**Exhibit 10.1**

 

**EMPLOYMENT AGREEMENT**

 

**FOR**

 

**JOHN W. STUART**

 

**THIS EMPLOYMENT AGREEMENT (“Agreement”)** is enteredinto as of the 12th day of October, 2000 by and between ON STAGE ENTERTAINMENT,INC., a Nevada corporation (“On Stage” or the “Company”), and JOHN W. STUART,an individual (“Executive”).

 

**WHEREAS**, the Company desires to employ the Executiveand the Executive desires to be employed by the Company, on the terms andconditions set forth herein.

 

**NOW, THEREFORE**, in consideration of themutual covenants and agreements set forth herein and for other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the Company and Executive hereby agree as follows:

 

**1.             EMPLOYMENT**

 

On the terms and conditionsset forth in this Agreement, the Company agrees to employ the Executive and theExecutive agrees to be employed by the Company for the term set forth inSection 2 hereof and in the position and with the duties set forth in Section 3hereof.

 

**2.             TERM**

 

The Employment of the Executiveby the Company as provided in Section 1 hereof shall commence on the effectivedate of this Agreement and end three (3) years thereafter, provided, that theterm of this Agreement shall be extended automatically for additional one (1)year periods on the first anniversary date of this Agreement and eachsubsequent anniversary date, unless and until each party provides writtennotice to the other party in accordance with Section 17 hereof not less thanninety (90) days prior to such anniversary date that such party is terminatingthis Agreement, which termination shall be effective as of the end of suchinitial term or extended term, as the case may be (the “Expiration Date”), oruntil sooner terminated as herein after set forth.

 

**3.             POSITION AND DUTIES**

 

The Executive shall serve asChairman of the Board and founder of the Company, with such duties andresponsibilities as the Company’ Board of Directors (“the Board”) may from timeto time determine and assign to the Executive. The Executive shall devote the Executive’s best efforts and fullbusiness time to the performance of the Executive’s duties and the advancementof the business and affairs of the Company. In addition,

 

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Executive agrees that he will not engage inany business, civic or other activities that would materially interfere withthe performance of his duties hereunder.

 

The Executive shall bepermitted to serve as a Director or Trustee of other organizations, subject tothe sole discretion of the Board, on a case-by-case basis.  Approval will not be granted if such serviceinvolves a competitor of the Company or materially interferes with theeffective performance of the Executive’s duties under the Agreement.  In connection with the Executive's employmentby the Company, the Executive shall be based at the principal executive officesof the Company or such other places as the Company and the Executive mutuallyagree, except for required travel on Company business.

 

**4.             DEFINITIONS**

 

For purposes of thisAgreement, the following terms shall have the meanings set forth in thisSection 4:

 

(a)           “Annual Bonus” shall mean a cash payment availableannually (or as otherwise provided for in this document) to Executive inaddition to Base salary, payment of which is contingent upon the performance ofthe Company and the Executive during each Calendar Year as determined inaccordance with section 5(b) of this Agreement.

 

(b)           “Annual Bonus Plan” shall mean the annual cashbonus plan approved by the Board as amended from time to time.  Participants in the Annual Bonus Plan shallbe eligible to receive annual cash payments based on Board assessment ofperformance which may be totally discretionary, or based partly or totally onspecific objectives established by the Board for the Company and Executive for theFiscal Year.

 

(c)           “Base Salary” shall mean the annual base salaryrate in effect for Executive from time to time during the Term of thisAgreement.

 

(d)           “Calendar” shall mean the one year period endingDecember 31 of each year.

 

(e)           “Cause” Shall mean Executive’s:

 

(i)                                     Conviction forany felony involving moral turpitude;

(ii)                                  Personaldishonesty, misconduct, breach of fiduciary duty involving personal profit, orintentional failure to perform stated duties;

(iii)                               Refusal toprovide appropriate information or to otherwise participate and cooperate inconnection with the obtaining by the Company of all licenses, permits, andapprovals necessary to the conduct of it’s business; or

 

 

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(iv)                              Inability to obtainany license, permit, or other authorization required to be obtained by suchperson as a condition to the conduct by the Company of entertainment relatedactivities.

