Exhibit 10.2
 
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of  February 8,2012,
between Mass Hysteria Entertainment Company, Inc., a Nevada corporation (the
“Corporation”), and Alan J. Bailey (the “Employee”).

The Corporation wishes to retain the services of the Employee and the Employee
wishes to be employed by the Corporation, on the terms and conditions set forth
in this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 
1.
Employment. The Employee and the Corporation hereby agree upon the terms and
conditions of employment hereinafter set forth.

 
2.
Term. The term of this Agreement shall commence on the date hereof and continue
on a month-to-month basis (the “Term”), unless sooner terminated as herein
provided including termination under any of the subsections described in
paragraph 9 or 10.

3.     Duties. The Employee shall serve   as Chief Financial Officer and as a
Member of the Board of the Corporation, in which capacities he shall be
responsible for the financial operations and strategy of the Corporation and its
subsidiaries and such other duties consistent with such position as the Board of
Directors of the Corporation (the “Board”) shall determine from time to time.
Without limiting the foregoing, the Employee shall consult with the Board with
respect to determining the Corporation’s financial business strategies. The
Employee shall receive no additional compensation for any services rendered as a
Director in the event he is simultaneously employed by the Corporation and
serving as a director of the Corporation.

4.     Compensation.
 
(a)   Salary. For all services rendered by the Employee pursuant to this
Agreement, during the term of this Agreement the Corporation shall pay the
Employee a salary at the annual rate of $90,000, payable at the rate of $ 7,500
per month  (which amount shall be automatically increased by ten percent (10%)
when and if the Corporation’s revenues, based on the trailing twelve months on a
pro forma basis, exceed $1,000,000) during the term of this Agreement. The Board
in its sole discretion may further increase said salary from time to time.
Payments hereunder shall be made only to the extent that the Corporation has
sufficient cash working capital to make such payments after taking into account
the Corporation’s  necessary operating expenses including any and all payments
due to its Chief Executive Officer. Until such time that payments can be made to
Employee , the amount of Employee’s compensation shall accrue  without interest.
The Board of Directors shall, not less than once each year, assess the
Employee’s performance relative to performance criteria discussed by the Board
with the Employee and adopted by the Board at the beginning of such year.

(b)   Bonus. At any time, at the sole discretion of the Board, the Corporation
may grant to the Employee a bonus in such amount and in such form, as it deems
appropriate.

(c)   Equity. The Employee shall  be granted an employee stock option to
purchase common stock at an amount and at an exercise price as determined by the
Board of Directors.

5.     Best Efforts. During the term of this Agreement, the Employee shall use
his best efforts to promote the interests of the Corporation and shall devote
sufficient time and efforts to its business and affairs in relation to
Employee’s responsibilities.

6.     Expenses. The Employee is authorized to incur reasonable expenses for
promoting the business of the Corporation, including expenses for entertainment,
travel and similar items. The Corporation will reimburse the Employee for
appropriate expenses upon the Employee’s presentation of an itemized account of
such expenditures. The Corporation shall at all times retain access to the
records maintained by Employee relative to reimbursable expenses.
 
 
 

--------------------------------------------------------------------------------

 
 
7.     Benefits. During the Term of this Agreement, the Employee shall be
entitled to, and the Corporation shall provide the following benefits in
addition to those specified in Section 4:

(a)
Health Insurance. At any time, the Corporation may, at the sole discretion of
the Board, pay for the Employee’s health and medical insurance consistent with
those provided to other key employees of the Corporation through the Term of
this Agreement.

(b)
Life Insurance. At any time during the Term of this Agreement, the Corporation
may, at the sole discretion of the Board, pay for the Employee’s personal life
insurance coverage up to a maximum amount of $1,000,000 per year.

 
(c)
D&O Liability Insurance. At any time during the Term of this Agreement, the
Corporation may, at the sole discretion of the Board, maintain in effect
directors’ and officers’ liability insurance covering the Employee, with
coverage reasonably satisfactory to the Employee.

(d)
Pension and Retirement Benefits. At any time during the Term of this Agreement,
the Corporation may, and at the sole discretion of the Board, contribute an
amount equal to ten percent (10%) of the Employee’s annual salary to a qualified
retirement account either set up by the Corporation or by the Employee.

