U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[x] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from January 1, 1999 to June 30, 1999
Commission file number 0-27833
International Cosmetics Marketing Co.
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(Name of small business issuer in its charter)
Florida
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(State or other jurisdiction of incorporation or organization)
65-0598868
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(I.R.S. Employer Identification No.)
6501 NW Park of Commerce Boulevard, Suite 205, Boca Raton, Florida 33487
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(Address of principal executive offices)(Zip Code)
Issuer's telephone number 561-999-8878
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Securities registered under Section 12(b) of the Exchange Act:
None
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(Title of each class)
Name of each exchange on which registered
not applicable
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Securities registered under Section 12(g) of the Exchange Act:
Common Stock
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [x]
No [ ]
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [x]
State issuer's revenues for its most recent fiscal year. Issuer had no
revenues for the 6 months ended June 30, 1999.
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days. The aggregate market value of the voting stock held by
non-affiliates as of March 13, 2000 was approximately $19,297,000.
State the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date. As of March 13, 2000,
4,759,400 shares of Common Stock are issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB into which the document
is incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) of
the Securities Act of 1933 ("Securities Act"). Not Applicable.
Transitional Small Business Disclosure Form (check one):
Yes No X
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PART I
The discussion in this Annual Report on Form 10-KSB regarding the Company and
its business and operations includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1996. Such statements
consist of any statement other than a recitation of historical fact and can be
identified by the use of forward-looking terminology such as "may," "expect,"
"anticipate," "estimate" or "continue" or the negative thereof or other
variations thereon or comparable terminology. The reader is cautioned that all
forward-looking statements are necessarily speculative and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in such forward looking statements. The
Company does not have a policy of updating or revising forward-looking
statements and thus it should not be assumed that silence by management of the
Company over time means that actual events are bearing out as estimated in such
forward looking statements.
From our inception, our fiscal year was December 31. On November 23, 1999, we
changed the fiscal year to June 30.
Item 1. Description of Business
General
Our History
We were incorporated in Florida on July 14, 1995 under the name
CindyCo., Inc. for the purpose of providing non-legal services to organizational
and start-up companies. Between October, 1998 and January 1999, we sold an
aggregate of 18,800 shares of our Common Stock to certain accredited or
otherwise sophisticated investors with whom we had pre-existing relationships
and who had access to relevant information concerning the Company in a private
placement exempt from registration under the Securities Act of 1933, as amended
(the "Securities Act") in reliance on Section 4(2) and Rule 506 of Regulation D
of the Securities Act. We received gross proceeds of $470 in this transaction.
Our prior management subsequently determined to narrow the scope of our
stated business purposes to concentrate in the area of marketing. In August
1999, we changed our name to International Cosmetics Marketing Co., our original
officers and directors resigned, and our current officers and directors were
elected to their positions. Concurrently, we entered into an agreement with
Beverly Sassoon International, Inc., Beverly Sassoon and Elan Sassoon which
grant us various rights which are described below related to the manufacturing,
marketing and distribution of products utilizing the "Beverly Sassoon" or "Elan
Sassoon" names.
Our Business Plan
As of June 30, 1999, we were a development stage company and our
business was the development, marketing and distribution of a broad range of
consumer products. We commenced operations in late 1999. We will seek to develop
and distribute a variety of products which have wide range of consumer appeal in
areas from skin care and cosmetics to nutrition and human wellness products to
apparel and other disposable goods. In order to build a database from which we
might select products to market and distribute, we presently anticipate that we
will solicit proposals from inventors who have substantially completed their
product development but lack the expertise or capital to market or distribute
it. We expect that we will utilize advertisements in trade and other
publications, networking, referrals from persons with whom we may have
pre-existing relationships and our Web site as methods of soliciting these
proposals. We may also acquire existing businesses with complimentary operations
as a method of expanding our business and operations.
Our business plan focuses our efforts and resources on the marketing
and distribution of our products. We will out source the manufacturing of these
products to one or more contract manufacturers.
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We are presently in the early stages of implementing our business plan,
including establishing various relationships with other companies to assist us
in the implementation of our business plan.
Under the terms of the Exclusive License Agreement with Beverly Sassoon
International, LLC. which we entered into in August 1999, we received the
exclusive rights to manufacture, market and distribute the line of skin care
products and cosmetics which Beverly Sassoon International, LLC. had previously
developed. These products, which include a complete line of skin care products
including moisturizers, treatments and masks, will be marketed and distributed
by us utilizing the name and likeness of Beverly Sassoon. We are in the
preliminary stages of designing packaging and the development of a marketing
campaign. As a result of the early stages of these discussions, we do not
presently have a timetable for the introduction of these products to the market.
Our distribution strategy will include direct selling and marketing
utilizing independent sales representatives much like Avon Products, Inc., Amway
and Mary Kay, Inc. Our business plan provides that these representatives, who
will be independent contractors, will purchase our products directly from us and
sell them directly to their customers. We will be responsible for the
recruitment and training of the independent sales representatives. We anticipate
that we will develop sales promotion and sales development activities which will
be directed towards giving selling assistance to the independent sales
representatives through aids such as brochures, product samples and
demonstration products. We have established a Web site which will serve both as
an additional marketing tool, and will provide a platform from which we will be
able to provide various support services to our independent sales
representatives. We also anticipate that we will seek to motivate our
independent sales representatives through the use of special incentive programs
that reward superior sales performance.
License Agreement
In August 1999 we entered into an Exclusive License Agreement with
Beverly Sassoon, Elan Sassoon and Beverly Sassoon International, LLC. which
granted us the following rights:
* We have an exclusive license to utilize Ms. Sassoon's name and
likeness in connection with the manufacture, marketing,
promotion and sale of certain of our products.
* Likewise, we have an exclusive license to utilize Mr.
Sassoon's name and likeness in connection with the
manufacture, marketing, promotion and sale of our products.
* We have an exclusive, worldwide license to manufacture, market
and distribute certain skin care products developed by Beverly
Sassoon International, LLC.
* Upon the expiration of certain existing licenses granted by
Ms. Sassoon to third parties related to the use of her name
and likeness in the marketing and promotion of pet care
products and slimming products, we will have the exclusive
license to also utilize Ms. Sassoon's name and likeness in
relation to these types of products.
The term of this Exclusive License Agreement is 99 years, with a 99
year renewal at our option. We retain full control over the manufacturing,
development and marketing of our products. Through Beverly Sassoon
International, LLC., Ms. Sassoon and Mr. Sassoon will consult with us in the
areas of product development and marketing, and we will utilize their names
and/or likenesses in promoting certain of our products and in the development of
certain of our brands. The consideration for the rights we received under this
Exclusive License Agreement included:
* Aggregate cash payment to Beverly Sassoon International, LLC
of up to $200,000.
* Issuance of 900,000 shares of our Common Stock to Beverly
Sassoon International, LLC.
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* The future payment of royalties equal to the greater of 2% of
gross revenues from the sales of any of our products which are
marketed or distributed subject to the terms of the Exclusive
License Agreement, or $25,000 per month. These royalty
payments will end if either Summer Camp West Limited
Partnership, a Georgia limited partnership controlled by
Beverly Sassoon, Romana DOD Limited Partnership, a Georgia
limited partnership controlled by Elan Sassoon or Capital
Distributors, LLC, which is controlled by Beverly Sassoon and
Elan Sassoon, exercises certain options to purchase an
aggregate of 4,850,000 shares of our Common Stock.
The Company has signed an endorsement contract with an individual to
endorse its products as part of the endorser's attempt to climb Mt. Everest in
the spring of 2000. We anticipate that we will also seek to license the use of
the names and likeness of other well-known individuals to assist us in the
development, marketing and establishment of certain of our brands. The Company
has not entered into any discussions with any additional well-known individuals
as of March 13, 2000.
Marketing Consulting Agreements
In September 1999, the Company entered into two separate Consulting
Agreements to provide the Company with marketing services. The one (1) year
Consulting Agreement with Viking Holding Company ("Viking"), provides that the
consultant will provide management, network marketing strategic organization and
structure recruiting experienced personnel and financial matters in connection
with the general sales, marketing and operation of the Company's business and
products, and expansion of services and products. The Company issued 200,000
shares of its Common Stock for the marketing services to be provided by Viking.
The shares are subject to waiver and forfeiture, termination and cancellation in
the event the Company has not within the term of the agreement (i) attained
sales in excess of $5,000,000; and (ii) secured at least 5,000 distributors
("Performance Goals"). The Company may in its sole discretion, waive the
satisfaction of the Performance Goals. The Shares will be held in escrow pending
satisfaction of the performance goals.