 

(f)            “Disability” shall be deemed to have occurred ifExecutive makes application for or is otherwise eligible for disabilitybenefits under any Company-sponsored long-term disability program coveringExecutive, and Executive qualifies for such benefits.  In the absence of a Company-sponsored long-term disabilityprogram covering Executive, Executive shall be presumed to be totally andpermanently disabled if so determined by the Company’s Board following theBoard’s review of a medical opinion satisfactory to the Board certifying thatExecutive will be permanently unable to perform his normal duties as Chairmanof the Board and founder of the Company as a result of a physical or mentalcondition.

 

(g)           “Good Reason” shall mean Executive’s VoluntaryTermination of Service from the Company within ninety (90) days following theoccurrence of one or more of the following events, unless such event isapproved in writing by Executive in advance of it’s occurrence:

 

(i)                                     Any reductionin the Executive’s total compensation opportunity consisting of three paycomponents: Base Salary, Target Annual Bonus and Target Annualized value oflong-term incentive awards, including stock options, unless the reduction inthe total compensation opportunity is applied equally to all officers of theCompany.  The target annualized value oflong-term incentives will be determined based on the Executive’s averagelong-term incentive award value for the prior three Fiscal Years, calculatedaccording to the Black Scholes option pricing model as required for proxystatement disclosure;

(ii)                                  A materialreduction in Executive’s title or responsibilities; or

(iii)                               Relocation ofExecutive’s primary place of work to a location more than fifty (50) miles fromExecutive’s primary residence as of the date of this Agreement.

 

(h)           “Long Term Incentive Plan” shall mean The Company’sAmended and Restated Incentive Stock Option Plan or any other form of equity(real or phantom) or other long-term incentive plan introduced by the Company.

 

(i)            “Service” shall mean Executive’s full-time orsubstantially full-time employment with the Company, or any affiliatedorganization, including any leave of absence approved by the Board.

 

(j)            “Stock Option Plan” shall mean the Company’sAmended and Restated Incentive Stock Option Plan.

 

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(k)           “Retirement” shall mean the termination ofemployment upon Executive’s attainment of age 65 with the sole approval of theBoard.

 

(l)            “Termination of Service” shall mean Executive’stermination of Service for any reason whatsoever, including death.

 

**5.             COMPENSTATION.**

 

(a)           Base Salary. The Company shall pay to the Executive an annual base salary of THREEHUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) per annum (the “BaseSalary”).  The Base Salary shall bereviewed no less frequently than annually and may be increased at the discretionof the Board based on prevailing market conditions, performance of theExecutive and other considerations.  Ifthe Executive’s Base Salary is increased, the increased amount shall be theBase Salary for the remainder of the employment term hereunder, except that theCompany may reduce the Executive’s Base Salary at any time as part of a generalsalary reduction applied to all officers of the Company.

 

(b)           Annual Bonus. The Executive shall be eligible to participate each Calendar Year in anAnnual Bonus Plan approved by the Board. The actual amount of Annual Bonus earned by Executive for Year 2000 andsubsequent years shall be determined by the Board in accordance with the AnnualBonus Plan approved by the Board.  AnyAnnual Bonus earned by the Executive shall be paid in Cash within one-hundredtwenty (120) days following the completion of the Company’s Fiscal Year or asotherwise specified in the Annual Bonus Plan. It should be noted that in no event shall Executive’s annual bonus beless than $150,000 per annum (the “Minimum Annual Bonus”).  Executive may elect to have the MinimumAnnual Bonus paid in equal bi-monthly installments.

 

(c)           Long-Term Incentives.  The Executive shall participate in any Long-Term Incentive Planthat may be designed specifically for the Executive or provided to the officersand other executives of the Company during the Term of this Agreement.

 

(d)           Medical and Dental Health Plans.  The Company shall provide Executive and hisimmediate family with medical and dental health insurance of the type and insuch amounts as is available from time to time to all other executive officersof the Company.  Nothing contained inthis Agreement shall prevent the Company from changing insurance carriers orfrom affecting modifications in insurance coverage for the Executive.

 

(e)           Life and Disability Insurance.  The Company shall purchase life anddisability insurance for Executive of the type and in such amounts as isavailable from time to time to all other executives of the Company.

