EMPLOYMENT AGREEMENT
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AGREEMENT made this day of 2000, by and between 1ST
MIRACLE GROUP, INC., having a place of business at 0000 Xxxxxx Xxxx., Xxxxxxxxx
Xxxx, Xxxx Xxxxxxxxx, Xxxxxxxxxx 00000, (hereinafter referred to as "EMPLOYER")
and XXXXXXX X. XXXXXXX residing at 00 Xxxxxxxxx Xxxxxxx Xxxx, Xxxxxxx, Xxx
Xxxxxxxxx 00000 (hereinafter referred to as "EMPLOYEE").
W I T N E S S E T H:
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WHEREAS, the EMPLOYER is engaged in the business of making
and producing movies for worldwide distribution; and
WHEREAS, the EMPLOYER is desirous of employing EMPLOYEE
and
EMPLOYEE wishes to be employed by EMPLOYER in accordance
with the terms and conditions set forth in this Agreement; and
WHEREAS, EMPLOYER and EMPLOYEE have heretofore entered
into Consulting Arrangements; and
WHEREAS, EMPLOYER is desirous of providing the within
Employment Agreement in order to secure the services of EMPLOYEE.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL
COVENANTS AND PROMISES AND OTHER GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT OF WHICH IS
HEREBY ACKNOWLEDGED, IT IS MUTUALLY AGREED AS
FOLLOWS:
FIRST: EMPLOYER and EMPLOYEE are agreeable to enter into
an Employment Agreement, and the within Employment Agreement ("Agreement")
supersedes all Consulting Agreements. The EMPLOYER does hereby employ EMPLOYER
as Chief Executive Officer, for a period of five (5) years, commencing June 1,
2000 and terminating May 31, 2005. The duties of EMPLOYEE as Chief Executive
Officer shall include, but not be limited to, managing the business of the
EMPLOYER, its relationship with current and potential investors, obtaining the
support of a well-established, well-known market-maker for the EMPLOYER's
securities, and obtaining financing for EMPLOYER, in addition to assisting
EMPLOYER in the production, promotion and distribution of existing film and
movie properties, as well as in the production of new movie and film
productions.
It is agreed that EMPLOYEE will have the right to act as a
consultant for various companies during the term of the within Agreement so long
as consulting work does not interfere with EMPLOYEE's duties or compete with
EMPLOYER, except as provided for in Paragraph "THIRD" herein.
SECOND: EMPLOYEE agrees that he will, at all times,
faithfully, industriously, and to the best of his ability, experience and
talent, perform all of the duties that may be required of and from him, pursuant
to the expressed and implicit term hereof.
THIRD: EMPLOYER shall pay to the EMPLOYEE, and the
EMPLOYEE agrees to accept from the EMPLOYER, in full payment for the EMPLOYEE
services hereunder, compensation at the rate of $425,000 per annum. EMPLOYEE
will be paid on the first day of each month during the term of the within
agreement. Additionally, EMPLOYER agrees to pay to EMPLOYEE, upon execution of
the within Agreement, a "sign on" bonus in the sum of $150,000.
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It is further understood and agreed that EMPLOYEE will
have the right to receive production fees, based upon new productions and/or
movies introduced by EMPLOYEE and produced by EMPLOYER during the term of the
within Agreement. EMPLOYEE will be entitled to receive a production and/or
producer fee on the production of each movie made by EMPLOYER, which fee will be
agreed upon by EMPLOYEE. The fee will be a percentage of the budget of said
production or movie. In the event EMPLOYER and EMPLOYEE do not mutually agree
with respect to the payment of a production fee, EMPLOYEE will have the right to
offer said production or movie to any other entity or organization which will
not be a violation of the within Agreement. EMPLOYER and EMPLOYEE understand and
agree that EMPLOYER has the right of first offer, as stated herein, and that
EMPLOYEE is provided the within as a part of EMPLOYEE's compensation, as
EMPLOYEE has agreed to the within annual base salary compensation conditioned
upon EMPLOYEE being able to, and having the right to, additional production
and/or movie fees, as provided for herein.
