EXHIBIT 4.1
AMERICAN CONSOLIDATED MANAGEMENT GROUP, INC.
PLAN INFORMATION
FOR THE
AMERICAN CONSOLIDATED MANAGEMENT GROUP EMPLOYEE DEBT REPAYMENT PLAN
This document constitutes part of a prospectus covering securities
that have been registered under the Securities Act of 1933.
July 30, 2002
AMERICAN CONSOLIDATED MANAGEMENT GROUP, INC. EMPLOYEE
DEBT REPAYMENT PLAN (THE "PLAN")
General Plan Information
From inception through 1994, American Consolidated Management Group, Inc. (the
"Company") was engaged in the mining business. The Company's efforts in the
mining business were unsuccessful and from 1994 to date the Company has had no
mining or other current business operations. The Company has not had sufficient
funding to meet its cash needs. As a result, the Company has accrued salary
obligations to its officers and other amounts owing to its directors,
consultants and advisors (the "Accrued Obligations"). At June 30, 2002, the
amount of the Accrued Obligations, including accrued interest, was $2,019,549.
The Company has also agreed to issue 10,000 shares of stock to each of six
members of its board of directors in consideration for services rendered (the
"Director Obligations").
The purpose of the Plan is to settle the Accrued Obligations and Director
Obligations in full by issuing to up to an aggregate of 662,894 shares of the
Company's common stock to these individuals (the "Shares"). On July 26, 2002 the
closing price of our shares was $2.10. As a result, if the obligations are
settled under the terms of the Plan the settlement amounts will be at a
substantial discount to the amount of the Accrued Obligations. The officers,
directors, consultants and advisors who may elect to receive the Shares (the
"Plan Participants") under the Plan are (i) natural persons, (ii) they have
provided bona fide services to the Company and (iii) the services were not in
connection with the offer or sale of securities in a capital-raising transaction
and such persons do not directly or indirectly promote or maintain a market for
the Company's securities.
The Plan became effective on July 30, 2002 and it will terminate when the last
of the Accrued Obligations and Director Obligations has been settled or such
sooner time as the Board of Directors may determine. The Plan is administered by
the Company's officers who have the authority to issue Shares to the Plan
Participants in the amounts set forth below and in exchange for a release of the
specified Accrued Obligations.
The Plan is not subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
For additional information about the Plan or its administrators you may contact
Scott Moeller at 70 West Canyon Crest Rd., Suite D, Alpine, Utah 84004,
telephone (801) 756-1414.
Securities to be Offered
The Plan authorizes the issuance of up to an aggregate of 662,894 shares to the
Plan Participants in exchange for a release of the Accrued Obligations and
Director Obligations. The release to be executed by the Plan Participants will
be in substantially the same form as attached hereto as Exhibit A. The
approximate amount of the Accrued Obligations owing to each Plan Participant and
the number of Shares to be issued to each Plan Participant in satisfaction of
the Accrued Obligations are as follows:
Number of Shares to be Issued
in Satisfaction of the Accrued
Name of Plan Participant Accrued Obligations Obligation
------------------------ ------------------- ----------
William D. Moeller $1,003,608 290,124
Steven J. Haslam 91,691 26,506
Scott S. Moeller 422,851 122,238
Leah Chandler 208,849 60,375
Keith W. Moeller 285,399 82,504
Lyndon Ricks 73,151 21,147
The number of Shares to be issued to each Plan Participant in satisfaction of
the Director Obligations are as follows:
Number of Shares to be Issued in
Name of Plan Participant Satisfaction of the Director Obligations
------------------------ ----------------------------------------
William D. Moeller 10,000
Steven J. Haslam 10,000
Robert J. Holladay 10,000
John DeNiro 10,000
Keith W. Moeller 10,000
Scott S. Moeller 10,000
Employees Who May Participate in the Plan
Shares may only be issued under the Plan to Plan Participants.
