EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of this 1st day of January, 2004, between American Stellar Energy , Inc. a
Nevada corporation (the "Company"), and Xxxxxxx X. Xxxxxx Xx., an individual
(the "Executive"), whose is located at 0000 Xxxxx Xxxxx, Xxxxxxx, XX 00000
and Acorn Holdings.
RECITALS
WHEREAS, the Executive is desirous of being employed by the Company; and
WHEREAS, the Company has agreed with Acorn Holdings who will provide the
services of the Executive, upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Company and the Executive do hereby agree as follows:
1. Recitals. The above recitals are true, correct, and are herein
incorporated by reference.
2. Employment. The Company hereby employs the Executive in the capacity of
Chief Executive Officer, President, and Director for American Stellar Energy,
Inc. and the Executive hereby accepts such employment, upon the terms and
conditions hereinafter set forth.
3. Duties During Employment Period. During the "Term" (including any renewals
thereof) as defined in Section 5 of this Agreement, the Executive shall:
A. Diligently devote the Executive's time and efforts to the
business and affairs of the Company and subsidiaries. The Executive shall
have such duties and powers that are commensurate and consistent with those of
a Chief Executive Officer and Director, subject to the authority and direction
of the Company's Board of Directors; and
B. Devote attention and render services to the Company and shall
be employed by the Company according to the terms and conditions of this
Agreement.
4. Compensation and Benefits
A. Salary. The Executive shall be paid a base salary (the "Base
Salary"), payable monthly, in arrears, at an annual rate of no less than
Ninety Six Thousand Dollars ($96,000.00) per year.
B. Bonus. As additional compensation, the Executive shall be
entitled to receive a bonus ("Bonus") for each fiscal year during the Term and
each Renewal Term in the amount as to be determined by the Company's Board of
Directors and based on the accepted approved Pro Forma Profit and Loss annual
budgets of the company and operating subsidiaries.
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C. Employee Benefits. The Executive shall be entitled to
participate in all benefit programs of the Company currently existing, or
hereafter made available to executives and/or other executive employees,
including, but not limited to, pension and other retirement plans, including
any 401K Plan, group life insurance, dental, hospitalization, surgical and
major medical coverage, sick leave, salary continuation, vacation and
holidays, long-term disability, and other fringe benefits.
D. Dental, Optical, and Medical Insurance. The Company shall
provide dental, optical, hospitalization, surgical and major medical coverage
for the Executive and Executive's family.
E. Vacation. During each year of the Term, and each year of any
Renewal Term, the Executive shall be entitled to four (4) weeks of vacation
time to be utilized or paid for each year, or accrue and carry over into the
following year; provided, however, that the Executive shall evidence
reasonable judgment with regard to appropriate vacation scheduling.
F. Business Expense Reimbursement. The Executive shall be
provided with Company credit cards, either American Express or Visa/Master
Card, for business travel and entertainment, and the Executive shall be
entitled to receive proper reimbursement for all reasonable, out-of-pocket
expenses incurred directly by the Executive (in accordance with the policies
and procedures established by the Company for its executive officers),
including first class accommodations in performing services hereunder.
G. Portable Cellular Telephone. The Company shall provide the
Executive with a portable cellular telephone and a GSM phone that operates in
the countries served by the Company, and the Company shall also be responsible
for all costs and expenses in connection with such telephones, including, but
not limited to, monthly service charges and maintenance, usage charges and
long distance, whether these be incurred for personal or Company business.
H. Stock. The Executive shall receive 1. Options as may be
determined, from time to time, by the Company's Board of Directors.
The Executive shall have the right to sell or transfer any or all of the
shares, or options, except as to any shares or options covered in an Executive
Company share pooling agreement.
I. Insurance and Disability Payments. The Company agrees to
obtain at its sole expense, and for the benefit of the Executive's heirs, life
insurance policies on the Executive in the amount of no less than ten (10)
times Executive's current rate of salary. Furthermore, the Company agrees to
provide, at its sole expense, a disability policy for the Executive which
shall provide for payments equal to one hundred percent (100%) of Executive's
current salary.
J. Computers. Executive will be provided with a fixed location
computer to be selected by the Executive to be used by the Executive at the
location selected by Executive. The Company will also provide Executive with a
laptop computer to his specification. Executive will have the option to
return such computers to the Company upon Executive's employment termination,
or at his option, he may retain such computers for his personal benefit upon
his departure from the Company.
