Attached files
Exhibit 10.5
LIBERTY COAL ENERGY CORP.
2012 EXECUTIVE COMPENSATION PLAN
1. PURPOSE. The purpose of this 2012 Executive Compensation Plan is to advance
the interests of Liberty Coal Energy Corp., a Nevada corporation (the "COMPANY")
and its shareholders, by encouraging and enabling selected executives upon whose
judgment, initiative and effort the Company is largely dependent for the
successful conduct of its business, to acquire and retain a proprietary interest
in the Company by ownership of its stock, to keep personnel of experience and
ability in the employ of the Company and to compensate them for their
contributions to the growth and profits of the Company and thereby induce them
to continue to make such contributions in the future.
2. DEFINITIONS. Terms having their first letter capitalized in this Plan shall
have the meanings set forth below:
2.1. "BOARD" shall mean the board of directors of the Company.
2.2. "COMMITTEE" shall mean the directors duly appointed to administer the
Plan.
2.3. "COMPANY" shall mean Liberty Coal Energy Corp., a Nevada corporation.
2.4. "INTERMEDIARY" shall mean Elco Securities, Ltd. Located at Loyalist
Plaza, Don Mackay Blvd., P.O. Box AB-20377, Marsh Harbor, Abaco, Bahamas.
2.5. "PLAN" shall mean this 2012 Executive Compensation Plan.
2.6. "BONUS SHARE" shall mean the shares of common stock of the Company
reserved pursuant to Section 4 hereof and any such shares issued to a Recipient
pursuant to this Plan.
2.7. "BONUS SHARE RESERVE" shall have the meaning ascribed to it in Section
4.
2.8. "MOT" shall mean the Memorandum of Terms dated August 17, 2012 and
numbered MOT 530362-102 LBTG by the Company.
2.9. "RECIPIENT" shall mean any individual rendering services for the
Company to whom shares are granted pursuant to this Plan.
2.10. "VALUE ADDED MODEL" shall mean the model of available Bonus Shares as
set forth on Exhibit A attached hereto.
3. ADMINISTRATION OF PLAN. The Plan shall be administered by the Company's Board
of Directors or in the alternative by a committee of two or more directors
appointed by the Board (the "COMMITTEE"). The Committee shall report all action
taken by it to the Board. The Committee shall have full and final authority in
its discretion, subject to the provisions of the Plan, to (i) determine the
individuals to whom and the time or times at which Bonus Shares shall be granted
and the number of Bonus Shares; (ii) construe and interpret the Plan; and (iii)
make all other determinations and take all other actions deemed necessary or
advisable for the proper administration of the Plan. All such actions and
determinations shall be conclusively binding for all purposes and upon all
persons.
4. BONUS SHARE RESERVE. There shall be established a Bonus Share Reserve to
which shall be credited a number of shares of the Company's common stock not
exceed the greater of (i) 300,000,000 shares or (ii) Twenty Percent (20%) of the
Company's authorized shares of common stock (the "BONUS SHARE RESERVE"). In the
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event that the shares of common stock of the Company should, as a result of a
stock split or stock dividend or combination of shares or any other change, or
exchange for other securities by reclassification, reorganization, merger,
consolidation, recapitalization or otherwise, be increased or decreased or
changed into or exchanged for, a different number or kind of shares of stock or
other securities of the Company or of another corporation, the number of shares
then remaining in the Bonus Share Reserve shall be appropriately adjusted to
reflect such action. Upon the grant of shares hereunder, this reserve shall be
reduced by the number of shares so granted. Distributions of Bonus Shares may,
as the Committee shall in its sole discretion determine, be made from authorized
but unissued shares or from treasury shares. All authorized and unissued shares
issued as Bonus Shares in accordance with the Plan shall be fully paid and
non-assessable and free from preemptive rights.
