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PERSONAL SERVICES AGREEMENT

Executive Employment Agreement

PERSONAL SERVICES AGREEMENT | Document Parties: NEWPORT ENTERTAINMENT GROUP, INC. You are currently viewing:
This Executive Employment Agreement involves

NEWPORT ENTERTAINMENT GROUP, INC.

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Title: PERSONAL SERVICES AGREEMENT
Date: 3/1/2006

PERSONAL SERVICES AGREEMENT, Parties: newport entertainment group  inc.
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PERSONAL SERVICES AGREEMENT

 

This Personal Services Agreement (the “ Agreement ”) is entered into this 27th day of September, 2005, by and between Newport Entertainment Group, Inc., a Nevada corporation (the “ Company ”) with its principal place of business at 8000 Spring Mountain Road, Las Vegas, Nevada, and J. Wade Mezey, Esq., LL.M. (“ Executive ”) to be effective as of January 1, 2006 (the “ Effective Date ”).

 

PREMISES

 

WHEREAS , the Company desires to employ Executive pursuant to the terms and conditions and for the consideration set forth in this Agreement and Executive desires to enter the employ of the Company pursuant to such terms and conditions and for such consideration;

 

WHEREAS , the provisions of this Agreement are a condition of Executive being employed by Company, of Executive’s having access to confidential business and technological information, and of Executive’s being eligible to receive certain benefits of the Company. This Agreement is entered into, and is reasonably necessary, to protect confidential information and customer relationships to which Executive may have access, and to protect the goodwill and other business interests of the Company; and

 

WHEREAS , the provisions of this Agreement are also a condition to Executive’s agreement to provide personal services to the Company.

 

NOW THEREFORE , in consideration of the mutual promises and covenants agreed to herein, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive agree as follows:

 

AGREEMENT

 

1.

Position, Term, Duties, Responsibilities .

 

(a)   Position . Executive shall be employed by the Company as its President and Chief operating Officer to act in accordance with the terms and conditions hereinafter set forth. Additionally, during the Employment Period, the Company agrees that it shall recommend to the Board the election of the Employee as a Director of the Company on the Commencement Date or as soon as practical thereafter. Upon the expiration of his term as a Director during the Employment Period, the Company agrees to use its best efforts to cause him to be re-nominated for election and to recommend his election.

 

(b)   Duties . Executive shall faithfully and diligently render such services and perform such related duties and responsibilities as are customarily performed by a person holding such title and as otherwise may, from time to time, be reasonably assigned to Executive by the Company’s Board of Directors (the “ Board ”). Executive shall comply with the provisions of this Agreement and all reasonable rules, regulations and administrative directions now or hereafter established by the Company.

 

(c)   Other Activities . During Executive’s employment with the Company, Executive shall devote his entire business time, attention and energies to the performance of his duties and functions under this Agreement; provided, however, that nothing in this Agreement shall prevent Executive from: (i) serving as a director of any entity that is not a Competitive Business (as defined in Section 5(a)); (ii) managing his personal investments and affairs and the personal investments and affairs of any of his family members; (iii) acquiring any interest in any entity, whether or not part of a control group, that is directly or indirectly owned or controlled, in whole or in part, by Executive and/or one or more members of his family, or a partnership, trust or other entity held by or for the benefit of Executive and/or one or more members of his family, and/or (iv) performing any services for any entity, whether or not part of a control group, that is directly or indirectly owned or controlled, in whole or in part, by Executive and/or one or more members of his family, or a partnership, trust or other entity held by or for the benefit of Executive and/or one or more members of his family; provided, however, that any service shall be insubstantial and shall not include any active involvement in the management of such entity and provided further that such entities do not constitute a Competitive Business (as defined in Section 5(a)).

 

(d)   Term . This Agreement shall be for a term beginning on the Effective Date and terminating the earlier of (i) the date which is five (5) years from the Effective Date (the “Expiration Date ”), or (ii) the date on which Executive’s employment is terminated pursuant to Section 3 of this Agreement (the “ Initial Term ”); provided that, unless earlier terminated pursuant to Section 3 of this Agreement, the Initial Term shall be automatically extended for additional one-year terms (each a “ Renewal Term” ) upon the expiration of the Initial Term or any such Renewal Term unless the Board or Executive delivers to the other at least thirty (30) days prior to the expiration of the Initial Term or the then current Renewal Term, as the case may be, a written notice specifying that the term of the Executive’s employment will not be renewed at the end of the Initial Term or such Renewal Term, as the case may be (the “ Term Termination Notice ”). The Initial Term or, in the event that the Executive’s employment hereunder is earlier terminated pursuant to Section 3 or renewed as provided in this Section 1 (c), such shorter or longer period, as the case may be, is hereinafter called the “ Term .”

