EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made, entered
into, and effective as of September 1, 1999 ("Effective Date"), by
and between AMS Acquisition Corp, a Nevada, a Colorado corporation
(the "Company") and Xxxxx Xxxxxxxx ("Employee").
RECITALS
WHEREAS, the Company desires to benefit from Employee's
expertise and employ Employee and Employee is willing to accept such
employment.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions contained herein, the parties hereto hereby agree as
follows:
AGREEMENT
1. Term and Duties.
The Company hereby employs Employee as President as of the
Effective Date for a period of five (5) years, at which time this
Agreement shall terminate unless extended by mutual agreement of the
parties. Employee shall faithfully and diligently perform all
professional duties and acts as may be reasonably requested of
Employee by the Company or its officers consistent with the function
of a President in this or a similar company.
2. Duties.
Employee shall have supervision and control over, and
responsibility for, the general management and operation of the
Company and shall have such other powers and duties as may from time
to time be prescribed by the Board of Directors, provided that such
duties are reasonable and customary for a president. Employee will
perform Employee's services to the best of Employee's ability.
Employee agrees throughout the term of this Agreement to devote
sufficient time, energy and skill to the business of the Company and
to the promotion of the best interests of the Company. Employee
will be provided with appropriate equipment, secretarial help,
supplies, and other facilities and services suitable to Employee's
position and adequate for the performance of his duties in the
discretion of the Board of Directors.
3. Compensation.
3.1 Subject to the termination of this Agreement as
provided herein, the Company shall compensate Employee for his
services as follows (collectively referred to as the "Compensation"):
(a) Employee shall receive an annual salary ("Salary") of
Eighty Five Thousand Dollars ($85,000.00) payable in semi-monthly
installments in accordance with the Company's practices, less normal
payroll deductions. At the beginning of the second year of this
Agreement, the Salary shall be increased to Ninety Five Thousand
Dollars ($95,000.00) per year. At the beginning of the third year
of this Agreement, the Salary shall be increased
to One Hundred Ten Thousand Dollars ($110,000.00) per year.
Within thirty (30) days of the end of the third year of this Agreement,
the Company and Employee shall conduct a salary review and mutually agree
upon Employee's salary for the final two (2) years of this Agreement;
provided, however, that in no event shall the salary during the
final two (2) years of this Agreement be less than the salary in the
third year, plus a ten percent (10%) per annum cost of living
allowance.
(b) Employee shall receive, in addition to the Salary set
forth above, a cash bonus (the "Bonus"), payable annually following
the end of each fiscal year, equal to three eighths (3/8) of one
percent (1%) of the gross sales of the Company, if and only if the
Company is profitable for the corresponding fiscal year.
(c) In addition to the Salary and Bonus set forth above,
Employee shall be granted options to acquire common stock of the
Company as follows: At the end of Year 1, Employee will become
eligible to purchase up to 100,000 shares of common stock at a price
of $0.32 per share; at the end of Years 2 and 3, Employee will
become eligible to purchase 100,000 shares of common stock at a
price equal to the average closing bid price on the five (5)
business days immediately preceding the anniversary date of this
Agreement.
(d) Employee shall be given an automobile allowance equal
to Four Hundred Fifty Dollars ($450.00) per month, payable in cash
to the Employee.
(e) Employee will be provided with medical insurance under
a plan and with a provider chosen by the Company. Until such time
as a plan is chosen by the Company, the Company shall reimburse
Employee for any COBRA premiums paid by Employee.
3.2 Employee shall accrue vacation time beginning in Year
1 of this Agreement at the rate of four (4) weeks per year.
3.3 In addition to the Compensation set forth above, the
Company shall periodically review Employee's performance and
services rendered with a view to paying discretionary bonuses based
upon above-average or outstanding performance for a prior period.
Any such bonuses approved by the Company shall be paid to Employee
within 30 days of the grant thereof.
