CONSULTANT COMPENSATION AGREEMENT NO. 1
THIS CONSULTANT COMPENSATION AGREEMENT (the "Plan") is made
this 24th day of August, 1998, among American Coal Corporation, a Nevada
corporation ("American Coal"); and Xxxxxxxx Xxxxx, Xxxxxxxx Xxx, Justeene
Xxxxxxxxxxx and Xxxx Xxxxxxx Xxxxxx, Esq, who have executed and delivered this
Plan by the execution and delivery of the Counterpart Signature Pages which
are designated as Exhibits "X," "X," "C" and "D" hereof (collectively, the
"Consultants").
WHEREAS, the Board of Directors of American Coal has adopted a
written compensation agreement for compensation of four individual Consultants
who are natural persons, two of whom are directors and executive officers of
the Company, one of whom is a consultant to the Company and one of whom is an
attorney; and
WHEREAS, American Coal has engaged the Consultants to provide
services at the request of and subject to the satisfaction of its management;
and
WHEREAS, the Consultants have provided services at the request
and subject to the approval of the management of American Coal; and
WHEREAS, a general description of the nature of the services
performed and to be performed by the Consultants and the maximum value of such
services under this Plan are listed in the Counterpart Signature Pages; and
WHEREAS, American Coal and the Consultants intend that this
Plan and the services performed hereunder shall be made, requested and
performed in such a manner that this Plan shall be a "written compensation
agreement" as defined in Rule 405 of the Securities and Exchange Commission
("Commission") pursuant to which American Coal may issue "freely tradeable"
shares (except as may be limited by "affiliate" status) of its common stock as
payment for services rendered pursuant to an S-8 Registration Statement to be
filed with the Commission by American Coal;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, it is agreed:
Section 1
Compensation Plan
1.1 Employment. American Coal hereby employs the Consultants
and the consultants hereby accept such employment, and have and will perform
the services requested by management of American Coal to its satisfaction
during the term hereof. The services performed by the Consultants hereunder
have been and will be personally rendered by the Consultants, and no one
acting for or on behalf of the Consultants, except those persons normally
employed by the consultants in rendering services to others, such as
secretaries, bookkeepers and the like.
1.2 Independent Contractors. Regardless of the Consultants'
status as "employees" under Rule 405 of the Commission, all services rendered
by the Consultants hereunder have been rendered as independent contractors,
and the Consultants shall be liable for any FICA taxes, withholding or other
similar taxes or charges, and the Consultants shall indemnify and hold
American Coal harmless therefrom; it is understood and agreed that the value
of all such items has been taken into account by the Consultants in computing
the billable rate for the services the Consultants have rendered and agreed to
render to American Coal.
1.3 Term. All services performed at the request of American
Coal by the Consultants shall have been performed within 120 days from the
date hereof, at which time this Plan shall terminate, unless otherwise
provided herein; provided, however, this Plan may be extended for an
additional 120 day period by written agreement of American Coal and any of the
Consultants.
1.4 Payment. American Coal and the Consultants agree that
American Coal shall pay the invoices of the Consultants for the services
performed under this Plan by the issuance of shares of its common stock
(taking into account the 100 for one reverse split effected in August, 1998)
at a price of $0.05 per share; provided, however, such shares of common stock
shall be issued pursuant to and shall be subject to the filing and
effectiveness of a Registration Statement on Form S-8 covering such shares
with the Commission.
1.5 Invoices for Services. On the completion of rendering the
services performed by the Consultants hereunder, each of the Consultants shall
provide American Coal with a written invoice detailing the services duly
performed. Such invoice shall be paid by American Coal in accordance with
Section 1.4 above, subject to the satisfaction of the management of American
Coal that the services have been performed, and to the extent performed, that
the performance was in a satisfactory manner. The submission of an invoice
for the services performed by each of the Consultants shall be deemed to be a
subscription by the respective Consultants to purchase shares of common stock
of American Coal at the price outlined in Section 1.4 above, subject only to
the filing and effectiveness of a Registration Statement on Form S-8 covering
such shares with the Commission.
