**Exhibit 10.3**

 

**EMPLOYMENT AGREEMENT**

 

**FOR**

 

**TIMOTHY J. PARROTT**

 

**THIS EMPLOYMENT AGREEMENT (“Agreement”)**is****entered into as of the 12th day ofOctober, 2000 by and between ON STAGE ENTERTAINMENT, INC., a Nevada corporation(“On Stage” or the “Company”), and TIMOTHY J. PARROTT, an individual(“Executive”).

 

**WHEREAS,** the Company desires toemploy the Executive and the Executive desires to be employed by the Company,on the terms and conditions set forth herein.

 

**NOW**, **THEREFORE**,in consideration of the mutual covenants and agreements set forth herein andfor other good and valuable consideration, the receipt and sufficiency of whichare hereby acknowledged, 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 theExecutive by the Company as provided in Section 1 hereof shall commence on theeffective date of this Agreement and end three (3) years thereafter, provided,that the term of this Agreement shall be extended automatically for additionalone (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 hereinafter set forth.

 

**3**.             **POSITION AND DUTIES**

 

The Executive shall serve asthe Chief Executive Officer of the Company and a member of the Company’s Boardof Directors (the “Board”), with such duties and responsibilities as the Boardmay from time to time determine and assign to the Executive.  The Executive shall devote the Executive’sbest efforts and full business time to the performance of the Executive’sduties and the advancement of the business and affairs of the Company.  In addition, Executive agrees that he willnot engage in any

 

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business, civic or other activities, thatwould materially interfere with the 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’semployment by the Company, the Executive shall be based at the principalexecutive offices of the Company or such other places as the Company and theExecutive mutually agree, except for required travel on Company business.

 

**4**.             **DEFINITIONS**

 

For purposes of this Agreement,the following terms shall have the meanings set forth in this Section 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 in accordance with section 5(b) of thisAgreement.

 

(b)           “Annual Bonus Plan” shall mean the annual cashbonus plan approved by the Board as amended from time to time. Participants inthe Annual Bonus Plan shall be eligible to receive annual cash payments basedon Board assessment of performance which may be totally discretionary, or basedpartly or totally on specific objectives established by the Board for theCompany and Executive for the Fiscal 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)                    Personal dishonesty,misconduct, breach of fiduciary duty involving personal profit, or intentionalfailure to perform stated duties;

(iii)                 Refusal to provideappropriate information or to otherwise participate and cooperate in connectionwith the obtaining by the Company of all licenses, permits, and approvalsnecessary to the conduct of it’s business; or

 

 

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(iv)     Inability to obtain any license, permit, orother authorization required to be obtained by such person as a condition tothe conduct by the Company of entertainment related activities.

 

(f)            “Disability” shall be deemed to have occurred if Executive makes application for oris otherwise eligible for disability benefits under any Company-sponsoredlong-term disability program covering Executive, and Executive qualifies forsuch benefits.  In the absence of aCompany-sponsored long-term disability program covering Executive, Executiveshall be presumed to be totally and permanently disabled if so determined bythe Company’s Board following the Board’s review of a medical opinionsatisfactory to the Board certifying that Executive will be permanently unableto perform his normal duties as Chairman of the Board and Chief ExecutiveOfficer as a result of a physical or mental condition.

 

(g)           “Good Reason” shall mean Executive’s Voluntary Termination of Service from the Companywithin ninety (90) days following the occurrence of one or more of thefollowing events, unless such event is approved in writing by Executive inadvance of it’s occurrence:

 

(i)                                     Any reductionin the Executive’s total compensation opportunity consisting of three paycomponents:  Base Salary,  Target Annual Bonus and Target Annualizedvalue of long-term incentive awards, including stock options, unless thereduction in the total compensation opportunity is applied equally to allofficers of the Company.  The targetannualized value of long-term incentives will be determined based on theExecutive’s average long-term incentive award value for the prior three FiscalYears, calculated according to the Black Scholes option pricing model asrequired for proxy statement 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’s Amended andRestated Incentive Stock Option Plan or any other form of equity (real orphantom) 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’s Amended and Restated Incentive StockOption Plan.