The eighteen (18) month Consulting Agreement with Hatteras Investment
Company ("Hatteras") provides that the consultant will provide management,
network marketing strategic organization and structure recruiting experienced
personnel and financial matters in connection with the general sales, marketing
and operation of the Company's business and products, and expansion of services
and products. The Company issued 200,000 shares of its Common Stock for the
marketing services to be provided by Hatteras. The shares are subject to waiver
and forfeiture, termination and cancellation in the event the Company has not
within the term of the agreement (i) attained sales in excess of $10,000,000;
and (ii) secured at least 10,000 distributors ("Performance Goals"). The Company
may in its sole discretion, waive the satisfaction of the Performance Goals. The
Shares will be held in escrow pending satisfaction of the performance goals.
Competition
We will be operating in a very competitive industry, dominated by
national and international companies with well-established brands. Our primary
competitors will be companies such as Amway, Avon Products, Inc. and Mary Kay,
Inc., all of whom are better capitalized, have more experience in our industry
and have established varying degrees of consumer loyalty. There are no
assurances we will ever be successful in establishing our brands or penetrating
our target markets.
Intellectual Property
Under the terms of the Exclusive License Agreement, we have the rights
to all trademarks, copyrights, trade names and other intellectual property
related to the use of the names and likeness of Beverly Sassoon or Elan Sassoon
for products marketed and distributed under the terms of that agreement. We are
in the process of filing certain fictitious name applications with the state of
Florida in order to conduct business under the names "Beverly Sassoon" and
"Beverly Sassoon & Company" and are currently awaiting confirmation from the
state. Ms. Sassoon and Mr. Sassoon have agreed to execute such additional
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documents as we deem reasonably necessary to register and protect these
intellectual property rights. As we develop other trademarks, trade names,
copyrights or other intellectual property rights, we may seek to protect these,
as well as those related to Ms. Sassoon and Mr. Sassoon, by registration in the
United States and other countries where these products may be marketed.
Depending upon the development of our business, we may also wish to develop and
market products which incorporate patented or patent-pending formulations, as
well as products covered by design patents or other patent applications. While
we may seek to protect our intellectual property, in general, there can be no
assurance that our efforts to protect our intellectual property rights through
copyright, trademark and trade secret laws will be effective to prevent
misappropriation of our products. Our failure or inability to protect our
proprietary rights could materially adversely affect our business, financial
condition and results of operations.
Special Matters Related to Our Use of Independent Sales Representatives
Because our independent sales representatives are will classified as
independent contractors, and not as our employees, we are unable to provide them
the same level of direction and oversight as our employees. While we have
policies and rules in place governing the conduct of our independent sales
representatives, and we will periodically review the sales tactics of these
independent sales representatives, it is difficult to enforce our policies and
rules for the independent sales representatives.
Government Regulation
As our business strategy includes the development, marketing and
distribution of a wide range of consumer products, we may from time to time
become subject to compliance with various federal or state laws, rules and
regulations related to these products, including regulation by the Food and Drug
Administration and the Federal Trade Commission in the United States, as well as
various other federal, state and local or foreign regulatory authorities. Such
regulations would relate principally to the ingredients, labeling, packaging and
marketing of our products. It is also possible that certain of our products may
also be classified as over-the-counter drugs. Additional regulatory requirements
for such products would include additional labeling requirements, registration
of the manufacturer and semi-annual update of the drug list. In the event we
should fail to comply with the foregoing, or other as yet unidentified, federal
and state laws, rules and regulations, our business and operations could be
materially and adversely impacted.
Our network marketing system is subject to a number of federal and
state regulations administered by the FTC and various state agencies.
Regulations applicable to network marketing organizations are generally directed
at ensuring that product sales are ultimately made to consumers, and that
advancement within such organizations be based on sales of the organizations'
products rather than investments in the organizations or other non-retail sales
related criteria. Various government agencies monitor direct selling activities,
and we may be requested from time to time to supply information regarding our
marketing plan to these agencies. Although we believe our network marketing
system is in substantial compliance with the laws and regulation relating to
direct selling activities, we cannot be certain that legislation and regulations
adopted in particular jurisdictions in the future will not adversely affect our
operations. In this regard, our policies and procedures were designed to be in
compliance with the "Amway Decision," the rules by which most network marketing
standards are measured. We could also be found to be in non-compliance with
existing statutes or regulations as a result of, among other things, misconduct
by our independent sales representatives, the ambiguous nature of certain
regulations, and the considerable interpretative and enforcement discretion
given to regulators. Any assertion or determination that we or our independent
sales representatives are not in compliance with existing statutes or regulation
could have a material adverse affect on our business and operations. In
addition, an adverse determination by any one state could influence the
decisions of regulatory authorities in other jurisdictions.
We may also be subject to the risk of private party challenges to the
legality of our network marketing system. For example, in Webster v. Omnitrition
International, Inc., 79 F.3d 776 (9th Cir. 1996), the "multi-level marketing"
program of Omnitrition International, Inc. was challenged in a class action by
certain Omnitrition distributors who alleged that Omnitrition was operating an
illegal "pyramid scheme" in violation of federal and
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state laws. We believe that our network marketing system satisfies the standards
set forth in the Omnitrition case and other applicable statutes and case law
defining a legal marketing system, in part based upon significant differences
between our marketing system and that described in the Omnitrition case.
However, the regulatory requirements concerning network marketing systems do not
include "bright line" rules, and are inherently fact-based. An future challenge
and subsequent adverse judicial determination with respect to our network
marketing system could have a material adverse effect on our business and
operations. Among other things, such a determination could require us to make
modifications to our network marketing system and result in negative publicity.
In addition, adverse rulings by courts in any proceedings challenging the
legality of multi-level marketing systems, even in those not involving us, could
have a material adverse effect on our business and operations.
Employees
As of February 13, 2000, the Company has twelve full time employees. As
we implement our business plan, we anticipate we will be hiring additional
full-time employees in the areas of sales and marketing. None of our employees
are covered by collective bargaining agreements and we believe we have
satisfactory relationships with our employees.
Item 2. Description of Property
The Company's principal offices are located at 6501 N.W. Park of Commerce
Boulevard, Suite 205, Boca Raton, Florida 33487. The Company has entered into a
lease agreement with an unrelated third party for this location of approximately
4,251 square feet of commercial office space. The lease is for a term of five
(5) years, commencing on November 1, 1999 and expiring on October 31, 2004. The
Company will pay a base rent, ranging from $5,313.75 per month to $5,977.25 per
month over the term of the lease, along with its pro rata share of certain
common area maintenance, operating expenses, taxes and insurance.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
Our stock is not currently traded. The Company has applied to have
its common stock listed on the OTC Bulletin Board. There is no assurance that
the application will be approved. As of March 13, 2000, the Company believes
that it has approximately 41 record holders of its common stock.
We have never declared or paid any cash dividends on our common stock.
We currently expect to retain future earnings, if any, to finance the growth and
development of our business.
Item 6. Management's Discussion and Analysis or Plan of Operation
Read the following discussion together with the information contained
in the Financial Statements and related Notes included elsewhere in this filing.
Operations
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The Company had a net loss of $150 for the six months ended June 30, 1999
compared to a net loss of $170 for the twelve months ended December 31, 1998.
The Company had no revenues as of June 30, 1999 and did not commence operations
until late 1999.
Liquidity and Capital Resources
We anticipate the cost of funding our proposed business plan could
range between $1-$2 million dollars. Our Board of Directors has approved the
issuance of convertible debentures in the principal amount not to exceed $2
million dollars which may be sold from time to time by the Company to raise
start-up capital. As of March 13, 2000, we have sold to one accredited investor
an aggregate of $1,950,000 in the form of a convertible debenture in a private
placement exempt from registration under the Securities Act in reliance on
Section 4(2) of the Securities Act. While no commitments have been received to
provide the balance of the funding, we believe that there are persons or
entities that will provide the balance of any needed financing on terms offered
by us.
Item 7. Financial Statements
Our financial statements are contained in pages F-1 through F-13 as
follows.
Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
Management
Executive Officers and Directors
The following table sets forth information concerning our executive
officers and directors Members of our Board of Directors will be elected at our
annual meeting of shareholders, and will serve for one year or until their
successors are elected and qualify. Our officers are elected by the Board of
Directors, and their terms of office are at the discretion of the Board of
Directors.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Stephanie McAnly 56 Director and President
Sonny Spoden 54 Director and Chief Financial Officer
William Wirch 52 Executive Vice President and Chief Operating Officer
</TABLE>
Ms. McAnly has been an officer and director since August 1999. Stephanie McAnly
has served as the Company's President since August 19, 1999. From July 1998
through August 1999, Ms. McAnly held the position of Director of Marketing and
Training for 1-800-PARTYSHop, Inc., a multilevel marketing company offering
theme party supplies, gifts and accessories. She developed and implemented the
1-800-PARTYSHop, Inc. national training program, wrote the policy and training
manuals and served as a seminar instructor nationwide. She was a Master
Distributor and Corporate Trainer from April 1998 to July 1998 for Premier Plus,
Inc., a multilevel marketing company promoting telecommunications products,
travel packages and golf equipment. And previously, for the period of October
1995 to April 1998, Ms. McAnly was the Top
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Money Earner and Corporate Trainer for Strategic Telecom Systems, Inc., a
multilevel marketing company promoting telecommunications products. She also
served on the Strategic Telecom President's Advisory Board. From June 1985
through April 1996, Ms. McAnly was President of the corporation, The Bear Facts,
Inc., a childcare center and preschool educational facility in DeSoto County,
Florida. Ms. McAnly holds both a B.A. in English from the University of Florida
and a B.A. in education from the University of South Florida.