1.6 Common Stock Price. To the extent deemed required or
necessary and for all purposes of this Plan, the Consultants shall have an
"option" covering such shares of common stock at the per share price set forth
in paragraph 1.4 above during the term hereof; the Consultants assume the risk
of any decrease in the per share price or value of the shares of common stock
of American Coal that may be issued by American Coal for services performed by
the Consultants hereunder, and the Consultants agree that any such decrease
shall in no way affect the rights, obligations or duties of the Consultants
hereunder.
1.7 Limitation on Services. None of the services rendered by
the Consultants and paid for by the issuance of shares of common stock of
American Coal shall be services related to any "capital raising" transaction.
1.8 Delivery of Shares. On submission of an invoice for
services actually performed by the respective Consultants, and duly verified
to the satisfaction of American Coal, and subject to the filing and
effectiveness of a Registration Statement on Form S-8 of the Commission
covering such shares, one or more stock certificates representing such shares
shall be delivered to the respective Consultants at the addresses listed on
the Counterpart Signature Pages, unless another address shall be provided to
American Coal in writing prior to the issuance of such shares.
1.9 Adjustments in the Number of Shares of Common Stock and
Price Per Share. American Coal and the Consultants agree that the per share
price of shares of common stock that may be issued by American Coal to the
Consultants for services performed under this Plan has been arbitrarily set by
American Coal; however, in the event American Coal shall undergo a merger,
consolidation, reorganization, recapitalization, declare a stock dividend of
its shares of common stock or cause to be implemented a forward or reverse
stock split (the 100 for 1 reverse split of August, 1998, has already been
taken into effect) which affects the present number of issued and outstanding
shares of common stock of American Coal prior to the issuance of shares to the
Consultants, that the per share price and the number of shares issuable to the
Consultants for services actually rendered hereunder after such event shall be
appropriately adjusted to reflect any such event.
1.10 Effective Date. The Effective Date of the Plan for each of
the Consultants shall be the date set forth on the respective Counterpart
Signature Pages.
1.11 Conditions. The Plan is subject to the following
conditions, to-wit:
(i) No shares shall be issued under the Plan unless
the Agreement and Plan of Merger between the
Company and U S Jet, Inc., a Delaware
corporation ("U S Jet"), is completed; and
(ii) The number of shares of common stock to be
issued
under the Plan shall in no event exceed 10% of
the
total issued and outstanding shares of common
stock of the post-reorganized company.
Section 2
Representations and Warranties of American Coal
American Coal represents and warrants to, and covenants with,
the Consultants as follows:
2.1 Corporate Status. American Coal is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada and is licensed or qualified as a foreign corporation in all states
in which the nature of its business or the character or ownership of its
properties makes such licensing or qualification necessary.
2.2 Compensation Plan. The Board of Directors of American Coal
has duly adopted a Compensation Plan as defined in Rule 405 of the Commission
pursuant to which American Coal may issue "freely tradeable" shares of its
common stock as payment for services rendered, subject to the filing and
effectiveness of an S-8 Registration Statement to be filed with the Commission
by American Coal.
2.3 Registration Statement on Form S-8. American Coal shall
engage the services of a competent professional to prepare and file a
Registration Statement on Form S-8 with the Commission to cover the shares of
common stock to be issued under the Plan; shall cooperate with such
professional in every manner whatsoever to the extent reasonably required or
necessary so that such Registration Statement shall be competently prepared,
which such Registration Statement shall not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, and which such Registration Statement shall become
effective immediately upon its filing; such Registration Statement shall be
prepared at the sole cost and expense of American Coal; and American Coal will
provide to the Consultants prior to the issuance and delivery of any such
shares of common stock a copy of such Registration Statement, the Compensation
Plan adopted by its Board of Directors, all quarterly, annual or current
reports or other documents incorporated by reference into such Registration
Statement and any other similar reports filed or publicly disseminated
following the effective date of any such Registration Statement.