 

(f)            Automobile Allowance.  The Company shall lease for Executive a suitable automobile andshall pay for all fair and reasonable expenses incurred by Executive in

 

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connection with the operation of suchautomobile including, without limitation, insurance, maintenance, gasoline andoil.  The automobile will be insuredthrough the Company’s insurance carrier. The Company will exercise its best efforts to establish the lease insuch a way that the automobile will not be an income item to Executive forfederal income tax purposes.  Thegeneral parameters of the automobile lease shall be as follows: (i) The basicmonthly lease payment is not to exceed $1,500.00 (excluding taxes and extramileage charges); The capitalized cost reduction at the time the lease isexecuted shall not exceed $75,000.00 plus customary drive-off costs, such astaxes and a security deposit; and (iii) The lease term shall be between twelve(12) and thirty-six (36) months.

 

(g)           Cellular Telephone.  The Company will provide Executive with a cellular telephone, acellular car telephone and a pager and will pay for or reimburse Executive forall fair and reasonable expenses incurred by Executive for the use of saiditems in the performance of his services hereunder.

 

(h)           Home Office Expenses.  The Company will pay for the installation and line charges for atwo-line telephone and a fax machine with it own line in Executive’s home tothe extent used in the performance of his services hereunder.  The company will pay for or reimburse toExecutive, whichever the case may be, all reasonable costs associated withkeeping an office at his home, including, but not limited to: a desk, a two-waytelephone, a facsimile machine, a computer, computer software, a copy machineand all office supplies reasonable related to maintaining an office.

 

(i)            Vacation Holidays.  The Executive shall be entitled to all public holidays observedby the Company and vacation days in accordance with the applicable vacationpolicies (three weeks vacation) for officers of the Company, which shall betaken at a reasonable time or times.  Inthe event Executive is unable to utilize his allotted vacation time, Executiveshall have the right to request that the Company pay him his salary in lieu ofany such unutilized vacation days at the expiration of any given employmentyear.

 

**6.             EXPENSES**

 

The Company shall reimbursethe Executive for all reasonable expenses incurred by the Executive (inaccordance with the policies and procedures in effect for officers of theCompany) in connection with the Executive’s services under this Agreement.  The Executive shall account to the Company for such expenses inaccordance with policies and procedures established by the Company.

 

**7.             CONFIDENTIAL INFORMATION**

 

During the period in which this Agreementremains in force and while Executive is entitled to receive any benefits underthis Agreement, Executive shall not, without prior written consent of the Boardor pursuant to and consistent with the order of any court, legislative body orregulatory agency (a) engage directly or indirectly (including, by way ofexample only, as principal, partner, venturer, employee, or agent), nor haveany direct

 

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or indirect interest, in any business which competeswith the Company in any material way, or (b) disclose to any third party,either directly or indirectly, any non-public information regarding theCompany’s business, customers, financial conditions, strategies, or operationsthe disclosure of which could possibly harm the Company in any material way.Clause (a) above shall not apply to any investment by Executive in the stock ofa publicly-traded corporation, provided such investment constitutes less thanfive percent (5%) of the corporation’s cumulative voting shares.  In the event that Executive violates clauses(a) or (b) above, Executive’s rights to any benefits under this Agreement shallimmediately terminate.

 

**8.             VESTING OF STOCK OPTIONS UPON ACHANGE OF CONTROL**

 

Upon the effective date of a Change ofControl, all stock options previously granted to the Executive under theCompany’s Long-Term Incentive Plan (excluding any stock options granted underthe Company’s Amended & Restated Incentive Stock Option Plan) shall becomefully vested and exercisable by the Executive.

 

For the purposes of thisSection 8, “Change of Control” shall mean the occurrence of any of thefollowing events.

