EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made and entered into this 30th day of November 2001,
between XXXXXXX XXXXXXXX (hereinafter referred to as "Employee") and HOLLYWOOD
XXXXXXXX.XXX, INC., a Delaware corporation, by and through its Board of
Directors (hereinafter referred to as "Employer").
IN CONSIDERATION of the mutual promises set forth below, Employee and
Employer hereby agree as follows:
1. EMPLOYMENT. Employer hereby agrees to employ Employee and Employee
hereby agrees to provide services to Employer in the position of Chief Executive
Officer upon the terms and conditions hereinafter set forth.
2. DUTIES. Employee shall perform the duties and responsibilities set
forth in Exhibit "A" during the term of this Agreement. Employer shall appoint
Employee to a seat on the Board of Directors.
3. TERM OF AGREEMENT. The parties agree that the initial term of this
Agreement shall be two (2) years commencing December 1, 2001.
Should Employer terminate this Agreement and Employee's employment for
any reason other than for cause (as set forth below) and/or breach any provision
of this Agreement, and further excluding the case in which Employee shall resign
in the absence of Employer's breach, then all rights of forfeiture of the shares
of Employer common stock issued as a result of this Agreement shall expire
immediately.
Notwithstanding any contrary provision set forth hereinabove, Employer
shall have the right, at its option, to terminate this Agreement for cause upon:
a.) Employee's material breach of this Agreement;
b.) Employee's willful misconduct or gross negligence in
the discharge of his duties hereunder; or
c.) Employee's commission of any act of moral turpitude
which detrimentally affects the Company or is reasonably likely to detrimentally
affect the Company;
provided, however, that prior to terminating Employee pursuant to clause (a),
Employer shall give Employee at least fifteen (15) business days' written notice
of an intent to terminate due to such failure to act or breach, which notice
shall specify such failure or breach, and, if Employee cures such failure or
breach within such fifteen (15) day period, this Agreement shall remain in full
force and effect.
Employer may also terminate the employment of Employee hereunder upon
the death of Employee or upon Employee's inability by reason of sickness or
disability, as described in Paragraph 11 below, to perform his obligations for a
period of more than one hundred eighty (180) days consecutively without payment
of the lump sum described above.
Employee may terminate his employment hereunder upon at least fifteen
(15) days' prior written notice to Employer of a material breach of this
Agreement by Employer, which notice shall specify such breach, provided that if
Employer cures such breach within such fifteen (15) day period, this Agreement
shall remain in full force and effect.
In the event of termination by Employee as aforesaid, the removal of
all stock legends related to risk of forfeiture shall be accomplished within
thirty (30) days of said termination.
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4. EMPLOYEE WORKING CONDITIONS. Employer agrees that, during the term
of this Agreement, Employer: (1) shall maintain a board of directors of three
persons which shall include the Employee and one other person nominated by the
Employee; (2) shall treat Employee with respect and professional courtesy
commensurate with Employee's position; (3) shall provide, establish and maintain
reasonable working conditions for Employee and abide by all state, federal and
local employment regulations and laws; (4) shall not, without the express
written consent of Employee, alter or significantly reduce the duties and
responsibilities assigned to Employee as set forth in Exhibit "A" to this
Agreement; (5) shall not, without Employee's express written consent, reduce the
facilities and perquisites made available to Employee at the time this Agreement
is executed and as enhanced during the term of this Agreement; (6) shall not
materially reduce the type or level of Employee benefits to which Employee is
entitled at the time this Agreement is executed and as enhanced during the term
of this Agreement; and (7) shall allow Employee to perform his duties from
locations other than the Employer's place of business. If the parties mutually
agree to relocate the corporate offices, Employee shall within a reasonable time
thereafter arrange to be present at the corporate offices from time to time on a
regular basis demonstrating a presence commensurate with his position.
