exv10w1



 





Exhibit 10.1




CONSUMER DIRECT OF AMERICA

2004 STOCK COMPENSATION PLAN




     1. PURPOSE OF THE PLAN. The purpose of this Stock Compensation Plan
(“Plan”) of Consumer Direct of America, a Nevada corporation (the “Company”) is
to provide the Company with a means of compensating selected key employees
(including officers) of and consultants and advisors to the Company and its
subsidiaries for their services with shares of Common Stock of the Company.



     2. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Company’s Board of Directors (the “Board”).



          2.1 Award or Sale of Shares. The Company’s Board shall (a) select those
key employees (including officers), consultants and advisors to whom shares of
the Company’s Common Stock shall be awarded or sold, and (b) determine the
number of shares to be awarded or sold; the time or times at which shares shall
be awarded or sold; and such conditions, rights of repurchase, rights of first
refusal or other transfer restrictions as the Board may determine. Each award
or sale of shares under the Plan shall be evidenced by a written agreement
between the Company and the person to whom shares of the Company’s Common Stock
are awarded or sold.



          2.2 Consideration for Shares. Shares of the Company’s Common Stock to be
awarded or sold under the Plan shall be issued for such lawful consideration,
having a value not less than the par value thereof, as shall be determined from
time to time by the Board in its sole discretion.



          2.3 Board Procedures. The Board from time to time may adopt such rules
and regulations for carrying out the purposes of the Plan as it may deem proper
and in the best interests of the Company. The Board shall keep minutes of its
meetings and records of its actions. A majority of the members of the Board
shall constitute a quorum for the transaction of any business by the Board.
The Board may act at any time by an affirmative vote of a majority of those
members voting. Such vote may be taken at a meeting (which may be conducted in
person or through use of conference telephone or any other communications
equipment in accordance with Section 78.315 of the Nevada General Corporation
Law, as amended) or by written consent of Board members without a meeting.



          2.4 Finality of Board Action. The Board shall resolve all questions
arising under the Plan. Each determination, interpretation, or other action
made or taken by the Board shall be final and conclusive and binding on all
persons, including, without limitation, the Company, its stockholders, the
Board and each of the members of the Board.



          2.5 Non-Liability of Board Members. No Board member shall be liable for
any action or determination made by him or her in good faith with respect to
the Plan or any shares of the Company’s Common Stock sold or awarded under it.



          2.6 Board Power to Amend, Suspend, or Terminate the Plan. The



 









 




Board may, from time to time, make such changes in or additions to the Plan as
it may deem proper and in the best interests of the Company and its
stockholders. The Board may also suspend or terminate the Plan at any time,
without notice, and in its sole discretion.




     3. SHARES SUBJECT TO THE PLAN. For purposes of the Plan, the Board of
Directors is authorized to sell or award up to Seven Hundred Fifty Thousand
(750,000) shares of the Company’s Common Stock (“Common Stock”).



     4. PARTICIPANTS. All key employees (including officers) of and
consultants and advisors to the Company and any of its subsidiaries (sometimes
referred to herein as “participants”) are eligible to participate in the Plan;
provided, however, that consultants and advisors are eligible to participate in
the Plan only if (i) they are natural persons; (ii) they provide bona fide
services to the Company; and (iii) the services provided by them are not in
connection with the offer or sale of securities in a capital raising
transaction, and do not directly or indirectly promote or maintain a market for
the Company’s securities. A copy of this Plan shall be delivered to all
participants, together with a copy of any Board resolutions authorizing the
issuance of the shares and establishing the terms and conditions, if any,
relating to the sale or award of such shares.



     5. RIGHTS AND OBLIGATIONS OF PARTICIPANTS. The award or sale of shares of
Common Stock shall be conditioned upon the participant providing to the Board a
written representation that, at the time of such award or sale, it is the
intent of such person(s) to acquire the shares for investment only and not with
a view toward distribution. The certificate for unregistered shares issued for
investment shall be restricted by the Company as to transfer unless the Company
receives an opinion of counsel satisfactory to the Company to the effect that
such restriction is not necessary under the applicable law. The providing of
such representation and such restriction on transfer shall not, however, be
required upon any person’s receipt of shares of Common Stock under the Plan in
the event that, at the time of award or sale, the shares shall be (i) covered
by an effective and current registration statement under the Securities Act of
1933, as amended, and (ii) either qualified or exempt from qualification under
applicable state securities laws. The Company shall, however, under no
circumstances be required to sell or issue any shares under the Plan if, in the
opinion of the Board, (i) the issuance of such shares would constitute a
violation by the participant or the Company of any applicable law or regulation
of any governmental authority, or (ii) the consent or approval of any
governmental authority is necessary or desirable as a condition of, or in
connection with, the issuance of such shares.



