CONSULTANT COMPENSATION AGREEMENT NO. 1
THIS CONSULTANT COMPENSATION AGREEMENT (the "Plan") is made this 30th day
of November, 2000, among Formula Footwear, Inc., a Utah corporation ("Formula");
and the following individuals who have executed and delivered this Plan by the
execution and delivery of the Counterpart Signature Pages which are designated
as Exhibits "A" through "B" hereof: Xxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxxxxx,
Esq. (collectively, the "Consultants").
WHEREAS, the Board of Directors of Formula has adopted a written
compensation agreement for compensation of two individual Consultants who are
natural persons; and
WHEREAS, Formula 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 Formula; 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 exhibits thereto;
and
WHEREAS, Formula 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 Formula 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
Formula;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, it is agreed:
Section 1
Compensation Plan
1.1 Employment. Formula hereby employs the Consultants and the consultants
hereby accept such employment, and have and will perform the services requested
by management of Formula 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 Formula 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 Formula.
1.3 Term. All services performed at the request of Formula 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 Formula and any of the Consultants.
1.4 Payment. Formula and the Consultants agree that Formula shall pay the
invoices of the Consultants for the services performed under this Plan by the
issuance of shares of its common stock at a price of $0.01 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
Formula with a written invoice detailing the services duly performed. Such
invoice shall be paid by Formula in accordance with Section 1.4 above, subject
to (i) the satisfaction of the management of Formula 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 Formula 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 Formula that may be
issued by Formula 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 Formula
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 Formula, 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 Formula in writing prior to the issuance of
such shares.
1.9 Adjustments in the Number of Shares of Common Stock and Price Per
Share. Formula and the Consultants agree that the per share price of shares of
common stock that may be issued by Formula to the Consultants for services
performed under this Plan has been arbitrarily set by Formula; however, in the
event Formula shall undergo a merger, consolidation, reorganization, or
recapitalization other, declare a stock dividend of its shares of common stock
or cause to be implemented a forward or reverse stock split which affects the
present number of issued and outstanding shares of common stock of Formula 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:
(b) 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 Company.
Section 2
Representations and Warranties of Formula
Formula represents and warrants to, and covenants with, the Consultants as
follows:
2.1 Corporate Status. Formula is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah 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 Formula has duly adopted a
Compensation Plan as defined in Rule 405 of the Commission pursuant to which
Formula 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 Formula.
2.3 Registration Statement on Form S-8. Formula 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 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 Registration
Statement shall become effective immediately upon its filing; such Registration
Statement shall be prepared at the sole cost and expense of Formula; and Formula
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. Formula 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. Formula 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. Formula is required to file reports with
the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act"), and Formula 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. Formula 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 Formula hereunder have been
duly authorized by all requisite corporate action on the part of Formula, and
this Plan constitutes a valid and binding obligation of Formula and performance
hereunder will not violate any provision of the Articles of Incorporation,
Bylaws, agreements, mortgages or other commitments of Formula.
Section 3
Representations and Warranties of the Consultants
Each of the Consultants represents and warrants to, and covenants
with, Formula as follows:
3.1 Employment. Each of the Consultants hereby accepts employment by
Formula 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 Formula,
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 Formula, and the Consultants, singly, or through
the advice of a competent professional, fully believe that an investment in
shares of common stock of Formula 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 Formula
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
Formula 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 Formula 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 Formula and the respective Consultants in writing; (2)
by either the Directors of Formula 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 Formula 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 Formula: 0000 Xxxxx 000 Xxxx, Xxxxx 000
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 Plan are 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 Utah, 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 Formula 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.
FORMULA FOOTWEAR, INC.
By /S/ XXXXX XXXXXX
---------------------------
Xxxxx X. Xxxxxx, President and Director
EXHIBIT "A"
CONSULTANT COMPENSATION AGREEMENT NO. 1
COUNTERPART SIGNATURE PAGE
THIS COUNTERPART SIGNATURE PAGE for that certain Consultant Compensation
Agreement No. 1 between Formula Footwear, Inc. and the undersigned Consultant is
executed as of the date set forth hereinbelow.
Consultant:
Xxxxxxx X. Xxxxxxxxxx, Esq.
