Employment Agreement - Intra-Asia Entertainment Corp. and Michael Demetrios
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as a
November 1, 2000, by and between Intra-Asia Entertainment Corporation, a
Delaware corporation (the "Company"), and Michael Demetrios ("Demetrios").
1. Employment.
1.1 Employment as Chairman and Chief Executive Officer. The
Company agrees to employ Demetrios, and Demetrios agrees to be employed by the
Company, as the Company's Chief Executive Officer for the period beginning on
January 1, 2001 (the "Effective Date") and ending on December 31, 2001 (the
"Employment Period"), unless such employment is terminated earlier pursuant to
Section 4. Demetrios will serve as Chairman of the Company's Board of Directors
(the "Board") during the Employment Period. Upon his termination as the
Company's Chief Executive Officer, Demetrios shall promptly resign as Chairman
of the Board, if so requested by the Company.
1.2 Extension of Employment Period. The Company may, upon written
notice given to Demetrios no later than October 31, 2001, extend the term of the
Employment Period for one additional year, i.e., to end on December 31, 2002.
1.3 Duties as Employee. Demetrios agrees to serve the Company as
Chief Executive Officer during the Employment Period. Demetrios will report to
the Board of Directors and his duties shall be those customary for a Chief
Executive Officer of a company similar to the Company and such other duties as
are specified by the Company's Board. In case of a reorganization, merger,
consolidation, liquidation, dissolution, sale of all or substantially all of the
Company's assets or similar event, the Board reserves the right, in its sole
discretion to change or modify Demetrios' title or duties hereunder as it deems
appropriate in good faith, provided, however that his duties as modified shall
be substantially similar to those engaged in prior to any such transaction.
During the Employment Period, Demetrios shall devote full time to, and use his
best efforts to advance, the business and welfare of the Company. Demetrios
shall not directly or indirectly render any service of a business, commercial,
or professional nature to any other person, organization or other entity,
whether for compensation or otherwise, directly or indirectly, without the prior
written consent of a majority of the members of the Board. Notwithstanding the
foregoing, Demetrios shall be entitled to provide consulting services, to the
extent not a Competing Activity (as defined in Section 7.1 of this Agreement),
subject to the prior written consent of a majority of the members of the Board,
such consent by the Board not to be unreasonably withheld.
A. At the discretion of the Board, Demetrios will have full
control and authority over operating and capital expenditures by the Company,
and will approve all such expenditures in advance of their being made or
incurred. It is understood by the parties that the proceeds of any initial
public offering may be used only to improve Fuhua Park or any subsequently
acquired park. Demetrios will have authority to hire a bilingual Vice President
to be responsible for Fuhua Park operations.
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2. Salary and Benefits.
2.1 Salary and Bonus. The Company shall pay Demetrios a salary at
the annual rate of $200,000 per year payable at least as frequently as monthly
and subject to such payroll deductions as may be necessary or customary in
respect of the Company's salaried employees in general. Demetrios' bonus
arrangements are as set forth in Exhibit A hereto.
2.2 Savings and Retirement Plans. Demetrios shall be entitled to
participate at the discretion of the Board in all savings and retirement plans,
practices, policies and programs applicable generally to other senior executives
of the Company.
2.3 Vacations. Demetrios shall be entitled to two weeks paid
vacation during each year of the Employment Period.
2.4 Expenses. Demetrios shall be entitled to receive prompt
reimbursement for all reasonable employment expenses incurred by him in
accordance with the policies, practices and procedures as in effect generally
with respect to other senior executives of the Company. Demetrios will be
compensated for business class air-fare in accordance with Company Policy.
2.5 Automobile Allowance. During the Employment Period, Demetrios
will be provided with a monthly car allowance not to exceed $450.
2.6 Fringe Benefits. Demetrios shall be entitled to fringe
benefits (including health, disability and other insurance) in accordance with
the plans, practices, programs and policies as in effect generally with respect
to other senior executives of the Company.
3. Additional Compensation.
Incentive Options. In further consideration of Demetrios' employment
hereunder, the Company hereby grants to Demetrios' the option to purchase all or
any portion of five percent (5%) of the shares of the common stock of the
Company that are outstanding as of the Effective Date of this Agreement, which
stock option shall be subject to the terms and conditions set forth in Exhibit B
to this Agreement. Exhibit B is an integral part of this Agreement.