5. ELIGIBILITY, GRANTING AND VESTING OF BONUS SHARES. Bonus Shares may be
granted under the Plan to the Company's (or the Company's subsidiaries)
executives, provided that bona fide services shall be rendered by such Recipient
and the Recipient spends or will spend a significant amount of time and
attention on the affairs and business of the Company or an affiliated entity of
the Company. Each quarter, the Committee, in its sole discretion, is empowered
to grant to an eligible Recipient a number of Bonus Shares as it shall determine
from time to time; provided that the aggregate grant of Bonus Shares per quarter
to eligible Recipients does not exceed the maximum number of common shares
permitted to be granted in the Value Added Model and such shares are granted and
issued in compliance with the terms of this Plan and the MOT. Each grant of
these Bonus Shares shall vest pursuant to the terms of the MOT and when the
Company receives written notice from the Intermediary that a successful breakout
has occurred pursuant to the Value Added Model, the Bonus Shares granted in
connection with the respective breakout shall become immediately 100% vested.
The Committee may grant Bonus Shares each quarter within the limits of the
respective breakouts set forth in the Value Added Model. At such time as the
employment of a Recipient ceases, any shares not fully vested shall be forfeited
by the Recipient and shall be returned to the Bonus Share Reserve. The
Committee, in its sole discretion, may also impose restrictions on the future
transferability of the Bonus Shares, which restrictions shall be set forth on
the notification to the Recipient of the grant. The aggregate number of Bonus
Shares which may be granted pursuant to this Plan shall not exceed the amount
available therefore in the Bonus Share Reserve.
6. FORM OF GRANTS. Each grant shall specify the number of Bonus Shares subject
thereto, subject to the provisions of Section 5 hereof. At the time of making
any grant, the Committee shall advise the Recipient by delivery of written
notice, in the form of Exhibit B attached hereto.
7. RECIPIENTS' REPRESENTATIONS.
7.1. The Committee may require that, in acquiring any Bonus Shares, the
Recipient agree with, and represent to, the Company that the Recipient is
acquiring such Bonus Shares for the purpose of investment and with no present
intention to transfer, sell or otherwise dispose of shares except such
distribution by a legal representative as shall be required by will or the laws
of any jurisdiction in winding-up the estate of any Recipient. Such shares shall
be transferable thereafter only if the proposed transfer shall be permissible
pursuant to the Plan and if, in the opinion of counsel (who shall be
satisfactory to the Committee), such transfer shall at such time be in
compliance with applicable securities laws.
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7.2. To effectuate Paragraph 7.1 above, the Recipient shall deliver to the
Committee, in duplicate, an agreement in writing, signed by the Recipient, in
form and substance as set forth in Exhibit C attached hereto, and the Committee
shall forthwith acknowledge its receipt thereof.
8. RESTRICTIONS UPON ISSUANCE.
8.1. Bonus Shares shall forthwith after the making of any representations
required by Section 7 hereof, or if no representations are required then within
thirty (30) days of the date of grant, be duly issued and transferred and a
certificate or certificates for such shares shall be issued in the Recipient's
name. The Recipient shall thereupon be a shareholder with respect to all the
shares represented by such certificate or certificates, shall have all the
rights of a shareholder with respect to all such shares, including the right to
vote such shares and to receive all dividends and other distributions (subject
to the provisions of Section 8.2 hereof) paid with respect to such shares.
Certificates of stock representing Bonus Shares shall be imprinted with a legend
to the effect that the shares represented thereby are subject to the provisions
of this Agreement, and to the vesting and transfer limitations established by
the Committee, and each transfer agent for the common stock shall be instructed
to like effect with respect of such shares.
8.2. In the event that, as the result of a stock split or stock dividend or
combination of shares or any other change, or exchange for other securities, by
reclassification, reorganization, merger, consolidation, recapitalization or
otherwise, the Recipient shall, as owner of the Bonus Shares subject to
restrictions hereunder, be entitled to new or additional or different shares of
stock or securities, the certificate or certificates for, or other evidences of,
such new or additional or different shares or securities, together with a stock
power or other instrument of transfer appropriately endorsed, shall also be
imprinted with a legend as provided in Section 8.1, and all provisions of the
Plan relating to restrictions herein set forth shall thereupon be applicable to
such new or additional or different shares or securities to the extent
applicable to the shares with respect to which they were distributed.