000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Date: 12/1/00 /S/ XXXXXXX XXXXXXXXXX
------ ---------------------
Number of Shares and
Maximum Value
of Services
General Description of Services to be Performed
See Exhibit A-1 attached hereto and incorporated
herein by reference as will be set forth in invoices 25,000
to Formula as payment of the option price $250
EXHIBIT X-0
Xxxxxxxx 0, 0000
Xxxxxxx X. Xxxxxxxxxx
000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Via Facsimile
Re: Services qualifying for issuance of compensatory shares of common stock
of Formula Footwear, Inc., a Utah corporation (the "Company"),
to be registered on Form S-8 of the Securities and Exchange Commission.
Dear Xx. Xxxxxxxxxx:
As per your request, the following is a list of services I rendered while
serving as a consultant to the Company:
Legal Services, to include:
Consultation with auditors. Communication with former
officers and directors. Review of all Annual and Quarterly
SEC filings, to include: 03/31/00 KSB, 12/31/99 QSB, 6/30/00
QSB, 9/30/00 QSB, 9/30/99 and 1999 QSB.
I further acknowledge that I have received your letter dated December 1,
2000, and the Memorandum accompanying it, and that none of the services
described above was rendered in connection with any "capital raising"
transaction or the direct or indirect promotion or maintenance of a market for
the Company's securities.
Please let me know if I can be of further assistance.
Respectfully,
/S/ XXXXXXX XXXXXXXXXX
EXHIBIT "B"
CONSULTANT COMPENSATION AGREEMENT NO. 1
COUNTERPART SIGNATURE PAGE
THIS COUNTERPART SIGNATURE PAGE for that certain Consultant
Compensation Agreement No. 1 between Formula Footwear, Inc. and the undersigned
Consultant is executed as of the date set forth hereinbelow.
Consultant:
Xxxxx X. Xxxxxx
0000 Xxxxx 000 Xxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Date: 12/1/00 /S/ XXXXX XXXXXX
------ ---------------------
Number of Shares
Maximum Value
of Services
General Description of Services to be Performed
See Exhibit B-1 attached hereto and incorporated
herein by reference as will be set forth in invoices 25,000
to Formula as payment of the option price $250
EXHIBIT "B-1"
December 1, 2000
Xxxxxxx X. Xxxxxxxxxx
000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Via Facsimile
Re: Services qualifying for issuance of compensatory shares of common stock
of Formula Footwear, Inc., a Utah corporation (the "Company"),
to be registered on Form S-8 of the Securities and Exchange Commission.
Dear Xx. Xxxxxxxxxx:
As per your request, the following is a list of services I rendered while
serving as a consultant to the Company from September 1998 to present:
Prepared all Annual and Quarterly SEC filings, to include: 03/31/00
KSB, 9/30/99 QSB, 12/30/99 QSB, 6/30/00 QSB and 9/30/99 QSB.
Maintained the corporations books and records.
Communicated with auditor to assist in the preparation of audited
financials.
Correspondence with CUSIP Service Bureau.
Maintained correspondence with the Company's Officers and Board of
Directors.
I further acknowledge that I have received your letter dated December 1,
2000, and the Memorandum accompanying it, and that none of the services
described above was rendered in connection with any "capital raising"
transaction or the direct or indirect promotion or maintenance of a market for
the Company's securities.
Please let me know if I can be of further assistance.
Respectfully,
/S/ XXXXX XXXXXX
December 1, 0000
Xxxxxxx X. Xxxxxxxxxx, Xxx.
Xxxxx X. Xxxxxx
Via Facsimile
Re: Issuance of compensatory shares of common stock of
Formula Footwear, Inc., a Utah corporation (the "Company"), to
each of you, as consultants or employees, to be
registered on Form S-8 of the Securities and Exchange
Commission
Gentlemen:
I represent the Company and have been engaged to prepare a Registration
Statement on Form S-8 of the Securities and Exchange Commission for the
registration of the securities to be issued to you under a written compensation
agreement to be prepared by this office.
I have prepared a brief Memorandum of the proposed amendments of the
Securities and Exchange Commission to this Form, and have enclosed a copy
thereof for your review.
Please review this Memorandum and advise me in writing of the types of
services you are to render, and please facsimile me a copy your typed comments
(I cannot scan hand written notations for an XXXXX filing), indicating, if
applicable, that these prohibitions do not relate to you or the services you are
to render.
With respect to services, I would like a detailed explanation of all
"non-capital raising" services rendered, including dates, if applicable.
You cannot be paid in securities on an S-8 Registration Statement to
raise funds or promote the stock of the company.
Thank you very much.
Yours very sincerely,
/S/XXXXXXX X. XXXXXXXXXX
Xxxxxxx X. Xxxxxxxxxx
cc. Formula Footwear, Inc.