4. Termination. The term of Demetrios' employment under this Agreement
may terminate as hereinafter provided, in which case (i) Demetrios shall be
entitled to the amounts set forth in Section 4.3 hereof and (ii) Demetrios shall
remain subject to the provisions of Sections 5, 6 and 7 hereof to the extent
applicable. The Employment Period shall not extend for any period beyond the
second anniversary of the Effective Date unless agreed to in writing by
Demetrios and the Company.
4.1 Death or Disability. If Demetrios dies or becomes disabled
during the Employment Period, Demetrios' employment under this Agreement shall
automatically terminate upon death or after three consecutive months of
disability, as the case may be. "Disability" shall mean any physical or mental
illness that renders Demetrios unable to perform his agreed-upon services under
this Agreement. Such disability shall be determined by a licensed physician not
affiliated with the parties to this Agreement. In the event of Demetrios'
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death, the amounts due him pursuant to this Agreement through the date of his
death shall be paid to whomever he has previously designated or, in the event no
such designation is made, to his estate, or to the beneficiaries of his estate.
4.2 Termination for Cause. Demetrios' employment under this
Agreement may be terminated by the Company for "cause", as determined in good
faith by the Board. The term "cause" is defined as any one or more of the
following occurrences:
A. Demetrios' continuing repeated willful failure or refusal
to perform his duties as required by this Agreement or other material breach of
this Agreement, provided, that termination of Demetrios' employment pursuant to
this subsection (a) shall not constitute valid termination for cause unless
Demetrios shall have first received written notice from the Board stating with
specificity the nature of such failure or refusal and affording Demetrios at
least 15 days to correct the act or omission complained of;
B. Gross negligence, material violation by Demetrios of any
duty of loyalty to the Company or any other material misconduct on the part of
Demetrios, provided that termination of Demetrios' employment pursuant to this
subsection (b) shall not constitute valid termination for cause unless Demetrios
shall have first received written notice from the Board stating with specificity
the nature of such failure or refusal and affording Demetrios at least 15 days
to fully correct the act or omission complained of and to indemnify the Company
for any damage caused to it by such act or omission;
C. Demetrios' conviction by, or entry of a pleas of guilty or
nolo contendere in a court of competent and final jurisdiction for any crime
involving moral turpitude or punishable by imprisonment in excess of six months
in the jurisdiction involved; or
D. Demetrios' commission of an act of fraud, whether prior to
or subsequent to the date hereof, upon the Company.
4.3 Payments Upon Termination.
A. Completion of Employment Period. If at the end of the
Employment Period the parties have not agreed in writing to extend the term of
Demetrios' employment with the Company, Demetrios shall receive his salary and
any applicable bonus through the date of such termination. Options vested at
such termination date shall be exercisable in accordance with the respective
terms of Exhibit B. Options not vested at such termination date shall be
immediately cancelled. In no event shall Demetrios be entitled to receive
additional salary, bonus, options or compensation of any other kind hereunder.
B. Death or Disability. In the event of Demetrios' termination
as set forth in Section 4.1 hereof, he shall receive his salary and the pro rata
portion of any applicable bonus payment through the date of such termination.
Options vested at such termination date shall be exercisable in accordance with
the respective terms of Exhibit B. Options not vested at such termination date
shall be immediately cancelled. In no event shall Demetrios be entitled to
receive additional salary, bonus, options or compensation of any other kind
hereunder.
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C. Voluntary Termination or Termination for Cause. In the
event of Demetrios' voluntary termination or his termination for cause as set
forth in Section 4.2 hereof, he shall receive his salary through the date of
such termination. Options not exercised as of such termination date shall be
immediately cancelled. In no event shall Demetrios be entitled to receive
additional salary, bonus, options or compensation of any other kind hereunder.
D. Termination Without Cause. In the event of Demetrios'
termination by the Company other than for cause as set forth in Section 4.2
hereof, he shall receive his salary through the date of such termination plus an
additional month's salary as provided in Section 2.1 hereof. Options vested at
such termination date shall be available in accordance with the respective terms
of Exhibit B. Options not exercised on or before such termination date shall be
immediately cancelled. In no event shall Demetrios be entitled to receive
additional salary, bonus, options or compensation of any other kind hereunder.
