As filed with the Securities and Exchange Commission on July 3, 2002 Reg. No. 33
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------
HOUSEHOLD DIRECT, INC.
Delaware 51-0388634
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
#3 Glen Road
Sandy Hook, CT 06482
------------------------------------------------
CONSULTING AGREEMENTS AND
STOCK COMPENSATION PLAN
--------------------------------------------
John D. Folger
Chief Executive Officer
#3 Glen Road
Sandy Hook, CT 06482
(203) 426-2312
Copy to:
Rebecca Wilson, Esq.
2781 W. MacArthur Blvd, Suite 168
Santa Ana, CA 92704
(714) 850-3356 (714) 850-3368 (fax)
CALCULATION OF REGISTRATION FEE
- -------------------- ------------- ---------- ---------- ------------------
Proposed Proposed
maximum maximum
Title of Amount to offering Aggregate Amount of
securities to be price offering registration
to be registered registered per share fee
- -------------------- ------------- ---------- ---------- -------------------
- -------------------- ------------- ---------- ---------- -------------------
Common Stock
(par value 0.001) 25,000,000 $0.0013 $32,500 $81.25
- -------------------- ------------- ---------- -------- -------------------
Estimated solely for the purpose of determining the amount of registration fee
and pursuant to Rules 457(c) and 457 (h) of the General Rules and Regulations
under the Securities Act of 1993, based upon the exercise price of 25,000,000
Common Stock at $0.0013 per share.
PART I
INFORMATION REQUIRED IN THIS SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
*Information required by Part 1 to be contained in the Section
10(a) prospectus is omitted from the registration statement in accordance with
Rule 428 under the Securities Act of 1933.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by HouseHold Direct, Inc., (the
"Company") with the Securities and Exchange Commission (the "Commission") are
incorporated by reference herein:
(a) the Company's annual report on Form 10-KSB for the fiscal year ended
December 31, 2001 (Commission File No. 0-107441):
(b) all other reports filed by the Company pursuant to Section 13(a) or Section
15 (d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since December 31, 2001 through the date hereof; and
(c) any document filed by the Company with the Commission pursuant to Sections
13(a), 13( c), 14 or 15(d) of the Exchange Act subsequent to the date
hereof, but prior to the filing of a post-effective amendment to this
Registration Statement which indicates that all shares of Common Stock
registered hereunder have been sold or that deregisters all such shares of
Common Stock then remaining unsold, such documents being deemed to be
incorporated by reference herein and to be part hereof from the date of
filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officer
The Certificate of Incorporation of the Company provides that all directors,
officers, employees and agents of the Company shall be entitled to be
indemnified by the Company to the fullest extent permitted by law. The
Certificate of Incorporation also provides as follows:
The corporation shall, to the fullest extent permitted by the Act, as the same
may be amended and supplemented, indemnify all directors, officers, employees,
and agents of the corporation whom it shall have power to indemnify thereunder
from and against any and all of the expenses, liabilities, or other matters
referred to therein or covered thereby.
Such right to indemnification or advancement of expenses shall continue as to a
person who has ceased to be a director, officer, employee, or agent of the
corporation, and shall inure to the benefit of the heirs, executives, and
administrators of such persons. The indemnification and advancement of expenses
provided for herein shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any bylaw,
agreement, vote of stockholders or of disinterested directors or otherwise. The
corporation shall have the right to purchase and maintain insurance on behalf of
its directors, officers, and employees or agents to the full extent permitted by
the Act, as the same may be amended or supplemented.
Commission Policy
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The Exhibits to this registration statement are listed in the index to
Exhibits on page 8.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
securities Act 1933:
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement:
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement; provided, however, that paragraph (1)(i)
and (I)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraph is
contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15 (d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendments shall be deemed to be
a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
To remove from registration by mean of a post-effective amendment
any of the securities being registered hereunder that remain
unsold at the termination of the offering.
The undersigned Company hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Company's annual report pursuant to Section 13 (a)
or Section 15 (d) of the Securities and Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the above-described
provisions or otherwise, the Company has been advised that in the
opinion of the Commission such indemnification is against public
policy as expressed in the Securities act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing a form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sandy Hook, State of Connecticut on July 3, 2002.
HouseHold Direct, Inc.