Mr. Spoden has been an officer and director since August 1999. From January 1996
until May 1999, Mr. Spoden was Chief Financial Officer of Easy Access
International, Inc., a publicly-owned holding company with subsidiaries engaged
in the development, marketing, and distribution of telecommunication products
and services. From 1993 until January 1996, Mr. Spoden was an independent
business and financial advisor in Boca Raton, Florida. From 1969 until 1993, Mr.
Spoden was employed by Ernst & Young LLP, and was a general partner and an
accounting and auditing partner for the period 1982 to 1993. During his career
with Ernst & Young LLP, Mr. Spoden was based in the Baltimore, Maryland office
and the National office in New York City (1978 to 1980 and 1988 to 1993). Mr.
Spoden received a B. S. with high honors, and a major in finance, from the
University of Maryland in 1969, and has been licensed as a Certified Public
Accountant in three states. For the period 1963 to 1967, Mr. Spoden served in
the U. S. Navy, primarily with the Naval Security Group in Washington, D.C.
Mr. Wirch was employed as Executive Vice President and Chief Operating Officer
in February 2000. From October 1998 through January 1999, Mr. Wirch was Chief
Operating Officer for PetMed Express. In 1998, Mr. Wirch operated Rainforest
Specialty Cages, Inc. as president and owner. For the period 1985 through 1995,
Mr. Wirch held various positions with The Iams Company, including V. P.
International Development of Iams Pet Food International (Europe) and V. P.
Finance and Administration and Chief Financial Officer. For the period 1978
through 1983, Mr. Wirch held various technical and information processing
positions with NCR Corporation. Mr. Wirch was with the U. S. Air Force in 1967.
Mr. Wirch received a A.A.S. degree in accounting from Sinclair Community College
(Dayton, Ohio) and a B.B.A. degree in finance (Summa Cum Laude) from National
University (San Diego, California).
There are no family relationship between any of the executive officers
and directors. Each director is elected at our annual meeting of shareholders
and holds office until the next annual meeting of shareholders, or until his
successor is elected and qualified.
Compliance with Section 16(a) of the Exchange Act
We were not subject to the reporting requirements of Rule 16a-3(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") during the
six months ended June 30, 1999..
Item 10. Executive Compensation
Cash Compensation
The following table summarizes all compensation recorded by the Company
in each of the last two fiscal years for the Company's Chief Executive Officer
and each other executive officers serving as such whose annual compensation
exceeded $100,000.
<TABLE>
<CAPTION>
Long - Term
Annual Compensation Compensation Awards
---------------------------------------------------------------
Name and Other Annual Restricted Options All Other
Principal Position Year Salary Bonus Compensation Stk Awds SARs(#) LTIP Compen.
- ------------------ ---- ------ --------------------- -------- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles B. Pearlman 1998 $0 $0 0 0 0 0
President, Chief 1997 $0 $0 0 0 0 0
Executive Officer,
and Director(1)
</TABLE>
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(1) Mr. Pearlman served as our Chief Executive Officer and a director
from our inception in 1995 until August 1999.
OPTION GRANTS IN SIX MONTHS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
Individual Grants
-----------------
No. of Securities % of Total Options
Underlying Granted to Employees Exercise Expiration
Name Options Granted in Fiscal Year Price Date
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles B. Pearlman
President and Director(1) 0 0 0 0
</TABLE>
(1) Mr. Pearlman served as our President and a director from our
inception in 1995 until August 1999.
AGGREGATE OPTION EXERCISES IN SIX MONTHS ENDED JUNE 30, 1999
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
No. of Securities
Underlying Options Value of Unexercised
Shares Options at In-the-Money options at
Acquired on Value June 30, 1999 June 30, 1999
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles B. Pearlman
President, Chief
Executive Officer and
Director (1) 0 n/a n/a n/a n/a n/a
</TABLE>
(1) Mr. Pearlman served as our Chief Executive Officer and a director
from our inception in 1995 until August 1999.
1997 Stock Option Plan
Our 1997 Stock Option Plan ("Plan") was adopted by our Board of
Directors and the holders of a majority of our issued and outstanding capital
stock on October 1, 1997, effective as of that date. Under the Plan, we have
reserved an aggregate of 1,000,000 shares of Common Stock for issuance pursuant
to options granted under the Plan ("Plan Options"), of which options to acquire
an aggregate of 325,000 shares have been granted to Ms. McAnly and Messrs.
Spoden and Wirch. The purpose of the Plan is to encourage stock ownership by our
officers, directors and key employees, and to give such persons a greater
personal interest in our success and an added incentive. The Board of Directors
will administer the Plan including, without limitation, the selection of the
persons who will be granted Plan Options under the Plan, the type of Plan
Options to be granted, the number of shares subject to each Plan Option and the
Plan Option price.
Plan Options granted under the Plan may either be options qualifying as
incentive stock options ("Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended, or options that do not so qualify
("Non-Qualified Options"). In addition, the Plan also allows for the inclusion
of a reload option provision ("Reload Option"), which permits an eligible person
to pay the exercise price of the Plan
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Option with shares of Common Stock owned by the eligible person, and receive a
new Plan Option to purchase shares of Common Stock equal in number to the
tendered shares. Any Incentive Option granted under the Plan must provide for an
exercise price of not less than 100% of the fair market value of the underlying
shares on the date of such grant, but the exercise price of any Incentive Option
granted to an eligible employee owning more than 10% of the outstanding Common
Stock must not be less than 110% of such fair market value as determined on the
date of the grant. The term of each Plan Option and the manner in which it may
be exercised is determined by the Board of Directors. provided that no Plan
Option may be exercisable more than 10 years after the date of its grant and, in
the case of an Incentive Option granted to an eligible employee owning more than
10% of the Common Stock, no more than five years after the date of the grant.
The Plan provides that, if our outstanding shares are increased,
decreased, exchanged or otherwise adjusted due to a share dividend, forward or
reverse share split, recapitalization, reorganization, merger, consolidation,
combination or exchange of shares, an appropriate and proportionate adjustment
shall be made in the number or kind of shares subject to the Plan or subject to
unexercised Plan Options and in the purchase price per share under such Plan
Options. Any adjustment, however, does not change the total purchase price
payable for the shares subject to outstanding Plan Options. In the event of our
proposed dissolution or liquidation, a proposed sale of all or substantially all
of our assets, a merger or tender offer for our shares of Common Stock, the
Board of Directors may declare that each Option granted under this Plan shall
terminate as of a date to be fixed by the Board of Directors; provided that not
less than 30 days written notice of the date so fixed shall be given to each
Eligible Person holding an Option, and each such Eligible Person shall have the
right, during the period of 30 days proceeding such termination, to exercise his
Option as to all or any part of the shares, including shares of stock as to
which such Option would not otherwise be exercisable.
The Plan provides that the Plan Options granted thereunder shall be
exercisable from time to time in whole or in part, unless otherwise specified in
the agreement representing the Plan Options or by the Board of Directors. Each
Plan Option may be exercised in whole or in part at any time during the period
from the date of the grant until the end of the period covered by the Plan
Option period. The Plan provides that, with respect to Incentive Stock Options,
the aggregate fair market value (determined as of the time the option is
granted) of the shares of Common Stock, with respect to which Incentive Stock
Options are first exercisable by any option holder during any calendar year
(including all of our incentive stock option plans or any parent or any
subsidiary which are qualified under Section 422 of the Internal Revenue Code of
1986) shall not exceed $100,000.
All Plan Options are nonassignable and nontransferable, except by will
or by the laws of descent and distribution, and during the lifetime of the
optionee, may be exercised only by such optionee. If an optionee's employment is
terminated for any reason, other than his death or disability or termination for
cause, or if an optionee is not our employee but is a member of the Board of
Directors and his service as a director is terminated for any reason, other than
death or disability, the Plan Option granted to him shall lapse to the extent
unexercised on the earlier of the expiration date or 30 days following the date
of termination. If the optionee dies during the term of his employment, the Plan
Option granted to him shall lapse to the extent unexercised on the earlier of
the expiration date of the Plan Option or the date one year following the date
of the optionee's death. If the optionee is permanently and totally disabled
within the meaning of Section 22(c)(3) of the Internal Revenue Code of 1986, the
Plan Option granted to him lapses to the extent unexercised on the earlier of
the expiration date of the option or one year following the date of such
disability.