     6. PAYMENT OF SHARES.



          (a) The entire purchase price of shares issued under the Plan shall be
payable in lawful money of the United States of America at the time when such
shares are issued, except as provided in subsection (b) below.



          (b) At the discretion of the Board, shares may be issued under the Plan in
consideration of services performed; provided, however, that no shares shall be
issued for a



2









 




contract for future services nor shall any shares be issued in consideration of
services performed unless and until such services have been fully performed.




     7. ADJUSTMENTS. If the outstanding Common Stock shall be hereafter
increased or decreased, or changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation, by
reason of a recapitalization, reclassification, reorganization, merger,
consolidation, share exchange, or other business combination in which the
Company is the surviving parent corporation, stock split-up, combination of
shares, or dividend or other distribution payable in capital stock or rights to
acquire capital stock, appropriate adjustment shall be made by the Board in the
number and kind of shares which may be granted under the Plan.



     8. TAX WITHHOLDING. As a condition to the purchase or award of shares,
the participant shall make such arrangements as the Board may require for the
satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with such purchase or award.



     9. TERM OF PLAN.



          9.1 Effective Date. The Plan shall become effective on May 14, 2004.



          9.2 Termination Date. The Plan shall terminate at midnight on May 13,
2014, and no shares shall be awarded or sold after that time. The Plan may be
suspended or terminated at any earlier time by the Board within the limitations
set forth in Section 2.6.



     10. NON-EXCLUSIVITY OF PLAN. Nothing contained in the Plan is intended to
amend, modify, or rescind any previously approved compensation plans, programs
or options entered into by the Company. This Plan shall be construed to be in
addition to and independent of any and all such other arrangements. The
adoption of the Plan by the Board shall not be construed as creating any
limitations on the power or authority of the Board to adopt, with or without
stockholder approval, such additional or other compensation arrangements as the
Board may from time to time deem desirable.



     11. GOVERNING LAW. The Plan and all rights and obligations under it shall
be construed and enforced in accordance with the laws of the state of Nevada.




3










 





CONSUMER DIRECT OF AMERICA

2004 Stock Compensation Plan




750,000 Shares of Common Stock




     We are offering up to 750,000 shares of Common Stock (the “Shares”)
pursuant to the Consumer Direct of America 2004 Stock Compensation Plan. This
prospectus summarizes the terms of the plan.



     For information regarding the plan and the Shares covered by the plan, you
should rely exclusively on this prospectus and any amendment or supplement to
this prospectus.



     If you have any questions after reading this prospectus, you may contact
Joseph Cosio-Barron, at 6330 S. Sandhill Rd., Suite 8, Las Vegas, Nevada 89120,
telephone (702) 547-7300.



     This document constitutes part of a prospectus covering securities that
have been registered under the Securities Act of 1933) as amended (“Securities
Act’”).



May 20, 2004




 









 








CONSUMER DIRECT OF AMERICA




TABLE OF CONTENTS




	 	 	 	 	 
	Incorporation of Certain Documents by Reference
	 	 	3	 
	The 2004 Stock Compensation Plan
	 	 	4	 
	Restrictions on Resales by Affiliates
	 	 	 	 
	Securities Act Registration or Exemption
	 	 	5	 
	Exchange Act “Short Swing” Trading Restrictions
	 	 	5	 
	Federal Tax Considerations
	 	 	5	 







Exhibits:




     Exhibit A:                      2004 Stock Compensation Plan



     Exhibit B:                      Individual Agreement Governing Issuance of Shares



     Exhibit C:                      Board Resolutions Governing Issuance of Shares



 









 





INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE




     We have filed the following documents with the Securities and Exchange
Commission and hereby incorporate them by reference in this prospectus:



     (a) Our annual report on Form 10-K for the year ended December 31, 2003.



