[EXHIBIT 10.2.1]
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of May 23,
2003, between Xxxx Xxxx ("Employee"), 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000,
Xxx Xxxxxxx, Xxxxxxxxxx 00000, and Film and Music Entertainment, Inc.
("Company"), 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000, XXX, on the following terms and conditions:
1. Engagement of Services. Company wishes to retain the services of
----------------------
Employee in connection with certain matters relating to Company's business,
as more fully described in Section 3 hereof, and Employee is willing to
provide Such services.
2. Term. The term of this Agreement (the "Term") shall commence as of
----
the date set forth above and continue for a period of Five (5) years, or
upon thirty days' prior written notice from either party.
3. Services to be Provided. Employee agrees that Employee will, on a
----------------------
non-exclusive basis and consistent with Employee's other professional
commitments render to Company such Employment services as President and
Member of the Board of Directors of Company. Employee further agrees at all
times not to engage in conduct which will disparage the reputation of
Company and/or Company's technology, products and services or which might
tend to adversely affect the market price of Company's common stock.
Employee shall not be required at any time to render services that would
materially interfere with Employee's prior professional obligations.
4. Compensation. All compensation provided for under this section 4
------------
shall be provided on a "Most Favored Nations Basis" with that of Xxxxxxx
Xxxxx.
4.1 Base Salary. Provided Employee shall faithfully and completely
perform the services required hereunder and otherwise fulfill his
obligations under this Agreement, Company shall pay Employee, as full
compensation for the services requested of Employee hereunder
(a) For all work performed at the rate of .00) per year.
(b) In addition to the Base Salary, the Company, at its sole
discretion and with the approval of the Compensation Committee of the Board
of Directors, provide Employee with a cash, or non-cash bonus.
(c) All compensation under this section shall be payable in
accordance with Employer's normal practices.
4.2 Options. The Company will, upon execution of this
Agreement, grant Employee options pursuant to the Non-Qualified Stock
Option Agreement attached hereto and incorporated herein as "Exhibit B",
purchase Eighteen Million (18,000,000) shares of the common stock of the
Company restricted under Rule 144 of the United States Security and
Exchange Commission, exercisable at a price of Fifty (50%) of the closing
price of May 6, 2003, and pursuant to the terms embodied in the Xxxx
Xxxx/Film and Music Entertainment, Inc. Voting Trust Agreement attached
hereto as "Exhibit A" becoming a part of the whole hereof. Options granted
hereunder shall be considered "Dripped Out" pursuant to and in compensation
for the work performed under this Agreement for the period ending prior to
the Drip Out date as specified in Section 3 of Exhibit A
4.3 Benefits. During the Employment Term, Employee shall be
entitle to participate in all benefit plans available to other employees of
Employer of similar stature on terms no less favorable than provided to any
other employee of similar stature.
5. Expenses.
--------
(a) In General. Employee may incur various costs and expenses in
performing his services under this Agreement. Company agrees to pay for
only those reasonable costs and expenses by prior written agreement of the
Company.
(b) Out of Town Travel. Company agrees to pay transportation,
meals, lodging and all other costs of any necessary out-of-town travel by
Employee (with air travel to be coach class for Employee). Prior written
approval by Company shall be required for all air travel in connection with
this Agreement.
Employee shall invoice Company promptly for the foregoing expenses.
Such invoices shall be payable within 30 days of receipt.
6. Termination For "Cause".
-----------------------
Employer may terminate Employee's employment for "cause" as defined in
this section at any time upon written notice to Employee. As used herein
the term "cause" shall mean anyone or combination of the following:
(i) Employee's arrest for or conviction of any crime (whether or
not involving Employer) which constitutes a crime of moral turpitude or is
punishable by imprisonment of one year or more.
(ii) Employee's act or omission or act constituting fraud,
dishonesty or misrepresentation, whether prior or subsequent to the date
hereof, including, without limitation any fraud dishonesty or
misrepresentation relating to Employee's hiring by Employer.
(iii) Any act or omission by Employee involving willful
malfeasance or willful gross negligence or constituting a material breach
of this Agreement.
(iv) Employee's failure, inability (which does not qualify as a
disability under federal or state
law, or refusal to perform Employee's duties in a manner satisfactory to
Employer. Employer's good faith judgment as to Employee's ability to
perform Employee's duties shall be controlling.
(v) Employee' s violation of any material rule or regulation of
Employer applicable to other Employees of similar stature.
Not withstanding the foregoing, Employee shall not be deemed in breach
of this provision unless and until Employer shall have given Employee
written notice describing the breach and Employee shall have failed to cure
the breach within three (3) business days after Employee's receipt of that
written notice, provided that there shall be no cure period with respect to
any matter incapable of being cured. Employee shall not be required to give
a second notice and opportunity to cure with respect to any breach by
Employee.
7. Employee authorizes and agrees that Employer retains the right
of offset and may deduct from the compensation payable to Employee under
this Agreement the amount of any debts owed by Employee to Employer
including, but not limited to, any outstanding loans, unpaid advances and
the value of any Employer property retained by Employee.