The Board of Directors may amend, suspend or terminate the Plan at any
time. However, no such action may prejudice the rights of any optionee who has
prior thereto been granted options under this Plan. Further, no amendment to
this Plan which has the effect of (a) increasing the aggregate number of shares
subject to the Plan (except for adjustments due to changes in our
capitalization), or (b) changing the definition of "Eligible Person" under this
Plan, may be effective unless and until approved by our stockholders in the same
manner as approval of the Plan was required. Any such termination of the Plan
shall not affect the validity of any Plan Options previously granted thereunder.
Unless the Plan shall theretofore have been suspended or terminated by the Board
of Directors, the Plan shall terminate on October 1, 2007.
10
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
As of March 13, 2000, there are 4,759,400 shares of our Common Stock
issued and outstanding. There are no shares of preferred stock currently issued
and outstanding, and the outstanding options are not presently exercisable. The
following table sets forth, as of the close of business on March 13, 2000, (a)
the name, address and number of shares of each person known by us to be the
beneficial owner of more than five percent of our Common Stock; and (b) the
number of shares of our Common Stock owned by each officer and director, and all
officers and directors as a group, together with their respective percentage
holdings of such shares. Unless otherwise indicated, the address for each person
is 6501 N.W. Park of Commerce Boulevard, Suite 205, Boca Raton, Florida 33487.
<TABLE>
<CAPTION>
Name and Amount of Percentage
Address of Beneficial of
Beneficial Owner(1) Ownership of Stock Class
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Stephanie McAnly(2) 33,333 *
Sonny Spoden(3) 25,000 *
William Wirch(4) 50,000 1.1%
Nico Pronk(5) 390,000 8.1%
Beverly Sassoon
International, LLC(6) 900,000 18.8%
All Executive Officers
and Directors as a Group
(three people)(2)(3)(4) 108,333 2.3%
</TABLE>
* less than one percent
(1) Pursuant to Rule 13-d-3 under the Exchange Act, beneficial
ownership of a security consists of sole or shared voting power (including the
power to vote or direct the voting) and/or sole or shared investment power
(including the power to dispose or direct the disposition) with respect to a
security whether through a contract, arrangement, understanding, relationship or
otherwise. Unless otherwise indicated, each person indicated has sole power to
vote, or dispose or direct the disposition of all shares beneficially owned,
subject to applicable unity property laws.
(2) Includes 33,333 shares issuable upon exercise of options granted
under the Company's 1997 Stock Option Plan exercisable for five (5) years at an
exercise price of $2.50 per share. Does not include 66,667 shares issuable upon
exercise of options which shall be vest at a rate of 25,000 options on each
August 19, 2001 and August 19, 2002 under the Company's 1997 Stock Option Plan
which options will be exercisable for five (5) years at an exercise price equal
$2.50 per share upon vesting at 33,333 shares on August 19, 2000 and 33,334
shares on August 19, 2001. Does not include 100,000 shares under options which
may be granted and exercisable for five years at an exercise price equal to the
then fair market value of the stock at the date of the grant upon vesting 50,000
shares on August 19, 2001 and 50,000 shares on August 19, 2002.
(3) Includes 25,000 shares issuable upon exercise of options granted
under the Company's 1997 Stock Option Plan exercisable for five (5) years at an
exercise price of $2.50 per share. Does not include 50,000 shares issuable upon
exercise of options which vest at a rate of 25,000 options on each August 19,
2001 and August 19, 2002 under the Company's 1997 Stock Option Plan which
options will be exercisable for five (5) years at an exercise price equal to
$2.50 per share upon vesting at 25,000 shares on August 19, 2000 and 25,000
shares on August 19, 2001, Does not include 50,000 shares under options which
may be granted and exercisable for five years at an exercise price equal to the
then fair market value of
11
<PAGE>
the stock at the date of the grant upon vesting 25,000 shares on August 19, 2001
and 25,000 shares on August 19, 2002.
(4) Includes 50,000 shares issuable upon exercise of options granted
under the Company's Stock Option Plan exercisable for five (5) years at an
exercise price of $2.50 per share. Does not include 100,000 shares issuable upon
exercise of options which shall vest at a rate of 50,000 options on each
February 13, 2001 and February 13, 2002 under the Company's 1997 Stock Option
Plan which options will be exercisable for five (5) years at an exercise price
of $2.50 per share upon vesting at 50,000 shares on February 13, 2001 and 50,000
shares on February 13, 2001. Does not include 150,000 shares under options which
may be granted and exercisable for five years at an exercise price equal to the
then fair market value of the stock at the date of the grant upon vesting 75,000
shares on February 13, 2002 and 75,000 shares on February 13, 2003.
(5) Nico Pronk is the holder of convertible debentures in the face
amount of $1,950,000 Purchased subsequent to June 30, 1999 and convertible into
common stock at $5.00 per share. Mr. Pronk's address is Mr. Nico Pronk, % 1801
Clint Moore Road, Suite 110, Boca Raton, Florida 33487.
(6) Beverly Sassoon International, LLC. is a Florida limited liability
company whose principal place of business is P.O. Box 267145, Weston, FL
33326-7145. Beverly Sassoon, Elan Sassoon and Paul Lambert are the managing
members and control persons of Beverly Sassoon International, LLC. Does not
include options to purchase 4,850,000 shares of our Common Stock, at an exercise
price of $.001 per share, which are held by the following individuals and
entity:
<TABLE>
<CAPTION>
Holder No. of Shares Underlying Option
------ -------------------------------
<S> <C> <C>
Summer Camp West Limited
Partnership (1) 2,250,000
Romana DOD Limited Partnership (2) 2,000,000
Capital Distributors, LLC (3) 600,000
</TABLE>
(1) On August 19, 1999, options to purchase these shares were
issued to Beverly Sassoon which she subsequently transferred
to Summer Camp West Limited Partnership, a Georgia limited
partnership controlled by Beverly Sassoon.
(2) On August 19, 1999, options to purchase these shares were
issued to Elan Sassoon which he subsequently transferred to
Romana DOD Limited Partnership, a Georgia limited partnership
controlled by Elan Sassoon.
(3) Capital Distributions, LLC is a Florida limited liability
company controlled by Beverly Sassoon and Elan Sassoon.
Item 12. Certain Relationships and Related Transactions
None.
Item 13. Exhibits and Reports on Form 8-K
The following documents are filed as a part of this report or are
incorporated by reference to previous filings, if so indicated:
(a) Exhibits
--------
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10(a) Employment Agreement dated as of February 13, 2000 by
and between Interntional Cosmetics Marketing Co. and
William Wirch
12
<PAGE>
(b) Reports on Form 8-K
-------------------
None.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, International Cosmetics Marketing Co. has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
International Cosmetics Marketing Co.
By: Stephanie McAnly
----------------
Stephanie McAnly, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Stephanie McAnly Director and President March 13, 2000
- ---------------------------
/s/ Sonny Spoden Director, Chief Financial Officer
- --------------------------- and Principal Accounting Office March 13, 2000
14
</TABLE>
<PAGE>
INTERNATIONAL COSMETICS MARKETING CO.
AUDITED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1999 and 1998
and the Period From July 14, 1995 (Date of Inception) to June 30, 1999
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
--------
<S> <C>
INDEPENDENT AUDITORS' REPORT F-1
- ----------------------------
FINANCIAL STATEMENTS
- --------------------
BALANCE SHEETS F-2
STATEMENTS OF OPERATIONS F-3
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY F-4
STATEMENTS OF CASH FLOWS F-5
NOTES TO FINANCIAL STATEMENTS F-6-13
- -----------------------------
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholders of INTERNATIONAL COSMETICS MARKETING CO.
We have audited the accompanying balance sheet of International Cosmetics
Marketing Co. (a development stage company) as of June 30, 1999 and December 31,
1998 and the related statements of operations, changes in stockholders' equity,
and cash flows for the six months ended June 30, 1999 and 1998 and the period
from July 14, 1995 (date of inception) to June 30, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of International Cosmetics
Marketing Co.(a development stage company) as of June 30, 1999 and December 31,
1998 and the results of its operations and its cash flows for the six months
ended June 30, 1999 and 1998 and for the period from July 14, 1995 (date of
inception) to June 30, 1999 in conformity with generally accepted accounting
principles.
/s/ LONDON WITTE & COMPANY, P.A.
- --------------------------------
LONDON WITTE & COMPANY, P.A.
Certified Public Accountants
February 22, 2000, except for Note 8,
As to which the date is March 14, 2000
F-1
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
June 30, 1999 and December 31, 1998
A S S E T S
June 30, December 31,
1999 1998
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash $ 450 $ 240
Deferred offering costs 9,340 0
-------- ---------
TOTAL CURRENT ASSETS 9,790 240
-------- ---------
TOTAL ASSETS $ 9,790 $ 240
======== =========
L I A B I L I T I E S A N D S T O C K H O L D E R S ' E Q U I T Y
CURRENT LIABILITIES
Accrued expenses $ 9,340 $ 0
-------- ---------
TOTAL CURRENT LIABILITIES 9,340 0
-------- ---------
STOCKHOLDERS' EQUITY
Common stock, par value $.001 per share;
25,000,000 shares authorized; 7,450,000
shares issued and outstanding 7,450 7,442
Preferred stock, par value $.001 per share;
5,000,000 shares authorized; no shares
issued and outstanding 0 0
Additional paid-in capital 1,116 764
Deficit accumulated during the development
stage (8,116) (7,966)
-------- ---------
TOTAL STOCKHOLDERS' EQUITY 450 240
-------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,790 $ 240
======== =========
</TABLE>
See accompanying notes to financial statements and independent auditors' report.