 

(a)           When any “person” (as such term is used in Sections 13 (d)and 14 (d) of the Securities Exchange Act of 1934, as amended) other than theCompany is or becomes the “beneficial owner” (as defined in Rule 13-d-3 undersaid Act), Directly or indirectly, of securities of the Company representing50% or more of the total voting power represented by the Company’s then outstandingvoting securities; or

 

(b)           The approval by the stockholders of the Company of amerger or consolidation of the Company with any other corporation, other than amerger or consolidation which would result in the voting securities of theCompany outstanding immediately prior thereto continuing to represent (eitherby remaining outstanding or by being converted into voting securities of thesurviving entity) at least fifty percent (50%) of the total voting powerrepresented by the voting securities of the Company or such surviving securityoutstanding immediately after such merger or consolidation; or the stockholdersof the Company approve a plan of complete liquidation of the Company or anagreement for the sale or disposition by the Company of all or substantiallyall the Company’s assets.

 

**9.             EXECUTIVE’S RIGHTS UPONTERMINATION OF SERVICE**

 

(a)           For Reason of Voluntary Resignation Constituting GoodReason or Termination by the Company Without Cause.  In the event of Executive’s Termination ofService for reason of (i) voluntary resignation by Executive constituting GoodReason; or (ii) Executive’s Termination of Service by the Company withoutcause, Executive (or if Executive dies while benefits remain due under thisAgreement, Executive’s beneficiaries as designated in accordance with theprovisions of Section 12 herein) shall be entitled to receive the followingupon such Termination Service:

 

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(i)                                     Paymentimmediately upon Executive’s Termination of Service of any previously unpaidBase Salary and the pro-rata portion of any Annual Bonus owed to Executive (ifnecessary, the Company may pay such Annual Bonus when all bonuses for thatcalendar year are calculated and paid under the Company’s Annual Bonus Plan)through the date of the Executive’s Termination of Service;

(ii)                                  Base Salary,for a period equal to the amount of time remaining under the Term of thisAgreement following such Termination, payable in equal biweekly Installments;

(iii)                               The average ofthe actual Annual Bonus payments for the three Calendar Years completed priorto such Termination, for a period equal to the amount of time remaining underthe Term of this Agreement following such Termination, payable in accordancewith the typical payout schedule of Annual Bonuses earned by the Executive forthe prior three Calendar year.

(iv)                              Continuedparticipation in fringe benefits and perquisites for balance of the term asdescribed in Section 5 (d) herein, as available to Executive immediately priorto Executive’s Termination of Service. If continued participation in one or more of these fringe benefits isnot possible due to legal or other constraints, the Company shall provideExecutive with sufficient funds on a monthly basis to enable Executive tosecure fringe benefits, on an after-tax basis, substantially similar to thosewhich Executive was entitled to immediately prior to Executive’s Termination ofService;

(v)                                 Immediatevesting of any stock options or other rights previously provided to Executiveunder the Company’s Long-Term Incentive Plan, excluding any stock optionsgranted under the Company’s Amended & Restated Incentive Stock Option Planand any cash-based long-term incentives; and

(vi)                              Payment of anylife insurance, Disability, or other benefits provided to Executive by theCompany in accordance with the terms and conditions of such benefits and thisAgreement.

 

(b)           For Reason of Retirement.  In the event of Executive’s Termination of Service for reason ofRetirement, Executive (or if Executive dies while benefits remain due underthis Agreement, Executive’s beneficiaries as designated in accordance with theprovisions of Section 12 herein) shall be entitled to receive the followingupon such Termination of Service:

 

(i)                                     Payment immediatelyupon Executive’s Termination of Service of any previously unpaid Base Salary;

(ii)                                  Performance ofCompany obligations with respect to Executive’s exercise of any stock optionsor other rights previously granted to Executive under the Company’s Long-TermIncentive Plan,

 

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provided such options orother rights have vested in accordance with any agreement between the Companyand Executive covering such options or other rights; and

(iii)                               Payment of anyretirement benefits provided to Executive by the Company in accordance with theterms and conditions of such benefits and this Agreement.