8.3. The grant of any Bonus Shares shall be subject to the condition that
if at any time the Company shall determine in its discretion that the
satisfaction of withholding tax or other withholding liabilities, or that the
listing, registration, or qualification of any Bonus Shares upon such exercise
upon any securities exchange or under any state or federal law, or that the
consent or approval of any regulatory body, is necessary or desirable as a
condition of, or in connection with, the issuance of any Bonus Shares, then in
any such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to the Company.
8.4. Unless the Bonus Shares covered by the Plan have been registered with
the Securities and Exchange Commission pursuant to Section 5 of the Securities
Act of 1933, as amended, each Recipient shall, by accepting a Bonus Share,
represent and agree, for himself and his transferees by will or the laws of
descent and distribution, that all Bonus Shares were acquired for investment and
not for resale or distribution. The person entitled to receive Bonus Shares
shall, upon request of the Committee, furnish evidence satisfactory to the
Committee (including a written and signed representation) to the effect that the
shares of stock are being acquired in good faith for investment and not for
resale or distribution. Furthermore, the Committee may, if it deems appropriate,
affix a legend to certificates representing Bonus Shares indicating that such
Bonus Shares have not been registered with the Securities and Exchange
Commission and may so notify the Company's transfer agent. Such shares may be
disposed of by a Recipient in the following manner only: (i) pursuant to an
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effective registration statement covering such resale or reoffer, (ii) pursuant
to an applicable exemption from registration as indicated in a written opinion
of counsel acceptable to the Company, or (iii) in a transaction that meets all
the requirements of Rule 144 of the Securities and Exchange Commission. If Bonus
Shares covered by the Plan have been registered with the Securities and Exchange
Commission, no such restrictions on resale shall apply, except in the case of
Recipients who are directors, officers, or principal shareholders of the
Company. Such persons may dispose of shares only by one of the three aforesaid
methods.
9. LIMITATIONS. Neither the action of the Company in establishing the Plan, nor
any action taken by it nor by the Committee under the Plan, nor any provision of
the Plan, shall be construed as giving to any person the right to be retained in
the employ of the Company. Every right of action by any person receiving shares
of common stock pursuant to this Plan against any past, present or future member
of the Board, or any officer or employee of the Company arising out of or in
connection with this Plan shall, irrespective of the place where action may be
brought and irrespective of the place of residence of any such director, officer
or employee cease and be barred by the expiration of one year from the date of
the act or omission in respect of which such right of action arises.
10. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Board of Directors may
alter, suspend, or discontinue the Plan at any time. Unless the Plan shall
theretofore have been terminated by the Board, the Plan shall terminate 10 years
after the effective date of the Plan. No Bonus Share may be granted during any
suspension or after the termination of the Plan. No amendment, suspension, or
termination of the Plan shall, without a recipient's consent, alter or impair
any of the rights or obligations under any Bonus Share theretofore granted to
such recipient under the Plan.
11. COMPLIANCE WITH LEGISLATION. The Plan, the grant and exercise of Bonus
Shares hereunder and the Company's obligation to deliver common shares hereunder
shall be subject to all applicable federal and state laws, rules and
regulations, the rules and regulations of any stock exchange on which the
Company's common shares are listed for trading and to such approvals by any
regulatory or governmental agency as may, in the opinion of counsel to the
Company, be required. The Company shall not be obliged by any provision of the
Plan or the grant of any Bonus Shares hereunder to issue common shares in
violation of such laws, rules and regulations or any condition of such
approvals. No Bonus Shares shall be granted and no common shares issued
hereunder where such grant or issue would require registration of the Plan or of
common shares under the securities laws of any jurisdiction and any purported
grant of any Bonus Shares or issue of common shares hereunder in violation of
this Section shall be void.
12. EFFECTIVE DATE. The Plan shall be effective upon the approval of the Plan by
the shareholders of the Company, given by the affirmative vote of a majority of
the votes attached to the common shares of the Company entitled to vote and
represented and voted at an annual or special meeting of the holders of such
common shares held, among other things, to consider and approve the Plan.