2.4 Federal and State Securities Laws, Rules and Regulations.
American Coal shall fully comply with any and all federal or state securities
laws, rules and regulations governing the issuance of any such shares of
common stock.
2.5 Limitation on Services. American Coal shall not request the
Consultants to perform any services in connection with any "capital raising"
transaction under this Plan.
2.6 Reports With the Commission. American Coal is required to
file reports with the Commission pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and American Coal has or
will file with the Commission all reports required to be filed by it
forthwith, and shall continue to file such reports with the Commission so long
as required, but for a period of not less than one year; and such reports are
or will be true and correct in every material respect.
2.7 Corporate Authority and Due Authorization. American Coal
has full corporate power and authority to enter into this Plan and to carry
out its obligations hereunder. Execution of this Plan and performance by
American Coal hereunder have been duly authorized by all requisite corporate
action on the part of American Coal, and this Plan constitutes a valid and
binding obligation of American Coal and performance hereunder will not violate
any provision of the Articles of Incorporation, Bylaws, agreements, mortgages
or other commitments of American Coal.
Section 3
Representations and Warranties of the Consultants
Each of the Consultants represents and warrants to, and
covenants with, American Coal as follows:
3.1 Employment. Each of the Consultants hereby accepts
employment by American Coal for the services performed pursuant to this
Agreement. The services performed by the Consultants hereunder have been
personally rendered by the Consultants, and no one acting for or on behalf of
the Consultants.
3.2 Accredited Investors. Each of the Consultants represents
and warrants that, by reason of income, net assets, education, background and
business acumen, the Consultants have the experience and knowledge to evaluate
the risks and merits attendant to an investment in shares of common stock of
American Coal, either singly or through the aid and assistance of a competent
professional, and are fully capable of bearing the economic risk of loss of
the total investment of services; further, they are "accredited investors" as
that term is defined under the 1933 Act or the rules and regulations
promulgated thereunder.
3.3 Suitability of Investment. Prior to the execution of this
Plan, each of the Consultants shall have provided the services outlined in the
respective Counterpart Signature Pages to American Coal, and the Consultants,
singly, or through the advice of a competent professional, fully believe that
an investment in shares of common stock of American Coal is a suitable
investment for the Consultants.
3.4 Limitation on Services. None of the services rendered by
the Consultants and paid for by the issuance of shares of common stock of
American Coal shall be services related to any "capital raising" transaction.
3.5 Authority and Authorization. Each of the Consultants has
full power and authority to enter into this Plan and carry out the obligations
hereunder. Execution of this Plan and performance by the Consultants
hereunder constitutes a valid and binding obligation of the Consultants and
performance hereunder will not violate any other agreement to which any of the
Consultants is a party.
Section 4
Indemnity
American Coal and the Consultants agree to indemnify and hold
the other harmless for any loss or damage resulting from any misstatement of a
material fact or omission to state a material fact by the other contained
herein or contained in the S-8 Registration Statement of American Coal to be
filed hereunder, to the extent that any misstatement or omission contained in
the Registration Statement was based upon information supplied by the other.
Section 5
Termination
Prior to the performance of services hereunder, this Plan may
be terminated (1) by mutual consent of American Coal and the respective
Consultants in writing; (2) by either the Directors of American Coal or the
respective Consultants if there has been a material misrepresentation or
material breach of any warranty or covenant by the other party; and (3) shall
automatically terminate at the expiration of the term hereof, provided,
however, all representations and warranties shall survive the termination
hereof; provided, further, however, that any obligation of American Coal to
pay for any services actually rendered by the Consultants hereunder shall
survive any such termination.
Section 6
General Provisions
6.1 Further Assurances. At any time, and from time to time,
after the execution hereof, each party will execute such additional
instruments and take such action as may be reasonably requested by the other
party to carry out the intent and purposes of this Plan.