     (b) Our quarterly report on Form 10-Q for the quarter ended March 31,
2004.



     (c) All other reports filed by us pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of our fiscal year covered
by our annual report referred to in (a) above.



     (d) The description of our class of Common Stock which is
registered under Section 12 of the Securities Exchange Act of 1934,
as amended (“Exchange Act”).



     In addition, all of the documents that we file with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the
date of this prospectus and before we file a post-effective amendment which
indicates that all of the Shares have been sold, or which deregisters all of
the Shares then remaining unsold, shall be deemed to be incorporated by
reference in this prospectus and to be part hereof from the date of filing of
such documents.



     We hereby undertake to provide you, without charge, upon your written or
oral request, a copy of any or all of the documents incorporated in this
prospectus by reference as described above, excluding exhibits thereto (except
for those exhibits incorporated by reference into the text of such documents).
If we subsequently provide you with information updating the information in the
prospectus, we undertake to provide promptly, without charge, upon your written
or oral request, another copy of this prospectus and all prior updates or
revisions. We will also make available without charge, upon your written or
oral request, any other documents which may be required to be delivered to you
pursuant to Rule 428(b) under the Securities Act. You should direct your
requests to Joseph Cosio-Barron, Vice President and General Counsel, at 6330 S.
Sandhill Rd., Suite 8, Las Vegas, Nevada 89120, telephone (702) 547-7300.



 









 





THE 2004 STOCK COMPENSATION PLAN




     Purpose. The purpose of the plan is to provide us with a means of
compensating selected key employees (including officers) of, and consultants
and advisors to, the Company and its subsidiaries for their services with
shares of Common Stock of the Company. A copy of the plan is attached as
Exhibit A to this prospectus.



     Shares Subject to the Plan. All Shares awarded or sold under the plan
will be newly issued shares of the Company’s Common Stock. The number of
Shares subject to the plan is 750,000. The Company’s Board of Directors will
adjust the number and kind of shares subject to the plan in the event of any
recapitalization, reclassification, reorganization, merger, consolidation,
share exchange, other business combination in which the Company is the
surviving parent corporation, stock split-up, combination of shares, or
dividend or other distribution payable in capital stock or rights to acquire
capital stock.



     Administration. The Board of Directors administers the plan. The Board
selects those who are to participate in the plan. The Board determines the
number of Shares to be awarded or sold to participants, the times of such
awards or sales, the consideration to be paid for the Shares, and the
conditions, rights of repurchase, rights of first refusal and transfer
restrictions, if any, that will apply. At the Board’s discretion, Shares may
be issued in consideration of services fully performed, if such services are
not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for
the Company’s securities. You may obtain additional information about the plan
and its administrators by contacting Joseph Cosio-Barron, at 6330 S. Sandhill
Rd., Suite 8, Las Vegas, Nevada 89120, telephone (702) 547-7300.



     Written Agreements. Each award or sale of Shares under the plan must be
evidenced by a written agreement between the Company and the recipient of the
Shares, A copy of the written agreement between you and the Company has been
attached to this prospectus as Exhibit B. In addition, a copy of the Board
resolutions authorizing the Company to issue the Shares to you under that
agreement is attached as Exhibit C.



     Amendment. The Board may make changes in or additions to the plan which
it
deems to be proper and in the best interests of the Company and its
stockholders.



     Term and Termination. The plan became effective on May 14, 2004 and will
automatically terminate on May 13, 2014. The Board may also act to suspend or
terminate the plan at any time, without notice.



     Inapplicability of ERISA. The plan is not subject to provisions of the
Employee Retirement Income Security Act of 1974.



 









 





RESTRICTIONS ON RESALES BY AFFILIATES




Securities Act Registration or Exemption




     If you are, or if you become, an “affiliate” of the Company as defined by
regulations under the Securities Act, you may not offer or sell the Shares you
receive under the plan except pursuant to an effective registration statement
under the Securities Act or an available exemption from registration. For this
purpose, the term “affiliate” means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company. You should consult with counsel about your
possible status as an affiliate of the Company.



