Rights under the Plan. No fractional shares of Common Stock shall be
issued, and the Board and/or Committee shall determine the manner in which
fractional share value shall be treated.
6. Option Agreements. As a condition to the grant of an Option, each
------------------
recipient of an Option shall execute an option agreement in such form not
inconsistent with the Plan as the Board shall approve. These option agreements
may differ among recipients. The Board may, in its sole discretion, include
additional provisions in option agreements, including without limitation
restrictions on transfer, repurchase rights, commitments to pay cash bonuses, to
make, arrange for or guarantee loans or to transfer other property to optionees
upon exercise of options, or such other provisions as shall be determined by the
Board; provided, however, that such additional provisions shall not be
inconsistent with any provision of the Plan.
7. Option Exercise Price.
-----------------------
A. Subject to Subparagraph 3D of this Plan and Subparagraph B of this
Paragraph 7, the purchase price per share of Common Stock deliverable upon the
exercise of an Option ("exercise price") shall be determined by the Board.
B. The exercise price of each Non-Qualified Option granted under the Plan
shall in no event be less than the par value per share of the Company's Common
Stock.
8. Cancellation and New Grant of Options, Etc. The Board shall have
---------------------------------------------
the authority to effect, at any time and from time to time, with the consent of
the affected optionees, the cancellation of any or all outstanding Options and
the grant in substitution therefor of new Options covering the same or different
shares of Common Stock and having an exercise price per share which may be lower
or higher than the exercise price per share of the canceled Options.
9. Exercise of Options.
---------------------
A. Each Option granted under the Plan shall be exercisable either in full
or in installments at such time or times and during such period as shall be set
forth in the agreement evidencing the Option, subject to the provisions of the
Plan. The partial exercise of an option shall not cause the expiration,
termination or cancellation of the remaining portion thereof. The Board may, in
its sole discretion, (i) accelerate the date or dates on which all or any
particular Option or Options granted under the Plan may be exercised or (ii)
extend the dates during which all, or any particular, Option or Options granted
under the Plan may be exercised.
B. Options granted under the Plan may provide for payment of the exercise
price plus taxes (as provided in Section 22, below) by any of the following
methods:
(i) In cash, by wire transfer, by certified or cashier's check, or by
money order; or
(ii) By delivery to the Company of an exercise notice that requests
the Company to issue to the Optionee the full number of shares as to which
the Option is then exercisable, less the number of shares that have an
aggregate Fair Market Value, as determined by the Board in its sole
discretion at the time of exercise, equal to the aggregate purchase price
of the shares to which such exercise relates. (This method of exercise
allows the Optionee to use a portion of the shares issuable at the time of
exercise as payment for the shares to which the option relates and is often
referred to as a "cashless exercise." For example, if the Optionee elects
to exercise 1,000 shares at an exercise price of $0.25 and the current Fair
Market Value of the shares on the date of exercise is $1.00, the Optionee
can use 250 of the 1,000 shares at $1.00 per share to pay for the exercise
of the entire Option (250 x $1.00 = $250.00) and receive only the remaining
750 shares.)
For purposes of this section, " Fair Market Value" shall be defined as the
average closing price of the common stock (if actual sales price information on
any trading day is not available, the closing bid price shall be used) for the
five trading days prior to the Date of Exercise of this Option (the "Average
Closing Bid Price"), as reported by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), or if the common stock is not
traded on NASDAQ, the Average Closing Bid Price in the over-the-counter market;
provided, however, that if the common stock is listed on a stock exchange, the
Fair Market Value shall be the Average Closing Bid Price on such exchange; and,
provided further, that if the common stock is not quoted or listed by any
organization, the fair value of the common stock, as determined by the Board of
Directors of the Company, whose determination shall be conclusive, shall be
used). In no event shall the Fair Market Value of any share of Common Stock be
less than its par value.
10. Option Period. Subject to earlier termination under other
--------------
provisions of this Plan, each Option and all rights thereunder shall expire on
such date as shall be set forth in the applicable option agreement.