By /s/ John D. Folger
-----------------------------------
John D. Folger, CEO
Each person whose signature appears below hereby constitutes and appoints John
D. Folger as his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead in any and all capacities to sign any and all amendments (including
post-effective amendments) to this Registration Statement on Form S-8 and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission under the Securities Act
of 1933. Pursuant to the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in their capacities
and on the dates indicated.
Signature Title Date
- ---------- ------ ----
/s/ John D. Folger CEO & Director July 3, 2002
John D. Folger
/s/ Ann Jameson Vice President, Secretary, July 3, 2002
Ann Jameson Treasurer & Director
INDEX TO EXHIBITS
Exhibit
NO. Description
4.1 Consulting Agreements
5.1 Opinion of Counsel, regarding the legality of the securities registered
hereunder.
10.2 2002 Stock Compensation Plan
23.1 Consent of Independent Public Accountants
23.2 Consent of Counsel (included as part of Exhibit 5.1)
Exhibit 4.1
Consulting Agreements
Number of Shares/Options
4.1 (a) 6,400,000
4.2 (b) 5,000,000
CONSULTING AGREEMENT
This Consulting Agreement (the "Consulting Agreement") made as of July 3, 2002,
by and between Stephen J. Fryer, 2201 Alta Vista, Newport Beach, C 92660,
("Consultant") and HouseHold Direct, Inc. with offices at #3 Glen Road, Sandy
Hook, CT 06482 (the "Company").
WITNESSETH
WHEREAS, the Company requires and will continue to require consulting
services relating to management, strategic planning and marketing in connection
with its business; and
WHEREAS, Consultant can provide the Company with strategic planning and
marketing consulting services and is desirous of performing such services for
the Company; and
WHEREAS, the Company wishes to induce Consultant to provide these
consulting services to the Company,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
stated, it is agreed as follows:
1. APPOINTMENT.
-----------
The Company hereby engages Consultant and Consultant agrees to render services
to the Company as a consultant upon the terms and conditions hereinafter set
forth.
2. TERM.
----
The term of this Consulting Agreement began as of the date of this Agreement,
and shall terminate on July 3, 2003, unless earlier terminated in accordance
with paragraph 7 herein or extended as agreed to between the parties.
3. SERVICES.
--------
During the term of this Agreement, Consultant shall provide advice to, undertake
for and consult with the Company concerning management, marketing, consulting,
strategic planning, corporate organization and structure, financial matters in
connection with the operation of the businesses of the Company, expansion of
services, acquisitions and business opportunities, and shall review and advise
the Company regarding its overall progress, needs and condition. Consultant
agrees to provide on a timely basis the following enumerated services plus any
additional services contemplated thereby:
(a) The implementation of short-range and long-term strategic planning to
fully develop and enhance the Company's assets, resources, products
and services;
(b) The implementation of a domestic marketing program to enable the
Company to broaden the markets for its services and promote the image
of the Company and its products and services;
(c) Advise the Company relative to the recruitment and employment of key
executives consistent with the expansion of operations of the Company;
(d) The identification, evaluation, structuring, negotiating and closing
of joint ventures, strategic alliances, business acquisitions and
advice with regard to the ongoing managing and operating of such
acquisitions upon consummation thereof; and
(e) Advice and recommendations regarding corporate financing including the
structure, terms and content of bank loans, institutional loans,
private debt funding, mezzanine financing, blind pool financing and
other preferred and common stock equity private or public financing.
4. DUTIES OF THE COMPANY.
---------------------
The Company shall provide Consultant, on a regular and timely basis, with all
approved data and information about it, its subsidiaries, its management, its
products and services and its operations as shall be reasonably requested by
Consultant, and shall advise Consultant of any facts which would affect the
accuracy of any data and information previously supplied pursuant to this
paragraph. The Company shall promptly supply Consultant with full and complete
copies of all financial reports, all fillings with all federal and state
securities agencies; with full and complete copies of all stockholder reports;
with all data and information supplied by any financial analyst, and with all
brochures or other sales materials relating to its products or services.
5. COMPENSATION.
------------
The Company will immediately grant Consultant the options to purchase 6,400,000
shares of the Company's Common Stock with an exercise price at $0.0013 per
share, which option shall expire on July 3, 2003 at 5:00 P.M. P.S.T. The number
of shares herein are subject to the anti-dilution provisions of the
corresponding option which is being issued in conjunction with this Agreement.
Consultant in providing the foregoing services shall be reimbursed for any
pre-approved out-of-pocket costs, including, without limitation, travel,
lodging, telephone, postage and Federal Express charges.