8. Confidentiality. In connection with Employee's services
---------------
hereunder, Company w\ill be disclosing to Employee certain
confidential information all of which Company considers to be
secret or proprietary ("Proprietary Information"), and Employee
agrees, during the Term and forever after the expiration or
termination of this Agreement, to hold the Proprietary
Information in confidence, and not to disclose such Proprietary
Information to third parties (except pursuant to judicial
process) or to use such Proprietary Information for Employee's
own account, without Company's prior written authorization.
Proprietary Information shall be used by Employee only in
connection with services rendered pursuant to this Agreement.
Proprietary information shall not be deemed to include
information that: (a) is in or becomes in the public domain
without violation of this
Agreement by Employee, or (b) is already in the possession of
Employee, as evidenced by written documents, prior to the
disclosure thereof by Company, or (c) is rightfully received from
a third entity having no obligation to Company and without
violation of this Agreement by Employee. Employee shall not issue
any publicity or statements to the press or third parties
regarding Company, or its technology, products or services,
without Company's prior written consent in each instance.
9. Company's Duties. Company agrees to cooperate with
----------------
Employee, to abide by this Agreement, and to pay Employee's bills
on time.
10. Warranties. Employee warrants that Employee is under no
----------
obligation to any third party that would prevent Employee from
rendering the services contemplated by this Agreement, and that
Employee is free to enter into this Agreement. Company warrants
that Company is under no obligation to any third party that would
prevent Company from performing its obligations under this
Agreement and that Company is free to enter into this Agreement.
11. Indemnity .Employee will indemnify and hold harmless
---------
Company from any and all liabilities, costs, and expenses
(including attorney' s fees) incurred by reason of any breach of
this Agreement by Employee. The Company will indemnify and hold
harmless Employee from any and all liabilities, costs, and
expenses (including attorney's fees) incurred by reason of any
breach of this Agreement by Company.
12. No Injunctive Relief. In the event of any breach or an
-------------------
alleged breach of this Agreement by Company, it is acknowledged
that Employee's rights and remedies shall be strictly limited to
the right of Employee to recover damages in an action at law, and
in no event shall Employee be entitled to rescind this Agreement,
revoke any of the rights herein granted or to equitable or
injunctive relief, including without limitation specific
performance.
13. Notices. Any notice required or permitted to be given
-------
hereunder shall be in writing and shall be personally delivered,
including by messenger or courier (e.g., delivery by Federal
Express or other similarly recognized air express company),
or by certified or registered mail, return receipt requested,
postage prepaid, to Employee at the address previously
inscribed or to Company at Pervasys, Inc., 0000 Xxxxxxx Xxxx Xxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, XXX, with a copy
to Alexander, Xxx, Xxxxxxxx & Xxxxxx, LLP, Attention: Xxxxxx X.
Xxx, 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000, XXX. Any party may change its address for notices
hereunder by giving written notice in the manner provided for
herein.
14. Disability. If Employee becomes "Materially Disabled"
----------
(as defined in this Section) during the Employment Term, Employer
may, at its election, terminate this Agreement, except that
Employee's obligations under Sections 9, 11, and 12 of this
Agreement shall survive any such termination. "Material
Disabled" shall mean any instance where employee becomes unable,
as a result of a serious health condition (other than
pregnancy-related disability), to render full services as
contemplated by this Agreement for any period totaling more than
four (4) weeks in the aggregate during any twelve (12) month
period. In the event of termination pursuant to this Section 14,
Employer shall thereupon be released and discharged from all
further obligations under this Agreement, except for any vested
benefits and unpaid Base Salary for time worked.
15. Death. In the event of Employee's death, this Agreement
-----
shall terminate, and Employee shall thereupon be released and
discharged from all further obligations under this Agreement,
except for any vested benefits and unpaid earned Base Salary for
time worked.
16. Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties. No modification or amendment of
this Agreement shall be binding unless executed in writing by all
the parties.
17. Assignability. This agreement is not assignable by either
-------------
party without the prior written consent of the other.
18. Severability. If any provision of this Agreement is
------------
declared invalid, illegal or incapable of being enforced, all of
the remaining provisions of this Agreement shall nevertheless
continue in full force and effect.
19. Arbitration. Any dispute, controversy or claim arising
-----------
out of or relating to the enforcement, interpretation or alleged
breach of this Agreement, or the services rendered pursuant to
this Agreement, shall be submitted to and resolved by binding
arbitration in Los Angeles, California in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator
may be entered in and enforceable by any court having jurisdiction.
20. Choice of Law. This Agreement shall be construed and
-------------
enforced in accordance with the laws of the State of California,
United States of America.
In Witness Whereof, the undersigned have executed this Agreement as
of the date first set forth above.
Xxxx XxXx
("Employee")
("Company")
Film and Music Entertainment, Inc.
By:/s/Xxxxxxxx X. Xxxxxx
-------------------------------
Its: Secretary