11. Nontransferability of Options. Options shall not be assignable or
------------------------------
transferable by the optionee, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the life of the
optionee, except to the extent otherwise provided in the agreement evidencing
the Option, shall be exercisable only by the optionee.
12. Effect of Termination of Employment or Other Relationship. Subject
---------------------------------------------------------
to all other provisions of the Plan, the Board shall determine the period of
time during which an Optionee may exercise an Option following (i) the
termination of the optionee's employment or other relationship with the Company
or a Related Corporation or (ii) the death or disability of the optionee. Such
periods shall be set forth in the agreement evidencing the Option.
13. Adjustments.
-----------
A. If, through or as a result of any merger, consolidation, sale of all or
substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, an
appropriate and proportionate adjustment shall be made in (a) the maximum number
and kind of shares reserved for issuance under the Plan, (b) the number and kind
of shares or other securities subject to any then outstanding Options under the
Plan, and (c) the price for each share subject to any then outstanding Options
under the Plan, without changing the aggregate purchase price as to which such
Options remain exercisable. No fractional shares shall be issued under the Plan
on account of any such adjustments.
B. Any adjustments under this Paragraph 13 shall be made by the Board of
Directors, whose determination as to what adjustments, if any, will be made and
the extent thereof shall be final, binding and conclusive.
14. Rights as a Shareholder. The holder of an Option shall have no
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rights as a shareholder with respect to any shares covered by the option
(including, without limitation, any voting rights, the right to inspect or
receive the Company's balance sheets or financial statements or any rights to
receive dividends or non-cash distributions with respect to such shares) until
the date of issue of a stock certificate for such shares. No adjustment shall
be made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.
15. Merger, Consolidation, Asset Sale, Liquidation, Etc.
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A. Except as may otherwise be provided in the applicable option agreement,
in the event of a consolidation or merger or sale of all or substantially all of
the assets of the Company in which outstanding shares of Common Stock are
exchanged for securities, cash or other property of any other corporation or
business entity, or in the event of the liquidation of the Company (each, a
"Change in Control"), the Board, or the board of directors of any corporation
assuming the obligations of the Company, shall, in its discretion, take any one
or more of the following actions, as to outstanding Options: (i) provide that
such Options shall be assumed, or equivalent options shall be substituted, by
the acquiring or succeeding corporation (or an affiliate thereof); (ii) upon
written notice to the optionees, provide that any and all outstanding Options
shall become exercisable in full (to the extent not otherwise so exercisable) as
of a specified date or time ("Accelerated Vesting Date") prior to the
consummation of such transaction, and that all unexercised Options shall
terminate as of a specified date or time ("Accelerated Expiration Date")
following the Accelerated Vesting Date unless exercised by the Optionee prior to
the Accelerated Expiration Date; provided, however, that optionees shall be
given a reasonable period of time within which to exercise or provide for the
exercise of outstanding Options following such written notice and before the
Accelerated Expiration Date; (iii) in the event of a merger under the terms of
which holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment for each share surrendered in the merger (the "Merger
Price"), terminate each outstanding Option in exchange for a payment, made or
provided for by the Company, equal in amount to the excess, if any, of the
Merger Price over the per-share exercise price of each such Option, times the
number of shares of Common Stock subject to such Option; or (iv) terminate each
outstanding Option in exchange for a cash payment equal in amount to the product
of the excess, if any, of the fair market value of a share of Common Stock over
the per-share exercise price of each such Option, times the number of shares
subject to such Option. The Board shall determine the fair market value of a
share of Common Stock for purposes of the foregoing, and the Board's
determination of such fair market value shall be final, binding and conclusive.