     Generally, an affiliate may resell the Shares in reliance on the exemption
from registration provided by Rule 144 under the Securities Act if:




	•	 	Information filed with the Securities and Exchange Commission about
the Company is current at the time of sale






	•	 	The affiliate transmits a notice of proposed sale on Form 144 to
the Securities and Exchange Commission






	•	 	The affiliate does not sell more Shares than the rule permits in
any three-month period (generally up to 1 % of the outstanding shares)






	•	 	The sale is made in a brokers transaction or a transaction directly
with a market maker





     You should consult with counsel about how to satisfy Rule 144 in your
specific situation.



Exchange Act “Short-Swing” Trading Restriction




     If you are an officer or director of the Company and you sell any of the
Shares within six months after you acquire them, or if you sell Shares within
six months before or after you purchase other shares of the Company’s Common
Stock, you may be required to pay the Company the resulting profits, as
determined under Section 16{b) of the Exchange Act and related rules. Any
officer or director should therefore consult with counsel before purchasing or
selling securities of the Company.



FEDERAL TAX CONSIDERATIONS




     The plan is not qualified under Section 401 (a) of the Internal Revenue
Code.



     For federal income tax purposes, participants to whom Shares are awarded
or sold under the plan will take a basis in the Shares equal to the fair market
value of the Shares on the date of the award or sale. Participants who are
awarded Shares will recognize



 









 





ordinary income equal to the fair market value of the Shares on the date of the
award, and the Company will be entitled to a corresponding deduction as of such
date. Income realized by employees is subject to income and employment
withholding taxes.




     If you sell the Shares you receive under the plan, you will recognize
either long-term or short-term capital gain or loss depending upon the length
of time you have held the Shares. Under current law, any Shares you hold for
less than one year would be taxed as short-term capital gain upon disposition
at federal rates of up to 38.6%. Shares you hold for more than 12 months would
be taxed as long-term capital gain and would be subject to a maximum federal
tax rate of 15%.



 









 





Exhibit A




CONSUMER DIRECT OF AMERICA

2004 STOCK COMPENSATION PLAN




     1. PURPOSE OF THE PLAN. The purpose of this Stock Compensation Plan
(“Plan”) of Consumer Direct of America, a Nevada corporation (the “Company”) is
to provide the Company with a means of compensating selected key employees
(including officers) of and consultants and advisors to the Company and its
subsidiaries for their services with shares of Common Stock of the Company.



     2. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Company’s Board of Directors (the “Board”).



          2.1 Award or Sale of Shares. The Company’s Board shall (a) select those
key employees (including officers), consultants and advisors to whom shares of
the Company’s Common Stock shall be awarded or sold, and (b) determine the
number of shares to be awarded or sold; the time or times at which shares shall
be awarded or sold; and such conditions, rights of repurchase, rights of first
refusal or other transfer restrictions as the Board may determine. Each award
or sale of shares under the Plan shall be evidenced by a written agreement
between the Company and the person to whom shares of the Company’s Common Stock
are awarded or sold.



          2.2 Consideration for Shares. Shares of the Company’s Common Stock to be
awarded or sold under the Plan shall be issued for such lawful consideration,
having a value not less than the par value thereof, as shall be determined from
time to time by the Board in its sole discretion.



          2.3 Board Procedures. The Board from time to time may adopt such rules
and regulations for carrying out the purposes of the Plan as it may deem proper
and in the best interests of the Company. The Board shall keep minutes of its
meetings and records of its actions. A majority of the members of the Board
shall constitute a quorum for the transaction of any business by the Board.
The Board may act at any time by an affirmative vote of a majority of those
members voting. Such vote may be taken at a meeting (which may be conducted in
person or through use of conference telephone or any other communications
equipment in accordance with Section 78.315 of the Nevada General Corporation
Law, as amended) or by written consent of Board members without a meeting.



          2.4 Finality of Board Action. The Board shall resolve all questions
arising under the Plan. Each determination, interpretation, or other action
made or taken by the Board shall be final and conclusive and binding on all
persons, including, without limitation, the Company, its stockholders, the
Board and each of the members of the Board.



          2.5 Non-Liability of Board Members. No Board member shall be liable for
any action or determination made by him or her in good faith with respect to
the Plan or any shares of the Company’s Common Stock sold or awarded under it.



 









 





          2.6 Board Power to Amend, Suspend, or Terminate the Plan. The
Board may, from time to time, make such changes in or additions to the Plan as
it may deem proper and in the best interests of the Company and its
stockholders. The Board may also suspend or terminate the Plan at any time,
without notice, and in its sole discretion.