5. Ownership of Intangibles. Demetrios hereby grants and assigns to the
Company all of his right, title and interest in and to any ideas, designs,
techniques, processes, trademarks, inventions and improvements (collectively,
"Inventions") arising during the term of this Agreement, which Inventions relate
to the business of the Company or any of its affiliates, or to actual or
demonstrable anticipated research or development of the Company or any of its
affiliates, or results from work performed by Demetrios for the Company or any
of its affiliates, together with all patents that are pending or have been
issued in the United States and in all foreign countries during the term of this
Agreement with respect to such Inventions (the "Proprietary Rights"). All such
Proprietary Rights shall be the sole and exclusive property of the Company and
shall remain such notwithstanding the subsequent termination of employment under
this Agreement. To the extent that any Proprietary Rights or other ideas,
designs, techniques, processes, trademarks, inventions or improvements used by
the Company during the term of this Agreement rely upon or use patented or
unpatented Inventions that Demetrios has made or conceived prior to the date of
this Agreement, Demetrios hereby grants an exclusive, perpetual, royalty-free,
worldwide license to use such Invention.
6. Confidential Information. Demetrios agrees that during the
Employment Period, he will be dealing with proprietary, nonpublic and
confidential information, including inventions and processes developed by the
Company or any of its affiliates, relating to the present and prospective
business, assets and good will of the Company or any of its affiliates (all of
the foregoing referred to as "confidential information"). Without limiting the
generality of the foregoing, it is understood that Demetrios will have access to
information regarding intellectual property of the Company or any of its
affiliates, inventions and ideas under development by them, and information
regarding the actual and prospective business and customers of the Company or
any of its affiliates. Demetrios agrees that he will not disclose to anyone,
directly or indirectly, any of such confidential matters, or use them other than
in the course of performing his obligations under this Agreement. All documents
prepared by Demetrios in connection with the services provided herein, and all
confidential information (however embodies or recorded) that might be given to
him are the exclusive property of the Company and shall be returned to the
Company at its request. After termination of Demetrios' employment with the
Company, he shall not, without the prior written consent of the Company, or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it in writing. Demetrios acknowledges that
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such actions could cause irreparable harm to the Company and that the Company
may obtain an injunction or other equitable relief to enforce this provision.
Furthermore, upon termination of this Agreement, Demetrios shall promptly
deliver to the Company all books, memoranda, records and written data in
original form of every kind relating to the business and affairs of the Company
that may then be in his personal possession.
7. Noncompetition.
7.1 No Competing Activities. Demetrios agrees that, while he is
employed by the Company, he shall not engage or participate in any state of the
United States, directly or indirectly, either as an owner, partner, director,
trustee, officer, employee, consultant, advisor or in any other individual or
representative capacity, in any activity which is the same as, similar to or
competitive in any manner with the business of the Company or its members or
affiliates (herein, a "Competing Activity") or have any investment in a business
which is engaged in a Competing Activity (other than an ownership interest of
less than 5% of any company whose securities are listed on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market). Demetrios
further agrees that in the event of a termination for cause as set forth in
Section 4.2 hereof, he shall not, for a two-year period following such
termination of employment, engage in a Competing Activity or have any investment
in a business which is engaged in a Competing Activity (other than an ownership
interest of less than 5% of any company whose securities are listed on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market).
7.2 Reasonable Limitations. Demetrios acknowledges that, given
the nature of the Company's business, the covenants contained in this Section 7
contain reasonable limitations as to time, geographical area and scope of
activity to be restrained, and do not impose a greater restraint than is
necessary to protect the legitimate business interests of the Company. If,
however, this Section 7 is determined by any court of competent jurisdiction, or
in any arbitration, as the case may be, to be unenforceable by reason of its
extending for too long a period of time or over too large a geographic area or
by reason of its being too extensive in any other respect or for any other
reason it will be interpreted to extend only over the longest period of time for
which it may be enforceable and/or over the largest geographical area as to
which it may be enforceable and/or to the maximum extent in all other aspects as
to which it may be enforceable, all as determined by such court, or in such
arbitration, as the case may be.