EMPLOYER agrees to provide a monthly automobile allowance
for the maintenance, lease, insurance and all other related expenses for an
automobile to be used by EMPLOYEE in the business of EMPLOYER, in addition to a
monthly housing allowance. Additionally, EMPLOYER further agrees to reimburse
EMPLOYEE for all business and business related expenses incurred by EMPLOYEE
during the term of his employment. EMPLOYEE agrees to provide documentation, as
may be required with respect to said expenses.
In the event that EMPLOYER authorizes an Employee Stock
Option Plan, then in that event EMPLOYEE will be entitled to participate in the
Plan in a similar manner as all Officers of the EMPLOYER.
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EMPLOYER acknowledges and recognizes that EMPLOYEE has
provided valuable services to EMPLOYER, which services have substantially
contributed to and resulted in EMPLOYER being able to continue to operate its
business and enhance the value of EMPLOYER to its shareholders. Based upon the
foregoing, EMPLOYER has made arrangements on prior occasion for the issuance of
and delivery to EMPLOYEE of an aggregate of 154,000,000 shares of fully paid,
non-assessable common stock of EMPLOYER which is deemed a part of the within
Agreement under the following terms and conditions:
(a) As a condition precedent to the
issuance of said 154,000,000 shares, EMPLOYEE agrees that the within Employment
Agreement was to be executed by EMPLOYEE, and EMPLOYEE further acknowledges that
said 154,000,000 shares will be subject to a lock-up and/or restricted public
market sale condition for a minimum period of one year from the date of
issuance; and
(d) In the event that EMPLOYEE is
terminated for cause prior to October 31, 2000, then and in that event, EMPLOYEE
agrees to return all of said shares herein upon a court of competent
jurisdiction establishing that EMPLOYEE was terminated for cause.
FOURTH: In the event that the Employment Agreement is
terminated by EMPLOYER without cause, or EMPLOYEE is requested to act as other
than as Chief Executive Officer or EMPLOYER sells an amount of its outstanding
and issued common stock to any entity or third party, which results in a change
of control of EMPLOYER, then in such event, if EMPLOYEE's employment herein is
not continued, then all payments due to EMPLOYEE for the full term of the
Agreement will be due to EMPLOYEE.
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FIFTH: EMPLOYEE shall devote all of his working time, attention,
knowledge and skill solely and exclusively to the business and interest of the
EMPLOYER. The EMPLOYEE expressly agrees that he will not, during the term hereof
or for one (1) year from the termination of this Agreement, be involved directly
or indirectly, in any form, fashion or manner, as a partner, officer, director,
stockholder, advisor, consultant or employee in any other business similar to or
in any way competing with the business of the EMPLOYER. Nothing herein contained
shall, however, limit the rights of the EMPLOYEE to own up to 5% of the capital
stock or other securities of any corporation, whose stock or securities are
publicly owned or traded regularly on a public exchange or in the
over-the-counter market, or to prevent the EMPLOYEE from investing financially
in, or limiting the EMPLOYEE rights to invest financially in, other businesses
not allied with or competing with the business of the EMPLOYER, as long as
EMPLOYEE continues to devote all of his working time, attention, knowledge and
skill, solely and exclusively to the business and interest of the EMPLOYER,
except as provided for in Paragraph "THIRD" herein.
