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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made as of this 1st day of June, 1999, by and
between:
THOROUGHBRED INTERESTS, INC., a Nevada corporation having its executive
office at 0000 Xxxx Xxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (hereinafter referred to
as "EMPLOYER")
AND
XXXXX X. XXXXXX, an adult individual residing at 0000 Xxxx Xxxxx Xxxxx,
Xxxxxxxxxx, XX 00000 (hereinafter "EMPLOYEE")
WITNESSETH THAT;
WHEREAS, EMPLOYEE has certain education, experience, background, know-how
and contacts which would be useful and helpful to EMPLOYER in its business and
EMPLOYER is desirous of employing EMPLOYEE in order to obtain the benefits of
such education, experience, background, know-how and contacts;
WHEREAS, EMPLOYEE is agreeable to being employed by EMPLOYER and providing
the benefits of his education, experience, background and contacts to EMPLOYER;
WHEREAS, the parties have agreed upon the terms of such employment and
desire a written, formal contract to evidence their agreements;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
forbearances contained herein, and intending to be legally bound, the parties
have agreed as follows;
1. EMPLOYMENT. For the term provided in Paragraph 2, EMPLOYER hereby
employs EMPLOYEE, and EMPLOYEE hereby accepts that employment, upon the terms
and conditions hereinafter set forth.
2. TERM.
(a) This Agreement shall become effective as of June 1, 1999.
(b) This Agreement, subject to the provisions of Paragraphs 16 and 17
below, shall continue and exist for an initial period
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from such effective date until December 31, 2000. (initial term).
(c) If, four (4) months prior to the expiration date of the initial term,
neither party is then in default under this Agreement, EMPLOYER shall have the
option to extend the term of this Agreement for an additional one (1) year
period. Such option shall be exercised by EMPLOYER mailing notice to EMPLOYEE,
on or before three (3) months prior to the expiration date of the initial term,
of its intention to so extend the Agreement. If EMPLOYER shall not exercise its
extension option on or before the three months prior to the expiration date of
the initial term, this Agreement shall terminate as provided.
(d) This Agreement shall be subject to a further one (1) year extension
under the procedure provided in subparagraph (c), provided that at December 31
of the then existing extension year neither party is then in default under this
Agreement and notice of exercise of the extension option is given on or before
January 31 of such extension year.
(e) Notwithstanding the foregoing, the term of this Agreement is otherwise
subject to the various termination provisions contained hereafter.
3. COMPENSATION-BASE. (a) For all services rendered under this Agreement,
EMPLOYEE shall be paid, as base compensation, such annual salary as shall be
determined by the EMPLOYER's Board of Directors from time to time, but in no
event shall such compensation be at a rate of less than Ten Thousand Dollars per
month, finances permitting.
(b) EMPLOYEE shall receive his salary, finances permitting, each month. Any
amounts not paid to EMPLOYEE will accrue and be received by employee as
EMPLOYER'S finances permit. Such base compensation payments shall be in addition
to such incentive compensation, fringe benefits and bonuses as provided
elsewhere herein.
(b) For compensation purposes, and provided that such assignment does not
require residential relocation, EMPLOYER may assign EMPLOYEE to one or more of
its subsidiaries and/or affiliates (if
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any), to perform services consistent with EMPLOYEE's duties hereunder. In such
event, EMPLOYEE may be separately compensated by each such entity. All such
compensation shall be deducted from the compensation payable under subparagraphs
(a) and (b) above as may then be applicable and EMPLOYER shall pay EMPLOYEE only
the difference between (i) the total of all such compensations from such
subsidiaries and affiliates and (ii) the base compensation actually being paid
as then in effect.
(c) At the end of each calendar year, if not sooner, the EMPLOYER's Board of
Directors shall review the performance of EMPLOYEE for such immediately
preceeding period, and, based upon such evaluation, establish any increase in
the base compensation payable to EMPLOYEE for a succeeding period. EMPLOYER
shall not be obligated to provide any increase.