Purchase of Securities Pursuant to the Plan and Payment of Securities Offered
Plan Participants may elect to participate in the Plan at any time after the
Plan's effective date (July 30, 2002) and prior to the Plan's termination. The
Plan will terminate when the last of the Accrued Obligations and Director
Obligations has been settled or such sooner time as the Board of Directors may
determine.
Plan participants may elect to receive the number of Shares set forth above and
participate in the Plan be executing a release in the form attached hereto as
Exhibit A. Plan participants must elect to release ACMG from all outstanding
obligations in order to participate in the Plan.
The Shares given to Plan Participant will be issued by the Company and will not
be purchased in the market.
Information regarding the amount or status of the Accrued Obligations and
Director Obligations or the Shares issued in cancellation of the same will be
distributed to participants upon request. Other than the releases, the Company
does not anticipate providing reports or otherwise periodically disseminating
information about the amount and status of potential Plan Participant's
accounts.
Resale Restrictions
Unless a registration statement under the Securities Act of 1933, as amended,
(the "1933 Act") is in effect registering the sale of the Shares, then the
Shares are not freely tradeable and must be held indefinitely unless and until
such Shares are either registered under the 1933 Act or an exemption from such
registration is available. The Company intends to file a Registration Statement
on Form S-8 prior to the offer or sale of the Shares.
Except for the Registration Statement on Form S-8, the Company will not be
required to register or qualify any Shares hereafter with the Securities and
Exchange Commission or any State agency.
Any Plan Participants that are also "control persons" are also subject to
additional restrictions relating to the resale of their Shares. Control persons
include any person directly or indirectly controlling or controlled by the
issuer, or any person under direct or indirect common control with the issuer.
Control persons may only resell the Shares pursuant to a registration statement
filed under the 1933 Act, in compliance with the applicable conditions of Rule
144 as promulgated under the 1933 Act or where another exemption from such
registration are available.
Tax Effects of Plan Participants
The following is a brief summary of the principal federal income tax
consequences under current federal income tax laws relating to Shares issued
under the Plan. This summary is not intended to be exhaustive and, among other
things, does not describe state, local or foreign income tax consequences.
Employees
In cases where the Plan Participant is an employee, at the time the Shares are
issued to the employee the employee will realize ordinary income for federal tax
purposes in an amount equal to the fair market value of the Shares. In addition,
fair market value of the Shares issued to the employee will also be subject to
employment taxes (e.g., FICA and FUTA), including applicable withholding
requirements. The Company will generally be entitled to a tax deduction at such
time in the same amount that the employee realized as ordinary income. If stock
so acquired is later sold or exchanged, then the difference between the sales
price and the fair market value of Shares on the date of issuance is generally
taxable as capital gain or loss.
Independent Contractors
In cases where the Plan Participant is an independent contractor, at the time
the Shares are issued to the independent contractor the independent contractor
will realize ordinary income for federal tax purposes in an amount equal to the
fair market value of the Shares. In addition, fair market value of the Shares
issued to the independent contractor will also be subject to self-employment
taxes (e.g., FICA and FUTA), including applicable estimated tax payment
requirements. The Company will generally be entitled to a tax deduction at such
time in the same amount that the independent contractor realized as ordinary
income. If stock so acquired is later sold or exchanged, then the difference
between the sales price and the fair market value of Shares on the date of
issuance is generally taxable as capital gain or loss.
Other Registrant Information and Employee Plan Information
Plan Participants are entitled to obtain, without charge, upon written or oral
request, copies of the documents incorporated by reference in Item 3 of Part II
of the registration statement to which this prospectus relates, which documents
are incorporated by reference in this Section 10(a) prospectus. Participants are
also entitled to obtain, without charge, upon written or oral request, copies of
other documents required to be delivered pursuant to Rule 428(b). Requests
should be directed to Scott Moeller at 70 West Canyon Crest Rd., Suite D,
Alpine, Utah 84004, telephone (801) 756-1414.