EXHIBIT 6.04
EMPLOYMENT AGREEMENT
This AGREEMENT made as of the 27th day of May, 1999, by and between
SHOWSTAR ENTERTAINMENT CORPORATION, a Colorado corporation (the "Company"), and
XXXX XXXXX ("Employee").
WHEREAS, Employee heretofore has been employed by the Company and the Company
seeks to reward Employee by entering into this Agreement with Employee;
WHEREAS, the Company and Employee mutually desire that Employee continue to be
employed by the Company and that Employee devote reasonable efforts and
attention to the operation of the Company; and
WHEREAS, the Company and Employee mutually desire to set forth the terms of
their intended employment relationship;
NOW THEREFORE, in consideration of the premises and the terms hereinafter set
forth, the parties, intending to be legally bound, agree as follows:
1. Employment of Employee. Beginning on the Effective Date (hereinafter
defined), the Company shall employ Employee, and Employee shall accept
employment by the Company, as its Chairman of the Board of Directors, President
and Chief Executive Officer pursuant to the terms of this Agreement. Employee
currently is a member of the Company's Board of Directors; the Company shall use
it best efforts to cause Employee to be reelected to the Board of Directors
while Employee is employed by the Company.
2. Employee's Duties. Employee's primary duties will consist of those as may
be reasonably determined by the Board of Directors and as are generally
consistent with the duties of a Chief Executive Officer of the Company. The
Board of Directors will assist and work with the Employee in the performance of
his duties.
3. Time Obligations; Other Employment. Employee shall be a full-time employee
of the Company and shall devote reasonable efforts to the Company's business and
purposes. Employee shall not engage in any activities in conflict with the
purposes and businesses of the Company as from time to time conducted.
4. Compensation. For all services rendered by Employee to the Company
under this Agreement or otherwise, the Company shall compensate Employee as
follows commencing on the Effective Date:
4.1. Base Salary. Base salary at the rate of $12,500 per month,
subject, however, to any increase(s) as determined by the Company. Base
salary shall be payable no less often than twice each month, on the fifteenth
and on the last day of each month, in conformity with the usual salary
payment practices of the Company.
4.2. Restricted Stock Grant. Upon the Effective Date, the Company
shall award to Employee One Million (1,000,000) shares of the common stock of
the Company ("Grant Shares"), which shall vest in and become owned by
Employee at the rate of One Hundred Thousand (100,000) shares at the end of
each successive three-month period during the term of this Agreement,
commencing on the Effective Date, with the result that all 1,000,000 Grant
Shares shall vest in and become owned by Employee after the initial Thirty
(30) months of the term of this
Agreement. In the event that Employee's employment by the Company terminates
before all Grant Shares are vested, all Grant Shares not vested shall
immediately vest. In addition, Employee's right to all Grant Shares shall
immediately vest twenty (20) days before a Change in Control Event, as defined
below.
4.3. Stock Options. In addition to the base salary and Grant Shares
set forth above, the Company shall grant to Employee, upon the Effective Date,
options to purchase One Million (1,000,000) shares of common stock of the
Company exercisable at $0.50 per share. Such options shall vest in and become
exercisable by Employee at the rate of options on One Hundred Thousand
(100,000) shares at the end of each successive three (3) month period
commencing on the Effective Date. This will result in the options on all
1,000,000 shares being entirely vest in and becoming exercisable by Employee
thirty (30) months after the Effective Date. The foregoing notwithstanding,
Employee's right to all of the said options shall vest and all of the said
options shall become immediately exercisable, twenty (20) days before a Change
in Control Event, as defined below. All of such options, to the extent not
exercised, shall expire ten (10) years after the Effective Date. In addition to
the foregoing, Employee shall be included in the group of senior executives
considered for future grants of stock options under stock option plans, if any,
in effect for the Company from time to time.
4.4. Performance Bonus. Employee also shall be entitled to receive a
performance bonus in cash, payable within 90 days following the end of each
fiscal year of the Company during the term of this Agreement, equivalent to
Five Per Cent (5%) of the pretax profits of the Company, if any, during such
fiscal year, as reasonably determined by the Company in accordance with
generally accepted accounting principles consistently applied.
4.5. Benefits. Employee shall be entitled to all fringe benefits
offered generally to the Company's senior officers and any other benefit plans
established by the Company, subject to the rules and regulations in effect
regarding participation in such plans.
4.6. Severance Payment. If a Change in Control Event should occur
and Employee's employment by the Company hereunder be terminated for any reason
(voluntarily or involuntarily) within two (2) years thereafter, Employee shall
be paid a lump sum payment equal to three (3) times his then annual rate of
base salary simultaneously with such termination.
5. Confidentiality; Change in Control Event
5.1. Employee agrees that he will not, except to the Company, its
subsidiaries and affiliates, communicate or divulge to any person, firm or
corporation, directly or indirectly, any confidential or proprietary
information relating to the business, customers and suppliers or other affairs
of the Company, its parents, subsidiaries and their affiliates.
5.2. For purposes of this Agreement, a "Change in Control Event"
shall mean (i) a sale or other change in control of all or a substantial
portion of all of the Company's assets or (ii) any transaction or series of
related transactions (including without limitation any reorganization, merger
or consolidation) which results to the shareholders of the Company immediately
prior to such transaction holding, following such transaction, less than fifty
percent (50%) of the voting power of the surviving or continuing entity or
(iii) a change of the voting group that in fact controls the Company on the
Effective
Date or (iv) a change in persons who constitute a majority of the Board of
Directors of the Company on the Effective Date.