 

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(k)           “Retirement” shall mean the termination of employment upon Executive’s attainment ofage 65 with the sole approval of the Board.

 

(l)            “Termination of Service”  shall mean Executive’s termination of Service for any reasonwhatsoever, including death.

 

**5.**             **COMPENSTATION.**

 

(a)           Base Salary. The Company shall pay to the Executive an annual base salary (the “BaseSalary”) in accordance with the following:

 
| (i)   | ONE DOLLAR ($1.00) for the  period of the date of this Agreement through December 31, 2000;                                                 |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  | ONE HUNDRED TWENTY  THOUSAND DOLLARS ($120,000.00) for the period of January 1, 2001 through  December 31, 2001; and                        |
| (iii) | An annual salary TO BE  DETERMINED by the compensation committee of the Board for the period of  January 1, 2002 through December 31, 2002. |

 

After December 31, 2001, theBase Salary shall be reviewed no less frequently than annually and may beincreased at the discretion of the Board based on prevailing market conditions,performance of the Executive and other considerations.  If the Executive’s Base Salary is increased,the increased amount shall be the Base salary for the remainder of theemployment term hereunder, except that the Company may reduce the Executive’sBase Salary at any time as part of a general salary reduction applied to allofficers 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 and subsequentyears shall be determined by the Board in accordance with the Annual Bonus Planapproved by the Board.  Any Annual Bonusearned by the Executive shall be paid in Cash within one-hundred twenty (120)days following the completion of the Company’s Fiscal Year or as otherwisespecified in the Annual Bonus Plan.

 

(c)           Stock Options. Executive shall be issued an option to purchase 750,000 shares of theCompany’s Common Stock, which will be granted under the Company’s Stock OptionPlan (the “Options”).  The Options shallbe valid for a period of five (5) years from the date of grant, shall have astrike price of $0.50 per share and shall be exercisable as follows: (1)250,000 of the Options shall be exercisable on January 1, 2001; (2) 250,000 ofthe Options shall be exercisable on January 1, 2002; and (3) the remaining250,000 shall be exercisable on January 1, 2003. Subject to Section 422 of theInternal Revenue Code of 1986, as amended (the “Code”), Executive shall specifywhat portion of the Options granted to Executive shall be treated as incentivestock options and what portion shall be treated as non-qualified stock options.

 

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(d)           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.

 

(e)           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.

 

(f)            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.

 

(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 Companyfor such expenses in accordance with policies and procedures established by theCompany.

 

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**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 or indirect interest, in any business which competes with theCompany in any material way, or (b) disclose to any third party, eitherdirectly or indirectly, any non-public information regarding the Company’sbusiness, customers, financial conditions, strategies, or operations thedisclosure of which could possibly harm the Company in any material way.  Clause (a) above shall not apply to anyinvestment by Executive in the stock of a publicly traded corporation, providedsuch investment constitutes less than five percent (5%) of the corporation’scumulative voting shares.  In the eventthat Executive violates clauses (a) or (b) above, Executive’s rights to anybenefits under this Agreement shall immediately terminate.

 

**8**.             **VESTING OF STOCK OPTIONS UPON A CHANGE 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 Stock Option Plan) shall become fully vested and exercisable bythe Executive.

 

For purpose of this Section8, “Change of Control” shall mean the occurrence of any of the followingevents.

 

(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 thenoutstanding voting 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 an agreementfor the sale or disposition by the Company of all or substantially all theCompany’s assets.

 

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**9**.             **EXECUTIVE’S RIGHTS UPON TERMINATION 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:

 

(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 OptionPlan and 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.

 

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(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)                                     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, provided such options or other rights have vested in accordancewith any agreement between the Company and Executive covering such options orother 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)                                     Paymentimmediately upon Executive’s Termination of Service of any previously unpaidBase Salary;

(ii)                                  Continuedparticipation in fringe benefits and perquisites for twenty-four (24) months 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;

(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.