B. In the event of a Change in Control and to the extent the rights
described in this Section 15B are not already substantially provided to each
Qualified Option Recipient (as defined below) by the Board (or the board of
directors of any corporation assuming the obligations of the Company) pursuant
to Section 15A, beginning on the date which is 180 days from the date of such
Change in Control, each Qualified Option Recipient shall have the right to
exercise and receive from the Company or its successor their respective
Acceleration Amount (as defined below). A "Qualified Option Recipient" is
defined as an option recipient hereunder who both (A) has maintained a
relationship as an employee, officer or director of, or consultant or advisor
to, the Company or its successor for the 180 days immediately prior to the
Change in Control and (B) on the date which is 180 days after the date of the
Change in Control, either (i) maintains a relationship as an employee, officer
or director of, or consultant or advisor to, the Company or its successor or
(ii) fails to maintain a relationship as an employee, officer or director of, or
consultant or advisor to, the Company or its successor by reason of having such
relationship terminated by the Company or its successor other than for Cause,
where "Cause" means willful misconduct or willful failure of the option
recipient to perform the responsibilities of such option recipient's agreed-upon
business relationship with the Company or its successor, including without
limitation such option recipient's breach of any provision of any employment,
consulting, nondisclosure, non-competition or similar agreement between the
option recipient and the Company. With respect to each Qualified Option
Recipient, the "Acceleration Amount" shall mean the lesser of (a) the number of
additional shares of Common Stock (or their equivalent) which would have become
vested pursuant to their option agreement over the twelve (12) month period
following the date of the Change in Control or (b) fifty percent (50%) of the
shares of Common Stock (or their equivalent) which had not yet vested pursuant
to their option agreement as of the date of the Change in Control. The Board
and, where applicable, the board of directors of any corporation assuming the
obligations of the Company, shall take all necessary action to accomplish the
purposes of this Section 15B, including all such actions as are necessary to
provide for the assumption of such obligation upon the Change in Control.
C. The Company may grant Options under the Plan in substitution for
Options held by employees of another corporation who become employees of the
Company or a Related Corporation as the result of a merger or consolidation of
the employing corporation with the Company or a Related Corporation, or as a
result of the acquisition by the Company or a Related Corporation of property or
stock of the employing corporation. The Company may direct that substitute
Options be granted on such terms and conditions as the Board considers
appropriate in the circumstances.
D. In the event of a Change in Control and with respect thereto, the
rights and responsibilities of holders of Stock Rights pursuant to this Plan
shall be governed first and foremost by the Company's agreement with the
respective recipient of such Stock Rights and then, to the extent applicable, by
the terms of this Section 15.
16. Stock Restriction Agreement. As a condition to the grant of an
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Award or a Purchase authorization under the Plan, the recipient of the Award or
Purchase authorization shall execute an agreement ("Stock Restriction
Agreement") in such form not inconsistent with the Plan as may be approved by
the Board. Stock Restriction Agreements may differ among recipients. Stock
Restriction Agreements may include any provisions the Board determines should be
included and that are not inconsistent with any provision of the Plan.
17. No Special Employment Rights. Nothing contained in the Plan or in
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any option agreement or other agreement or instrument executed pursuant to the
provisions of the Plan shall confer upon any Optionee any right with respect to
the continuation of his or her employment by the Company or any Related
Corporation or interfere in any way with the right of the Company or a Related
Corporation at any time to terminate such employment or to increase or decrease
the compensation of the optionee.
18. Other Employee Benefits. Except as to plans which by their terms
-------------------------
include such amounts as compensation, no amount of compensation deemed to be
received by an employee as a result of the grant or exercise of an Option or the
sale of shares received upon such exercise, or as a result of the grant of an
Award or the authorization or making of a Purchase will constitute compensation
with respect to which any other employee benefits of such employee are
determined, including, without limitation, benefits under any bonus, pension,
profit-sharing, life insurance or salary continuation plan, except as otherwise
specifically determined by the Board.
19. Amendment of the Plan.
------------------------
A. The Board may at any time, and from time to time, modify or amend the
Plan in any respect.
B. The termination or any modification or amendment of the Plan shall not,
without the consent of an optionee, affect the optionee's rights under an Option
previously granted. With the consent of the Optionee affected, the Board may
amend outstanding option agreements in a manner not inconsistent with the Plan.