6. REPRESENTATION AND INDEMNIFICATION.
----------------------------------
The Company shall be deemed to have been made a continuing representation of the
accuracy of any and all facts, material information and data which it supplies
to Consultant and acknowledges its awareness that Consultant will rely on such
continuing representation in disseminating such information and otherwise
performing its advisory functions. Consultant in the absence of notice in
writing from the Company will rely on the continuing accuracy of material,
information and data supplied by the Company. Consultant represents that he has
knowledge of and is experienced in providing the aforementioned services.
7. MISCELLANEOUS.
-------------
Termination: This Agreement may be terminated by either Party upon written
notice to the other Party for any reason which shall be effective five (5)
business days from the date of such notice. This Agreement shall be terminated
immediately upon written notice for material breach of this Agreement.
Modification: This Consulting Agreement sets forth the entire understanding of
the Parties with respect to the subject matter hereof. This Consulting Agreement
may be amended only in writing signed by both Parties.
Notices: Any notice required or permitted to be given hereunder shall be in
writing and shall be mailed or otherwise delivered in person or by facsimile
transmission at the address of such Party set forth above or to such other
address or facsimile telephone number, as the Party shall have furnished in
writing to the other Party.
Waiver: Any waiver by either Party of a breach of any provision of this
Consulting Agreement shall not operate as or be construed to be a waiver of any
other breach of that provision or of any breach of any other provision of this
Consulting Agreement. The failure of a Party to insist upon strict adherence to
any term of this Consulting Agreement on one or more occasions will not be
considered a waiver or deprive that Party of the right thereafter to insist upon
adherence to that term of any other term of this Consulting Agreement.
Assignment: The options under this Agreement are assignable at the discretion of
the Consultant.
Severability: If any provision of this Consulting Agreement is invalid, illegal,
or unenforceable, the balance of this Consulting Agreement shall remain in
effect, and if any provision is inapplicable to any person or circumstance, it
shall nevertheless remain applicable to all other persons and circumstances.
Disagreements: Any dispute or other disagreement arising from or out of this
Consulting Agreement shall be submitted to arbitration under the rules of the
American Arbitration Association and the decision of the arbiter(s) shall be
enforceable in any court having jurisdiction thereof. Arbitration shall occur
only in Orange County, CA. The interpretation and the enforcement of this
Agreement shall be governed by California Law as applied to residents of the
State of California relating to contracts executed in and to be performed solely
within the State of California. In the event any dispute is arbitrated, the
prevailing Party (as determined by the arbiter(s)) shall be entitled to recover
that Party's reasonable attorney's fees incurred (as determined by the
arbiter(s)).
IN WITNESS WHEREOF, this Consulting Agreement has been executed by the
Parties as of the date first above written.
HOUSEHOLD DIRECT, INC. CONSULTANT
/s/ John D. Folger /s/ Stephen J. Fryer
- ------------------------------ ----------------------------
John D. Folger , CEO Stephen J. Fryer
CONSULTING AGREEMENT
This Consulting Agreement (the "Consulting Agreement") made as of July 3, 2002,
by and between John Manning, 2918 Pheasant Run, Humble, Texas 77396,
("Consultant") and HouseHold Direct, Inc. with offices at #3 Glen Road, Sandy
Hook, CT 06482 (the "Company").
WITNESSETH
WHEREAS, the Company requires and will continue to require consulting services
relating to management, strategic planning and marketing in connection with its
business; and
WHEREAS, Consultant can provide the Company with strategic planning and
marketing consulting services and is desirous of performing such services for
the Company; and
WHEREAS, the Company wishes to induce Consultant to provide these consulting
services to the Company,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter stated, it
is agreed as follows:
1. APPOINTMENT.
-----------
The Company hereby engages Consultant and Consultant agrees to render services
to the Company as a consultant upon the terms and conditions hereinafter set
forth.
2. TERM.
----
The term of this Consulting Agreement began as of the date of this Agreement,
and shall terminate on July 3, 2003, unless earlier terminated in accordance
with paragraph 7 herein or extended as agreed to between the parties.
