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TYPE: EX - 4.1
SEQUENCE: 1
DESCRIPTION: CONSULTING AGREEMENT AND COMPENSATION PLAN
CONSULTING AGREEMENT AND COMPENSATION PLAN
THIS AGREEMENT is entered into as of this 3rd day of January, 2000 by and
between Solomon Alliance Group, Inc. (the "Company") and David T. Shaheen
("Consultant").
RECITALS:
A. The Company's shares are traded on the NASDAQ OTC Bulletin Board quotation
system and the Company desires to engage Consultant, formerly counsel to the
Company until December 1999, to assist the Company with business strategy and
development activities.
B. Consultant has advised the Company that he has the necessary expertise and
knowledge to properly assist the Company in the development of the Company and
its business.
NOW, THEREFORE, in consideration of and based upon the Recitals, the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and legal sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. DESCRIPTION OF SERVICES. Following execution hereof by both parties,
Consultant will provide the following business development services, none
of which involve the financing of the Company through an issuance of
securities or promoting or maintaining a market for the Company's
securities (collectively, the "Services"):
(a) Advise regarding the Company's business objectives, including
achieving reporting status as a public company;
(b) Assistance in the identification of potential acquisition
candidates and business opportunities;
(c) Identification of opportunities for business and
revenue-generation for the Company;
(d) Assistance with the valuation and due diligence requirements of
strategic acquisitions and opportunities and the structuring of
the terms of such transactions;
(e) Identification of potential board members or other key personnel
for the Company's consideration; and
(f) Other services pertaining to the growth, development and
compliance responsibilities of the Company as may be requested
and agreed by the parties.
2. COMPENSATION FOR SERVICES. As compensation for Services, the Company will
issue to Consultant, for a per share purchase price to Consultant of $0.10
per share, up to 500,000 shares of its $0.001 par value common stock. The
Company acknowledges that payment for the shares has been made in full by
the rendering of certain valuable services. Compensation to the Consultant
may be made by stock grant, stock options or warrants as follows:
(a) A warrant for 150,000 shares of the Company, exercisable for five
years at $0.10 per share, will be delivered to the Consultant in
March 2000 in consideration of Consultant's advisory services on
an ongoing basis during the first calendar quarter of the year
2000.
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(b) 100,000 shares of restricted stock will be issued to the
Consultant in the event that the Consultant identifies for the
Company an appropriate corporation for a business combination
with the Company. Such restricted stock, valued by the Company at
$0.10 per share, will only be issued following an agreement
between the parties regarding the foregoing.
(c) Stock option for 100,000 shares of the Company, exercisable for
five years at $0.10 per share, will be delivered to the
Consultant in June 2000 in consideration of Consultant's advisory
services on an ongoing basis during the second calendar quarter
of the year 2000.
(d) Additional stock options shall be granted to the Consultant
pursuant to agreement between the parties in connection with the
rendering of any additional Services for the benefit of the
Company.
3. RESERVATION OF SHARES. The maximum number of authorized but unissued shares
of the Company's Common Stock that the Company may be required to issue on
the grant of awards or on the exercise of options or warrants under this
Plan is hereby reserved for such purpose. The Board of Directors may
increase the number of shares subject to this Plan as it may deem necessary
or advisable for additional grants or as a consequence of a stock split or
other reorganization or recapitalization affecting all Common Shares.
4. CAPITAL ADJUSTMENTS. The number and consideration of shares of Common Stock
covered by each award and the total number of shares that may be granted or
sold under the Plan shall be proportionally adjusted to reflect, subject to
any required action by stockholders, any stock dividend or split,
recapitalization, merger, consolidation, spin-off, reorganization,
combination or exchange of shares or other similar corporate change.
5. RULE 428 PROSPECTUS INFORMATION. The parties agree that this Agreement
shall be deemed an "employee benefit plan" as defined in Rule 405 of
Regulation C under the Securities Act of 1933 and that the "plan" shall be
self administered by Consultant. Consultant acknowledges the following:
(a) The Company will cause to be filed a registration statement on
Form S-8 to register the common stock issued to Consultant by the
Company pursuant to this agreement and to register the resale of
that common stock.
(b) The information contained in Form S-8 and any resale prospectus
may disclose details concerning this agreement, which disclosure
will not be confidential.
(c) This Agreement is compensatory in nature and purpose with respect
to obligations of the Company owing to Consultant, which from time
to time will be current obligations, and is not subject to any
provisions of the Employee Retirement Income Security Act of 1974.
(d) Consultant shall self-administer this plan and has the sole
discretion to dispose of or distribute the securities issued
under this Agreement, unless prohibited by law.
(e) The common stock of the Company issued under this agreement has
been registered under Section 12(g) of the Securities Exchange
Act of 1934.
(f) As an "employee benefit plan" this agreement is limited to the
benefit of Consultant. The Company, however, may enter into
similar agreements from time to time which constitute separate
employee benefit plans for other consultants, advisors,
employees, directors or officers of the Company.
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(g) Consultant is not required to contribute toward the securities
issued under this agreement, except for services rendered by
Consultant under this agreement.
(h) Given the nature of this agreement as compensatory in nature and
purpose and the sole discretion of Consultant in administering
this plan, the Company will not issue any reports concerning the
plan to Consultant, other than to provide an annual recap of the
securities issued and cash paid hereunder as required by the
Internal Revenue Code and appurtenant rules and regulations.
(i) The Company has not imposed any resale restrictions on the
securities issued under this agreement.
(j) This plan is not qualified under Section 401 of the Internal
Revenue Code of 1986. The value of the securities issued under
this agreement constitutes ordinary income to Consultant.