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5. Term. The term of employment hereunder will commence on the Effective
Date and end one (1) year from such Effective Date (the "Term"), unless
terminated pursuant to Section 6, of this Agreement, provided that the
Executive and the Company may, upon mutual written consent, renew this
Agreement for such duration as may be mutually agreed upon by the parties
("Renewal Term"). For purposes of this Agreement, "Effective Date" shall mean
January 1, 2004.
6. Consequences of Termination of Employment.
A. Death. In the event of the death of the Executive during the
Term or Renewal Term of this Agreement, salary shall be paid to the
Executive's designated beneficiary, or, in the absence of such designation, to
the estate or other legal representative of the Executive for a period of one
(1) year from and after the date of death. The Company shall also be
obligated to pay to the Executive's estate or heirs, as the case may be, any
accrued or declared Bonus. Other death benefits will be determined in
accordance with the terms of the Company's benefit programs and plans.
B. Disability.
1. In the event of the Executive's disability, as hereinafter defined,
the Executive shall be entitled to compensation in accordance with the
Company's disability compensation practice for senior executives, including
any separate arrangement or policy covering the Executive, but in all events
the Executive shall continue to receive the Executive's salary for a period,
at the annual rate in effect immediately prior to the commencement of
disability, of not less than one (1) year from the date on which the
disability has deemed to occur as hereinafter provided below. Any amounts
provided for in this Section 6B shall be offset by other long-term disability
benefits provided to the Executive by the Company.
2. "Disability," for the purposes of this Agreement, shall be deemed to
have occurred in the event i) the Executive is unable by reason of sickness
or accident to perform the Executive's duties under this Agreement for a
cumulative total of twelve (12) weeks within any one calendar year; or
ii) the Executive is unable to perform Executive's duties for ninety
(90) consecutive days; or
iii) the Executive has a guardian of the person or estate appointed by a
court of competent jurisdiction. Termination due to disability shall be
deemed to have occurred upon the first day of the month following the
determination of disability as defined in the preceding sentence.
Anything herein to the contrary notwithstanding, if, following a termination
of employment hereunder due to disability as provided in the preceding
paragraph, the Executive becomes re-employed by a third party, whether as an
executive or as a consultant, any salary, annual incentive payments or other
benefits earned by the Executive from such employment shall offset any salary
continuation due to the Executive hereunder commencing with the date of
re-employment.
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C. Termination by the Company for Cause
1. Nothing herein shall prevent the Company from terminating employment
for "Cause" as hereinafter defined. The Executive shall continue to receive
salary only for the period ending with the date of such termination as
provided in this Section 6C. Any rights and benefits the Executive may have
in respect of any other compensation shall be determined in accordance with
the terms of such other compensation arrangements or such plans or programs.
2. "Cause" shall mean:
(a) committing or participating in an injurious act of fraud, gross
neglect, intentional misrepresentation, or embezzlement against the Company;
or
(b) committing or participating in any other injurious act of omission
wantonly or willfully against the Company, monetarily or otherwise.
3. Notwithstanding anything else contained in this Agreement, this
Agreement will not be deemed to have been terminated for Cause unless and
until there shall have been delivered to the Executive a notice of termination
stating that the Executive committed one of the types of conduct set forth in
this Section 6C contained in this Agreement and specifying the particulars
thereof and the Executive shall be given a thirty (30) day period to cure such
conduct set forth in Section 6C.
D. Termination by the Company Other than for Cause.
The foregoing notwithstanding, the Company may terminate the Executive's
employment for whatever reason it deems appropriate; provided, however, that
in the event such termination is not based on Cause, as provided in Section 6C
above, or if Executive's employment is terminated under Sections 6F or 6G
hereof, the Company shall continue to be obligated to pay to Executive all
salary and current and future Bonuses and Executive shall be entitled to all
stock options earned or not yet earned through the Term (and any Renewal Term)
of this Agreement and Company will register all shares owned by the
Executive, his family, and companies controlled by the Executive or his family
as well as all options at Company's expense.