 

(c)           For Reason of Disability.  In the event of Executive’s Termination of Service for reason ofDisability, Executive (or if Executive while benefits remain due under thisAgreement, Executive’s beneficiaries as designated in accordance with theprovisions of Section 12 herein) shall be entitled to receive the followingupon such Termination of Service:

 

(i)                                     Payment immediatelyupon Executive’s Termination of Service of any previously unpaid Base Salary;

(ii)                                  Continuedparticipation in fringe benefits and perquisites for twenty-four (24) months asdescribed in Section 5(d) herein, as available to Executive immediately prior toExecutive’s Termination of Service.  Ifcontinued participation in one or more of these fringe benefits is not possibledue to legal or other constraints the Company shall provide Executive withsufficient funds on a monthly basis to enable Executive to secure fringebenefits, on an after-tax basis, substantially similar to those which Executivewas entitled to immediately prior to Executive's Termination of Service;

(iii)                               Performance ofCompany obligations with respect to Executive’s exercise of any stock optionsor other rights previously granted to Executive under the Company’s Long-TermIncentive Plan, provided such options or other rights have vested in accordancewith any agreement between the Company and Executive covering such options orother rights; and

(iv)                              Payment of anylife insurance, Disability, or other benefits provided to Executive by theCompany in accordance with the terms and conditions of such benefits and thisAgreement.

 

(d)           For Reason of Death.  In the Event of Executive’s Termination for Service for Reason ofDeath, Executive’s beneficiaries as designated in accordance with theprovisions of Section 12, herein shall be entitled to receive the followingupon such Termination of Service:

 

(i)                                     Paymentimmediately upon Executive’s Termination of Service of any previously unpaidBase Salary;

 

(ii)                                  Performance ofCompany obligations with respect to Executive’s exercise of any stock optionsor other rights previously granted to Executive under the Company’s Long-TermIncentive Plan

 

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provided such options orother rights have vested in accordance with any agreement between the Companyand Executive covering such options or other rights; and

(iii)                               Payment of anylife insurance benefits provided to Executive by the Company in accordance withthe terms and conditions of such benefits and this Agreement.

 

(e)           For Reason of Voluntary Resignation Not ConstitutingGood Reason.  In the event ofExecutive’s Termination of Service for reason of voluntary resignation byExecutive not constituting Good Reason, Executive (or if Executive dies whilebenefits remain due under this Agreement, Executive’s beneficiaries asdesignated in accordance with the provisions of Section 12 herein) shall beentitled to receive the following upon such Termination of Service:

 

(i)                                     Paymentimmediately upon Executives Termination of Service of any previously unpaidBase Salary;

(ii)                                  Performance ofCompany obligations with respect to Executives exercise of any stock options orother rights previously granted to Executive under the Company’s Long-TermIncentive Plan, provided such options or other rights have vested in accordancewith any agreement between the Company and the Executive covering such optionsor other rights; and

(iii)                               Payment of anylife insurance benefits provided to Executive by the Company in accordance withthe terms and conditions of such benefits and this Agreement.

 

(f)            For Reason of Cause.  In the event of Executive's Termination of Service for Reason of Cause,the Company's obligation to Executive shall be limited to:

 

(i)                                     Paymentimmediately upon Executive's Termination of Service of any previously unpaidBase Salary;

(ii)                                  Performance ofCompany obligations with respect to Executive's exercise of any stock optionsor other rights have vested in accordance with agreement between the Companyand Executive covering such options or other rights; and

(iii)                               Payment of anylife insurance benefits provided to Executive by the Company in accordance withthe terms and conditions of such benefits and this Agent.

 

**10.          MITIGATION**

 

Executive shall not berequired to mitigate the amount of any benefit provided for in this Agreementby actively seeking alternative employment during the period in which suchBenefits are paid.

 

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**11.          LIMITATION OF BENEFITS UNDER THISAGREEMENT**

 

(a)           In the event that the payment of any benefit due toExecutive under this Agreement (including any early vesting of stock options orother rights under the Company’s Long-Term Incentive Plan): (i) constitutes a“parachute payment” within the meaning of Section 280G of the Internal RevenueCode of 1986, as amended (the “Code”); and (ii) but for this Section would besubject to the excise tax imposed by Section 4999 of the Code, then thecumulative benefits due under the Agreement shall be payable either as:

 
| (i)  | the full payment, or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii) | such lesser amount which  would result in no portion of the payment being subject to excise tax under  Section 4999 of the Code, whichever of the foregoing amounts, taking into  account the applicable Federal, State, and local employment taxes, income  taxes and the excise tax imposed by Section 4999 of the Internal Revenue  Code, results in the receipt by the Executive, on an after tax basis, of the  greatest amount of the payment, notwithstanding that all or some portion of  the payment may be taxable under Section 4999 of the Code. |

 

All determinations requiredto be made under this Section 11 shall be made in writing by the Company’sindependent public accountants (the “Accounting Firm”).  The Company shall cause the Accounting Firmto provide detailed supporting calculations of it’s determinations to theCompany and Executive.  Notice must begiven to the Accounting Firm within fifteen (15) business days after an evententitling Executive to a payment under this Agreement.  All fees and expenses of the Accounting Firmshall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority(within the meaning of Section 6662 of the Code).