F-2
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1999 and 1998
and the Period From July 14, 1995 (Date of Inception) to June 30, 1999
INCEPTION
TO
June 30, June 30, June 30,
1999 1998 1999
---- ---- ----
<S> <C> <C> <C>
REVENUES $ 0 $ 0 $ 0
OPERATING EXPENSES:
General and administrative 150 150 8,116
----------- ----------- -----------
NET LOSS BEFORE INCOME TAXES (150) (150) (8,116)
INCOME TAX EXPENSE (BENEFIT) 0 0 0
----------- ----------- -----------
NET LOSS $ (150) $ (150) $ (8,116)
=========== =========== ===========
NET LOSS PER SHARE - BASIC (0.000020) (0.000020)
=========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING:
Basic 7,450,000 7,431,200
=========== ===========
</TABLE>
See accompanying notes to financial statements and independent auditors' report.
F-3
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Six Months Ended June 30, 1999 and 1998
and the Period From July 14, 1995 (Date of Inception) to June 30, 1999
COMMON STOCK AND TOTAL
CAPITAL IN EXCESS ACCUMULATED STOCKHOLDERS'
SHARES OF PAR VALUE DEFICIT EQUITY
------ ------------ ------- ------
<S> <C> <C> <C> <C>
BALANCES AT JULY 14, 1995 0 $ 0 $ 0 $ 0
Issuance of common stock
for organizational costs 7,431,200 7,431 0 7,431
Contribution of capital 0 200 0 200
Net Loss 0 0 (7,631) (7,631)
---------- --------- --------- ---------
BALANCES AT DECEMBER 31, 1996 7,431,200 7,631 (7,631) 0
Contribution of capital 0 165 0 165
Net Loss 0 0 (165) (165)
---------- --------- --------- ---------
BALANCES AT DECEMBER 31, 1997 7,431,200 7,796 (7,796) 0
Issuance of common stock
at $.025 per share 10,400 260 0 260
Contribution of capital 0 150 0 150
Net Loss 0 0 (170) (170)
---------- --------- --------- ---------
BALANCES AT JUNE 30, 1998 7,441,600 8,206 (7,966) 240
Net Loss 0 0 0 0
---------- --------- --------- ---------
BALANCES AT DECEMBER 31, 1998 7,441,600 8,206 (7,966) 240
Issuance of common stock
at $.025 per share 8,400 210 0 210
Contribution of capital 0 150 0 150
Net Loss 0 0 (150) (150)
---------- --------- --------- ---------
BALANCES AT JUNE 30, 1999 7,450,000 $ 8,566 $ (8,116) $ 450
========== ========= ========= =========
</TABLE>
See accompanying notes to financial statements and independent auditors' report.
F-4
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1999 and 1998
and the Period From July 14, 1995 (Date of Inception) to June 30, 1999
INCEPTION
TO
June 30, June 30, June 30,
1999 1998 1999
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (150) $ (150) $(8,116)
------- ------- -------
Adjustments to reconcile net
loss to net cash used by
operating activities:
Changes in operating assets and liabilities:
Deferred offerring costs (9,490) 0 (9,490)
Accrued expenses 9,490 0 9,490
------- ------- -------
Net cash used by operating activities (150) (150) (8,116)
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used by investing activities 0 0 0
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Contribution of capital 150 150 665
Proceeds from common stock issuance 210 0 7,901
------- ------- -------
Net cash provided by financing
activities 360 150 8,566
------- ------- -------
NET INCREASE (DECREASE) IN CASH 210 0 450
CASH AND EQUIVALENTS, BEGINNING 240 0 0
------- ------- -------
CASH AND EQUIVALENTS, ENDING $ 450 $ 0 $ 450
======= ======= =======
</TABLE>
See accompanying notes to financial statements and independent auditors' report.
F-5
<PAGE>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Nature of Operations
International Cosmetics Marketing Co. (formerly CindyCo, Inc.) is a Florida
corporation formed on July 14, 1995. The Company is in the development stage and
has no operating history. The subsistence of the Company is dependent upon
sufficient proceeds being raised through financing or capital contributions. The
Company intends to develop, market and distribute a broad range of consumer
products in the areas of skin care and cosmetic, nutrition and human wellness
products, various apparel and other goods. During December 1999, the Company
began operations.
Basis of Presentation
The Company prepares its financial statements on the accrual basis of
accounting, recognizing income when earned and expenses when incurred.
Fiscal Year Change
On November 29, 1999, the Board of Directors retroactively approved a change in
the Company's fiscal year end from December 31 to June 30. These audited
financial statements are for the six-month transition period ended June 30,
1999, and the comparative financial statements are for the six months ended June
30, 1998.
Cash and Cash Equivalents
For purposes of these financial statements, the Company considers all
unrestricted highly liquid investments with original maturities of three months
or less to be cash equivalents. Cash equivalents are carried at cost, which
approximates market value.
Income Taxes
Deferred tax assets and liabilities are determined based upon differences
between financial statement and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which differences are expected to
reverse.
The Company provides a valuation allowance against deferred tax assets if, based
on the weight of evidence available, it
F-6
<PAGE>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
- ------------------------------------------------------------
Income Taxes (cont'd)
is more likely than not that some or all of the deferred tax assets will not be
realized.
Financial Statement Estimates
The preparation of financial statements in conformity with Generally Accepted
Accounting Principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Loss Per Share
Basic net income (loss) per common share is computed by dividing net income
(loss) available to common stockholders by the weighted average number of common
shares outstanding for the period. Diluted income (loss) per common share
reflects the maximum dilution that would have resulted from the assumed exercise
related to dilutive securities and is computed by dividing net income (loss) by
the weighted average number of common shares and all dilutive securities
outstanding. No dilutive securities existed as of the balance sheet dates.
NOTE 2 - COMMON AND PREFERRED STOCK
- -----------------------------------
Common Stock
The Company is authorized to issue 25,000,000 shares of common stock with a per
share par value of $.001. On July 14, 1995, the Board of Directors authorized
the issuance of 7,431,200 common shares in exchange for organizational services
valued at $7,431.20. Subsequent to the balance sheet date, as a part of the
transactions described in Note 6, 4,000,000 of these shares were returned to and
canceled by the Company.
Between October 1998 and February 1999, the Company sold 18,800 shares of common
stock to various individuals pursuant to Rule 506 of Regulation D of the
Securities Act at $.025 per share, for a total of $470. In January 2000, the
Company cancelled these shares.
F-7
<PAGE>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and 1998
NOTE 2 - COMMON AND PREFERRED STOCK (cont'd)
- --------------------------------------------
Common Stock (cont'd)
Each share of common stock entitles its owner to one vote. The common shares
carry no preemptive rights and are not redeemable. Cumulative voting is not
permitted.
Preferred Stock
The Company has authorized the issuance of 5,000,000 shares of preferred stock
with a par value of $.001 per share, bearing such voting, dividend, conversion,
liquidation and other rights and preferences as the Board of Directors may
determine. No shares of preferred stock have been issued.
NOTE 3 - STOCK OPTION PLAN
- --------------------------
On October 1, 1997, the Board of Directors and shareholders approved a stock
option plan entitled the "1997 Stock Option Plan" (the "plan"). Under the plan,
the Company has reserved an aggregate of 1,000,000 shares of common stock for
issuance pursuant to options granted under the plan. The Stock Options Committee
of the Board of Directors of the Company will administer the plan. Options
granted under the plan may either be options qualifying as incentive stock
options under Section 422 of the Internal Revenue Code of 1986, as amended, or
non-qualified options. The term and recipient of each option granted under the
plan, and the manner in which it may be exercised, will be determined by the
Board of Directors or the Stock Option Committee. No plan options have been
granted as of June 30, 1999.
NOTE 4 - DEFERRED TAXES
- -----------------------
Under current tax law, all start up costs must be amortized over a period of not
less than 60 months, starting with the month in which business commences. As of
June 30, 1999, the amount of start up costs was $9,340. Since operations have
not commenced as of June 30, 1999, these costs are a non-amortizable asset for
income tax reporting purposes. Based on the evidence available, the Company has
provided a valuation allowance to offset any deferred tax asset arising from the
future tax benefits from the amortization of its start up costs.