5. SALARY. As consideration for Employee's services as set forth in
Exhibit "A" to this Agreement, Employee agrees to accept and Employer agrees to
pay Employee a lump sum salary of three hundred thousand and 00/100 dollars
($300,000.00) payable in the form of 20,000,000 shares of Employer's restricted
common stock. The stock certificates in the denominations designated by Employee
shall be issued immediately upon request by Employer after a registration
statement registering the 20,000,000 common shares on whatever form is available
to Employer shall become effective.
a). The parties hereto acknowledge that this advance is in
full settlement of all salary obligations to the Employee by the Employer and
therefore should the Employee fail to successfully complete the duties assigned
to him as set forth on Exhibit A to this Agreement on or before the end of the
initial term of employment, the Employee shall return the certificate or
certificates representing the 20,000,000 shares of restricted common stock back
to the Company for cancellation. The certificate or certificates representing
the 20,000,000 shares of restricted common stock shall bear an additional
restrictive legend referring to this Agreement and the substantial right of
forfeiture.
b). Due to the substantial right of forfeiture, Employer
agrees not to withhold taxes upon issuance of the 20,000,000 shares of
restricted common stock nor require the payment of estimated taxes until such
time as the substantial risk of forfeiture lapsed or the Employee makes a
Section 83(b) election pursuant to the Internal Revenue Code, whichever first
occurs.
6. EXPENSES. The Employee shall be reimbursed by Employer for all
reasonable expenses incurred in the course of performing services for the
Employer including but not limited to expenses related to mobile communications,
travel, entertainment and the like. Employees shall receive reimbursement within
10 days of providing the Employer on the form provided to the Employee by the
Employer a report of his expenses including receipts where available.
7. BENEFITS. Employee shall be provided health and welfare benefits
including but not limited to medical, dental, disability and life insurance and
vacation and sick leave on the same terms and conditions as similarly situated
employees. Employee, at his election, may be reimbursed for medical plan
selected by him rather than receiving coverage under the medical plans
maintained by the employer. Long term disability insurance shall be fully paid
during all periods of eligibility requiring premium. In addition, Employee shall
be entitled to qualify for and participate in other Employer benefit plans, 401K
plan, bonus programs and stock option programs, if any, in accordance with the
terms of such plans and programs.
8. OTHER INTERESTS. Employer acknowledges that Employee owns and
operates Dydx Group of Funds, an Illinois corporation. Nothing in this Agreement
shall prohibit Employee continuing to perform services for or spend time
overseeing the operation of Dydx Group of Funds as Employee deems necessary. In
addition, during the term of this Agreement, Employee shall be allowed to pursue
other business interests or professional pursuits, provided that Employee's
pursuit of other business interests shall not materially diminish Employee's
performance of his duties as set forth herein.
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9. HEALTH AND WELFARE. As further consideration for Employee's
services, Employer agrees to provide after termination of this Agreement health
and welfare insurance benefits to Employee under the same terms and conditions
as provided to Employee during the term of this Agreement during the period and
to the extent required by COBRA. Employee's benefits shall also include a life
insurance policy in a death benefit amount of not less than Five Hundred
Thousand and 00/100 Dollars ($500,000.00) naming ________________ as
beneficiary, also remaining in effect for the period of time COBRA health
insurance benefits continue.
10. TRADE SECRETS. Employee will, in the course of his duties on behalf
of Employer, be advised of certain business matters and affairs of Employer
regarding its clients and the management of its business. The duties performed
by Employee for Employer place him in a position of trust and confidence with
respect to certain trade secrets relating to the business of Employer and not
generally known to the public. Employee will not, either during the term of his
employment or any time in the future, directly or indirectly:
a.) disclose or furnish, directly or indirectly, to any other
person, firm, agency, corporation, client, business, or enterprise, any trade
secrets acquired by him during the term of this Agreement except in confidence
in the ordinary course of the Company's business where appropriate to serve the
interests of the Company.
b.) individually or in conjunction with any other person,
firm, agency, company, client, business, or corporation, employ or cause to be
employed any trade secret in any manner whatsoever, except in furtherance of the
business of Employer.
Notwithstanding any contrary provision set forth hereinabove, and
without limiting the scope of the covenants made by Employee in this Paragraph
10, Employee agrees that Employee shall, from time to time, subscribe to and
execute agreements with the Company in the form and content subscribed to and
executed by other employees of the Company to protect the Company's trade
secrets and proprietary information.
11. CORPORATE AUTHORITY. Employer acknowledges and agrees that Employer
has the full authorization of its Board of Directors to enter into and perform
all aspects of this Agreement from and after the date it is executed.
