Exhibit 10.3
AMENDED
EMPLOYMENT AGREEMENT
for
XXXXX XXXXX
THIS AMENDED EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into as of the first day of February, 1997, by and between ON STAGE
ENTERTAINMENT, INC., a Nevada Corporation formally known as LEGENDS IN CONCERT,
INC. (the "Company"), and XXXXX XXXXX, an individual ("Sidhu").
RECITALS
WHEREAS, Sidhu has been employed by the Company since August 1, 1995,
pursuant to the terms of various letters and other agreements;
WHEREAS, the Company has granted to Sidhu on August 8, 1996, 24,794
incentive stock options (post-reverse split) under the Company's 1996 Stock
Option Plan, the terms and conditions of this grant are to remain unchanged and
in force.
WHEREAS, Sidhu desires to continue to be employed by the Company and
the Company desires to continue to employ Sidhu;
WHEREAS, the Company and Sidhu desire to clarify and amend Sidhu's
employment terms in a single document;
WHEREAS, the Company and Sidhu desire to make this Agreement so as to
supersede any and all past agreements and/or understandings, whether written or
oral, and to make any such previous agreements and/or understandings void and no
longer of any force or effect; and
WHEREAS, the Company and Sidhu acknowledge that certain terms of this
Agreement are contingent upon the Company successfully having a registration
statement filed and declared effective by the Securities and Exchange Commission
for the sale of $5,000,000 of its securities to the public by no later than June
30, 1997 (the "Financing Objective").
NOW, THEREFORE, in consideration of the foregoing recitals along with
the mutual promises and understandings herein contained and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
AGREEMENT
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1. RECITALS. The above-listed Recitals are incorporated into this Agreement in
their entirety and expressly made a part hereof.
2. POSITION AND TITLE. The Company agrees to employ Sidhu for the position of
Senior Vice President, Chief Financial Officer and Treasurer, together with such
authority as is specified from time to time by the Board of Directors. Sidhu's
duties and responsibilities shall include, but shall not be limited to: (i)
performing the day-to-day management of the Company's financial affairs; (ii)
financial reporting; (iii) timely filing of corporate tax reports; (iv) fund
raising and strategic planning; and (v) completion and presentation of the
Company's monthly financial reports to the Board of Directors. Sidhu accepts
this employment and hereby agrees to devote his full-time, abilities and energy
to the faithful performance of the duties assigned to him and to the promotion
and development of the business affairs of the Company, and not to divert any
related business opportunities from the Company to himself or to any other
person or business entity.
3. SUPERVISOR. Sidhu will report to the President of the Company.
4. CONTINGENT TERMS. Subparagraphs A and B to this Section 4 shall commence on
February 1, 1997 and shall continue to be effective if and only if the Company
is able to meet the Financing Objective. If the Company meets the Financing
Objective, subparagraphs C and D to this Section 4 are void and shall not apply.
If the Company fails to meet the Financing Objective, then subparagraphs A and B
shall terminate and become void on June 1, 1997, and subparagraphs C and D shall
become effective on June 1, 1997.
A. Term and Termination.
(a) Length of Employment. Sidhu's employment shall be for a
period of three (3) years and four (4) months and four (4) months, commencing on
February 1, 1997, and continuing through and including MayMay 31January 31,
2000, unless terminated sooner as set forth herein. However, Sidhu's obligation
in Section 65, below, shall continue in full force and effect even after such
termination.
(b) Termination For Cause. The Company shall have the right
to terminate this Agreement and Sidhu's employment at any time for cause.
"Cause" for termination shall include: (1) Sidhu's breach of this Agreement; (2)
conduct materially injurious to the Company; (3) fraud, theft, embezzlement,
misappropriation or similar activity; (4) conviction or pleading guilty or no
contest to any criminal offense, excluding minor offenses such as traffic
offenses; or (5) gross neglect of employment duties or consistently poor job
performance. In the event the Company terminates Sidhu for cause, Sidhu shall
not be entitled to any further salary or other benefits provided under this
Agreement, and shall no longer have any rights to or under any non-vested
options.
(c) Severance Pay. The Company shall have the right to
terminate this Agreement and Sidhu's employment at any time without cause,
provided that the Company shall: (1) pay Sidhu a lump sum payment on the date of
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such termination in an amount equal to twelve months of Sidhu's (a) Base Salary,
(b) car allowance and , (c) insurance allowance, plus reimburse Sidhu for and
(d) any accrued but unused vacation days up until the date of
termination;vacation pay, and (2) immediately vest all of Sidhu's non-vested
options.