F-8
<PAGE>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and 1998
NOTE 5 - LEASES
- ---------------
On November 1, 1999, the Company entered into a lease agreement with an
unrelated third party to rent approximately 4,251 square feet of commercial
office space at 6501 N.W. Park of Commerce Boulevard, Suite 205, Boca Raton,
Florida for its principal offices. The lease is for a term of 5 years,
commencing on November 1, 1999 and expiring on October 31, 2004. The Company
will pay a $50,000 security deposit, to be paid $10,000 at lease execution and
$40,000 prior to occupancy. The Company will pay a base rent, ranging from
$5,313.75 per month to $5,977.25 per month over the term of the lease, along
with it's pro rata share of certain common area maintenance, operating expenses,
taxes and insurance.
Minimum Future Lease Payments
2000 $ 42,510
2001 63,765
2002 65,465
2003 67,084
2004 70,807
2005 23,909
--------
Total $333,540
========
NOTE 6 - NON-MONETARY TRANSACTIONS
- ----------------------------------
Certain founders of the Company performed organizational services and incurred
certain costs during the initial formation of the Company. On July 14, 1995, the
Board of Directors authorized the issuance of an aggregate of 7,431,200 shares
of common stock for these services, 4,000,000 of which were subsequently
returned to the Company for cancellation in connection with the transactions
described in Note 8.
NOTE 7 - RELATED PARTY TRANSACTIONS
- -----------------------------------
Refer to Note 6, which describes the issuance of founder shares of the Company's
common stock for organizational services. No other related party transactions
occurred during the period of these financial statements.
F-9
<PAGE>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and 1998
NOTE 8 - SUBSEQUENT EVENTS
- --------------------------
On August 19, 1999, the Company entered into an Exclusive License Agreement with
Beverly Sassoon International, LLC, Ms. Beverly Sassoon and Mr. Elan Sassoon.
The agreement granted the Company the following rights: 1) an exclusive license
to utilize Ms. Sassoon's name and likeness with the manufacturing, promotion and
sale of certain products, 2) an exclusive license to utilize Mr. Sassoon's name
and likeness with the manufacturing, promotion and sale of certain products, 3)
an exclusive, worldwide license to manufacture, market and distribute certain
skin care products developed by Beverly Sassoon International, LLC, and 4) upon
the expiration of certain existing licenses granted by Ms. Sassoon to third
parties related to the use of her name and likeness in the marketing and
promotion of pet care and slimming products, the exclusive license to utilize
Ms. Sassoon's name and likeness with regards to these types of products. The
term of this Exclusive License Agreement is 99 years, with a 99 year renewal at
the Company's option.
The Company will retain full control over the manufacturing, development and
marketing of the Company's products. Also, Ms. Sassoon and Mr. Sassoon, through
Beverly Sassoon International, LLC, will consult with the Company in connection
with product development and marketing. As consideration for the rights granted
under this agreement, Beverly Sassoon International, LLC will receive a payment
of $150,000 and an aggregate of up to $50,000 of payments for certain expenses
and 900,000 shares of the Company's common stock.
The Company will pay future royalty payments equal to the greater of 2% of gross
revenues from sales of any products which are marketed or distributed under the
terms of the Exclusive License Agreement, or $25,000 per month. These royalty
payments will end if Summer Camp West Limited Partnership, a Georgia limited
partnership controlled by Beverly Sassoon, Romana DOD Limited Partnership, a
Georgia limited partnership controlled by Elan Sassoon and/or Capital
Distributors, LLC, a Florida limited liability company controlled by Beverly
Sassoon and Elan Sassoon exercise certain options to purchase 4,850,000 shares
of the Company's common stock. The options are exercisable for a period of two
years commencing on the earlier of August 19, 2001 or the 18th month anniversary
of the date the Company's securities are first traded on the Nasdaq Stock Market
in
F-10
<PAGE>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and 1998
NOTE 8 - SUBSEQUENT EVENTS (cont'd)
- -----------------------------------
the following quantities: 1) 2,250,000 shares for Summer Camp West Limited
Partnership, 2) 2,000,000 shares for Romana DOD Limited Partnership, 3) 600,000
shares for Capital Distributors, LLC.
As stated above in Note 2 and Note 6, subsequent to the balance sheet date,
certain founders returned 4,000,000 shares of the Company's common stock to the
Company for cancellation.
Subsequent to the above referenced transactions, the Company issued a total of
400,000 shares of the Company's common stock to consultants for future services
and 28,200 shares to counsel for the Company for legal services rendered.
The 400,000 shares of stock issued to consultants were issued pursuant to
consulting agreements with Hatteras Investment Company and Viking Holding
Company, which were entered into in September 1999. The Company agreed to issue
200,000 shares of common stock to each consultant as compensation for future
services. The consultants will provide advice to and consult with the Company
relating to management, network marketing, strategic planning, corporate
organization and structure, recruiting experienced personnel and financial
matters relating to the Company's general sales, marketing and operations.
The term of the agreement with Hatteras Investment Company is for 18 months from
the date of the agreement and may be extended for an additional 18 months
subsequent to the original term upon the mutual agreement of both parties.
Shares of stock issued as compensation for this agreement are subject to
termination and cancellation in the event that within 18 months after this
agreement the Company has not attained sales in excess of $10,000,000 and the
Company does not have at least 10,000 distributors.
The term of the agreement with Viking Holding Company is for 12 months from the
date of the agreement and may be renewed subsequent to the original term for an
additional 12 months upon the written mutual consent of both parties. Shares of
stock issued as compensation for this agreement are subject to termination and
cancellation in the event that within 12 months after this agreement the Company
has not attained sales in excess of $5,000,000 and the Company does not have at
least 5,000 distributors.
F-11
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INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and 1998
NOTE 8 - SUBSEQUENT EVENTS (cont'd)
- -----------------------------------
In August 1999, the Company changed its name from CindyCo, Inc. to International
Cosmetics Marketing Co. At the same time, the original officer and director
resigned, and the Company's current officers and directors were elected to their
current positions.
On August 19, 1999, the Company entered into an Employment Agreement with its
President for a term of three years. The agreement provides for a base salary
with increases based on sales volume. The Company has granted the Employee,
subject to certain vesting provisions, 100,000 options to purchase shares of the
Company's common stock at an exercise price of $2.50 per share under the 1997
Stock Option Plan discussed in Note 3. The options are exercisable for a period
of five years from the date of vesting, subject to continued employment with the
Company. The Employee may also be granted an additional 100,000 options to
purchase, subject to certain restrictions, shares of the Company's common stock
at fair market value at the date of the grant.
On August 19, 1999, the Company also entered into an Employment Agreement with
its Chief Financial Officer for a term of three years. The Company has granted
the Employee, subject to certain vesting provisions, 75,000 options to purchase
shares of the Company's common stock at an exercise price of $2.50 per share
under the 1997 Stock Option Plan discussed in Note 3. The options are
exercisable for a period of five years from the date of vesting, subject to
continued employment with the Company. The Employee may also be granted an
additional 60,000 options to purchase, subject to certain restrictions, shares
of the Company's common stock at fair market value at the date of the grant.
On February 13, 2000, the Company entered into an Employment Agreement with its
Vice-president\Chief Operating Officer for a term of three years. The Company
has granted the Employee, subject to certain vesting provisions, 150,000 options
to purchase shares of the Company's common stock at an exercise price of $2.50
per share under the 1997 Stock Option Plan discussed in Note 3. The options are
exercisable for a period of five years from the date of vesting, subject to
continued employment with the Company. The Employee may also be granted an
additional 150,000 options to purchase, subject to certain restrictions, shares
F-12
<PAGE>
INTERNATIONAL COSMETICS MARKETING CO.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and 1998
NOTE 8 - SUBSEQUENT EVENTS (cont'd)
- -----------------------------------
of the Company's common stock at fair market value at the date of the grant.
In August 1999, The Board of Directors authorized and approved the private
offering of up to $2,000,000 principal amount of 0% convertible debentures to
finance its business plan. Each debenture issued is due and payable in full
three years from the date of issuance and is convertible into shares of the
Company's common stock at a conversion price of $5.00 per share, subject to
adjustment in certain circumstances. As of March 14, 2000, $1,950,000 of
debentures had been sold.
In January 2000, the Company cancelled 18,800 shares previously issued under
Rule 506.
F-13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the _____ day of ________, 2000 (the "Effective Date"), between
International Cosmetics Marketing, Inc., a Florida corporation, whose principal
place of business is 6501 N.W. Park of Commerce Blvd., Suite 205, Boca Raton, FL
33487 and any of its successors or affiliated companies (collectively, the
"Company") and William Wirch, an individual whose address is 10274 Trailwood
Lane, Jupiter, FL 33478 (the "Employee").
RECITALS
WHEREAS, the Company is a Florida corporation and is principally
engaged in the business of marketing, distributing and selling consumer products
(the "Business").
WHEREAS, the Company desires to employ the Employee and the Employee
desires to enter into the employ of the Company.
WHEREAS, the Company has established a valuable reputation and goodwill
in its business, with expertise in all aspects of the Business.