 

(b)           In the event that it is determined by the Board, uponreceipt of a written opinion of the Company’s independent public accountants,that the enforcement of Section 8 hereof would preclude accounting for anyproposed business combination of the Company as a pooling of interests, and theBoard otherwise desires to approve a proposed business transaction whichrequires as a condition to the closing of such transactions that it beaccounted for as a pooling of interests, Section 8 of this Agreement shall benull and void, but only if the absence of enforcement of such sections hereofwould preserve the pooling treatment. For purposes of this Section 11, the Board’s determination shall requirethe unanimous approval of the disinterested members of the Board.

 

**12.          DESIGNATIONOF BENEFICIARIES**

 

Executive shall have theright at any time to designate any person(s) or trust(s) as beneficiaries towhom any benefits payable under this Agreement shall be made in the event ofExecutive’s death prior to the distribution of all benefits due Executive under

 

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this Agreement.  Each beneficiary designation shall be effective only when filedin writing with the Company during Executive’s lifetime.  If Executive designates more than onebeneficiary, distributions of cash payments shall be made in equal proportionsto each beneficiary unless otherwise provided for in Executive’s beneficiarydesignation.  The filing of a newbeneficiary designation shall cancel all designations previously filed.  Any finalized marriage or divorce (otherthan common law marriage) of Executive subsequent to the date of filing abeneficiary designation shall revoke such designation unless (a) in the case ofdivorce, the previous spouse was not designated as beneficiary, and (b) in thecase of marriage, Executive’s new spouse had previously been designated asbeneficiary.  If Executive fails to designatea beneficiary as provided for above, or if the beneficiary designation isrevoked by marriage, divorce, or otherwise without execution of a newdesignation, or if the beneficiary designated by Executive dies prior todistribution of the benefits due the Executive under this Agreement, theCompany shall direct the distribution of any benefits due under this Agreementto Executive’s estate.

 

**13.          SUCCESSORS**

 

Except as provided for inSection 12 above, the rights and duties of a party hereunder shall not beassignable by that party; provided, however, that this Agreement shall bebinding upon and shall inure to the benefit of any successor of the Company,and any such successor shall be deemed substituted for the Company under theterms of this Agreement.  The termsuccessor as used herein shall include any person, firm, corporation, or otherbusiness entity which at any time, by merger, purchase or otherwise, acquiressubstantially all of the assets or business of the Company.

 

**14.          ENTIRE AGREEMENT**

 

Withrespect to matters specified herein, this Agreement contains the entireagreement between the parties and supercedes all prior oral and writtenagreements, understandings, and commitments between the parties, including theprovisions of any stock option agreement(s) between the Executive and theCompany providing for the acceleration of vesting of vesting of Executive’sstock option(s) upon Executive’s Termination of Service.  No amendments to this Agreement may be madeexcept through a written document signed by both parties.

 

**15.          VALIDITY**

 

In the event that anyprovision of this Agreement is held to be invalid, void or unenforceable, thesame shall not affect, in any respect whatsoever, the validity of any otherprovision of the Agreement.

 

**16.          PARAGRAPHS AND OTHER HEADINGS**

 

Paragraphs or other headingscontained in this Agreement are for reference purposes only and shall notaffect in any way the meaning or interpretation of this Agreement.