The Board shall have the right to amend or modify (i) the terms and provisions
of the Plan, and (ii) the terms and provisions of the Plan and of any
outstanding Option to the extent necessary to ensure the qualification of the
Plan under Rule 16b-3.
20. Investment Representations. The Board may require any person to
---------------------------
whom an Option is granted, as a condition of exercising such Option, and any
person to whom an Award is granted or a Purchase is authorized, as a condition
thereof, to give written assurances in substance and form satisfactory to the
Board to the effect that such person is acquiring the Common Stock subject to
the Option, Award or Purchase for such person's own account for investment and
not with any present intention of selling or otherwise distributing the same,
and to such other effects as the Company deems necessary or appropriate in order
to comply with federal and applicable state securities laws, or with covenants
or representations made by the Company in connection with any public offering of
its Common Stock.
21. Compliance With Securities Laws. Each Option shall be subject to
---------------------------------
the requirement that if, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares subject to such
Option upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance or purchase
of shares thereunder, such Option may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval, or
satisfaction of such condition shall have been effected or obtained on
conditions acceptable to the Board. Nothing herein shall be deemed to require
the Company to apply for or to obtain such listing, registration or
qualification, or to satisfy such condition.
22. Withholding. The Company shall have the right to deduct from
-----------
payments of any kind otherwise due to the Optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to any shares
issued upon exercise of Options under the Plan or upon the grant of an Award,
the making of a Purchase of Common Stock for less than its fair market value, or
the vesting of restricted Common Stock acquired pursuant to a Stock Right. The
Board in its sole discretion may condition the exercise of an Option, the grant
of an Award, the making of a Purchase, or the vesting of restricted shares
acquired by exercising a Stock Right on the grantee's payment of such additional
withholding taxes by 1) additional withholding if the Optionee is an existing
employee with respect to whom the Company withholds taxes on the date of
exercise (or such other time as the Company's obligation to withhold taxes may
accrue); or 2) direct payment of the required withholding to the Company. The
Compensation Committee of the Board of Directors or the Board of Directors, as
applicable, in their sole discretion, shall determine the amount of taxes that
are required to be withheld.
23. Effective Date and Duration of the Plan.
---------------------------------------------
A. The Plan shall become effective when adopted by the Board and Stock
Rights granted under the Plan shall become exercisable upon the Board's approval
of the Plan. Amendments to the Plan not requiring shareholder approval shall
become effective when adopted by the Board. Stock Rights may be granted under
the Plan at any time after the effective date and before the termination date of
the Plan.
B. Unless sooner terminated as provided elsewhere in this Plan, this Plan
shall terminate upon the close of business on the day next preceding the tenth
anniversary of the date of its adoption by the Board. Stock Rights outstanding
on such date shall continue to have force and effect in accordance with the
provisions of the instruments evidencing such Stock Rights.
Adopted by the Board of Directors on December 15, 2004.
APPENDIX B
Certificate of Amendment to Articles of Incorporation
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For Nevada Profit Corporations
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(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)
1. Name of corporation: HUDSON VENTURES, INC.
2. The articles have been amended as follows (provide article numbers, if
available):
ARTICLE ONE. (NAME)
The name of the company is BATTLE MOUNTAIN GOLD EXPLORATION CORP.
ARTICLE FOUR. (CAPITAL STOCK)
The capitalization of the corporation is amended to reflect a 10:1 forward stock
split, to increase the authorized shares to Two Hundred Million (200,000,000)
shares of common stock, to reauthorize the par value of $.001 per share of
common stock, to reauthorize Ten Million (10,000,000) shares of preferred stock
and to reauthorize the par value of $.001 per share of preferred stock.
3. The vote by which the stockholders holding shares in the corporation
entitling them to exercise at least a majority of the voting power, or such
greater proportion of the voting power as may be required in the case of a vote
by classes or series, or as may be required by the provisions of the articles of
incorporation have voted in favor of the amendment is: Majority, 1,540,000
shares
4. Effective date of filing (optional):
5. Officer Signature: /s/ Dana Neill Upton
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