13. GOVERNING LAW. The Plan shall be governed by the laws of the State of
Nevada.
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14. EXPENSES OF ADMINISTRATION. All costs and expenses incurred in the operation
and administration of this Plan shall be borne by the Company.
The undersigned duly appointed secretary of the Company, does hereby certify
that this Plan, and its terms and provisions, were duly approved by the
Company's Board of Directors on this 27th day of September, 2012.
/s/ Robert Malasek
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Corporate Secretary
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EXHIBIT A
VALUE ADDED MODEL
Value Added Model % of Breakout Shares 100% Warrant Common
Nreakout Bonus Period Pref. Shr. Amt. Common Shr. Amt. Series VAM Shares 100%
--------------------- --------------- ---------------- ---------- -----------
Breakout 1-3 477,935 47,793,500 A-C 48,021,165
Breakout 4-6 389,894 38,989,400 D-F 39,754,278
Breakout 7-9 318,207 31,820,700 G-I 32,910,543
Breakout 10-12 259,808 25,980,800 J-L 27,244,963
Breakout 13-15 212,312 21,231,200 M-O 22,565,758
Breakout 16-18 173,479 17,347,900 P-R 18,681,042
Breakout 19-21 141,800 14,180,000 S-U 15,465,084
Breakout 22-24 115,947 11,594,700 V-X 12,802,755
Breakout 25-27 94,838 9,483,800 Y-AA 10,598,750
Breakout 28-30 77,598 7,759,800 AB-AD 8,774,165
Breakout 31-33 63,512 6,351,200 AE-AG 7,263,685
Breakout 34-36 51,996 5,199,600 AH-AJ 6,013,235
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Total Equity VAM: 2,377,326 237,732,600 Total Warrant VAM 250,095,423
Exhibit A-1
EXHIBIT B
LIBERTY COAL ENERGY CORP.
2012 EXECUTIVE COMPENSATION PLAN
TO: Recipient
PLEASE BE ADVISED that Liberty Coal Energy Corp. has on the date hereof granted
to the Recipient the number of Bonus Shares as set forth under and pursuant to
the 2012 Executive Compensation Plan. Before these shares are to be issued, the
Recipient must deliver to the Committee that administers the 2012 Executive
Compensation Plan an agreement in duplicate, in the form as Exhibit C attached
hereto. The Bonus Shares are granted and issued subject to the following vesting
and transfer limitations.
Number of Bonus Shares Granted: ______________
Vesting: These Bonus Shares shall vest pursuant to the
terms of the MOT until the Company receives
written notice from the Intermediary that a
successful breakout has occurred pursuant to
the Value Added Model.
Date of 100% Vesting: The Bonus Shares granted in connection with the
respective breakouts in the Value Added Model
shall become immediately 100% vested on the
date of the written notice from the
Intermediary that a successful breakout has
occurred.
Transfer Limitations: ______________
LIBERTY COAL ENERGY CORP.
Date: ________________, 20__
By:
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Signature of Authorized Signatory
Its:
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Print Name and Title of Signatory
Exhibit B-1
EXHIBIT C
Liberty Coal Energy Corp.
99-18th Street, Suite 3000
Denver, CO 80202
I represent and agree that said Bonus Shares are being acquired by me for
investment and that I have no present intention to transfer, sell or otherwise
dispose of such shares, except as permitted pursuant to the Plan and in
compliance with applicable securities laws, and agree further that said shares
are being acquired by me in accordance with and subject to the terms, provisions
and conditions of said Plan, to all of which I hereby expressly acknowledge and
agree. These agreements shall bind and inure to the benefit of my heirs, legal
representatives, successors and assigns.
My address of record is:
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My social security number is:
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Yours very truly,
Date: ________________, 20__
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Signature of Recipient
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Print Name of Recipient
Receipt of the above is hereby acknowledged.
LIBERTY COAL ENERGY CORP.
Date: ________________, 20__
By:
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Signature of Authorized Signatory
Its:
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Print Name and Title of Signatory
Exhibit C-