 
(e)
Other Benefits. At the sole discretion of the Board, the Corporation may provide
to the Employee the same benefits it makes available to other key employees of
the Corporation.

8.     Disclosure of Information. The Employee recognizes and acknowledges that
the Corporation’s trade secrets and all other confidential and proprietary
information of a business, financial or other nature, including without
limitation, lists of the Corporation’s actual and prospective customers, as they
exist from time to time (collectively, the “Confidential Information”), are a
valuable and unique asset of the Corporation and therefore agrees that he will
not, either during or after the term of his employment, disclose any
Confidential Information concerning the Corporation and/or its subsidiaries, to
any person, firm, corporation, association or other entity, for any reason
whatsoever, unless previously authorized to do so by the Corporation’s Board. It
is understood that the term “Confidential Information” shall not include any
information that has entered or enters the public domain through no fault of the
Employee. The Employee shall not make any use whatsoever, directly or
indirectly, of the Confidential Information, except as required in connection
with the performance of his duties for the Corporation. For the purpose of
enforcing this provision, the Corporation may resort to any remedy available to
it under the law.

9.     Disability and Death. In the event that Employee is absent from
employment by reason of illness or other incapacity by which Employee is unable
to perform the essential functions of his position for more than six (6)
consecutive months during the term of this Agreement or if the Employee dies
during the term of this Agreement , the Corporation may terminate this Agreement
and the Corporation shall pay to the Employee’s estate in a lump sum within 90
days an amount equal to 100% of the Employee’s annual salary rate then payable
to the Employee pursuant to paragraph 4(a) of this Agreement.

10.   Termination. The Corporation shall have the right, on written notice to
the Employee, by action of its Board to terminate the Employee’s employment
immediately at any time for cause . For purposes of this Agreement, “cause”
shall mean (i) conviction of a crime involving dishonesty or (ii) willfully
engaging in conduct materially injurious to the Corporation or (iii) the
material breach of this Agreement or any other agreement between the Employee
and the Corporation, which material breach has not been cured by Employee within
ten days after Employee’s receipt of written notice from the Corporation of such
material breach. Employee shall not be required to mitigate the amount of any
payment provided for in this paragraph 10 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
paragraph 10 be reduced by any compensation earned by Employee as the result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by Employee to the Corporation or otherwise. In the
event of termination of this Agreement for cause (including death or
disability), the Corporation shall have no further obligation to make any
payments or provide any benefits hereunder, with the exception of any Medical
coverage that was provided during the Employee’s employment. Such Medical
coverage shall continue for such period of time equal to the time the Employee
worked at the Corporation, but in no event shall the Medical coverage be
discontinued less than one-year after the termination of said Employee.

 
2

--------------------------------------------------------------------------------

 
 
11.   Enforceability, etc. This Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision hereof
shall be prohibited or invalid under any such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating or nullifying the remainder of such provision or any other
provisions of this Agreement. If any one or more of the provisions contained in
this Agreement shall for any reason be held to be excessively broad as to
duration, geographical scope, activity or subject, such provisions shall be
construed by limiting and reducing it so as to be enforceable to the maximum
extent permitted by applicable law.

12.   Notices. Any notice or other communication given pursuant to this
Agreement shall be in writing and shall be personally delivered, sent by
overnight courier or express mail, or mailed by first class certified or
registered mail, postage prepaid, return receipt requested to the parties at
their respective addresses set forth on the signature page hereof, or to such
other address as the parties shall have designated by notice to the other
parties.

13.   Waiver. The waiver by either party of a breach of any provision of this
Agreement by the other shall not operate or be construed as a waiver of any
subsequent breach.

14.   Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the Corporation, its successors and assigns, and the Employee,
his heirs and legal representatives.

15.   Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof. It may be changed only by
an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought. This Agreement
shall be construed in accordance with and governed by the laws of the State of
California without giving effect to principles of conflicts of laws. Any
disputes shall be resolved in accordance with the rules of the American
Arbitration Association . This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

MASS HYSTERIA ENTERTAINMENT COMPANY, INC.
 

         
By:
    Name: Daniel Grodnik   Title: Chairman of the Board of Director        
EMPLOYEE
        By:    
Alan J. Bailey
 

 
 
3

--------------------------------------------------------------------------------