B. Compensation.
(a) Base Salary. As compensation for his services, Sidhu
will receive $150,000 per annum, the ("Base Salary") payable in equal bi-monthly
installments. On August 1 of each year, Sidhu's annual Base Salary shall be
increased by ten percent (10%) of the previous year's Base Salary, contingent
upon Sidhu meeting reasonable financial performance goals established by the
Board of Directors.
(b) Bonus. An annual bonus pool of five percent (5%) of the
Company's pre-tax earnings (excluding extraordinary items or non-recurring
charges) will be established for key executives of the Company provided the
Company meets or exceeds it's projected pre-tax earnings for each year as
approved by the Board of Directors. Sidhu shall be eligible to participate in
the bonus pool, if any, as determined by the Board of Directors.
(c) Vacation Pay. Sidhu shall be eligible for 15 days of paid
vacation benefits each employment year, accrued on a pro rata basis.
(d) Insurance. Sidhu shall be paid a medical allowance of
$300 per month until such time as the Company establishes its own similar
medical and dental plan, at which time the Company will provide the same to
Sidhu and his immediate family at no cost to him, but in no event shall such
cost exceed $300 per month.
(e) Car Allowance. Sidhu shall be paid a car allowance of $500
per month.
(f) Cellular Telephone. The Company will reimburse Sidhu for
business related cellular telephone calls and for reasonable standard monthly
cellular telephone fees.
(g) Laptop Computer. The Company shall furnish Sidhu with a
laptop computer for his use during the term of this Agreement.
(h) Stock Options. The Company is granting to Sidhu,
contemporaneous with this Agreement, options to purchase 85,000 shares of Common
Stock (post-reverse split) at an exercise price of $4.00 per share (the "Sidhu
Options"). The Sidhu1 Options are being granted under the 1996 Stock Option Plan
and will be vested and fully exercisable upon the execution of this Agreement.
The Sidhu Options will terminate on June 1, 2007.
(i) Expense Reimbursement. The Company shall reimburse Sidhu for those expenses
incurred by him in connection with the performance of his duties on behalf of
the Company that are in accordance with the Company's expense reimbursement
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procedures then in place; provided, that such expenses are reasonable for an
executive of Sidhu's status and are appropriately documented.
(j) Executive Benefit Plan. If financial conditions permit,
the Company agrees to implement an executive benefit plan, which will include
life and disability insurance benefits. The Company may, at the sole discretion
of the Board of Directors, make contributions to an executive benefit plan.
C. Term and Termination.
(a) Length of Employment. Sidhu's employment with the
Company will be at will. This means that Sidhu may resign at any time and the
Company may terminate his employment at any time, with or without cause and with
or without notice. This employment status may not be changed in any respect
except by written agreement signed by the President and Chief Executive Officer
of the Company.
(b) Severance Pay. In the event the Company terminates
Sidhu's employment other than for cause Sidhu shall be entitled to three (3)
months' Base Ssalary. Although cause is not required for termination, "cause"
shall be defined for the purposes of this subparagraph (b) to include: (1)
Sidhu's material breach of this Agreement; (2) conduct materially injurious to
the Company; (3) fraud, theft, embezzlement, misappropriation or similar
activity; (4) conviction or pleading guilty or no contest to any criminal
offense, excluding minor offenses such as traffic offenses; or (5) gross neglect
of employment duties or consistently poor job performance. If Sidhu is
terminated for cause he shall not be paid any severance.
D. Compensation.
(a) Salary. As compensation for his services, Sidhu will
receive $110,000 per anum, payable in equal bi-monthly installments.
(b) Insurance. The Company shall maintain Director's and
Officer's Liability insurance.
(c) Cellular Telephone. The Company will reimburse Sidhu for
business related cellular telephone calls and for reasonable standard monthly
cellular telephone fees up to a maximum of $99.00 per month.
5. STOCK GRANT.
(a) Stock Grant Upon Bridge Closing ("Bridge Grant"). As of
the date the Company is able to successfully complete a bridge financing with
Whale Securities Co., L.P. equal to or in excess of
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$250,000 in gross proceeds or March 31, 1997, whichever date is earlier, the
Company shall grant to Sidhu 40,532 shares of Common Stock (post-reverse split)
(the "Bridge Shares"). This stock grant shall be fully vested on the date of
grant.