E. Voluntary Termination.
In the event the Executive terminates the Executive's employment on the
Executive's own volition (except as provided in Section 6F and/or Section 6G
prior to the expiration of the Term or Renewal Term of this Agreement,
including any renewals thereof), such termination shall constitute a voluntary
termination and in such event the Executive shall be limited to the same
rights and benefits as provided in connection with Section 6A.
F. Constructive Termination of Employment.
A termination by the Company without Cause under Section 6D shall be deemed
to have occurred upon the occurrence of one or more of the following events
without the express written consent of the Executive:
1. a significant change in the nature or scope of the authorities,
powers, functions, duties or responsibilities attached to Executive's position
as described in Section 3; or
2. a change in Executive's principal office to a location not conducive
to operating in North America.
3. A five percent (5%) reduction in the Executive's salary below the
salary in effect immediately prior to such reduction or a reduction in any
Bonus announced to Executive by the Company's Board of Directors; or
4. A material breach of this Agreement by the Company; or
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5. A material reduction of the Executive's benefits under any employee
benefit plan, program or arrangement (for Executive individually or as part of
a group) of the Company as then in effect or as in effect on the Effective
Date of this Agreement, which reduction shall not be effectuated for similarly
situated employees of the Company; or
6. Failure by a successor company to assume the obligations of the
Company under this Agreement; or
7. If at any time Executive is not a member of the Board of Directors of
the Company.
G. Termination Following a Change of Control.
1. In the event that a "Change in Control," as hereinafter defined, of
the Company shall occur at any time during the Term or Renewal Term hereof,
the Executive shall have the right to terminate the Executive's employment
under this Agreement upon thirty (30) days written notice given at any time
within one (1) year after the occurrence of such event, and such termination
of the Executive's employment with the Company pursuant to this Section 6G1,
then, in any such event, such termination shall be deemed to be a termination
by the Company other than for Cause and the Executive shall be entitled to
such compensation and benefits as set forth in Section 6D of this Agreement.
2. For purposes of this Agreement, a "Change in Control" of the Company
shall mean a change in control:
a) as set forth in Section 280G of the Internal Revenue Code; or
b) the occurrence of any of the following:
i) any person, group or organization, other than the Executive, is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined voting power
of the Company's outstanding securities then having the right to vote at
elections of directors; or
ii) the individuals who at the Effective Date of this Agreement
constitute the Board of Directors cease for any reason to constitute a
majority thereof unless the election, or nomination for election, of each new
director was approved by the Executive; or
iii) there is a failure to elect two or more (or such number of
directors as would constitute a majority of the Board of Directors) candidates
nominated by management of the Company to the Board of Directors; or
iv) the business or over fifty percent (50%) of the business revenues of
the Company for which the Executive's services are principally performed is/
are disposed of by the Company pursuant to a partial or complete liquidation
of the Company, a sale of assets (including stock of a subsidiary of the
Company) or otherwise.
Anything herein to the contrary notwithstanding, this Section 6G2 will
not apply where the Executive gives the Executive's explicit written waiver
stating that for the purposes of this Section 6G2 a Change in Control shall
not be deemed to have occurred. The Executive's participation in any
negotiations or other matters in relation to a Change in Control shall in no
way constitute such a waiver which can only be given by an explicit written
waiver as provided in the preceding sentence.
An "Attempted Change in Control" shall be deemed to have occurred if any
substantial attempt, accompanied by significant work efforts and expenditures
of moneys made to accomplish a Change in Control, as described in Section 6G2
above, whether or not such attempt is made with the approval of a majority of
the then current members of the Board of Directors.
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3. In the event that, within twelve (12) months of any Change in Control
of the Company or any Attempted Change in Control of the Company, the Company
terminates the employment of the Executive under this Agreement, for any
reason other than for Cause as defined in Section 6C2, then, in any such
event, such termination shall be deemed to be a termination by the Company
other than for Cause and the Executive shall be entitled to such compensation
and benefits as set forth in Subsection 6D of this Agreement.