 

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**17.          NOTICE**

 

Any notice or demandrequired or permitted to be given under this Agreement shall be made in writingand shall be deemed effective upon the personal delivery thereof if deliveredor, if mailed, 48 hours after having been deposited in the United States mail,postage prepaid, and addressed in the case of the Company to the attention ofthe Board of Directors at the Company’s then principal place of business,presently 4625 West Nevso Drive, Suite # 9, Las Vegas, Nevada 89103, and in thecase of Executive, presently 8213 Rancho Destino, Las Vegas, Nevada 89123.  Either party may change the address to whichsuch notices are to be addressed by giving the other party notice in the mannerherein set forth.

 

**18.          RIGHT OF EMPLOYMENT**

 

Nothing stated or implied bythis Agreement shall prevent the Company from terminating the Service ofExecutive at any time, nor prevent Executive from voluntarily terminatingService at any time.

 

**19.          ARBITRATION OF DISPUTES**

 

Except as expressly providedbelow, in the event of a dispute arising over the interpretation or enforcementof any of the provisions of this Agreement, or any other controversy or claimarising out of or relating to the Agreement, the Company and Executive agree tosubmit such dispute to binding arbitration in accordance with the CommercialArbitration Rules of the American Arbitration Association to the fullest extentpermitted by law. Each party expressly waives it’s entitlement, if any, to haveany such controversy heard before a court or jury.  Either party may, within 90 days of the occurrence of the eventgiving rise to the dispute, initiate arbitration by notifying the other inwriting. Failure to initiate arbitration within such 90 day period, or suchextended period as may be mutually agreed in writing within such 90 day period,shall constitute a waiver of any and all such claims, and they shall be foreverbarred.  Both parties shall attempt toagree upon a mutually acceptable arbitrator. If the Company and Executive are unable to agree upon one arbitrator,then an arbitrator shall be selected in accordance with the then-current rulesof the American Arbitration Association. The arbitrator’s decision shall be final and binding on bothparties.  The  Company and Executive agree that the arbitration shall occur inLas Vegas, Nevada.  The fees andexpenses of the arbitrator for any arbitration under this Agreement shall bepaid by the Company.  The fees andexpenses of counsel and experts retained by each party, the Company and theExecutive, shall be paid by the party retaining the services.  The arbitrator shall have no authority toaward punitive or exemplary damages against any party.  Notwithstanding the foregoing, no disputesarising under or in connection with any agreement concerning proprietary informationshall be subject to arbitration, and either party may pursue other legal andequitable remedies in connection therewith. As used in the Section 19, the term “Executive” shall also mean, in theevent of Executive’s death, his designated beneficiaries, his personalrepresentative, or the executor or administrator of his estate.

 

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**20.          WITHOLDING TAXES**

 

To the extent required bylaw, the Company shall withhold from any payments due the Executive due underthis Agreement any applicable federal, state or local taxes and such otherdeductions as are prescribed by law or Company policy.

 

**21.          APPLICABLE LAW**

 

To the full extentcontrollable by stipulation of the parties, this Agreement shall be interpretedand enforced under Nevada law.

 

**22.          GOVERNING LAW**

 

This Agreement shall begoverned in all respects by the internal laws of the State of Nevada.

 

**23.          SUCCESSORS AND ASSIGNS**

 

Except as otherwise providedherein, the provisions hereof shall inure to the benefit of and be bindingupon, the successors, assigns, heirs, executors and administrators of theparties hereto.

 

**24.          AMENDMENT**

 

Neither this Agreement norany term hereof may be amended, waived, discharged or terminated other than bywritten instrument signed by the party against whom enforcement of suchamendment, waiver, discharge or termination is sought.

 

**25.          COUNTERPARTS**

 

This Agreement may beexecuted in any number of counterparts, each of which shall be enforceableagainst the parties actually executing such counterparts, and all of whichtogether shall constitute one instrument.

 

**IN WITNESS WHEREOF**, the Company has causedthis Agreement to be executed by it’s duly authorized Representative(s) andExecutive has affixed his signature as of the date first written above.

 
| EXECUTIVE          | ON STAGE ENTERTAINMENT,  INC. |
|--------------------|-------------------------------|
|               |                          |   |
|               |                          |   |
| /s/ John W. Stuart |                          | By: | /s/ Timothy J. Parrott |
|               | Name:                         | TIM PARROTT |
|               | Title:                        | CEO & PRESIDENT |
|                    |                               |  |  |  |  |  |

 

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