SIXTH: During the course of EMPLOYEE employment under this Agreement,
and for one (1) year thereafter, the EMPLOYEE specifically agrees that he will
not, at any time, in any fashion, form or manner, either directly or indirectly,
use, divulge, disclose or communicate to any person, firm or corporation, in any
manner whatsoever, any confidential or proprietary information of any kind,
nature or description concerning any matters affecting or relating to the
business of the EMPLOYER including, without limiting the generality of the
foregoing, any of its customers, its manner of operations, its plans, its ideas,
processes, programs, its intellectual property or other data, information or
materials of any kind, nature or description, without regard to whether any or
all of the foregoing matters shall be deemed confidential, material or
important. The parties hereto stipulate that, as between them, the same are
important, material, confidential and gravely affect the effective and
successful conduct of the business of the EMPLOYER and its goodwill, and that
any breach of the terms of this paragraph is a material breach thereof, except
where the EMPLOYEE shall be acting on behalf of the EMPLOYER. EMPLOYEE
understands and agrees that, in the event that EMPLOYEE violates the terms and
conditions, as stated in this paragraph, that he will be subject to an
injunction and damages, and understands and agrees that EMPLOYER's remedy to
prevent further or continued damages will include a petition for injunctive
relief. EMPLOYEE expressly acknowledges that the restrictions contained in this
paragraph are reasonable and are properly required for the adequate protection
of the EMPLOYER's interests.
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EMPLOYEE further understands and agrees that EMPLOYER, in
entering into this Agreement, is relying upon EMPLOYEE's representation and
warranty that all trade secrets and other proprietary information of EMPLOYER
will be kept strictly confidential by EMPLOYEE and not utilized by EMPLOYEE in
any manner whatsoever other than on EMPLOYER's behalf during the course of
EMPLOYEE's employment with EMPLOYER.
SEVENTH: EMPLOYEE agrees that, during the term of this
Agreement and for one (1) year after termination hereof, he shall not, for
himself or any third party, directly or indirectly, divert or attempt to divert
from the EMPLOYER or its Subsidiaries or affiliates any business of any kind in
which it is engaged or employed, solicit for employment, or recommend for
employment any person employed by the EMPLOYER or by any of its subsidiaries or
affiliates, during the period of such person employment and for a period of one
(1) year thereafter. EMPLOYEE expressly acknowledges that the restrictions
contained in this paragraph are reasonable and are properly required for the
adequate protection of the EMPLOYER interests.
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EIGHTH: It is expressly understood and agreed that the
terms of this Agreement, except for Paragraphs SIXTH and SEVENTH, may be
terminated by the EMPLOYER prior to May 31, 2005, upon the occurrence of any of
the following events:
(a) Automatically and without notice
upon the death of the EMPLOYEE; it is also understood that EMPLOYEE will be
entitled to three (3) months' salary which will be payable to his estate:
(b) Persistent absenteeism on the part
of the EMPLOYEE, which in the reasonable judgment of the Board of Directors of
the Company is having or will have a material adverse effect on the performance
of the EMPLOYEE's duties under this Agreement;
(c) Deliberate and willful failure to
perform normal services and duties required of EMPLOYEE pursuant to this
Agreement, except if the performance of such duties or services would result in
a violation of EMPLOYEE's fiduciary responsibility to the Company and its
shareholders or is in a violation of applicable laws;
(d) Any willful act or failure to act,
which in the reasonable opinion of the Board, is in bad faith and to the
material detriment of the EMPLOYER;
(e) Conviction of a felony involving
moral turpitude or dishonesty;
(f) Total or partial disability of the
EMPLOYEE for a period of three (3) consecutive months or ninety (90) days, in
the aggregate, so that he is prevented from satisfactorily performing a
substantial part of his duties; it being further understood and agreed that any
proceeds received by EMPLOYEE from a policy of disability benefits insurance or
any other proceeds received from any Federal, State or Municipal agency of
government will be credited to the amount of compensation paid to EMPLOYEE by
EMPLOYER; and
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(g) Fraudulent misconduct of the
EMPLOYEE. The Agreement shall not be terminated by any:
(a) Merger or consolidation, where the
Company is not the consolidating or surviving; or
(b) Transfer of all or a substantial
majority of the assets of the Company;
(c) Acquisition or control of fifty
percent (50%) or more of the Company's issued and voting equity share capital by
any party, or by parties acting in concert or under common control.
