EMPLOYMENT AGREEMENT
This Agreement is made and entered into at Phoenix, Arizona, effective
as of December 22, 1997 by and between Pacific Rim Entertainment, Inc., a
Delaware corporation (hereinafter referred to as "Employer") and Xxxx
Xxxxxxxxxx, a resident of Maricopa County, Arizona (hereinafter referred to as
"Employee"), whose respective addresses appear below.
IN CONSIDERATION of the mutual promises of the parties, and other
valuable consideration, the parties agree as follows:
1. Term.
The Employer does hereby employ and retain the services of Employee for
a term of three (3) years commencing December 22, 1997 and ending December 21,
2000 (hereinafter "Initial Term"). The Initial Term shall be automatically
extended and renewed for successive one-year periods (each year beyond the
Initial Term referred to as an "Extended Term") upon the terms and conditions
set forth in this Agreement, however, the Agreement may be terminated by either
party hereto provided no less than sixty (60) days notice is given prior to the
scheduled expiration of the Initial Term or Extended Term, whichever the case
may be.
2. Duties.
During the Term of Employment, Employee shall act as Chairman of the
Board and Chief Executive Officer of Employer and shall be responsible for the
day-to-day operation of the business of Employer. Said Employee shall devote his
full productive time, energies and abilities to the proper and efficient
operation of the business of Employer and its subsidiaries under and in
accordance with the direction of the Employer's Board of Directors as may be
made in good faith, notwithstanding that Employee may also serve as a Director
of Employer.
3. Compensation.
The full compensation and remuneration of Employee for the services
provided for herein during each year of employment hereunder, shall be as
follows:
a) an annual base salary in the sum of Two Hundred Thousand Dollars
($200,000), payable in monthly installments of Sixteen Thousand Six Hundred
Sixty Six Dollars and 67/100 ($16,666.67), which salary if unpaid for any reason
shall accrue cumulatively from month to month plus 10% interest per annum on the
unpaid portion;
b) interim and annual bonuses in such amounts and upon such terms and
conditions as may be determined by the Employer's Board of Directors from time
to time; and
c) an annual cost of living increase of five percent (5%) of the
preceding year's annual base salary.
4. Fringe Benefits.
a) Employee shall be entitled, subject to the terms and conditions of
particular plans and programs adopted by the Board of Directors, to all fringe
benefits afforded to other senior executives of the Employer including but not
by way of limitation, the right to participate in any pension, stock option,
retirement, major medical, group health, disability, accident and life
insurance, and other employee benefit programs made generally available, from
time to time, by the Employer.
b) During the term of this Agreement, Employer shall include Employee
and his family in family health insurance coverage provided for executive level
employees of Employer, and shall pay one hundred percent (100%) of all health
insurance premiums.
c) As additional salary, Employer shall reimburse Employee for
Employee's entire monthly premium cost to purchase a disability insurance policy
that shall pay to Employee the sum of $10,000 per month in the event of
Employee's disability as defined in said policy.
5. Termination.
Employer shall have the right to terminate this Agreement by written
notice after which such termination, Employer shall have no further obligations
hereunder other than the payment of accrued base salary and reimbursement of
accrued expenses, upon the occurrence of any of the following events or
circumstances:
a) death of Employee;
b) if Employee is unable, for reasons of illness, disability or similar
causes, to carry out or perform the duties required of him hereunder
continuously for three (3) months or intermittently for an aggregate of one
hundred twenty (120) days in a calendar year during the term of this Agreement;
or
c) if Employee is terminated for "cause" for any of the following
events: (i) any act or omission perpetrated as the result of gross negligence or
with intent to harm the Employer or any of its affiliates or subsidiaries, or
the business of either; (ii) commission of a felony for which Employee is
convicted by a court of law; (iii) perpetration of a dishonest act or a common
law fraud against the Employer or any of its affiliates or subsidiaries, found
by a court of law; (iv) the continued refusal to follow the directives of the
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Board of Directors of Employer which are made in good faith and not contrary to
law; (v) if Employee has so conducted himself (whether in connection with his
employment or otherwise) as to render Employee unfit to serve as an officer or a
trusted employee of Employer or has violated or broken any of the covenants or
obligations imposed on Employee by the Agreement; and
d) in the Event of termination for cause, Employer shall give Employee
notice of the facts or circumstances constituting same and a reasonable
opportunity to cure, rectify or reverse such facts of circumstances, if
applicable, and to present evidence to the Board of Directors in mitigation
thereof.