 

2.

Compensation, Bonuses and Benefits .

 

(a)   Base Salary . During Executive’s employment with the Company, the Company shall pay Executive a base annual salary (the “ Base Salary ”) of $240,000.00. The Base Salary shall be payable in accordance with the Company’s normal payroll schedule, less all applicable tax withholdings for state and federal income taxes, FICA and other deductions as required by law and/or authorized by Executive. The Executive’s Base Salary shall be reviewed by the Compensation Committee of the Board (the “ Compensation Committee ”) no less frequently than annually to determine whether or not it should be changed (if it is decreased it will be subject to the provisions of Section 3(g) Termination for Good Reason) in light of the duties and responsibilities of the Executive and the performance thereof, and, if it is determined by the Compensation Committee in its sole discretion that an increase is merited, such increase shall be promptly put into effect and the base salary of the Executive as so increased shall constitute the Base Salary of the Executive for purposes of this Agreement from and after such date.

 

(b)   Deferred Compensation . Executive agrees to defer his annually salary until the Company’s registration statement is deemed effective by the SEC or sooner on a mutually agreed upon date.

 

(c)   Incentive Compensation Program . During Executive’s employment with the Company, Executive shall be entitled to participate in such incentive compensation programs as are from time to time established and approved by the Board in accordance with the Company’s practice for similarly situated employees.

 

(d)   Benefits . Executive shall be entitled to participate in such employee benefit plans which the Company provides or may establish from time to time for the benefit of employees, subject to the terms of each such plan and subject to the right of the Company and the Board to modify, revise or eliminate such benefit plans from time to time in their sole discretion. Executive shall pay for the portion of the cost of such benefits as is from time-to-time established by the Company as the portion of such cost to be paid by senior executives of the Company.

 

(e)   Costs and Expenses . Executive shall be entitled to reimbursement for all ordinary reasonable out-of-pocket business expenses which are reasonably incurred by him in the furtherance of the Company’s business, in accordance with the policies adopted from time to time by the Company or the Board. Executive will comply with the Company’s travel policies as established from time to time by the Company or the Board.

 

(f)   Vacation . Executive shall be entitled to four weeks of vacation with pay each year, which shall accrue in accordance with the Company’s practice for senior executives of the Company. Executive will schedule vacation periods to minimize disruption of the Company’s business.

 

(g) Allowances . Executive shall be entitled to an automobile and cell phone allowance. The amount of the allowance shall be determined by the compensation committee; however, such amount shall not be less than $1,000 (in a combined total of the allowances).

 

(h) Retention Bonus . If the Executive is an active employee of the Company on the one-year anniversary (the "Anniversary Date") of the Effective Date, the Executive will be paid a bonus equal to $100,000. If the Executive is an active employee of the Company on each successive anniversary (the "Anniversary Date") of the Effective Date, the Executive will be paid a bonus equal to $200,000. In the sole discretion of the Executive, the amount of the deferred may be converted into Common Stock at $.10 per share.

 

(i) Signing Bonus . Executive shall be entitled to a $75,000 signing bonus to be paid within ninety (90) days of the Effective Date.

 

 

3.

Termination .

 

(a)   Mutual Agreement . Executive’s employment under this Agreement may be terminated at any time by the mutual agreement of the Company and Executive, expressed in writing.

 

(b)   Voluntary . Executive’s employment under this Agreement may be terminated by Executive with or without the consent of the Company by giving written notice of his/her intent to terminate with the effective date of termination at least four weeks after the effective date of the notice of termination. After such notice, the Company may accelerate the date such termination will take effect pursuant to this paragraph (b) without being in breach hereof.

 

(c)   Without Cause . The Company may terminate Executive’s employment under this Agreement at any time without Cause effective immediately upon delivery of written notice to Executive.

 

(d)   Disability or Death . The Company may terminate Executive’s employment under this Agreement upon the death or disability of Executive. For purposes of this Agreement, Executive shall be considered disabled if he/she is unable to perform his/her duties under this Agreement as a result of injury, illness or other disability for a period of 90 consecutive days, or 180 days in any 365 day period, and the Board reasonably determines that Executive has been unable to perform his/her duties for the 180 day period as a result of injury, illness or other disability.