WHEREAS, the Employee, by virtue of the Employee's employment with the
Company, will become familiar with and possessed with the manner, methods, trade
secrets and other confidential information pertaining to the Company's Business,
including the Company's client base and product sources and pricing.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Company and the Employee do hereby agree as follows:
1. Recitals. The above recitals are true, correct, and are herein
incorporated by reference.
2. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts employment, upon the terms and conditions hereinafter
set forth.
3. Authority and Power During Employment Period.
a. Duties and Responsibilities. During the term of this Agreement,
the Employee shall serve as Executive Vice President and Chief Operating Officer
of the Company and shall have such responsibilities and duties as are
customarily undertaken by individuals in similar positions as are requested by
the Company's Board of Directors.
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b. Time Devoted. Throughout the Term of the Agreement, the Employee
shall devote substantially all of the Employee's business time and attention to
the business and affairs of the Company consistent with the Employee's position
with the Company, except for reasonable vacations and except for illness or
incapacity.
4. Term. The Term of employment hereunder will commence on the
Effective Date as set forth above and end three (3) years from the Effective
Date, unless this Agreement shall have been earlier terminated pursuant to
Section 6 of this Agreement.
5. Compensation and Benefits.
a. Salary. The Employee shall be paid a base salary, payable in
accordance with the Company's policies from time to time for salaried employees,
at the rate of Ninety-Six Thousand Dollars ($96,000) per annum for the first
year, which salary for the second and third year shall be mutually determined by
the parties no later than 90 days prior to the expiration of the first and
second year, respectively.
b. Options. The Employee is granted 150,000 options (the "Options")
to purchase shares of the Company's Common Stock at an exercise price of $2.50
per share. Such Options are granted under the Company's 1997 Stock Option Plan
and pursuant to the form of Option attached hereto as Exhibit A and incorporated
herein by such reference. The Options shall be exercisable for a five (5) year
period from the date of vesting and shall vest, subject to continued employment
of the Employee, (A) 50,000 Options on the date of this Agreement, (B) 50,000
Options one year following the date of this Agreement, and (C) 50,000 Options
two years following the date of this Agreement.
In the event of (i) a sale of all or substantially all of the assets
of the Company; or (ii) a merger, stock exchange or other form of business
combination (the "Business Combination"), the result of which being that the
shareholders of the Company will own, after consummation of such Business
Combination, less than 49% of the then outstanding voting securities of the
Company, then, in such event, on the effective date of either the sale of all or
substantially all of the Company's assets or a Business Combination, all Options
not theretofore vested shall immediately vest and become exercisable.
c. Additional Options.
i. The Employee shall be granted up to 150,000 Options to
purchase shares of the Company's Common Stock at the Fair
Market Value (as hereinafter defined) of the Company's
Common Stock on the trading day immediately preceding the
date of grant. Such Options will be granted under the
Company's 1997 Stock Option Plan and pursuant to the form
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of Option attached hereto as Exhibit A and incorporated
herein by such reference. The Options shall be granted and
immediately exercisable for a five (5) year period from the
date of grant, subject to continued employment of the
Employee as follows: (a) 75,000 Option two years following
the date of this Agreement; and (b) 75,000 Options three
years following the date of this Agreement.
ii. For the purposes of this Agreement, "Fair Market Value"
shall be equal to the closing bid price of the Company's
Common Stock as reported on the OTC Bulletin Board or the
primary exchange on which the Company's Common Stock shall
be quoted.
d. Employee Benefits. The Employee shall be entitled to participate
in all benefit programs of the Company currently existing or hereafter made
available to salaried employees including, but not limited to, stock option
plans, pension and other retirement plans, group life insurance,
hospitalization, surgical and major medical coverage, sick leave, salary
continuation, vacation and holidays, long-term disability, and other fringe
benefits.
e. Vacation. During each fiscal year of the Company, the Employee
shall be entitled to such amount of vacation as determined by the Board of
Directors of the Company consistent with the Employee's position and length of
service to the Company.
6. Consequences of Termination of Employment.
a. Disability. In the event of the Employee's disability, the
Employee shall be entitled to compensation in accordance with the Company's
disability compensation practice for its salaried employees. "Disability," for
the purposes of this Agreement, shall be deemed to have occurred in the event
(A) the Employee is unable by reason of sickness or accident, to perform his
duties under this Agreement for an aggregate of 90 days in any 12-month period
or 45 consecutive days, or (B) the Employee has a guardian of the person or
estate appointed by a court of competent jurisdiction. Termination due to
disability shall be deemed to have occurred upon the first day of the month
following the determination of disability as defined in the preceding sentence.
b. Termination by the Company for Cause.
i. Nothing herein shall prevent the Company from terminating the
Employee for "Cause," as hereinafter defined. The Employee shall continue to
receive salary only for the period ending with the date of such termination as
provided in this Section 6(b). Any rights and benefits the Employee may have in
respect of any other compensation shall be
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<PAGE>
determined in accordance with the terms of such other compensation arrangements
or such plans or programs.
ii. "Cause" shall mean (A) committing or participating in an
injurious act of fraud, gross neglect, misrepresentation, embezzlement or
dishonesty against the Company; (B) committing or participating in any other
injurious act or omission wantonly, willfully, recklessly or in a manner which
was grossly negligent against the Company, monetarily or otherwise; (C) engaging
in a criminal enterprise involving moral turpitude; (D) an act or acts (1)
constituting a felony under the laws of the United States or any state thereof;
or (2) if applicable, loss of any state or federal license required for the
Employee to perform the Employee's material duties or responsibilities for the
Company; or (E) any assignment of this Agreement by the Employee in violation of
Section 13 of this Agreement.
iii. Notwithstanding anything else contained in this Agreement,
this Agreement will not be deemed to have been terminated for Cause unless and
until there shall have been delivered to the Employee a notice of termination
stating that the Employee committed one of the types of conduct described in
(ii) above. Notwithstanding, anything contained herein to the contrary, this
Agreement may be terminated (i) at any time upon the mutual written consent of
the Company and the Employee; or (ii) by either party giving 30 days' prior
written notice to the other party. During such 30 day period, the Employee shall
continue to perform the Employee's duties pursuant to this Agreement, and the
Company shall continue to compensate the Employee in accordance with this
Agreement.
c. Death. In the event of the death of the Employee during the
Term of the Agreement, compensation shall be paid to the Employee's designated
beneficiary, or, in the absence of such designation, to the estate or other
legal representative of the Employee for a period of thirty (30) days from and
after the date of death. Other death benefits will be determined in accordance
with the terms of the Company's benefit programs and plans.
7. Covenant Not to Compete and Non-Disclosure of Information.
a Covenant Not to Compete. The Employee acknowledges and
recognizes the highly competitive nature of the Company's Business and the
goodwill, continued patronage, and specifically the names and addresses of the
Company's Clients and the Company's Sources (as hereinafter defined) constitute
a substantial asset of the Company having been acquired through considerable
time, money and effort. Accordingly, in consideration of the execution of this
Agreement, the Employee agrees to the following:
i. That during the Restricted Period (as hereinafter
defined) and within the Restricted Area (as hereinafter defined), the Employee
will not, individually or in conjunction with others, directly or indirectly,
engage in any Business Activities (as hereinafter defined), whether as an
officer, director, proprietor, employer, partner, independent contractor,
investor
4
<PAGE>
(other than as a holder solely as an investment of less than one percent (1%) of
the outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent or otherwise.
ii. That during the Restricted Period and within the
Restricted Area, the Employee will not, directly or indirectly, compete with the
Company by soliciting, inducing or influencing any of the Company's Clients
which have a business relationship with the Company at the time during the
Restricted Period to discontinue or reduce the extent of such relationship with
the Company.
iii. That during the Restricted Period and within the
Restricted Area, the Employee will not (A) directly or indirectly recruit,
solicit or otherwise influence any employee or agent of the Company to
discontinue such employment or agency relationship with the Company, or (B)
employ or seek to employ, or cause or permit any business which competes
directly or indirectly with the Business Activities of the Company (the
"Competitive Business") to employ or seek to employ for any Competitive Business
employs or seeks to employ such person) employed by the Company.
iv. That during the Restricted Period the Employee will
not interfere with, or disrupt or attempt to disrupt any past, present or
prospective relationship, contractual or otherwise, between the Company and any
supplier, customer, employee or agent of the Company.
b. Non-Disclosure of Information. The Employee acknowledges
that the Company's trade secrets, private or secret processes, methods and
ideas, as they exist from time to time, customer lists and information
concerning the Company's products, Company Sources, services, training methods,
development, technical information, marketing activities and procedures, credit
and financial data concerning the Company and/or the Company's Clients and the
Company's Sources (the "Proprietary Information") are valuable, special and
unique assets of the Company, access to and knowledge of which are essential to
the performance of the Employee hereunder. In light of the highly competitive
nature of the industry in which the Company's Business is conducted, the
Employee agrees that all Proprietary Information, heretofore or in the future
obtained by the Employee as a result of the Employee's association with the
Company shall be considered confidential.