4. For purposes of this Section 6G, the Executive's employment shall be
deemed constructively terminated in the event one or more of the following
events occurs without the express written consent of the Executive:
a) Significant change in the nature or scope of the authorities, powers,
functions, duties or responsibilities attached to Executive's position as
described in Section 3; or
b) A five percent (5%) reduction in the Executive's salary below the
salary in effect immediately prior to such reduction or a reduction in any
Bonus announced to Executive by the Company's Board of Directors; or
c) Material breach of this Agreement by the Company; or
d) Material reduction of the Executive's benefits under any employee
benefit plan, program or arrangement (for Executive individually or as part of
a group) of the Company as then in effect or as in effect on the Effective
Date of this Agreement, which reduction shall not be effectuated for similarly
situated employees of the Company; or
e) Failure by a successor company to assume the obligations of Company
under this Agreement;
f) Change in the Executive's principal office to a location not
conducive to operating in North America
g) Executive is not re-elected in his current capacity or is not
re-elected to be a director of the Company; or
h) The Company's Board of Directors elects any chairman without the
express written consent of the Executive.
5. Anything in this Section 6G to the contrary notwithstanding, in no
event will any action or non-action by the Executive at any time prior to the
first anniversary date of the applicable Change in Control or Attempted Change
in Control (including any action or non-action prior to the Effective Date of
this Agreement) be deemed consent to any of the events described in this
Section 6G.
7. Non-Disclosure of Confidential Information.
A. Executive acknowledges that the Company's trade secrets,
private or secret processes, as they exist from time to time, business records
and plans, inventions, acquisition strategy, price structure and pricing,
discounts, costs, computer programs and listings, source code and/or subject
code, copyright, trademark, proprietary information, formulae, protocols,
forms, procedures, methods for operating the Company's business, credit and
financial data concerning the Company's clients, sales presentations,
revenues, acquisitions, practices and plans and information which is embodied
in written or otherwise recorded form, and other information of a confidential
nature not known publicly or by other companies selling to the same markets
(collectively, the "Confidential Information") are valuable, special and
unique assets of the Company, access to and knowledge of which have been
provided to Executive by virtue of Executive's association with the Company.
In light of the highly competitive nature of the industry in which the
Company's business is conducted, Executive agrees that all Confidential
Information, heretofore or in the future obtained by Executive as a result of
Executive's association with the Company, shall be considered confidential.
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B. The Executive agrees that the Executive shall:
1) hold in confidence and not disclose or make available to any third
party any such Confidential Information obtained directly or constructively
from the Company, unless so authorized in writing by the Company;
2) exercise all reasonable efforts to prevent third parties from gaining
access to the Confidential Information;
3) take such protective measures as may be reasonably necessary to
preserve the confidentiality of the Confidential Information.
C. Excluded from the Confidential Information, and therefore not
subject to the provisions of this Agreement, shall be any information which
the Executive can show:
1) at the time of disclosure, is in the public domain; or
2) after the disclosure, enters the public domain by way of printed
publication through no fault of the Executive; or
3) was in his possession at the time of disclosure and which was not
acquired directly or indirectly from the Company; or
4) was acquired, after disclosure, from a third party who did not
receive it from the Company, and who had the right to disclose the information
without any obligation to hold such information confidential.
D. Upon written request of the Company, Executive shall return to
the Company all written materials containing the Confidential Information.
8. Covenants as Essential Elements of this Agreements; Survival of Covenants.
It is understood by and between the parties hereto that the foregoing
covenants by Executive contained in Section 7 of this Agreement shall be
construed to be agreements independent of any other element of Executive's
relationship with the Company. The existence of any other claim or cause of
action, whether predicated on any other provision in this Agreement, or
otherwise, as a result of the relationship between the parties, shall not
constitute a defense to the enforcement of the covenants in Section 7 of this
Agreement against Executive.
9. Remedies and Enforcement.
A. Executive acknowledges and agrees that the Company's remedy at
law for a breach of any of the provisions of Section 7 herein would be
inadequate and the breach shall be per se deemed as causing irreparable harm
to the Company. In recognition of this fact, in the event of a breach by
Executive of any of the provisions of Section 7, Executive agrees that, in
addition to any remedy at law available to the Company, including, but not
limited to monetary damages, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available to the Company.
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B. It is further expressly understood and agreed that the
provisions of this Agreement shall apply whether this Agreement is terminated
by Company or Executive or upon its expiration or termination.
C. Nothing herein contained shall be construed as prohibiting
Company or Executive from pursuing any other remedies available to it/ him for
any breach or default of this Agreement.
