Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is effective as of February
28, 2005, is by and between RS Entertainment, Inc., a Utah Corporation, with
its principal place of business at 0000 X. Xxxxx Xxxx, Xxxx Xxxx Xxxx, XX
00000, hereinafter referred to as (the "RS Entertainment, Inc." or the
"Corporation"), and Xxxxxxx X. Xxxxxxxxx, hereinafter referred to as (the
"Employee").
ARTICLE 1.
TERM OF EMPLOYMENT
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1.1 Term. RS Entertainment, Inc. hereby employs the Employee and the
Employee hereby accepts employment with RS Entertainment, Inc. from March 1,
2005 until February 28, 2007.
1.2 Renewal. This Agreement shall continue for successive one (1)
year terms, unless either party gives notice of termination in writing to the
other party at least ninety (90) days prior to the expiration date.
ARTICLE 2.
DUTIES OF EMPLOYEE
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2.1 General Duties. The Employee agrees to serve as President and
C.E.O. of RS Entertainment, Inc. Corporation (RS Entertainment, Inc.) and to
perform diligently and to the best of his abilities the duties and services
pertaining to such office as set forth in the Bylaws of RS Entertainment, Inc.
that are currently in effect or as amended from time to time, as well as such
additional duties and services appropriate to such office as the Board of
Directors of RS Entertainment, Inc. ("Board of Directors") may reasonably
assign to Employee from time to time. Any action undertaken on behalf of RS
Entertainment, Inc. shall be done prudently and in good faith in furtherance
of the RS Entertainment, Inc.'s business and the business of RS Entertainment,
Inc.
2.2 Change in Duties. The duties of the Employee may be changed from
time to time by the mutual consent of RS Entertainment, Inc. and the Employee
without resulting in a rescission of this Agreement. Notwithstanding any such
change, the employment of the Employee shall be construed as continuing under
this Agreement as modified.
2.3 Devotion of Time to RS Entertainment, Inc.'s Business. The
Employee shall use his best efforts and shall devote his time and effort as
required to competently perform his duties.
ARTICLE 3.
COMPENSATION AND BENEFITS
3.1 Compensation. During the term of this Agreement, the Corporation
shall provide compensation to Employee in the following forms:
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Signing Bonus. Employee shall receive 1,000,000 shares of GKIG common
stock registered under form S-8 as an incentive for entering into this
agreement.
Base Salary. Employee shall receive an annual base salary of one hundred
fifty thousand dollars ($150,000) for 2005, which amount shall be subject to
annual review by the RS Entertainment, Inc. Board of Directors, thereafter.
Employee Benefit Plans. Employee shall be entitled to participate in all
employee benefit plans to be established by RS Entertainment's Board of
Directors on the same terms and conditions as all other employees similarly
situated, including reimbursement of reasonable expenses as approved by RS
Entertainment's Board of Directors.
3.2 Benefits. During the term of this Agreement, Employee shall be
afforded the following benefits as incidences of his employment:
(a) Health and Other. Employee and, to the extent applicable,
Employee's family, dependents and beneficiaries, shall be allowed to
participate in all benefits, plans and programs, including improvements or
modifications of the same, which are now, or may hereafter be, available to
employees of RS Entertainment, Inc. generally. Such benefits, plans and
programs may include, without limitation, a profit sharing plan, a thrift
plan, a health insurance or health care plan, life insurance, disability
insurance or a pension plan. RS Entertainment, Inc. shall not, however, by
reason of this paragraph be obligated to institute, maintain, or refrain from
changing, amending or discontinuing, any such benefit plan or program, so long
as such changes are similarly applicable to employees of RS Entertainment,
Inc. generally.