In the event of any merger or consolidation or transfer of
all, or a substantial majority, of the assets of the Company or acquisition or
control of fifty percent (50%) (or an amount of stock ownership that has the
ability to elect the Board of Directors of EMPLOYER) or more of the Company's
issued and voting equity share capital by any party or by parties acting in
concert or under common control, the surviving or resulting entity or the
transferee or transferees of the Company's assets or its issued and voting
equity share capital, shall be bound by, and shall have the benefit of, the
provision of this Agreement, and the Company shall endeavor to take all actions
necessary to ensure that such entity or transferee or transferees shall be bound
by the provisions of the Agreement. Moreover, in the event of such merger or
consolidation, or transfer of all or a substantial majority of the assets of the
Company or acquisition of the Company of the Company?s issued and voting equity
share capital as aforesaid, the EMPLOYEE may, at his option, at any time,
continue his employment under the terms of this Agreement, or upon giving not
less than thirty (30) days notice at any time, by registered mail, to the
registered office of the Company, requiring the Company to effect full
settlement of all the EMPLOYEE's entitlements under the terms of this Agreement,
which settlement shall also include the payment of EMPLOYEE's remuneration for
the full term of the Agreement.
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NINTH: EMPLOYER agrees that EMPLOYEE will be entitled, during the
term, to all fringe benefits in effect for executive officers of the EMPLOYER,
such as Blue Cross/ Blue Shield and Major Medical (including dental) and life
insurance benefits which are afforded to key employees of the EMPLOYER.
TENTH: This Agreement contains the total and entire Agreement between
the parties and shall, as of the effective date hereof, supersede any and all
other Agreements between the parties. The parties acknowledge and agree that
neither of them has made any representations that are not specifically set forth
herein, and each of the parties hereto acknowledges that he or it has relied
upon his or its own judgment in entering into same.
ELEVENTH: The parties hereto do further agree that no waiver or
modification of this Agreement or of any covenant, condition or limitation
herein contained, shall be valid, unless in writing and duly executed by the
party to be charged therewith, and that no evidence of any proceedings or
litigation between either of the parties arising out of or affecting this
Agreement or the rights and obligations of any party hereunder shall be valid
and binding unless such waiver or modification is in writing, duly executed, and
the parties further agree that the provisions of this paragraph may not be
waived except as herein set forth.
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TWELFTH: The parties hereto agree that it is their intention and
covenant that this Agreement and the performance hereunder shall be construed in
accordance with and under the laws of the State of New York, and that the terms
hereof may be enforced in any court of competent jurisdiction in an action for
specific performance which may be instituted under this Agreement, and that in
the event of any dispute or claim under the within Agreement, that same will be
resolved in the Courts of the State of New York.
THIRTEENTH: EMPLOYER indemnifies and holds harmless EMPLOYEE from any
claims of any type against EMPLOYER that arise prior to the date of the
commencement of this Agreement.
FOURTEENTH: EMPLOYEE warrants and represents to EMPLOYER that
EMPLOYEE has had sufficient and adequate opportunity to consult with EMPLOYEE's
counsel concerning the within Agreement, and is aware that EMPLOYER is relying
upon the within representation concerning entering into the Agreement herein.
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FIFTEENTH:All notices required or permitted to be given by either
party hereunder shall be in writing and mailed by registered mail, return
receipt requested and by regular mail to the other party addressed as follows:
If to EMPLOYER at:
1st MIRACLE GROUP, INC.
0000 Xxxxxx Xxxxxxxxx
Xxxxx 000/000
Xxxx Xxxxxxxxx, XX 00000
If to EMPLOYEE at:
0000 Xxxxxxx Xxx.
Xxxx, XX 00000
Any notice mailed, as provided above, shall be deemed completed on the date of
receipt, or five (5) days from the postmark on said postal receipt.
IN WITNESS WHEREOF, the parties have hereunto set their
hands and seals the day, month and year first above
written.
1ST MIRACLE GROUP, INC.
By:
XXXXXXX XXXXXXXX
XXXXXXX X. XXXXXXX