4. Disclosure of Confidential Information.
4.1 Employee shall not, during the term of this
Agreement and thereafter, communicate, divulge, or use for the
benefit of himself or any other person, partnership, association, or
corporation, either directly or indirectly, any information or
knowledge concerning the Company and any information, including but
not limited to pricing schedules, customer lists, communication
techniques, invoicing, and billing which may be communicated to
Employee by the Company during the term of this Agreement.
4.2 Employee agrees that any and all customer lists,
pricing schedules, products, formulas, inventions, schematics,
techniques, and goods created by Employee while rendering services
to Company shall be considered the property of the Company which
shall own all rights and interest in the same.
4.3 Employee covenants and agrees that during the term
of this Agreement he will not do any act, or fail to do any act, the
result of which may be prejudicial or injurious to the business and
goodwill of the Company.
5. Expenses.
The Company shall reimburse Employee for all reasonable
business related expenses incurred by Employee in the course of his
normal duties on behalf of the Company. In reimbursing Employee
for expenses, the ordinary and usual business guidelines and
documentation requirements shall be adhered to by the Company and
Employee. Any expenses which, individually or in the aggregate,
exceed Five Hundred Dollars ($500.00) must be consented to by the
Company in writing prior to being incurred by Employee.
6. Termination.
6.1 Termination by the Company. The Company reserves
the right to terminate this Agreement at any time for "cause". For
the purposes of this Agreement, an event or occurrence constituting
"cause" shall include, but not be limited to:
6.1.1 Employee's failure or refusal, after notice thereof,
to perform specific directives of the Board of Directors of the
Company, when such directives are consistent with the scope and
nature of the Employee's duties and responsibilities as set forth
herein or the commission of any intentional tort by the Employee
against the Company, or any breach by the Employee of any of the
covenants set forth in paragraphs 4 or 9 of this Agreement;
6.1.2 Drunkenness or use of drugs which interferes with
the performance of Employee's obligations under this Agreement,
continuing after notice thereof;
6.1.3 Any act of dishonesty or moral turpitude by the
Employee which constitutes a crime under the laws of the place where
the act was committed;
6.1.4 Any willful or intentional act by Employee which,
although not a crime, is of such impropriety or magnitude that it
substantially adversely affects the business and the reputation of
the Company.
In the event Employee is terminated for cause as defined
herein, Employee shall not be entitled to any bonus, termination or
severance payment of any sort.
6.2 Termination upon Death or Disability. This
Agreement shall be terminated upon the death of the Employee or, at
the Company's discretion, if the Employee suffers any physical or
mental disability that would prevent the performance of his duties
under this Agreement. Such a termination, in the case of
disability, shall be effected by giving thirty (30) days written
notice of termination to Employee.
6.3 Termination with Notice. This Agreement may be
terminated by either the Employee or the Company, with or without
cause, by giving the other party at least thirty (30) days notice in
advance. In the event that this Agreement is terminated by the
Company prior to the completion of the term of employment pursuant
to this paragraph, Employee shall be entitled to compensation earned
by and vested in him prior to the date of termination as provided
for in this Agreement, computed pro-rata up to and including that
date, plus ninety (90) days of Salary. In the event this Agreement
is terminated by the Employee, Employee shall be entitled to
compensation earned by and vested in him prior to the date of
termination.
7. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of
the parties hereto their respective devisees, legatees, heirs, legal
representatives, successors, and permitted assigns. The preceding
sentence shall not affect any restriction on assignment set forth
elsewhere in this Agreement.
8. Notices.
All notices provided for in this Agreement shall be in
writing signed by the party giving such notice, and delivered
personally or sent by overnight courier or messenger or sent by
registered or certified mail (air mail if overseas), return receipt
requested, or by telex, facsimile transmission, telegram or similar
means of communication. Notices shall be deemed to have been
received on the date of personal delivery, telex, facsimile
transmission, telegram or similar means of communication, or if sent
by overnight courier or messenger, shall be deemed to have been
received on the next delivery day after deposit with the courier or
messenger, or if sent by certified or registered mail, return
receipt requested, shall be deemed to have been received on the
third business day after the date of mailing. Notices shall be sent
to the addresses set forth below:
If to the Company:
Xxxxx Xxxxxxxx Entertainment, Inc.