7.3 Acknowledgement. Demetrios understands that the restrictions
in Section 7.1 hereof may limit his ability to earn a livelihood in a business
similar to the business of the Company, but he nevertheless believes that he has
received and will receive sufficient consideration hereunder and otherwise as an
employee of the Company to justify such restrictions which, in any event, given
his education, abilities and skills, Demetrios does not believe would prevent
him from earning a living. The Company agrees that Demetrios shall be entitled
to provide consulting services, to the extent not a Competing Activity, subject
to the prior written consent of a majority of the members of the Board, such
consent by the Board not to be unreasonably withheld.
8. Arbitration of Disputes. In the event of a dispute between Demetrios
and the Company with respect to the terms and conditions of this Agreement or
with respect
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to Demetrios' employment by the Company, both parties agree that any such
dispute shall be submitted to binding arbitration, and both parties specifically
waive any right they might otherwise have to a jury trial. The arbitration shall
be conducted in accordance with the laws of the State of California, and to the
extent applicable and not otherwise inconsistent with such laws, the rules of
the American Arbitration Association. The decision of any such arbitrator or
arbitrators (including any injunctive or other equitable relief) shall be
enforceable by the federal or state courts located in Los Angeles County, and
both parties submit to the jurisdiction of such courts for the purposes set
forth in this Agreement.
9. Miscellaneous.
9.1 Modification and Waiver of Breach. No waiver or modification
of this Agreement shall be binding unless it is in writing signed by the parties
hereto. No waiver of a breach hereof shall be deemed to constitute a waiver of a
future breach, whether of a similar or dissimilar nature.
9.2 Assignment. This Agreement shall inure to the benefit of and
shall be binding upon the Company, its successors and assigns. The obligations
and duties of Demetrios hereunder are personal and not assignable, whether
voluntarily or involuntarily or by operation of law or otherwise.
9.3 Notices. All notices and other communications required or
permitted under this Agreement shall be in writing, served personally on, or
mailed by certified or registered United States mail to, the party to be charged
with receipt thereof. Notices and other communications served by mail shall be
deemed given hereunder 72 hours after deposit of such notice or communication in
the United States Post Office as certified or registered mail with postage
prepaid and duly addressed to whom such notice or communication is to be given,
in the case of (a) the Company, Attention: Chairman, or (b) Demetrios, to the
address set forth below his name on the signature page hereof. Any such party
may change said party's address for purposes of this Section 9.3 by giving to
the party intended to be bound thereby, in the manner provided herein, a written
notice of such change.
9.4 Counterparts. This instrument may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
9.5 Governing Law. This Agreement shall be construed in
accordance with, and governed by, the internal laws of the State of California.
9.6 Savings Clause. If any provision of this Agreement or the
application thereof is held invalid, the invalidity shall not affect other
provisions or applications of the Agreement which can be given effect without
the invalid provisions or applications and to this end the provisions of this
Agreement are declared to be severable.
9.7 Complete Agreement. This instrument constitutes and contains
the entire agreement and understanding concerning Demetrios' employment and the
other subject matters addressed herein between the parties, and supersedes and
replaces all prior negotiations and all
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agreements proposed or otherwise, whether written or oral, concerning the
subject matters hereof. This is an integrated document.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
day and year first above written.
DEMETRIOS THE COMPANY:
INTRA-ASIA ENTERTAINMENT
CORPORATION
/s/ Michael Demetrios
By: /s/ Jun Yin
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Michael Demetrios
Address:
6201 Mulholland Way
Los Angeles, CA 90068
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EXHIBIT A
BONUS PLAN
The Company agrees to pay Demetrios a bonus of 1% of the funds raised
up to a maximum of $150,000 if the Company is successful in effecting an initial
public offering of the Company's common stock ("IPO") by October 31, 2002. The
Company agrees to consider in good faith paying an operating bonus based on
operating results.
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EXHIBIT B
STOCK OPTION
Stock Option. In further consideration of all services performed by Mr.
Demetrios under this Agreement, the Company hereby grants to Mr. Demetrios an
option to purchase up to five percent (5%) of the common stock of the Company
that are outstanding as of the Effective Date of this Agreement. Notwithstanding
any provisions under the Agreement to the contrary, such option shall be subject
to the following terms:
(a) The purchase price to be paid for such common shares upon
exercise of the stock option shall be the per share price
established by the IPO, as such term is defined in Exhibit A to
the Agreement.