12. BREACH. Each party to this Agreement shall indemnify and hold the
other harmless for any and all losses, costs, damages, expenses, (including
attorneys' fees) incurred by the indemnified party arising out of such party's
breach of this Agreement or any part thereof, regardless of the judgment or
decisions arising therefrom. All such losses, costs, damages, expenses and fees
shall be paid within thirty (30) days following tender of a written request.
Employer shall not be subject to liability for any breach caused solely by the
actions or inactions of the Employee relating to duties of the Employer pursuant
to the terms of this Agreement.
13. POLICIES. No change in Employer policy, rules or regulations shall
alter, modify or revoke any provision of this Employment Agreement.
14. INDEMNITY AND HOLD HARMLESS. To the fullest extent provided by the
law, Employer agrees Employer shall indemnify and hold Employee harmless from
any and all liabilities and/or losses, costs, damages or expenses, (including
attorney's fees) incurred by Employee in the course and scope of Employee's
duties for Employer or related in any way to Employee's association with
Employer, including but not limited to, liabilities arising from shareholder
derivative or direct law suits. Employer shall insure Employer's ability to so
indemnify Employee and shall present evidence of such insurance coverage
reasonably satisfactory to Employee within thirty (30) days of the execution of
this Agreement.
15. EMPLOYER'S COVENANT REGARDING RESTRUCTURE. Employer has represented
to Employee that Employer's Board of Directors intends to seriously consider a
restructure of the Employer, and that the same is in the best interests of the
Company. Such restructure shall be performed in such manner as necessary to
maintain the highest possible share price for outstanding shares and assist
Employee with his mission as set forth on Exhibit A.
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16. SUCCESSORS. This Agreement shall be binding upon the parties hereto
and upon their heirs, administrators, representatives, executors, successors and
assigns and shall inure to the benefit of said parties and each of them and
their heirs, administrators, representatives, executors, successors and assigns.
Employer specifically agrees it will require any successor to all or
substantially all of the business, stock and/or assets of the Employer to
expressly assume and agree to perform obligations under this Agreement in the
same manner and to the same extent that the Employer would be required to
perform.
17. SEVERABILITY. Employer and Employee agree that should any provision
of this Agreement be declared or be determined by any court of competent
jurisdiction to be illegal, invalid or unenforceable, the legality, validity and
enforceability of the remaining parts, terms and provisions shall not be
affected thereby, and said illegal, unenforceable or invalid part, term or
provision will be deemed not to be part of this Agreement.
18. CONFIDENTIALITY. Employee and Employer agree that they shall keep
the terms of this Agreement entirely confidential, except as and to the extent
required to be disclosed by applicable law, code or regulation.
19. JURISDICTION AND VENUE. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California. The parties
agree that any claim or action arising out of this Agreement shall be arbitrated
in accordance with the arbitration provisions and guidelines set forth on
Exhibit "B" attached hereto and incorporated herein by this reference. The
parties anticipate that all disputes hereunder shall be arbitrated; provided,
however, that any matter not subject to arbitration as a matter of law shall be
brought in a court of competent jurisdiction in the county and judicial district
in which the principal offices of the Company are located at the time the action
is commenced.
20. ENTIRE UNDERSTANDING. This Agreement contains all the
understandings and agreements between the parties concerning Employee's
employment. This Agreement replaces any and all prior agreements between
Employee and Employer related to Employee's employment and any and all such
prior Agreements are hereby canceled.
21. ATTORNEY'S FEES REIMBURSEMENT. Employer agrees to reimburse
Employee for Employee's reasonable attorney fees incurred by Employee in
connection with the negotiation and execution of this Agreement.
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IN WITNESS WHEREOF the parties have executed this Agreement the day and
year first written above at Los Angeles, California.
EMPLOYEE:
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
Notices in Care of: Xxxxxxx Xxxxxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
And to: Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000
HOLLYWOOD XXXXXXXX.XXX, INC.
/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, President
Notices in Care of: Hollywood Xxxxxxxx.xxx, Inc.