(b) Business and Entertainment Expenses. Subject to RS
Entertainment, Inc.'s standard policies and procedures with respect to expense
reimbursement as applied to its executive employees generally, RS
Entertainment, Inc. will reimburse Employee for, or pay on behalf of Employee,
reasonable and appropriate expenses incurred by Employee for business related
purposes, including dues and fees to approved industry and professional
organizations, and reasonable costs of entertainment incurred in connection
with business development. With regard to such expenses, the Employee shall:
(i) Keep an account book in which the Employee shall record at
or near the time that each expenditure is made:
(1) amount of the expenditure;
(2) the time, place and designation of the type of the
entertainment and travel, or other expense, or the date and description of the
gift (gifts made to one individual are not to exceed a total of twenty-five
dollars ($25.00) in any taxable year;
(3) the business reason for the expenditure and the nature
of the business benefit derived or expected to be derived as a result of the
expenditure; and
(4) the names, occupations, addresses, and other
information concerning each person who was entertained or given a gift
sufficient to establish a business relationship with RS Entertainment, Inc.;
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(ii) Obtain documentary evidence (such as a receipt for paid
xxxx), which states sufficient information to establish the amount, date,
place and the essential character of the expenditure, for each expenditure:
(1) Twenty-five dollars ($25.00) or more (except for
transportation charges if not readily available); and
(2) or lodging while traveling away from home. The
foregoing account book and documentary evidence shall be delivered to RS
Entertainment, Inc. whenever requested by RS Entertainment, Inc. and shall
thereafter be retained by the Employee.
3.3 Payroll and Deduction for Taxes. Employee shall receive all
compensation pursuant to this Agreement in accordance with RS Entertainment,
Inc.'s customary payroll practices with respect to time and manner of payment.
RS Entertainment, Inc. shall have the right to deduct from the compensation
due to the Employee hereunder any and all sums required for social security
and withholding taxes and for any other federal, state or local tax or charges
which may not be in effect or hereafter enacted or required as a charge on the
compensation of the Employee.
ARTICLE 4.
PROPERTY RIGHTS OF THE PARTIES
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4.1 Inventions, Copyrights, Patents and Trademarks. The Employee agrees
that he will promptly from time to time fully inform and disclose to RS
Entertainment, Inc. all inventions, designs, improvements, and discoveries
which he now has or may hereafter have during the term of this Agreement which
pertain or relate to the business of RS Entertainment, Inc. or to any
experimental work carried on by RS Entertainment, Inc., whether conceived by
the Employee alone or with others and whether or not conceived during regular
working hours. All such inventions, designs, improvements and discoveries
shall be the exclusive property of RS Entertainment, Inc.. The Employee shall
assist RS Entertainment, Inc. to obtain patents on all such inventions,
designs, improvements, and discoveries deemed patentable by things necessary
to obtain patent letters, vest RS Entertainment, Inc. with full and exclusive
title thereto, and protect the same against infringement by others.
4.2 Trade Secrets. The Employee during the term of employment under
this Agreement will have access to and become acquainted with various trade
secrets, consisting of devices, secret inventions, customer lists, customer
requirements and compilations of information, records and specifications,
which are owned by RS Entertainment, Inc. and which are regularly used in the
operation of the business of RS Entertainment, Inc.. The Employee shall not
disclose any of the aforesaid trade secrets, directly or indirectly or use
them in any way, either during the term of this Agreement or at any time
hereafter, except as required in the course of his employment. All files
records, documents, drawings, specifications, equipment, and similar items
relating to the business of RS Entertainment, Inc., whether prepared by the
Employee or otherwise coming into his possession, shall remain the exclusive
property of RS Entertainment, Inc. and shall not be removed from the premises
of RS Entertainment, Inc. under any circumstances whatsoever without the prior
written consent of RS Entertainment, Inc..
4.3 Non Solicitation of Customers After Termination of Employment. The
Employee shall not, for a period of one year, following the termination of
this Agreement, for whatever reason, either directly or indirectly:
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(a) Make known to any person, firm or corporation the names or
addresses of any of the customers of RS Entertainment, Inc. or any other
information pertaining to them; or
(b) Call on, solicit, or take away, or attempt to call on,
solicit, or take away any of the customers of RS Entertainment, Inc. on whom
the Employee called or with whom he became acquainted during his employment
with RS Entertainment, Inc. either for himself or for any other person, firm,
or corporation.