(b) Except as otherwise provided herein, the stock option will be
exercisable only during the ten-year period commencing on the
Effective Date of the Agreement and ending on December 31, 2010
(the "Option Period").
(c) The stock option shall become fully vested and exercisable by Mr.
Demetrios as follows:
fifty percent (50%) upon completion of the IPO, provided
that Mr. Demetrios remains in the employ of the Company;
one (1) year following the date of the IPO - another fifty
percent (50%) provided that Mr. Demetrios remains in the
employ of the Company.
Any portion of the stock option that is not immediately exercised
upon vesting by Mr. Demetrios shall accumulate and may be
exercised at any time during the Option Period. No partial
exercise of the stock option may be for less than 100 shares.
(d) The stock option (to the extent then exercisable) may be
exercised during the Option Period, in whole at any time or in
part from time to time, by giving the Company notice in writing
to that effect, specifying the number of whole shares as to which
the stock option is exercised. Payment of the purchase price for
the shares with respect to which the stock option is exercised
shall be made to the Company upon delivery of such notice, in the
form of cash or by a certified check, cashier's check, postal or
express money order payable to the order of the Company, or in
such other manner as shall be mutually acceptable to the Company
and Mr. Demetrios in order to facilitate the exercise of the
stock purchase option, including, but not limited to a "cashless
exercise" arrangement.
As soon as practicable after receipt of the notice of exercise
and payment of the purchase price, the Company shall cause
certificates for the number of shares with respect to which the
stock option is exercised to be issued in Mr. Demetrios'
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name or in the name of his executors, administrators, or other
legal representatives, heirs, legatees, next of kin or
distributees.
(e) The stock option shall not be transferable by Mr. Demetrios other
than to a family trust or by will or the laws of descent and
distribution, and shall be exercisable, during his lifetime, only
by Mr. Demetrios or the trustee of the family trust.
(f) Upon the death or disability (as defined in Section 4.1 of the
Agreement) of Mr. Demetrios, Mr. Demetrios or his legal
representatives shall have the right within one (1) year
thereafter to exercise, in whole or in part, the stock option to
the extent exercisable by Mr. Demetrios at the time of his death.
In no event, however, may the stock option be exercised at any
time after December 31, 2010.
(g) The Company at its election may terminate the stock option and
the provisions of the stock option shall become null and void and
inoperative immediately upon any attempted sale, assignment,
transfer, or other disposition by Mr. Demetrios of the stock
option or any of his right, title, and interest therein;
provided, however, that nothing herein shall be construed as
prohibiting Mr. Demetrios from providing for the transfer of the
stock option to a family trust or the disposition of the stock
option or his right, title, and interest in it upon his death (at
any time while he has the right to exercise the stock option) by
will or testamentary device or, as prohibiting the transfer of
the stock option by the laws of descent and distribution.
(h) The price and the number of shares covered by the stock option
shall be subject to equitable adjustment by the Company, if while
the stock option is outstanding there is a change in the shares
of common stock of the Company through merger, consolidation,
reorganization, recapitalization, reincorporation, stock split,
reverse stock split, stock dividend or other change in the
corporate structure of the Company.
(i) Neither Mr. Demetrios nor any person entitled to exercise Mr.
Demetrios' rights in the event of his death shall have any of the
rights of a shareholder with respect to the shares covered by the
stock option except to the extent that certificates have been
issued upon the exercise of the stock option.
(j) Upon Mr. Demetrios' voluntary termination of his employment under
the Agreement, Mr. Demetrios shall have a thirty-(30)-day period
measured from his termination date to exercise the stock option,
to the extent then vested. In no event, however, may the stock
option be exercised at any time after December 31, 2010.
(k) Upon termination of Mr. Demetrios' employment under the Agreement
by the Company, without cause, on or after the completion date of
the IPO, Mr. Demetrios shall have the right to exercise the stock
option to the extent then vested, within a one (1)-year period
measured from his termination date. In no
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event, however, may the stock option be exercised at any time
after December 31, 2010.
(l) Upon termination of Mr. Demetrios' employment under the Agreement
by the Company for cause (as defined in Section 4.2 of the
Agreement), the stock option shall, to the extent not yet
exercised, terminate immediately upon delivery of the notice of
termination.
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