4. COMPENSATION-FRINGE BENEFITS. EMPLOYEE shall receive at least the
following additional benefits, which may be extended or increased, but not
reduced, by EMPLOYER:
(a) Vacation - EMPLOYEE shall be entitled to paid vacation of two (2) weeks
during the first two years of this Agreement, three (3) weeks during the third,
fourth and fifth years of this Agreement, and four (4) weeks during any
extension year of this Agreement. Unused vacation time may be accumulated from
year to year if unused. EMPLOYEE shall not be compensated for any unused
vacation time.
(b) Base Personal Leave - During each year of this Agreement, EMPLOYEE shall
receive ten (10) days paid personal leave, which shall not be accumulated from
year to year if unused. EMPLOYEE shall not be compensated for any unused
personal leave. "Personal leave" shall include sick leave, bereavement leave,
and all other personal time off, other than legal holidays in the State of
Nevada.
(c) Medical Insurance - At present, EMPLOYER does not have or offer any medical,
surgical, dental and/or hospitalization insurance. At such time as EMPLOYER
shall adopt any of such plans, EMPLOYEE shall be entitled to family coverage
thereunder, paid by the EMPLOYER.
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(d) Other - EMPLOYEE shall receive such other fringe benefits as are available
to any other officers/employees/consultants. Nothing contained in this Agreement
shall be in lieu of any rights, benefits and privileges to which EMPLOYEE may be
entitled under any 401(k), retirement, pension, profit-sharing, insurance,
ESOT/ESOP, hospitalization, medical, surgical, dental, legal or other plans
which may now be in effect or which may hereafter be adopted, either by EMPLOYER
or any subsidiary or affiliate of EMPLOYER. EMPLOYEE shall have the same rights
and privileges to participate in such plans and benefits as any other employee
during his period of employment and EMPLOYEE shall be entitled to participate on
a parity with executives of equal rank.
5. COMPENSATION-BONUS. After the end of each calendar year, the EMPLOYER's
Board of Directors shall determine the net profits before taxes of EMPLOYER for
such prior year and shall determine any bonus for such year payable to EMPLOYEE.
EMPLOYER shall not be obligated to provide any bonus. Any bonus awarded shall be
paid at such time or times, in such amounts or installments, as the EMPLOYER's
Board of Directors may determine.
6. DUTIES. (a) EMPLOYEE is engaged as the Chief Executive Officer of
EMPLOYER. EMPLOYEE shall perform all usual and customary services as such an
executive, including but not limited to those set forth on Exhibit A, attached
hereto and made a part hereof. EMPLOYEE'S performance shall be subject to the
supervision of EMPLOYER'S Board of Directors. The precise job description and
the specific services to be rendered by EMPLOYEE may be defined, interpreted,
curtailed, or extended, from time to time, by determination of the EMPLOYER'
Board of Directors, provided, however, that any definition, interpretation,
curtailment, or extension is consistent with the status of, and/or educational
experience required for, the responsibilities for which EMPLOYEE has been
initially engaged hereunder. It is the intent of this provision to provide
EMPLOYER with flexibility in assigning responsibilities to EMPLOYEE and/or
promoting EMPLOYEE, and this provision shall not be used to discipline,
embarrass, humiliate or harass EMPLOYEE.
(b) In addition, EMPLOYEE agrees to serve as a director of EMPLOYER so long as
so elected by EMPLOYER's shareholders
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7. EXTENT AND PLACE OF SERVICES. (a) EMPLOYEE agrees that this employment
constitutes his primary employment and understands that his primary loyalty and
responsibility is to EMPLOYER. Accordingly, EMPLOYEE shall devote such adequate,
reasonable, and proper time, attention, and energies to the business of EMPLOYER
as shall be necessary or consistent with such understanding and EMPLOYEE shall
not, during the term of this Agreement, except for his continuing services to
the museum, be engaged in any other business activity (whether or not such
business activity is pursued for gain, profit, or other pecuniary advantage),
which conflicts with EMPLOYEE's employment responsibilities hereunder, without
prior, written authorization of EMPLOYER's Board of Directors. However, nothing
contained herein shall be construed as preventing EMPLOYEE from investing his
assets in such form or manner as EMPLOYEE may select, whether or not such
investment will require any services on EMPLOYEE's part in the operation of the
affairs of the companies in which such investments are made.