4.4 Ownership of RS Entertainment, Inc. and Customer Records. All
Records of RS Entertainment, Inc. and the accounts of customers and any other
records and books relating in any manner whatsoever to the customers of RS
Entertainment, Inc., whether prepared by the Employee or otherwise coming into
his possession, shall be the exclusive property of RS Entertainment, Inc.
regardless of who actually purchased the original book or record. All such
books and records shall be immediately returned to RS Entertainment, Inc. by
the Employee on any termination of his employment. If the Employee purchases
any such original book or record, he shall immediately notify RS
Entertainment, Inc., who then shall immediately reimburse him.
4.5 Return of RS Entertainment, Inc.'s Property. On termination of
employment or whenever requested by RS Entertainment, Inc., the Employee shall
immediately deliver to RS Entertainment, Inc. all property in his possession
or under his control belonging to RS Entertainment, Inc. including, but not
limited to the equipment, supplies, records, and other personal property under
Employee's control, which is RS Entertainment, Inc.'s, in good condition, with
ordinary wear and tear and damage by any cause beyond the reasonable control
of the Employee excepted.
ARTICLE 5.
NON-COMPETITION
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5.1 Non-Competition Agreement. In connection with this Employment
Agreement, Employee agrees that he shall not, either directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
shareholder, corporate officer, director, or in any other individual or
representative capacity, engage or participate in any business that is similar
to and/or in competition in any manner whatsoever with the business of RS
Entertainment, Inc. within the area, herein called "designated area"
consisting of the State of Utah, for so long as Employee is employed by, or
associated in any manner with RS Entertainment, Inc.. for a period of one (1)
year after the termination of Employee's employment with the RS
Entertainment, Inc., the employee shall not solicit personnel who have been
employed with RS Entertainment, Inc. in the past one year prior to the
termination.
5.2 Employee agrees not to solicit the customers of RS Entertainment,
Inc. for his personal account or the account of any other person or entity
other than RS Entertainment, Inc. at any time. The parties hereto agree that
notwithstanding any provisions of the Utah Codes that this covenant not to
compete is enforceable and necessary to protect RS Entertainment, Inc.'s trade
secrets including, but not limited to, patent and trademark designs, suppliers
and customer lists of RS Entertainment, Inc.
ARTICLE 6.
TERMINATION OF EMPLOYMENT
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6.1 Termination. Subject to the notice and other provisions of this
Section 6.1, RS Entertainment, Inc. shall have the right to terminate the
Executive's employment with RS Entertainment, Inc., and the Executive shall
have the right to resign from such employment, at any time and for no stated
reason.
(a) Disability. RS Entertainment, Inc. shall have the right to
terminate the employment of the Executive under this Agreement for disability
in the event Executive suffers an injury, illness or incapacity lasting for a
period of more than six (6) months provided that after such six (6) month
period RS Entertainment, Inc. shall have given at least ten (10) days written
notice of termination; provided further, however, that if the Executive is
eligible to receive disability payments pursuant to a disability policy paid
for by RS Entertainment, Inc., the Executive shall assign such benefits to RS
Entertainment, Inc. for all periods as to which he is receiving full payment
under this agreement.
(b) Death. This Agreement shall terminate upon the death of
Executive.
(c) With Cause. RS Entertainment, Inc. may terminate this
Agreement effective upon delivery of written notice to Executive given at any
time (without any necessity for prior notice) if any of the following shall
occur:
(1) Any material breach of Executive's obligations under this
Agreement not cured after ten (10) days notice from RS Entertainment, Inc.'s
Board of Directors:
(2) Executive's gross negligence in the performance of his
duties hereunder;
(3) Executive has committed any of the following: (i) a felony
criminal conviction; (ii) any other criminal conviction involving Executive's
lack of honesty or moral turpitude; (iii) drug or alcohol abuse; or (iv) acts
of dishonesty, gross carelessness or gross misconduct.
In the event executive's employment with RS Entertainment, Inc. is
terminated pursuant to items 6.1(a), (b), or (c), Executive or his beneficiary
shall be entitled to receive all base compensation earned by Executive up to
the date of termination and all un-reimbursed expenses. For a termination by
RS Entertainment, Inc. without good cause, Executive shall be entitled to
receive the base salary rate for the remaining Employment Term and all
un-reimbursed expenses.