6. Discoveries and Inventions.
Employee, in partial consideration of his employment and salary to be
paid to him, hereby agrees to disclose promptly to Employer, or any subsidiary,
parent, or affiliated company or its nominees, each and every discovery,
improvement and/or invention made, conceived and/or developed by him whether
during working hours or otherwise, during the entire period of his said
employment, which discoveries, improvements and/or inventions are capable of use
in any way in connection with the business of the Employer and for the same
consideration, Employee does hereby grant and convey to Employer or its nominee,
the entire right, title and interest, domestic and foreign, or such lesser
interests as such Employer at its option in any particular case may choose to
accept, in and to reach or all of said discoveries, improvements and/or
inventions; and he does further agree to sign all applications for patents or
copyrights, and to execute and deliver all assignments and other documents, and
to perform all acts and do all things necessary to make this Agreement and the
said grant and conveyance effective with respect to particular discoveries,
improvements and/or inventions.
7. Expenses.
(a) Employee is authorized to incur reasonable expenses for promoting
the business of Employer, including expenses for entertainment, travel, and
similar items. Employer will reimburse Employee for all such expenses upon the
presentation by Employee, from time to time, of an itemized account of such
expenditures, but only to the extent that such expenses are deductible to
Employer pursuant to the U.S. Internal Revenue Code.
(b) Employer will furnish Employee with a suitable late model
automobile for Employee's full time use and benefit and will pay all maintenance
and insurance premiums.
8. Vacation.
Employee shall be entitled each year to a vacation of approximately
four (4) weeks, during which time his compensation shall be paid in full.
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9. Confidential Information.
a) Employee acknowledges and agrees that all confidential information,
trade secrets, names of customers, suppliers, financial, accounting or
administrative information, business procedures or other information or
knowledge which is made known to Employee during the course of his employment by
Employer which is confidential and the property of the Employer;
b) Employee agrees that during the term of his employment by Employer,
and at all times thereafter forever, except in the ordinary course of fulfilling
Employee's assigned duties and obligations, Employee shall not, without the
prior express, written consent of the Employer, publish, disclose or make known
to anyone, or make any use of or authorize, assist, or enable anyone else to
publish or disclose or make use of, any confidential information or Employer
property, including, but not limited to, trade secrets, names of customers,
suppliers, financial, accounting or administrative information, business
procedures or any other information or knowledge which becomes known to Employee
as the result of or during his employment by the Employer.
10. Other Termination Provisions.
Notwithstanding anything herein contained to the contrary, Employer may
terminate this Agreement upon thirty (30) days' written notice to Employee upon
the happening of any of the following events:
a) the sale by Employer of substantially all of its assets;
b) a bona fide decision by Employer to terminate its business and
liquidate its assets; or
c) the merger or consolidation of Employer in a transaction in which
the shareholders of Employer receive less than fifty percent (50%) of the
outstanding voting shares of the new or continuing corporation.
11. Life and Disability Insurance.
During the Initial Term or any Extended Term, Employer shall insure
the life of Employee for such amount as the parties shall mutually agree upon.
The amount of such insurance shall be not less than One Million Dollars
($1,000,000). The premiums on such insurance shall be the obligation of
Employer, which shall be the owner of said policy. Upon Employee's death,
one-half (1/2) of the face value ($500,000) shall be paid to Employer, and the
other one-half ($500,000) to the Employee's estate.
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12. Indemnification.
In the event that Employee shall personally guarantee any loan(s) of
Employer, Employer may not terminate this Agreement until said loan(s) has been
paid in full or Employee is released from any personal liability pursuant to
said guarantee(s), and notwithstanding anything herein to the contrary, Employer
does hereby indemnify and agree to hold Employee harmless from and against all
losses, claims and expenses which Employee may sustain by reason of any
guarantee(s) executed by Employee for the benefit of Employer, including
reasonable attorneys' fees in defending against same.