In recognition of this fact, the Employee agrees that the Employee,
during the Restricted Period, will not use or disclose any of such Proprietary
Information for the Employee's own purposes or for the benefit of any person or
other entity or organization (except the Company) under any circumstances unless
such Proprietary Information has been publicly disclosed generally or, unless
upon written advice of legal counsel reasonably satisfactory to the Company, the
Employee is legally required to disclose such Proprietary Information. Documents
(as hereinafter defined) prepared by the Employee or that come into the
Employee's possession during the Employee's association with the Company are and
remain the property of the Company, and when
5
<PAGE>
this Agreement terminates, such Documents shall be returned to the Company at
the Company's principal place of business, as provided in the Notices provision
(Section 9) of this Agreement.
c. Documents. "Documents" shall mean all original written,
recorded, or graphic matters whatsoever, and any and all copies thereof
including, but not limited to: papers; email; books; records; tangible things;
correspondence; communications; telex messages; memoranda; work-papers; reports;
affidavits; statements; summaries; analyses; evaluations; client records and
information; agreements; agendas; advertisements; instructions; charges;
manuals; brochures; publications; directories; industry lists; schedules; price
lists; client lists; statistical records; training manuals; computer printouts;
books of account, records and invoices reflecting business operations; all
things similar to any of the foregoing however denominated. In all cases where
originals are not available, the term "Documents" shall also mean identical
copies of original documents or non-identical copies thereof.
d. Company's Clients. The "Company's Clients" shall be deemed
to be any persons, partnerships, corporations, professional associations or
other organizations for whom the Company has performed Business Activities.
e. Company's Sources. The "Company's Sources" shall be deemed
to be any person, partnership, corporation, professional association or other
organization from whom the Company has, before and during the term of this
Agreement, directly or indirectly purchased products from time to time.
f. Restrictive Period. The "Restrictive Period" shall be deemed
to be eighteen (18) months following termination or expiration of this
Agreement.
g. Restricted Area. The Restricted Area shall be deemed to mean
within Broward County, Dade County, Monroe County and Palm Beach County, Florida
and within any other county of any state in which the Company is providing
service at the time of termination.
h. Business Activities. "Business Activities" shall be deemed
to include the Business, any business activities concerning marketing,
distributing and selling skin care, nutritional and other consumer products
provided by the Company and any additional activities which the Company or any
of its affiliates may engage in during the term of this Agreement.
h. Covenants as Essential Elements of this Agreement. It is
understood by and between the parties hereto that the foregoing covenants
contained in Sections 7a and 7b are essential elements of this Agreement, and
that but for the agreement by the Employee to comply with such covenants, the
Company would not have agreed to enter into this Agreement. Such covenants by
the Employee shall be construed to be agreements independent of any other
provisions of this Agreement. The existence of any other claim or cause of
action, whether predicated on any other provision in this Agreement, or
otherwise, as a result of the relationship
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<PAGE>
between the parties shall not constitute a defense to the enforcement of such
covenants against the Employee.
i. Survival After Termination of Agreement. Notwithstanding
anything to the contrary contained in this Agreement, the covenants in Sections
7a and 7b shall survive the termination of this Agreement and the Employee's
employment with the Company.
j. Remedies.
i. The Employee acknowledges and agrees that the Company's
remedy at law for a breach or threatened breach of any of the provisions of
Section 7a or 7b herein would be inadequate and the breach shall be per se
deemed as causing irreparable harm to the Company. In recognition of this fact,
in the event of a breach or threatened breach by the Employee of any of the
provisions of Section 7a or 7b, the Employee agrees that, in addition to any
remedy at law available to the Company, including, but not limited to monetary
damages, all rights of the Employee to payment or otherwise under this Agreement
and all amounts then or thereafter due to the Employee from the Company under
this Agreement may be terminated and the Company, without posting any bond,
shall be entitled to obtain, and the Employee agrees not to oppose the Company's
request for equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available to the Company.
ii. The Employee acknowledges that the granting of a
temporary injunction, temporary restraining order or permanent injunction merely
prohibiting the use of Proprietary Information would not be an adequate remedy
upon breach or threatened breach of Section 7a or 7b and consequently agrees,
upon proof of any such breach, to the granting of injunctive relief prohibiting
any form of competition with the Company. Nothing herein contained shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach.
8. Withholding. Anything to the contrary notwithstanding, all
payments required to be made by the Company hereunder to the Employee or the
Employee's estate or beneficiaries shall be subject to the withholding of such
amounts, if any, relating to tax and other payroll deductions as the Company may
reasonably determine, the Company may accept other arrangements pursuant to
which it is satisfied that such tax and other payroll obligations will be
satisfied in a manner complying with applicable law or regulation.
9. Notices. Any notice required or permitted to be given under
the terms of this Agreement shall be sufficient if in writing and if sent
postage prepaid by registered or certified mail, return receipt requested; by
overnight delivery; by courier; or by confirmed telecopy, in the case of the
Employee to the Employee's last place of business or residence as shown on the
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<PAGE>
records of the Company, or in the case of the Company to its principal office as
set forth in the first paragraph of this Agreement, or at such other place as it
may designate.
10. Waiver. Unless agreed in writing, the failure of either
party, at any time, to require performance by the other of any provisions
hereunder shall not affect its right thereafter to enforce the same, nor shall a
waiver by either party of any breach of any provision hereof be taken or held to
be a waiver of any other preceding or succeeding breach of any term or provision
of this Agreement. No extension of time for the performance of any obligation or
act shall be deemed to be an extension of time for the performance of any other
obligation or act hereunder.
11. Completeness and Modification. This Agreement constitutes
the entire understanding between the parties hereto superseding all prior and
contemporaneous agreements or understandings among the parties hereto concerning
the Employment Agreement. This Agreement may be amended, modified, superseded or
canceled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties or, in the case of a waiver, by the party to be charged.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one agreement.
13. Binding Effect/Assignment. This Agreement shall be binding
upon the parties hereto, their heirs, legal representatives, successors and
assigns. This Agreement shall not be assignable by the Employee but shall be
assignable by the Company in connection with the sale, transfer or other
disposition of its business or to any of the Company's affiliates controlled by
or under common control with the Company.
14. Governing Law. This Agreement shall become valid when
executed and accepted by Company. The parties agree that it shall be deemed made
and entered into in the State of Florida and shall be governed and construed
under and in accordance with the laws of the State of Florida. Anything in this
Agreement to the contrary notwithstanding, the Employee shall conduct the
Employee's business in a lawful manner and faithfully comply with applicable
laws or regulations of the state, city or other political subdivision in which
the Employee is located.
15. Further Assurances. All parties hereto shall execute and
deliver such other instruments and do such other acts as may be necessary to
carry out the intent and purposes of this Agreement.
16. Headings. The headings of the sections are for convenience
only and shall not control or affect the meaning or construction or limit the
scope or intent of any of the provisions of this Agreement.
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17. Survival. Any termination of this Agreement shall not,
however, affect the ongoing provisions of this Agreement which shall survive
such termination in accordance with their terms.
18. Severability. The invalidity or unenforceability, in whole
or in part, of any covenant, promise or undertaking, or any section, subsection,
paragraph, sentence, clause, phrase or word or of any provision of this
Agreement shall not affect the validity or enforceability of the remaining
portions thereof.
19. Enforcement. Should it become necessary for any party to
institute legal action to enforce the terms and conditions of this Agreement,
the successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs.
20. Venue. Company and Employee acknowledge and agree that the
U.S. District for the Southern District of Florida, or if such court lacks
jurisdiction, the 17th Judicial Circuit (or its successor) in and for Broward
County, Florida, shall be the venue and exclusive proper forum in which to
adjudicate any case or controversy arising either, directly or indirectly, under
or in connection with this Agreement and the parties further agree that, in the
event of litigation arising out of or in connection with this Agreement in these
courts, they will not contest or challenge the jurisdiction or venue of these
courts.
21. Construction. This Agreement shall be construed within the
fair meaning of each of its terms and not against the party drafting the
document.
22. Independent Legal Counsel. The parties have either (i)
been represented by independent legal counsel in connection with the negotiation
and execution of this Agreement, or (ii) each has had the opportunity to obtain
independent legal counsel, has been advised that it is in their best interests
to do so, and by execution of this Agreement has waived such right.
THE EMPLOYEE ACKNOWLEDGES THAT THE EMPLOYEE HAS READ ALL OF THE TERMS OF THIS
AGREEMENT, UNDERSTANDS THE AGREEMENT, AND AGREES TO ABIDE BY ITS TERMS AND
CONDITIONS.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of date
set forth in the first paragraph of this Agreement.
THE COMPANY:
INTERNATIONAL COSMETICS MARKETING, INC.
By: /s/ Stephanie McAnly
------------------------
Stephanie McAnly, President
THE EMPLOYEE
/s/ William Wirch
-----------------
William Wirch
10