6.2 Effect of RS Entertainment, Inc.'s Merger, Transfer of Assets or
Dissolution. This Agreement shall not be terminated by any merger or
consolidation where RS Entertainment, Inc. is not the consolidated or
surviving corporation but shall be terminated in the event of voluntary or
involuntary dissolution of RS Entertainment, Inc.. In the event of a merger,
consolidation or sale RS Entertainment, Inc. shall take all actions necessary
to insure that such corporation or transferee is bound by the provisions of
this Agreement.
ARTICLE 7.
GENERAL PROVISIONS
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7.1 Damages for Breach of Contract. In the event of a breach of this
Agreement by either RS Entertainment, Inc. or Employee resulting in damages
to the other party, the damaged party may recover from the breaching party,
any and all damages that may be sustained.
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7.2 Governing Law, Jurisdiction and Venue. This Agreement is entered
into under, and shall be governed for all purposes by, the laws of the State
of Utah. Any suit by RS Entertainment, Inc. to enforce any right hereunder
or to obtain a declaration of any right or obligation hereunder may, at the
sole option of RS Entertainment, Inc., be brought (i) in any court of
competent jurisdiction in the State of Utah or (ii) in any court of competent
jurisdiction where jurisdiction may be had over Employee. Employee hereby
expressly consents to the jurisdiction of the foregoing courts for such
purposes and to the appointment of the Secretary of State for the State of
Utah as his agent for service of process.
7.3 Notices. Any notices to be given hereunder by either party to the
other may be effected by personal delivery in writing by either registered or
certified mail, postage prepaid with return receipt requested. Mailed notices
shall be addressed to the parties at their last known address. Notices
delivered personally shall be deemed communicated as of five (5) days after
mailing.
7.4 No Waiver. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall (i) be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time or (ii) preclude insistence upon strict compliance in the
future.
7.5 Partial Invalidity and Severability. If a court of competent
jurisdiction determines that any provision of this Agreement is invalid or
unenforceable, then the invalidity or unenforceability of that provision shall
not affect the validity or enforceability of any other provision of this
Agreement, and all other provisions shall remain in full force and effect.
7.6 Assignment. This Agreement, and the rights and obligations of the
parties hereunder, are personal and neither this Agreement, nor any right,
benefit or obligation of either party hereto, shall be subject to voluntary or
involuntary assignment, alienation or transfer, whether by operation of law or
otherwise, without the prior written consent of the other party except that
vested rights to payment shall be subject to devise, and shall descend in
accordance with applicable laws of inheritance.
7.7 Attorney's Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs, and necessary
disbursements in addition to any other relief to which he may be entitled.
7.8 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules of the American Arbitration Association, and
judgment on the award rendered may be entered in any court having jurisdiction
thereof.
7.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of
which together will constitute one and the same Agreement.
7.10 Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of the Employee by RS Entertainment, Inc. and contains all
of the covenants and agreements between the parties with respect to such
employment in any manner whatsoever. Each party to this Agreement
acknowledges that no representations, inducements, promises or agreements,
orally or otherwise, have been made by any party, or anyone acting on behalf
of any party, which are not embodied herein, and that no other agreement,
statement, or promise not contained in this Agreement shall be valid and
binding. Any modification of this Agreement will be effective only if it is
in writing signed by the party to be charged.
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*** SIGNATURE PAGE FOLLOWS***
IN WITNESS WHEREOF, this Agreement is executed on the day and year first above
written.
RS Entertainment, Inc.
/S/ Xxxx X. Xxxxxxx
__________________________________
Xxxx X. Xxxxxxx, Vice President
EMPLOYEE
/s/ Xxxxxxx X. Xxxxxxxxx
___________________________________
Xxxxxxx X. Xxxxxxxxx
XX INTELLIGENT SYSTEMS, INC.
/s/ Xxxx X. Xxxxxxx
_______________________________
By: Xxxx X. Xxxxxxx
Its: President and CEO