3. SERVICES.
--------
During the term of this Agreement, Consultant shall provide advice to, undertake
for and consult with the Company concerning management, marketing, consulting,
strategic planning, corporate organization and structure, financial matters in
connection with the operation of the businesses of the Company, expansion of
services, acquisitions and business opportunities, and shall review and advise
the Company regarding its overall progress, needs and condition. Consultant
agrees to provide on a timely basis the following enumerated services plus any
additional services contemplated thereby:
(a) The implementation of short-range and long-term strategic planning to
fully develop and enhance the Company's assets, resources, products
and services;
(b) The implementation of a domestic marketing program to enable the
Company to broaden the markets for its services and promote the image
of the Company and its products and services;
(c) Advise the Company relative to the recruitment and employment of key
executives consistent with the expansion of operations of the Company;
(d) The identification, evaluation, structuring, negotiating and closing
of joint ventures, strategic alliances, business acquisitions and
advice with regard to the ongoing managing and operating of such
acquisitions upon consummation thereof; and
(e) Advice and recommendations regarding corporate financing including the
structure, terms and content of bank loans, institutional loans,
private debt funding, mezzanine financing, blind pool financing and
other preferred and common stock equity private or public financing.
4. DUTIES OF THE COMPANY.
---------------------
The Company shall provide Consultant, on a regular and timely basis, with all
approved data and information about it, its subsidiaries, its management, its
products and services and its operations as shall be reasonably requested by
Consultant, and shall advise Consultant of any facts which would affect the
accuracy of any data and information previously supplied pursuant to this
paragraph. The Company shall promptly supply Consultant with full and complete
copies of all financial reports, all fillings with all federal and state
securities agencies; with full and complete copies of all stockholder reports;
with all data and information supplied by any financial analyst, and with all
brochures or other sales materials relating to its products or services.
5. COMPENSATION.
------------
The Company will immediately grant Consultant the options to purchase 5,000,000
shares of the Company's Common Stock with an exercise price at $0.0013 per
share, which option shall expire on July 3, 2003 at 5:00 P.M. P.S.T. The number
of shares herein are subject to the anti-dilution provisions of the
corresponding option which is being issued in conjunction with this Agreement.
Consultant in providing the foregoing services shall be reimbursed for any
pre-approved out-of-pocket costs, including, without limitation, travel,
lodging, telephone, postage and Federal Express charges.
6. REPRESENTATION AND INDEMNIFICATION.
----------------------------------
The Company shall be deemed to have been made a continuing representation of the
accuracy of any and all facts, material information and data which it supplies
to Consultant and acknowledges its awareness that Consultant will rely on such
continuing representation in disseminating such information and otherwise
performing its advisory functions. Consultant in the absence of notice in
writing from the Company will rely on the continuing accuracy of material,
information and data supplied by the Company. Consultant represents that he has
knowledge of and is experienced in providing the aforementioned services.
7. MISCELLANEOUS.
-------------
Termination: This Agreement may be terminated by either Party upon written
notice to the other Party for any reason which shall be effective five (5)
business days from the date of such notice. This Agreement shall be terminated
immediately upon written notice for material breach of this Agreement.
Modification: This Consulting Agreement sets forth the entire understanding of
the Parties with respect to the subject matter hereof. This Consulting Agreement
may be amended only in writing signed by both Parties.
Notices: Any notice required or permitted to be given hereunder shall be in
writing and shall be mailed or otherwise delivered in person or by facsimile
transmission at the address of such Party set forth above or to such other
address or facsimile telephone number, as the Party shall have furnished in
writing to the other Party.
Waiver: Any waiver by either Party of a breach of any provision of this
Consulting Agreement shall not operate as or be construed to be a waiver of any
other breach of that provision or of any breach of any other provision of this
Consulting Agreement. The failure of a Party to insist upon strict adherence to
any term of this Consulting Agreement on one or more occasions will not be
considered a waiver or deprive that Party of the right thereafter to insist upon
adherence to that term of any other term of this Consulting Agreement.
Assignment: The options under this Agreement are assignable at the discretion of
the Consultant.
Severability: If any provision of this Consulting Agreement is invalid, illegal,
or unenforceable, the balance of this Consulting Agreement shall remain in
effect, and if any provision is inapplicable to any person or circumstance, it
shall nevertheless remain applicable to all other persons and circumstances.
Disagreements: Any dispute or other disagreement arising from or out of this
Consulting Agreement shall be submitted to arbitration under the rules of the
American Arbitration Association and the decision of the arbiter(s) shall be
enforceable in any court having jurisdiction thereof. Arbitration shall occur
only in Orange County, CA. The interpretation and the enforcement of this
Agreement shall be governed by California Law as applied to residents of the
State of California relating to contracts executed in and to be performed solely
within the State of California. In the event any dispute is arbitrated, the
prevailing Party (as determined by the arbiter(s)) shall be entitled to recover
that Party's reasonable attorney's fees incurred (as determined by the
arbiter(s)).