8. WORKING FACILITIES. EMPLOYEE shall be furnished, at EMPLOYER's expense,
with all necessary working facilities, including but not limited to an equipped
office, clerical help, and telephone/facsimile/copying services, suitable to his
position and adequate for the performance of his duties.
9. EXPENSES. EMPLOYEE is not authorized to incur expenses on behalf of, or
chargeable to, EMPLOYER, with respect to his business travel, including
transportation, lodging, food, entertainment, etc. except within such guidelines
as may be established from time to time by the EMPLOYER's Management. EMPLOYER
shall reimburse EMPLOYEE for authorized expenses within such guidelines upon
presentation by EMPLOYEE, from time to time, of an itemized account of such
expenditures in much form am EMPLOYER may require, together with receipts or
other proofs of the expenditures as may be required.
10. NON-DISCLOSURE OF INFORMATION. (a) EMPLOYEE recognizes and
acknowledges that, during the course of his employment, he will have access to
valuable "Proprietary Information" and that such information constitutes unique
assets of the business of EMPLOYER and of which EMPLOYER is the sole and
exclusive owner. EMPLOYEE will treat such Proprietary Information on a
confidential basis and
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will not, during or after his employment, personally use or disclose all, or any
part of, such Proprietary Information to any person, firm, corporation,
association, agency, or other entity except as properly required in the conduct
of the business of EMPLOYER, or except as authorized in writing by EMPLOYER,
publish, disclose or authorize anyone else to publish or disclose, any
Proprietary Information of EMPLOYER with which EMPLOYEE'S service may in any way
acquaint EMPLOYEE. EMPLOYEE shall surrender possession of all Proprietary
Information, including especially all Trade Secrets, to EMPLOYER upon any
suspension or termination of EMPLOYEE's employment with the EMPLOYER. In the
event of a breach, or threatened breach, by EMPLOYEE, of the provisions of this
Paragraph, EMPLOYER shall be entitled to a preliminary, temporary and permanent
injunction restraining EMPLOYEE from disclosing in whole or in part, any such
Proprietary Information and/or from rendering any services to any person, firm,
corporation, association, agency, or other entity to whom such information, in
whole or in part, has been disclosed or is threatened to be disclosed.
Furthermore, nothing herein shall be construed as prohibiting EMPLOYER from
pursuing any other equitable or legal remedies available to it for such breach
or threatened breach, including the recovery of damages from EMPLOYEE.
(b) For purposes hereof, "Proprietary Information" shall not include information
which (i) is publicly available from a source other than EMPLOYEE or can be
lawfully obtained from a third party or parties in lawful possession thereof, or
(ii) is publicly release in writing by EMPLOYER, or (iii) is required to be
disclosed pursuant to the authority of any court or public agency.
(c) Nothing contained herein shall prohibit EMPLOYEE from continuing to use
information known to EMPLOYEE prior to the execution of this Agreement; however,
EMPLOYEE shall not publish or disclose any such information which as a result of
EMPLOYEE's services hereunder shall have become Proprietary Information of
EMPLOYER.
11. RESTRICTIVE COVENANT. (a) During the term of this Agreement and for a
period of twelve (12) months after the termination of this Agreement and any
extension thereof, EMPLOYEE will not, within those states of the United States
in which
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than fourteen (14) consecutive work days, or more than four (4) weeks in any
consecutive two-month period, the compensation otherwise payable to EMPLOYEE
thereafter during the continued period of such illness or incapacity may, at the
option of EMPLOYER be reduced by fifty percent (50%). If such illness or
incapacity shall continue for a period of thirty consecutive work days or more
than fifty percent of any calendar quarter, payment of such compensation may, at
the option of EMPLOYER, be stopped altogether. The full compensation shall be
reinstated upon EMPLOYEE's return to service and the discharge of his full
duties hereunder. Notwithstanding anything herein to the contrary, EMPLOYER may,
at its option, terminate this Agreement at any time after the EMPLOYEE shall be
absent from his employment, for whatever cause, for a continuous period of more
than six (6) months, and all obligations of EMPLOYER hereunder shall cease upon
any such termination.