Xxxxxxx X. Xxxxxxxxx, Corporate Secretary / CAO
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
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Exhibit "A"
Job Description Chief Executive Officer
1. Reports to Board of Directors.
2. All other executives report to him.
3. Has all authority traditionally granted to President and CEO
including but not limited to sole authority to create, hire,
fire, promote, demote, set salaries and other compensation and
benefit levels for all executive positions, excluding other
executive level positions hired and terminated by the Board of
Directors, whether or not the individuals therein are also
corporate officers.
4. A substantial condition of the Employee's employment shall be
to work toward the reorganization of the Company's corporate
debt in an effort to clean up the balance sheet to allow for
the acquisition of new business operations either by way of
purchase or merger including all required due diligence,
completion of any required agreements and obtaining
shareholder approval if required. Failure to conclude such a
transaction during the initial term of the employment will
result in the forfeiture of the 20,000,000 shares of
restricted common stock issued as full consideration of your
duties for the initial term of the employment. Completion of
such a transaction during the initial term shall automatically
remove any right or claim of forfeiture.
5. Has authority to select and/or retain outside service
providers such as accountants, attorneys etc.;
6. Has authority to delegate any and all tasks to competent
individuals.
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Exhibit "B"
Arbitration Provisions and Guidelines
ARBITRATION AGREEMENT
A. Any dispute(s) or difference(s) which arise during the course of
this Agreement and which either involve its interpretation or meaning, or relate
to performance required hereunder shall be submitted to and resolved by binding
arbitration; provided, however, that the parties are not waiving and are
expressly reserving their right to seek injunctive relief by judicial process.
Nevertheless, the parties may, by subsequent consent, agree to submit requests
for injunctive relief to an arbitrator or arbitration panel.
B. If either party shall, in the opinion of the other party, be in
breach of or default in the performance or observance of any term or condition
of this Agreement, the non-defaulting party shall notify the defaulting party in
writing of such fact, and the defaulting party shall have thirty (30) days from
the receipt of such notice to remedy or correct such breach or default. If the
non-defaulting party asserts that the breach of default has not been timely and
properly cured, it may commence arbitration as described herein and ask the
arbitrator to deem this Agreement terminated and/or to grant such relief as is
shown to be appropriate.
C. In the event the parties are unable to agree upon an arbitrator to
hear and resolve their differences (hereinafter the "Dispute"), each party shall
designate one person licensed as an attorney in the state containing the
headquarters of the Company. Said two attorneys shall select the neutral
arbitrator. Unless agreed upon by the parties to the contrary, arbitration shall
be by a single, neutral arbitrator (hereinafter, the "Arbitrator").
D. If the two attorneys designated in the immediately preceding
paragraph cannot agree on the selection of the Arbitrator, the matter of the
selection of the Arbitrator shall be submitted to the presiding judge of the
District Court for the jurisdictionally appropriate county in which the
Company's principal office is located. In such event, the selection shall be
limited to one person from a panel of retired judges, each party hereto
submitting three names for the court to consider and from which the Arbitrator
shall be selected.
E. The Arbitrator shall have the full and absolute authority to
interpret this Agreement, to deem conduct by the parties as either in compliance
with or in breach of this Agreement, to terminate this Agreement, and (if a
breach is found) to award appropriate damages or relief.
F. The Dispute shall be settled in accordance with then existing law of
the state in which the Company's headquarters are located. While evidence may be
accepted, omitted, considered or excluded in the discretion of the Arbitrator,
the Arbitrator shall be bound by that state's rules of evidence and by the
application of that state's uniform act, if any, governing arbitration. The
final decision of the Arbitrator shall be in the form of a reasoned decision and
be served on the parties, in writing, within 20 days after the conclusion of the
arbitration hearing.
G. The Arbitrator's decision shall be binding and conclusive. Neither
party shall pursue, prosecute or otherwise file any legal action or proceeding
(other than to seek injunctive relief as described above). Except as provided in
the uniform act, if applicable, as provided above, no appeal shall be taken from
the Arbitrator's decision or from any subsequent court order confirming said
decision.
H. The parties shall equally advance the costs incurred by arbitration.
The Arbitrator, however, shall have the discretion to award such costs as well
as attorneys' fees to the party prevailing in the arbitration proceedings.
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