(b) Buy-Back Provision. In the event that: (i) the Financing
Objective is not achieved; (ii) there is no change of control, merger, sale or
public offering of the Company by July 31, 1998; and (iii) Sidhu is terminated
by the Company or he resigns prior to July 31, 1998, then Sidhu shall
immediately tender all vested shares. Upon tender thereof, the Company will have
thirty (30) days to purchase said vested shares from Sidhu at a buy-back price
of $3.76 per share.
(c) Loan to Pay Tax Liability. In the event that any Bridge
Grant under this Employment Agreement creates a tax liability to Sidhu for the
tax year ending December 31, 1997, Company agrees to make a loan to Sidhu at an
8% annual interest rate, for a term not to exceed two (2) years, for the full
amount of said tax liability which shall be evidenced by a Promissory Note and
secured by Sidhu's shares of the Company's Common Stock. If Sidhu sells shares
of Common Stock, Sidhu agrees that the net proceeds from such sale shall first
be applied against any outstanding loan balance with the Company until such loan
and interest has been repaid in full.
6. CONFIDENTIAL INFORMATION. Sidhu acknowledges that during his employment by
the Company he will have access to various trade secrets and other proprietary
and confidential information. Sidhu agrees as a material condition of this
Agreement to execute a Confidentiality And Non-Competition Agreement in the form
of the attached Exhibit A, immediately upon the signing of this amendment.
7. ARBITRATION. Any disputes between Sidhu and the Company arising out of this
Agreement or Sidhu's compensation, stock or stock options, or Sidhu's employment
by the Company including but not limited to alleged violations of federal, state
and/or local statutes (for example, claims for discrimination including but not
limited to discrimination based on race, sex, sexual orientation, religion,
national origin, age, marital status, handicap or disability; and claims
relating to leaves of absence mandated by state or federal law), breach of any
contract or covenant (express or implied), tort claims, violation of public
policy or any other alleged violation of Sidhu's statutory, contractual or
common law rights (and including claims against the Company's officers,
directors, employees or agents), which Sidhu and the Company or other party are
unable to resolve through direct discussion, regardless of the kind or type of
dispute (excluding claims for workers' compensation, unemployment insurance and
any solely monetary dispute within the jurisdiction of small claims court) shall
be decided exclusively by conclusive and binding arbitration in the State of
Nevada in accordance with the American Arbitration Association's ("AAA")
Employment Dispute Resolution Rules (the "Rules"). Except for those claims
specifically excluded from coverage under this arbitration provision, Sidhu and
the Company hereby waive the right to pursue any claims, including but not
limited to employment termination-related claims, through civil litigation
outside the arbitration procedures of this provision, unless otherwise required
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by law. Sidhu and the Company each have the right to be represented by counsel
with respect to arbitration of any dispute pursuant to this Section. Each party
shall have the right to take depositions, make requests for production of
documents to any person or entity, and to subpoena witnesses and documents for
the arbitration. Additional discovery may be had only where the arbitrator so
orders, upon a showing of substantial need. The arbitrator shall be selected by
agreement between Sidhu and the Company, but if they do not agree on the
selection of an arbitrator within 30 days after the date of the request for
arbitration, the arbitrator shall be selected pursuant to the Rules. Each party
shall pay its own expenses for the arbitration and the fee and expenses of the
arbitrator shall be shared equally.
8. ENTIRE AGREEMENT. This Agreement contains the entire understanding between
Sidhu and the Company and it supersedes any prior oral or written agreements and
understandings between them. This Agreement may be modified only in writing
signed by both parties.
9. SEVERABILITY. If a court of competent jurisdiction holds that any provision
of this Agreement is void or unenforceable, the remaining provisions shall
continue in full force and effect.
10. NOTICES.
(a) Any notice under this Agreement given by the Company to Sidhu
shall be personally delivered to him or sent by certified mail to his most
recent home address as shown in the Company's records.
(b) Any notice by Sidhu to the Company shall be sent by certified mail
to the following address:
On Stage Entertainment, Inc.
0000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxx, Esq.
(c) Any notice sent by certified mail shall be effective when mailed.
11. GOVERNING LAW. This Agreement shall be governed by and interpreted and
enforced in accordance with the substantive laws of the State of Nevada without
reference to the principles governing conflict of laws applicable in that or any
other jurisdiction.
IN WITNESS WHEREOF, the parties hereto agree to the terms and
conditions contained herein and acknowledge the same by affixing their
signatures below the date and year first above written.
ON STAGE ENTERTAINMENT, INC.
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/s/ Xxxx X. Xxxxxx
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By: Xxxx X. Xxxxxx
Its: Chief Executive Officer
/s/ Xxxxx Xxxxx
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XXXXX XXXXX
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