     3. SHARES SUBJECT TO THE PLAN. For purposes of the Plan, the Board of
Directors is authorized to sell or award up to Seven Hundred Fifty Thousand
(750,000) shares of the Company’s Common Stock (“Common Stock”).



     4. PARTICIPANTS. All key employees (including officers) of and
consultants and advisors to the Company and any of its subsidiaries (sometimes
referred to herein as “participants”) are eligible to participate in the Plan;
provided, however, that consultants and advisors are eligible to participate in
the Plan only if (i) they are natural persons; (ii) they provide bona fide
services to the Company; and (iii) the services provided by them are not in
connection with the offer or sale of securities in a capital raising
transaction, and do not directly or indirectly promote or maintain a market for
the Company’s securities. A copy of this Plan shall be delivered to all
participants, together with a copy of any Board resolutions authorizing the
issuance of the shares and establishing the terms and conditions, if any,
relating to the sale or award of such shares.



     5. RIGHTS AND OBLIGATIONS OF PARTICIPANTS. The award or sale of shares of
Common Stock shall be conditioned upon the participant providing to the Board a
written representation that, at the time of such award or sale, it is the
intent of such person(s) to acquire the shares for investment only and not with
a view toward distribution. The certificate for unregistered shares issued for
investment shall be restricted by the Company as to transfer unless the Company
receives an opinion of counsel satisfactory to the Company to the effect that
such restriction is not necessary under the applicable law. The providing of
such representation and such restriction on transfer shall not, however, be
required upon any person’s receipt of shares of Common Stock under the Plan in
the event that, at the time of award or sale, the shares shall be (i) covered
by an effective and current registration statement under the Securities Act of
1933, as amended, and (ii) either qualified or exempt from qualification under
applicable state securities laws. The Company shall, however, under no
circumstances be required to sell or issue any shares under the Plan if, in the
opinion of the Board, (i) the issuance of such shares would constitute a
violation by the participant or the Company of any applicable law or regulation
of any governmental authority, or (ii) the consent or approval of any
governmental authority is necessary or desirable as a condition of, or in
connection with, the issuance of such shares.



     6. PAYMENT FOR SHARES.



          (a) The entire purchase price of shares issued under the Plan shall be
payable in lawful money of the United States of America at the time when such
shares are issued, except as provided in subsection (b) below.



 









 





          (b) At the discretion of the Board, shares may be issued under the Plan in
consideration of services performed; provided, however, that no shares shall be
issued for a contract for future services nor shall any shares be issued in
consideration of services performed unless and until such services have been
fully performed.



     7. ADJUSTMENTS. If the outstanding Common Stock shall be hereafter
increased or decreased, or changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation, by
reason of a recapitalization, reclassification, reorganization, merger,
consolidation, share exchange, or other business combination in which the
Company is the surviving parent corporation, stock split-up, combination of
shares, or dividend or other distribution payable in capital stock or rights to
acquire capital stock, appropriate adjustment shall be made by the Board in the
number and kind of shares which may be granted under the Plan.



     8. TAX WITHHOLDING. As a condition to the purchase or award of shares,
the participant shall make such arrangements as the Board may require for the
satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with such purchase or award.



     9. TERM OF PLAN.



          9.1 Effective Date. The Plan shall become effective on May 14, 2004.



          9.2 Termination Date. The Plan shall terminate at midnight on May 13,
2014, and no shares shall be awarded or sold after that time. The Plan may be
suspended or terminated at any earlier time by the Board within the limitations
set forth in Section 2.6.



     10. NON-EXCLUSIVITY OF PLAN. Nothing contained in the Plan is intended to
amend, modify, or rescind any previously approved compensation plans, programs
or options entered into by the Company. This Plan shall be construed to be in
addition to and independent of any and all such other arrangements. The
adoption of the Plan by the Board shall not be construed as creating any
limitations on the power or authority of the Board to adopt, with or without
stockholder approval, such additional or other compensation arrangements as the
Board may from time to time deem desirable.



     11. GOVERNING LAW. The Plan and all rights and obligations under it shall
be construed and enforced in accordance with the laws of the state of Nevada.



 









 





Exhibit B




Individual Agreement Governing Issuance of Shares