IN WITNESS WHEREOF, this Consulting Agreement has been executed by the
Parties as of the date first above written.
HOUSEHOLD DIRECT, INC. CONSULTANT
/s/ John D. Folger /s/ John Manning
- -------------------------------- --------------------------
John D. Folger , CEO John Manning
OPINION OF COUNSEL
Rebecca Wilson
Attorney at Law
2961W. MacArthur, Suite 120
Santa Ana, CA 92704
(714) 850-3356 / (714) 850-3368 (fax)
July 3, 2002
HouseHold Direct, Inc.
#3 Glen Road
Sandy Hook, CT 06482
Re: Registration Statement on Form S-8
Gentleman:
I have acted as counsel for HouseHold Direct, Inc. (the "Company"), in
connection with the preparation and filing of the Company's Registration
statement on Form S-8 under the Securities Act of 1933, as amended, (the
"Registration Statement"), relating to 25,000,000 shares of the Company's Common
Stock, 0.001 par value, (the "Common Stock"), issuable pursuant to the Company's
Stock Compensation Plan, (the "Plan") and Consulting Agreements (the
"Agreements").
I have examined the Certificate of Incorporation, as amended, and the By-Laws of
the Company and all amendments thereto, the Registration Statement and
originals, or copies certified to my satisfaction, of such records and meetings,
written actions in lieu of meetings, or resolutions adopted at meetings, of the
directors of the Company, and such other documents and instruments as in my
judgment are necessary or appropriate to enable me to render the opinions
expressed below.
Based on the foregoing examination, I am of the opinion that the shares of
Common Stock issuable with the Plan and the Agreements are duly authorized and,
when issued in accordance with the Plan and the Agreements, will be validly
issued, fully paid and non-assessable.
Further, I consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Rebecca Wilson
Rebecca Wilson, Esq.
HOUSEHOLD DIRECT, INC.
2002 STOCK COMPENSATION PLAN
1. Purpose of the Plan. The purpose of the 2002 Stock Compensation Plan
("Plan") of HouseHold Direct, Inc., a Delaware corporation, ("Company") is
to provide the Company with a means of compensating selected key employees
(including officers) and directors of and consultants to the Company and
its subsidiaries for their services rendered in connection with the
development of HouseHold Direct, Inc. with shares of Common Stock of the
Company.
2. Administration of the Plan. The Plan shall be administered by the Company's
Board of Directors (the "Board").
2.1 Award or Sales of shares. The Company's Board shall (a) select those
key employees (including officers), directors and consultants to whom
shares of the Company's Common Stock shall be awarded or sold, and (b)
determine the number of shares to be awarded or sold; the time or
times at which shares shall be awarded or sold; whether the shares to
be awarded or sold will be registered with the Securities and Exchange
Commission; and such conditions, rights of repurchase, rights of first
refusal or other transfer restrictions as the Board may determine.
Each award or sale of shares under the Plan may or may not be
evidenced by a written agreement between the Company and the persons
to whom shares of the Company's Common Stock are awarded or sold.
2.2 Consideration for Shares. Shares of the Company's Common Stock to be
awarded or sold under the Plan shall be issued for such consideration,
having a value not less than par value thereof, as shall be determined
from time to time by the Board in its sole discretion.
2.3 Board Procedures. The Board from time to time may adopt such rules and
regulations for carrying out the purposes of the Plan as it may deem
proper and in the best interests of the Company. The Board shall keep
minutes of its meetings and records of its actions. A majority of the
members of the Board shall constitute a quorum for the transaction of
any business by the Board. The Board may act at any time by an
affirmative vote of a majority of those members voting. Such vote
shall be taken at a meeting (which may be conducted in person or by
any telecommunication medium) or by written consent of Board members
without a meeting.
2.4 Finality of Board Action. The Board shall resolve all questions
arising under the Plan. Each determination, interpretation, or other
action made or taken by the Board shall be final and conclusive and
binding on all persons, including, without limitation, the Company,
its stockholders, the Board and each of the members of the Board.