13. Negative Covenant.
For a period of one (1) year following termination of this Agreement
due to expiration of the Term, or for any other reason identified in Paragraph 5
or Paragraph 10 hereof, Employee will not, on his own behalf or as partner,
officer, director, employee, consultant, or stockholder (holding more than ten
percent (10%) of the issued and outstanding stock of any firm or company) of any
other business, either directly or indirectly, solicit customers of Employer, or
any affiliates or subsidiaries of Employer (for the purposes of this Paragraph
13, defined in the aggregate as the "Company"), or perform any work, services,
or labor for or on behalf of any firm or company engaged in any business
competitive with or similar to the business of the Company in any state or
foreign country where the Company does business. Accordingly, the Company is
granted the right by Employee to apply to any court of competent jurisdiction
for one or more temporary or permanent injunctions enjoining Employee, his
agents and employees, from violating the provisions of this Agreement and/or
from continuing to breach such provisions. The negative covenant imposed, shall
not be effective for any purpose whatsoever if Employee is terminated without
cause.
14. Miscellaneous.
a) Entire Agreement. This Agreement embodies the entire agreement
between the parties hereto relative to the subject matter hereof and shall not
be modified, changed or altered in any respect except in writing signed by both
parties to this Agreement.
b) Benefits. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective next of kin, legatees,
administrators, executors, legal representatives, successors and permitted
assigns.
c) Attorneys Fees. In the event either party is required to obtain the
services of any attorney to enforce the provisions of this Agreement, the
prevailing party shall be entitled to its reasonable costs and attorney's fees
including expert witness fees, and costs of investigation.
d) Illegal Contract. In case any provision of this Agreement shall be
held invalid, illegal or unenforceable, in whole or in part, neither the
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validity of the remaining part of such provision, nor the validity of any other
provision of this Agreement shall in any way be affected thereby.
e) Waiver. A waiver of any breach of this Agreement, or of any of the
terms or conditions by either party thereto, shall not be deemed a waiver of any
repetition of such breach or in any way affect any other terms or conditions
hereof. No waiver shall be valid or binding unless it shall be in writing signed
by the parties.
f) Binding Effect. This Agreement, when executed by one duly
authorized officer of the corporation, shall bind the corporation and its
successors and assigns.
g) Successors and Assigns. Unless otherwise provided for, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective successors in interest and assigns, but in no event shall
any party be relieved of its obligations hereunder without the express written
consent of each other party.
h) Governing Law. This Agreement shall be governed by, the laws of the
State of Arizona. Each party hereby expressly and irrevocably consents to the
jurisdiction of the Arizona courts, and any action hereunder may be commenced
and tried only in a court of competent jurisdiction located in Maricopa County,
Arizona.
i) Time. Time is of the essence of this Agreement and each and every
provision hereof. Any extension of time granted for the performance of any duty
under this Agreement shall not be considered an extension of time for the
performance of any other duty under this Agreement.
j) Notices. Any notice to any party under this Agreement shall be in
writing, shall be effective on the earlier of (i) the date when received by such
party, or (ii) the date which is three (3) days after mailing (postage prepaid)
by certified or registered mail, return receipt requested, to the address of
such party set forth as follows:
To: EMPLOYER
President
Pacific Rim Entertainment, Inc.
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx XX 00000
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With a copy to:
Xxxxxx X. Xxxxxxx, Esq.
0000 X. 00xx Xxxxxx, Xxxxx #000
Xxxxxxx, Xxxxxxx 00000
To: EMPLOYEE
Xxxx Xxxxxxxxxx
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx XX 00000
k) Additional Acts and Documents. Each party hereto agrees to do all
such things and take all such actions, and to make, execute and deliver such
other documents and instruments, as shall be reasonably requested to carry out
the provisions, intent and purpose of this Agreement.
l) Guarantee of Payment. Employer will cause Osage Computer Group,
Inc. to ratify the terms and conditions of this Agreement and guarantee the
payment of all sums hereunder.
IN WITNESS WHEREOF the parties hereto have duly executed this
Agreement the day and year first above written.
EMPLOYER:
PACIFIC RIM ENTERTAINMENT, INC.
By:
-----------------------------
Its: President
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EMPLOYEE:
--------------------------------
Xxxx Xxxxxxxxxx
Ratified and Agreed:
OSAGE COMPUTER GROUP, INC.
By:
--------------------------
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