6. Term and Termination.
6.1. This Agreement shall become effective on the date it is
executed by both parties (the "Effective Date"). Unless otherwise terminated as
provided in this section 10, the term of Employee's employment shall expire on
December 31, 2004, provided, however, that the term of this Agreement shall
thereafter automatically renew for successive one-year periods unless either
party gives notice to the other party of non-renewal no later that October 31st
in any calendar year of this Agreement after 2003. Any such notice of
non-renewal shall be deemed a termination without cause for purposes hereof.
6.2. The provisions of paragraph 6.1 notwithstanding, this Agreement
shall terminate upon the occurrence of any one or more of the following:
a. Death of Employee; or
b. Inability of Employee to perform his duties for a period
of one hundred eighty (180) consecutive days due to sickness, disability or
any other cause, unless Employee is granted a leave of absence by the Company.
7. Notice and Opportunity to Cure. Whenever a breach of this
Agreement by either party is relied upon as a justification for any action
taken by the other party, before such action is taken, the party asserting
the breach shall give the other party written notice of the existence and
nature of the breach and such other party shall have the opportunity to
correct such breach during the sixty-day period following such notice. If
such cure is effected, then any such breach shall not be a basis for the
party intending to rely thereon.
8. Notices. All notices and other communications in connection with
this Agreement shall be in writing and shall be given by personal delivery or
by registered or certified mail, return receipt requested, addressed as
follows:
If to Employee: Xxxx Xxxxx
00000 - 00X Xxxxxx
Xxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
If to the Company: Showstar Entertainment Corporation
300 - 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
With a copy to: Xxxxx X. Xxxxx, Xx., Esq.
Xxxxxxx & Xxxxx P.L.L.C.
000 Xxxxx Xxxxxx - Xxxxx 0000
Xxxxxxx, XX 00000-0000
or to such other address as the party to receive the notice or other
communication shall have designated by notice to the other hereunder. The date
any such notice or other communication shall be deemed hereunder to have been
given shall be seven (7) days after the date that it is deposited in the mails,
with proper postage prepaid, or when delivered personally by hand, courier or
otherwise.
9. Assignment. The rights of either party shall not be assigned or
transferred, whether voluntarily or by operation of law or otherwise, without
the other party's prior written consent, nor shall the duties of either party
be delegated in whole or in part, whether voluntarily or by operation of law
or otherwise, without the other party's prior written consent. Any attempted
assignment, transfer or delegation shall be of no force or effect unless so
consented to in writing.
10. Preparation of Agreement. Employee acknowledges that this Agreement was
prepared by attorneys representing the Company. This Agreement will have tax
and other consequences to Employee. Employee acknowledges that he has been
advised by the Company to consult with an attorney, tax advisor and other
Employees of his choice before entering into this Agreement and he has done
so. Employee further acknowledges that he has not relied upon any legal or
tax advice of the Company or the Company's attorney in connection with this
Agreement.
11. Miscellaneous.
11.1. Waiver. No delay or failure by a party to exercise any right
under this Agreement, and no partial or single exercise of that right, shall
constitute a waiver of that or any other right, unless otherwise expressly
set forth in a writing signed by such party. No consent or waiver, express or
implied, by either party to any breach or default by the other party in the
performance by the other of its or his obligations hereunder shall be
effective unless made in a writing duly executed by the party giving or
making such consent or waiver. No such consent or waiver shall be deemed or
construed to be consent or waiver to or of any other breach or default in the
performance by such other party of the same or any other obligation of such
party.
11.2. Amendments. To be effective, all changes, additions and other
amendments to this Agreement must be set forth in a writing signed by the party
to be charged, and no oral changes, additions or other amendments hereto shall
be binding upon either party.
11.3. Integration. This Agreement constitutes the entire agreement
between the parties relating to the subject matter hereof and supersedes and
cancels all other prior agreements, understandings, representations,
warranties, inducements or other matters in connection with such subject matter.
11.4. Severability; Blue Pencil. The unenforceability or invalidity
of any provision of this Agreement in a particular case shall not render
unenforceable or invalid in such case any other provision hereof or such
provision in any other case. If any one or more of the provisions of this
Agreement shall for any reason be deemed excessive as to duration, scope,
activity or subject or shall be otherwise unenforceable, such provision(s)
shall be construed or recast so as to enforce the intent of the parties as
herein set forth to the greatest extent permitted by applicable law.
11.5. Headings. The headings and titles in this Agreement are for
purposes of convenience of reference only and shall not in any way affect the
meaning, interpretation or enforcement of this Agreement.
11.6. Governing Law. This Agreement shall be governed by the laws of
the State of Washington as in effect for contracts made and to be performed in
the State of Washington. The parties hereby submit to the jurisdiction of the
courts of, and the federal courts located in, the State of Washington for
all purposes related to this Agreement and the relationship between the parties,
and such courts shall have exclusive jurisdiction of the subject matter hereof
and thereof.
11.7. Nature of Relationship. The relationship of the parties shall
be only that of employer and employee. The parties do not intend to be partners
and neither party shall hold itself out as being a partner of, or having a
similar relationship with, the other party.
11.8. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY:
EMPLOYEE: SHOWSTAR ENTERTAINMENT
CORPORATION
/s/ By: /s/
Xxxx Xxxxx