 

(e)   For Cause by the Company . The Company may terminate Executive’s employment for “Cause” at any time prior to the expiration of the Term effective immediately upon delivery of written notice to Executive. For purposes of this Agreement, “Cause” shall mean:

 

(i)   Executive engaging in a material act of theft, embezzlement, misappropriation of funds or property, or fraud against, or with respect to the business, of the Company or any affiliate;

 

 

 

(ii)

Current use of illegal drugs on or off the job;

 

(iii)   Executive has been determined as a result of his/her incapacity due to physical or mental illness, by two physicians selected by the president of the Las Vegas, Colorado chapter of the American Medical Association, to be unable to perform substantially and continuously the Executive’s obligations under this Agreement for a period of three consecutive months or for an aggregate of six months in any 12-month period (a “ Disability ”);

 

(iv)   Executive commits a breach of any material term of this Agreement and, if such breach is capable of being cured, fails to cure such breach within 30 days of notice of such breach;

 

(v)   Executive is charged with or found guilty of, or pleads guilty or nolo contendere to a felony or a crime involving moral turpitude;

 

(vi)   As a result of Executive’s gross negligence or willful misconduct, Executive commits any act that causes, or knowingly fails to take reasonable and appropriate action to prevent, any material injury to the financial condition or business reputation of the Company or any affiliate; however, this shall not apply to any act of the Company or of its affiliates or subsidiaries or any other employee thereof except to the extent that such act was committed at the direction of, or with the knowledge and consent of, Executive;

 

(vii)   Engaging in any offense punishable by the termination of employment as set forth in the Company’s employment policies manual, as said manual is now in effect or as said manual is amended from time to time during the term of this Agreement;

 

(f)   Termination After Change of Control . Executive may terminate his/her employment within three (3) months after a Change of Control and prior to the expiration of the Term upon two (2) weeks prior written notice to the Company.

 

(g) Termination by the Employee with Good Reason. At the election of the Employee upon Good Reason or otherwise, upon five business days' prior written notice of termination employee may terminate this Agreement. For purposes of this Agreement, "Good Reason" for termination shall be deemed to exist solely if the Employee terminates employment within one year after the occurrence of any of the following without the explicit written consent of the Employee: (a) diminution of title, responsibilities, authority or duties; (b) a failure to be elected to or removal from the Board; (c) a change in work location beyond a 50 mile radius from the Employee's current location of employment (it being understood that foreign business travel shall not constitute a "change in work location" for these purposes unless it averages more than one calendar week per month outside North America), (d) the failure of the Company to obtain and deliver to the Employee a satisfactory written agreement from any successor to the Company to assume and agree to perform this Agreement, or (e) any breach of this Agreement or any other material breach of this Agreement by the Company.

 

 

Change of Control ” shall mean the occurrence of one or more of the following:

 

( i)   a person (as defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended (“ Exchange Act ”), other than an already existing shareholder as of the date hereof, that have an existing equity interest of 25% or greater, either individually or collectively, directly or indirectly becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated pursuant to the Exchange Act) of 50% or more of the securities or combined voting power of the Company’s outstanding securities;

 

(ii)   a complete liquidation or dissolution of the Company other than a liquidation or dissolution occurring after any of the following transactions: the merger or consolidation of the Company with an Affiliate, the transfer of 50% or more of the Voting Stock of the Company to an Affiliate or Affiliates or the sale or other transfer of all or substantially all of the assets of the Company to an Affiliate or Affiliates;

 

(iii)   the sale of all or substantially all of the Company’s assets to a single purchaser or group of affiliate purchasers, other than any Affiliate or Affiliates, in one or a series of related transactions;

 

(iv)   the Company engages in a merger or consolidation with another entity other than an Affiliate and immediately after that merger or consolidation, the terms or entities which were stockholders of the Company immediately prior to that merger or consolidation hold, directly or indirectly, less than 50% of the Voting Stock of the surviving entity; or

 

(v)   individuals who were members of the Board immediately prior to any particular meeting of the Company’s shareholders which involves a contest for the election of directors, fail to constitute a majority of the members of the Board following such election.

 

Affiliate ” shall mean any corporation, partnership, trust or other entity of which the Company and/or any of its Affiliates directly or indirectly owns a majority of the outstanding shares of any class of equity security of such corporation, partnership, trust or other entity and any corporation, partnership, trust or other entity which directly or indirectly owns a majority of the outstanding shares of any class of equity security of the Company or any of its Affiliates.

 

Voting Stock ” shall mean, with respect to a corporation, the capital stock of any class or classes of that corporation having general voting power under ordinary circumstances, in the absence of contingencies, to elect directors of such corporation and, with respect to any other entity, the securities of that entity having such general voting power to elect the members of the managing body of that entity.

 

 

(h)   Notice of Termination . Any purported termination of employment shall be communicated through written notice indicating the specific provision in this Agreement relied upon. In addition, notwithstanding the termination date specified in Executive’s notice of termination to the Company under this Section 3, the Company may, in its sole discretion, accelerate the termination date to any earlier date up to and including the date it received such notice and such date s


 
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