10. Litigation-Attorneys' Fees.
In connection with any litigation arising out of the enforcement of this
Agreement or for its interpretation, the prevailing party shall be entitled to
recover its costs, including reasonable attorneys' fees, at the trial and all
appellate levels from the other party hereto, who was the adverse party to
such litigation; however, the Company will advance to the Executive a minimum
of $10,000, if the Company files any litigation as a result of this Agreement
to cover Executive's legal costs and continue to fund Executive's legal
defense fees to the extent required to defend against the Company's actions.
In addition, the Company agrees to pay for any and all legal work or
representation required to defend and or settle any claims made by or against
Executive as a result of his employment with the Company.
11. Freedom to Contract.
The Executive represents and warrants that the Executive has the right to
negotiate and enter into this Agreement, and that this Agreement does not
breach, interfere with or conflict with any other existing contractual
agreement
12. Effect on Prior Agreements.
This Agreement supersedes any and all prior oral or written agreements,
concerning the subject matter hereof, in their entirety between the parties,
which shall be void and of no further force and effect after the date of this
Agreement.
13. Notices.
Any notice required or permitted to be given under the terms of this
Agreement shall be sufficient if in writing and if sent postage prepaid by
registered or certified mail, return receipt requested, by overnight delivery,
or by courier to the addresses of the respective parties set forth in the
preamble of this Agreement.
14. Waiver.
Unless agreed in writing, the failure of either party, at any time, to require
performance by the other of any provision hereunder shall not affect its
rights thereafter to enforce the same, nor shall a waiver by either party of
any breach of any provision hereof be taken or held to be a waiver of any
other preceding or succeeding breach of any term or provision of this
Agreement. No extension of time for the performance of any obligation or act
shall be deemed to be an extension of time for the performance of any other
obligation or act hereunder.
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15. Complete Agreement.
This Agreement contains the entire agreement between the parties hereto with
respect to the contents hereof and supersedes all prior agreements and
understandings between the parties with respect to such matters, whether
written or oral. Neither this Agreement nor any term or provision hereof may
be changed, waived, discharged or amended in any manner other than by an
instrument in writing, signed by the party against which the enforcement of
the change, waiver, discharge or amendment is sought.
16. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which shall constitute one agreement.
17. Binding Effect/Assignment.
This Agreement shall be binding upon the parties hereto, their heirs, legal
representatives, successors and assigns. This Agreement shall not be
assignable by the Executive but shall be assignable by the Company in
connection with the sale, transfer or other disposition of its business or to
any of the Company's affiliates controlled by or under common control with the
Company, with the written approval of Executive.
18. Governing Law, Venue, Waiver of Jury Trial.
The parties agree that this Agreement shall be deemed made and entered into in
the State of Nevada and shall be governed and construed under and in
accordance with the laws of the State of Nevada without giving effect to any
principles of conflicts of law. Company and Executive acknowledge and agree
that the Judicial Circuit, shall be the exclusive venue and proper forum in
which to adjudicate any case or controversy arising either, directly or
indirectly, under or in connection with this Agreement in these courts, they
will not contest or challenge the jurisdiction or venue of these courts. The
parties further agree and hereby waive and release any right to a trial by
jury in any action arising out of the interpretation, enforcement or breach of
this Agreement.
19. Headings.
The headings of the sections are for convenience only and shall not control or
affect the meaning or construction or limit the scope or intent of any of the
provisions of this Agreement.
20. Survival.
Any termination of this Agreement shall not affect the ongoing provisions of
this Agreement which shall survive such termination in accordance with their
terms.
21. Severabililty.
Whenever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or any other jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
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22. Construction.
This Agreement shall be constructed within the fair meaning of each of its
terms and not against the party drafting the document.
23. Service Restriction.
Nothing in this Agreement will prevent or restrict Executive from serving on
the Board of Directors of any public or private companies and receive
compensation from such service.
THE PARTIES TO THIS AGREEMENT HAVE READ THIS AGREEMENT, UNDERSTAND ITS TERMS
AND CONDITIONS, HAVE HAD THE OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL
OF THEIR OWN CHOICE AND AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
/s/ Xxxxxxxxx Xxxxxxxx
______________________________
AMERICAN STELLAR ENERGY, INC.
/s/ Xxxxxxx X. Xxxxxx Xx.
______________________________
ACORN HOLDINGS
/s/ Xxxxxxx X. Xxxxxx Xx.
______________________________
Xxxxxxx X. Xxxxxx Xx.