 

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(d)           For Reason of Death.  In the event of Executive’s Termination for Service for Reason ofDeath, Executive’s beneficiaries  asdesignated in accordance with the provisions of Section 12, herein shall be entitledto receive the following upon 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 provided such options or other rights have vested in accordancewith any agreement between the Company and Executive covering such options orother 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 ofCause, 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

 

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

 

**11.**          **LIMITATIONOF BENEFITS UNDER THIS AGREEMENT**

 

(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 Code of 1986; and(ii) but for this Section would be subject to the excise tax imposed by Section4999 of the Code, then the cumulative benefits due under the Agreement shall bepayable either as:

 

(i)                                     the fullpayment, or

(ii)                                  such lesser amount whichwould result in no portion of the payment being subject to excise tax underSection 4999 of the Code, whichever of the foregoing amounts, taking intoaccount the applicable Federal, State, and local employment taxes, income taxesand 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 greatestamount of the payment, notwithstanding that all or some portion of the paymentmay be taxable under Section 4999 of the Code.

 

All determinations required to be made underthis Section 11 shall be made in writing by the Company’s independent publicaccountants (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailedsupporting calculations of it’s determinations to the Company and Executive.  Notice must be given to the Accounting Firmwithin fifteen (15) business days after an event entitling Executive to apayment 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 substantialauthority (within the meaning of Section 6662 of the Code).

 

(b)           In the event that it is determined by the Board, upon receipt of a written opinion of theCompany’s independent public accountants, that the enforcement of Section 8hereof would preclude accounting for any proposed business combination of theCompany as a pooling of interests, and the Board otherwise desires to approve aproposed business transaction which requires as a condition to the closing ofsuch transactions that it be accounted for as a pooling of interests, Section 8of this Agreement shall be null and void, but only if the absence ofenforcement of such sections hereof

 

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would preserve the pooling treatment.  For purposes of this Section 11, the Board’sdetermination shall require the unanimous approval of the disinterested membersof 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 underthis Agreement.  Each beneficiarydesignation shall be effective only when filed in writing with the Companyduring Executive’s lifetime.  IfExecutive designates more than one beneficiary, distributions of cash paymentsshall be made in equal proportions to each beneficiary unless otherwise providedfor in Executive’s beneficiary designation.

 

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 todesignate a beneficiary as provided for above, or if the beneficiarydesignation is revoked by marriage, divorce, or otherwise without execution ofa new designation, 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 this 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’sTermination of Service.  No amendmentsto this Agreement may be made except through a written document signed by bothparties.

 

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**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.

 

**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                                                  . Either party may change theaddress to which such notices are to be addressed by giving the other partynotice in the manner herein 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 expresslywaives it’s entitlement, if any, to have any such controversy heard before acourt or jury.  Either party may, within90 days of the occurrence of the event giving rise to the dispute, initiatearbitration by notifying the other in writing. 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

 

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decision shall be final and binding on bothparties.  The Company and Executiveagree that the arbitration shall occur in Las 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 proprietaryinformation shall be subject to arbitration, and either party may pursue otherlegal and equitable remedies in connection therewith.  As used in this Section 19, the term “Executive” shall also mean,in the event of Executive’s death, his designated beneficiaries, his personalrepresentative, or the executor or administrator of his estate.

 

**20**.          **WITHHOLDINGTAXES**

 

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.**          **APPLICABLELAW**

 

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.

 

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**IN WITNESS WHEREOF,**  the Company has caused this Agreement to be executed by it’s dulyauthorized Representative(s) and Executive has affixed his signature as of thedate first written above.

 

 
| EXECUTIVE              |   | ON STAGE ENTERTAINMENT,  INC,. |
|------------------------|--------|--------------------------------|
|                   |   |                           |   |
|                   |   |                           |   |
| /s/ Timothy J. Parrott |   | By:                            |   /s/ John W. Stuart |   |
|                   |   | Name:                          |   Chairman |   |
|                   |   | Title:                         |   |   |
|                        |        |                                |  |  |  |  |  |

 

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