2.5 Non-Liability of Board Members. No Board member shall be liable for
any action or determination made by him in good faith with respect to
the Plan or any shares of the Company's Common Stock sold or awarded
under it.
2.6 Board Power to amend, Suspend, or Terminate the Plan. The Board may,
from time to time, make such changes in or additions to the Plan as it
may deem proper and in the best interests of the Company and its
Stockholders. The Board may also suspend or terminate the Plan at any
time, without notice, and in its sole discretion.
3. Shares Subject to the Plan. For purposes of the Plan, the Board of
Directors is authorized to sell or award up to 25,279,509 shares and/or
options of the Company's Common Stock, .001 par value per share ("Common
Stock").
4. Participants. All key employees (including officers) and directors of and
consultants to the Company and any of its subsidiaries (sometimes referred
to herein as ("Participants") are eligible to participate in the Plan. A
copy of this Plan shall be delivered to all requesting participants,
together with a copy of any Board resolutions authorizing the issuance of
the shares and establishing the terms and conditions, if any, relating to
the sale or award of such shares.
5. Rights and Obligations of Participants. The award or sale of shares of
Common Stock shall be conditioned upon the participant providing to the
Board a written representation that, at the time of such award or sale, it
is the intent of such person(s) to acquire the shares for investment only
and not with a view toward distribution. The certificate for unregistered
shares issued for investment shall be restricted by the Company as to
transfer unless the Company receives an opinion of counsel satisfactory to
the Company to the effect that such restriction is not necessary under the
pertaining law. The providing of such representation and such restriction
on transfer shall not, however, be required upon any person's receipt of
shares of Common Stock under the Plan in the event that, at the time of
award or sale, the shares shall be (i) covered by an effective and current
registration statement under the Securities Act of 1933, as amended, and
(ii) either qualified or exempt from qualification under applicable state
securities laws. The Company shall, however, under no circumstances be
required to sell or issue any shares under the Plan if, in the opinion of
the Board, (i) the issuance of such shares would constitute a violation by
the participant or the Company of any applicable law or regulation of any
governmental authority, or (ii) the consent or approval of any governmental
body is necessary or desirable as a condition of, or in connection with,
the issuance of such shares.
6. Payment of Shares.
(a) The entire purchase price of shares issued under the Plan shall be
payable in lawful money of the United States of America at the time
when such shares are purchased, except as provided in subsection (b)
below.
(b) At the discretion of the Board, Shares may be issued under the Plan in
consideration of services rendered.
7. Adjustments. If the outstanding Common Stock shall be hereafter increased
or decreased, or changed into or exchanged for a different number or kind
of shares or other securities of the Company or of another corporation, by
reason of a recapitalization, reclassification, reorganization, merger,
consolidation, share exchange, or other business combination in which the
Company is the surviving parent corporation, stock split-up, combination of
shares, or dividend or other distribution payable in capital stock or
rights to acquire capital stock, appropriate adjustment shall be made by
the Board in the number and kind of shares which may be granted under the
Plan.
8. Tax Withholding. As a condition to the purchase or award of shares, the
participant shall make such arrangements as the Board may require for the
satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with such purchase or award.
9. Terms of the Plan.
9.1 Effective Date. The Plan shall become effective on January 1, 2002.
9.2 Termination Date. The Plan shall terminate at Midnight on January 1,
2004, and no shares shall be awarded or sold after that time. The Plan
may be suspended or terminated at any earlier time by the Board within
the limitations set forth in Section 2.6.
10. Non-Exclusivity of the Plan. Nothing contained in the Plan is intended to
amend, modify, or rescind any previously approved compensation plans,
programs or options entered into by the Company. This Plan shall be
construed to be in addition to and independent of any and all such other
arrangements. The adoption of the Plan by the Board shall not be construed
as creating any limitations on the power of authority of the Board to
adopt, with or without stockholder approval, such additional or other
compensation arrangements as the Board may from time to time deem
desirable.
11. Governing Law. The Plan and all rights and obligations under it shall be
construed and enforced in accordance with the laws of the state of
California.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have issued our report dated May 15, 2002, accompanying the consolidated
financial statements of HouseHold Direct, Inc. and subsidiaries appearing in the
2000 Annual Report of the Company to its shareholders and accompanying the
schedules included in the Annual Report on Form 10-KSB for the year ended
December 31, 2001 which is incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of the aforementioned report.
/s/ Bloom and Company, LLP
Hempstead, NY
July 3, 2002