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx, Chief Executive Officer
Facsimile No.: (000) 000-0000
With a copy to:
The Law Offices of M. Xxxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: M. Xxxxxxx Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Employee:
Xxxxx Xxxxxxxx
Facsimile No.:
9. Assignment.
Subject to all other provisions of this Agreement, any attempt to
assign or transfer this Agreement or any of the rights conferred
hereby, by judicial process or otherwise, to any person, firm,
company, or corporation without the prior written consent of the
other party, shall be invalid, and may, at the option of such other
party, result in an incurable event of default resulting in
termination of this Agreement and all rights hereby conferred.
10. Choice of Law.
This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State
of California including all matters of construction, validity,
performance, and enforcement and without giving effect to the
principles of conflict of laws.
11. Jurisdiction.
The parties submit to the jurisdiction of the Courts of the State
of California or a Federal Court empaneled in the State of
California, County of Orange, for the resolution of all legal
disputes arising under the terms of this Agreement, including, but
not limited to, enforcement of any arbitration award.
12. Entire Agreement.
Except as provided herein, this Agreement, including exhibits,
contains the entire agreement of the parties, and supersedes all
existing negotiations, representations, or agreements and all other
oral, written, or other communications between them concerning the
subject matter of this Agreement. There are no representations,
agreements, arrangements, or understandings, oral or written,
between and among the parties hereto relating to the subject matter
of this Agreement that are not fully expressed herein.
13. Severability.
If any provision of this Agreement is unenforceable, invalid, or
violates applicable law, such provision, or unenforceable portion of
such provision, shall be deemed stricken and shall not affect the
enforceability of any other provisions of this Agreement.
14. Captions.
The captions in this Agreement are inserted only as a matter of
convenience and for reference and shall not be deemed to define,
limit, enlarge, or describe the scope of this Agreement or the
relationship of the parties, and shall not affect this Agreement or
the construction of any provisions herein.
15. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
16. Modification.
No change, modification, addition, or amendment to this Agreement
shall be valid unless in writing and signed by all parties hereto.
17. Waiver.
No waiver of any breach, covenant, representation, warranty
or default of this Agreement by any party shall be considered to be
a waiver of any other breach, covenant, representation, warranty or
default of this Agreement.
18. Interpretation
The terms and conditions of this Agreement shall be deemed to
have been prepared jointly by all of the Parties hereto. Any
ambiguity or uncertainty existing hereunder shall not be construed
against any one of the drafting parties, but shall be resolved by
reference to the other rules of interpretation of contracts as they
apply in the State of California.
19. Attorneys' Fees.
Except as otherwise provided herein, if a dispute should arise
between the parties including, but not limited to arbitration, the
prevailing party shall be reimbursed by the non-prevailing party for
all reasonable expenses incurred in resolving such dispute,
including reasonable attorneys' fees.
20. Taxes.
Any income taxes required to be paid in connection with the
payments due hereunder, shall be borne by the party required to make
such payment. Any withholding taxes in the nature of a tax on
income shall be deducted from payments due, and the party required
to withhold such tax shall furnish to the party receiving such
payment all documentation necessary to prove the proper amount to
withhold of such taxes and to prove payment to the tax authority of
such required withholding.
21. Not for the Benefit of Creditors or Third Parties.
The provisions of this Agreement are intended only for the
regulation of relations among the parties. This Agreement is not
intended for the benefit of creditors of the parties or other third
parties and no rights are granted to creditors of the parties or
other third parties under this Agreement. Under no circumstances
shall any third party, who is a minor, be deemed to have accepted,
adopted, or acted in reliance upon this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the Effective Date.
"Company" "Employee"
Xxxxx Xxxxxxxx Entertainment, Inc. Xxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxx /s/ Xxxxx Xxxxxxxx
By: Xxxxxx Xxxxxxxx
Its: Secretary