6.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if delivered in
person or sent by prepaid first-class registered or certified mail, return
receipt requested, as follows:
If to American Coal: 0000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
If to Consultants: The addresses listed on the
Counterpart Signature Pages
6.3 Entire Agreement. This Plan constitutes the entire
agreement between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
6.4 Headings. The section and subsection headings in this
Planare inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Plan.
6.5 Governing law. This Plan shall be governed by and construed
and enforced in accordance with the laws of the State of Nevada, except to the
extent pre-empted by federal law, in which event (and to that extent only),
federal law shall govern.
6.6 Assignment. Neither American Coal nor the Consultants can
assign any rights, duties or obligations under this Plan, and in the event of
any such assignment, such assignment shall be deemed null and void.
6.7 Counterparts. This Plan may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Plan effective
the day and year first above written.
AMERICAN COAL CORPORATION
By /s/ Xxxxxxxx Xxxxx, President
EXHIBIT "A"
CONSULTANT COMPENSATION AGREEMENT NO. 1
COUNTERPART SIGNATURE PAGE
THIS COUNTERPART SIGNATURE PAGE for that certain Consultant
Compensation Agreement No. 1 among American Coal Corporation and the
undersigned Consultant is executed as of the date set forth hereinbelow.
Consultant:
Xxxxxxxx Xxxxx
0000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Date: 8/24/98. /s/ Xxxxxxxx Xxxxx
Number of Shares and
Maximum Value
of Services
General Description of Services to be Performed
Reviewing "due diligence" materials respecting 100,000
U S Jet, Inc., the Agreement and Plan of Merger $5,000
regarding U S Jet, Inc. and various meetings
regarding the same.
EXHIBIT "B"
CONSULTANT COMPENSATION AGREEMENT NO. 1
COUNTERPART SIGNATURE PAGE
THIS COUNTERPART SIGNATURE PAGE for that certain Consultant
Compensation Agreement No. 1 among American Coal Corporation and the
undersigned Consultant is executed as of the date set forth hereinbelow.
Consultant:
Xxxxxxxx Xxx
0000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Date: 8/24/98. /s/ Xxxxxxxx Xxx
Number of Shares
Maximum Value
of Services
General Description of Services to be Performed
Reviewing "due diligence" materials respecting 100,000
U S Jet, Inc., the Agreement and Plan of Merger $5,000
regarding U S Jet, Inc. and various meetings
regarding the same.
EXHIBIT "C"
CONSULTANT COMPENSATION AGREEMENT NO. 1
COUNTERPART SIGNATURE PAGE
THIS COUNTERPART SIGNATURE PAGE for that certain Consultant
Compensation Agreement No. 1 among American Coal Corporation and the
undersigned Consultant is executed as of the date set forth hereinbelow.
Consultant:
Justeene Xxxxxxxxxxx
0000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Date: 8/24/98. /s/ Justeene Xxxxxxxxxxx
Number of Shares
Maximum Value
of Services
General Description of Services to be Performed
Reviewing the documentation respecting the 75,000
proposed Agreement and Plan of Merger with $3,750
U S Jet.
EXHIBIT "D"
CONSULTANT COMPENSATION AGREEMENT NO. 1
COUNTERPART SIGNATURE PAGE
THIS COUNTERPART SIGNATURE PAGE for that certain Consultant
Compensation Agreement No. 1 among American Coal Corporation and the
undersigned Consultant is executed as of the date set forth hereinbelow.
Consultant:
Xxxx Xxxxxxx Xxxxxx, Esq.
000 Xxxxx 0xx Xxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
Date: 8/24/98. /s/ Xxxx Xxxxxxx Xxxxxx, Esq.
Number of Shares
Maximum Value
of Services
General Description of Services to be Performed
Legal Services related to preliminary negotiations 25,000
regarding the Agreement and Plan of Merger with $1,250
U S Jet, Inc.