(b) EMPLOYER may elect to continue the payment of full compensation
notwithstanding the foregoing. Such payments shall be in the sole discretion of
EMPLOYER, may be discontinued at any time, and if initiated shall not thereby
become a requirement.
14. TERMINATION OF EMPLOYMENT. (a) EMPLOYER can terminate EMPLOYEE's
employment at any time for good cause. Without intending to limit the definition
of good cause hereby, good cause will include:
(1) the EMPLOYEE'S death;
(2) the occurrence of one of the following events;
(i) EMPLOYEE commits and/or is officially charged with a felony or
any crime involving moral turpitude or unethical conduct which in the good
faith opinion of the EMPLOYER could impair his ability to perform his
duties;
(ii) EMPLOYEE commits an act, or fails to take action in bad faith
and to the detriment of the EMPLOYER, or
(iii) in the good faith opinion of the EMPLOYER's Board of
Directors, the EMPLOYEE fails to fully and faithfully perform his
obligations under this Employment Agreement.
(b) The termination of EMPLOYEE'S services shall not constitute a termination of
the restrictive obligations and duties under
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Paragraphs 10, 11, and 12.
(c) In the event of the bankruptcy (Chapter 7), reorganization (Chapter 11) or
other termination of the business of the EMPLOYER, the provisions of Paragraph
10 shall continue in full force and effect only so long as full base
compensation by EMPLOYER shall continue.
15. ARBITRATION. Any controversy or claim arising out of, or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in Reno,
Nevada in accordance with the rules then pertaining of the American Arbitration
Association, but with all rights of discovery provided by the Nevada Rules of
Civil Procedure, and judgment upon the award rendered may be entered in any
court having jurisdiction thereof.
16. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by such other party. The failure of a party
to exercise any rights or privileges under this Agreement shall not be deemed to
be a waiver or extinguishment of such rights or privileges, all of which shall
continue to be exercisable.
17. BENEFIT. The rights and obligations of EMPLOYER under this Agreement
shall inure to the benefit of, and shall be binding upon, its successors and
assigns. The protection of Paragraphs 10, 11, and 12 shall inure to the benefit
of EMPLOYER and any successors and assigns. The rights and obligations of
EMPLOYEE under this Agreement shall inure to the benefit of, and shall be
binding upon, his heirs, administrators, executors, successors and assigns.
18. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if either personally delivered
or sent by certified mail, to his residence in the case of EMPLOYEE, or to its
principal office in the case of EMPLOYER.
19. LIFE INSURANCE. EMPLOYER and/or one or more of its subsidiaries may,
in its discretion at any time after the execution
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of this Agreement, apply for and procure, as owner and for its own benefit,
insurance on the life of EMPLOYEE, in such amounts and in such forms as EMPLOYER
may choose. EMPLOYER shall not be required to give EMPLOYEE any interest
whatsoever in any such policy or policies, (although nothing contained herein
shall be deemed to prohibit any such arrangement) but EMPLOYEE shall, at the
request of EMPLOYER, subject himself to such medical examination, supply such
information, and execute such information releases and documents as may be
required by the insurance company or companies to whom EMPLOYER has applied for
such insurance.
20. ENTIRE AGREEMENT. This instrument contains the entire agreement of the
parties and may be modified only by agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
21. APPLICABLE LAW. This Agreement shall be governed for all purposes by
the laws of the State of Nevada. If any provision of this Agreement is declared
void, such provision shall be deemed severed from this Agreement, which shall
otherwise remain in full force and effect.
22. COUNTERPARTS. This Agreement may be executed in two or
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more counterparts, including facsimile counterparts, any one of which shall be
deemed to be an original.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto set their hands and seals as of the day and year hereunto above
written.
THOROUGHBRED INTERESTS, INC.
ATTEST: By: /s/ Xxxxx X. Xxxxxx
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President
/s/ Xxxxx X. Xxxxxx
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Secretary EMPLOYEE:
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
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