(k) This agreement cannot be assigned or hypothecated by Consultant.
(l) This agreement will terminate or be forfeited as provided herein.
(m) This agreement does not provide for the holding of securities,
funds or other assets and, as such, no lien has or may be created
on any such securities, funds or assets.
6. NON-CIRCUMVENTION. In and for valuable consideration, the Company hereby
agrees that Consultant may take actions to introduce the Company (whether
conveyed in written, oral or data format, or otherwise by Consultant) to
certain business opportunities proprietary to Consultant (the
"Opportunities") for the benefit of the Company. The Company further
acknowledges and agrees that the identity of the subject Opportunities, and
all other information concerning the Opportunity (including without
limitation, all mailing information, phone and fax numbers, email addresses
and other contact information) introduced hereunder are proprietary to
Consultant, and shall be treated as confidential information. For a period
of one (1) year following the most recent substantive activity of the
parties hereto with respect to a particular Opportunity, the Company shall
not use such information except in the context of any joint venture with
Consultant or other participation as agreed by Consultant. The parties
agree that the intent of this provision is to compensate Consultant for the
identification of business opportunities and not to convey proprietary
rights to all contact with an entire organization, not itself a principal
in the Opportunity, by virtue of an introduction of an Opportunity which
includes a party which happens to be associated with such organization. The
parties further agree that the term "Opportunities" does not include any
existing or potential individuals or businesses that are already known to
the Company or become known to the Company as a result of Services being
provided under Section One of this Agreement at the time it is introduced
by (a) virtue of being generally known to the public; (b) having been
previously introduced by a third party; or (c) having been independently
developed by the Company without assistance, directly or indirectly, of
Consultant.
7. TERM; TERMINATION. This Agreement may be terminated by either party upon
fifteen (15) days' notice.
8. CONFIDENTIAL INFORMATION; TRADE SECRETS. Consultant shall not at any time
or in any manner, either directly or indirectly, use for the personal
benefit of Consultant, or divulge, disclose, or communicate in any manner
any information that is proprietary to the Company without the Company's
express written consent. Consultant will protect such information and treat
it as strictly confidential and shall not use or disclose to any person or
entity any Confidential Information or trade secrets of the Company other
than as necessary in the fulfillment of the Services. This paragraph shall
be effective both during the Term hereof and after the termination of this
Agreement.
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9. REGISTRATION OF SHARES. Consultant shall have "piggy-back" registration
rights applicable to all sharres issued pursuant hereto. In addition to the
foregoing, the Company agrees to register with the Securities and Exchange
Commission all shares issued hereunder on federal securities Form S-8,
promulgated under the Securities Act of 1933, as amended, promptly
following the Company's filing of its first quarterly report on Form
10-QSB.
10. INDEPENDENT CONTRACTOR. It is understood and acknowledged by both parties
that the Consultant is acting as independent contractor and not as an agent
or employee of the Company and, therefore, may not enter into any
agreements or incur any obligations or expenses on behalf of the Company
other than as described herein. The Consultant further agrees not to
disclose material information about the Corporation and its business and
shall not be retained by any individual or corporation with similar
business interests as the Corporation or the targeted acquisitions for a
period of one year.
11. COUNTERPARTS. This Agreement may be executed in any number of counterparts
by one original or facsimile signature of Consultant and Solomon Alliance
Group, Inc. each of which counterparts, when executed and delivered, shall
be an original but such counterparts together shall constitute one and the
same instrument. Any signature on a facsimile copy of the Agreement of any
document hereafter shall be binding and valid as if made on the original
copy of the Agreement or document.
12. CHOICE OF LAW AND INTERPRETATION. This Agreement shall be governed by, and
shall be construed in accordance with, the laws of the jurisdiction
designated by the Company. In the event that any provision of this
Agreement becomes or is declared by an arbitrator to be illegal,
unenforceable or void, this Agreement shall continue in full force and
effect without said provision.
13. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties and there are no other promises or conditions in any other
agreement whether oral or written. By their execution hereof, each party
(for itself and for any of its professional advisors or agents), agrees
that neither has any claim, or may assert any obligation, monetary or
otherwise, against the other except as may be set forth herein.
14. SEVERABILITY. If any provision of this Agreement shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall
continue to be valid and enforceable. If a court finds that any provision
of this Agreement is invalid or unenforceable, but that by limiting such
provision it would become valid and enforceable, then such provision shall
be deemed to be written, construed, and enforced as so limited.
15. DISPUTES AND EXPENSES. In the event of any dispute, the parties agree to
first submit to mediation pursuant to the rules of the American Arbitration
Association. If mediation is instituted (or if suit is brought subsequent
to conclusion of mediation) or an attorney must be paid by any party hereto
to enforce the terms of this Agreement, or to collect money damages for
breach hereof, the prevailing party shall be entitled to recover, in
addition to any other remedy, reimbursement for reasonable attorneys' fees,
court costs, costs of investigation and other related expenses incurred in
connection therewith.
16. MISCELLANEOUS. This Agreement can only be modified by written agreement
executed by the parties. The parties have been advised by counsel of their
own choice, and this Agreement is executed by each party voluntarily and
with full knowledge of its significance. Unless otherwise provided herein,
any provision hereof which imposes an obligation after termination of this
Agreement shall survive the termination or expiration hereof and be binding
on the parties. This Agreement shall be binding on the successors and legal
representatives of the parties.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
SOLOMON ALLIANCE GROUP, INC. DAVID T. SHAHEEN
By: /s/ /s/
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Thomas I. Weston, Jr. David T. Shaheen
President & CEO
