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Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("THE AGREEMENT") IS BY AND BETWEEN XXXXXXX X.
XXXXXXXX ("EMPLOYEE") 000 XXXXXXXXX XXXXXX XXXXX, XXXXX XXXXX, XXXXXXX 00000 AND
INTERNATIONAL REALTY GROUP, INC., A DELAWARE CORPORATION (THE "EMPLOYER") 000 XX
000 XXXXXX, XXXXX 000, XXXXX, XXXXXXX 00000 (COLLECTIVELY THE "PARTIES").
STATEMENT OF FACTS
1. Employee has been employed by Employer and currently holds the position
of President of Employer. Employer believes that Employee's continued
involvement in its business will contribute to the future success of
Employer.
2. Employee wishes to continue his employment with Employer, and Employer
also wishes to have such employment continue, on the basis set forth in
this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and the mutual agreements,
covenants and provisions herein contained, the Parties agree as follows:
ARTICLE 1
SECTION 1.1 - DEFINITIONS
"Base Salary" is defined in Section 3.1 hereof.
"Cause" is defined in Section 4.1 hereof.
"Disability" and "Disabled" are defined in Section 5.1 hereof.
"Duties" shall mean those duties of Employee described
in Section 2.4 hereof.
"Effective Date" is defined in Section 2.2 hereof.
ARTICLE II
SECTION 2.1 - EMPLOYMENT: Employer hereby employs the Employee and the Employee
hereby accepts such employment under the terms and conditions set forth in this
Agreement.
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SECTION 2.2 - TERMS: This Agreement shall be deemed to be effective, and the
term of Employee's employment ("Term") shall commence as of December 1, 1998
(the "Effective Date"), and shall continue for a period of three (3) years from
the Effective Date. The term shall be automatically renewed upon its expiration
for one additional year and every year thereafter unless (i) it is sooner
terminated in accordance with Article IV or (ii) either party gives written
notice to the other party in the manner provided in Section 8.6 indicating such
party's intention not to renew this Agreement, which notice is given not less
than 30 days prior to the expiration of the three-year Term, specified above, or
any annual renewal Term thereafter (each term so renewed deemed part of the
continuing Term).
SECTION 2.3 - BEST EFFORTS: During the Term, the Employee shall devote
substantially all of his business time and energy to the performance of the
duties hereunder and shall perform his Duties as defined herein to the best of
his ability subject to the instruction, direction and control of the Chairman of
the Board, CEO, Employer's Executive Committee, and Board of Directors of
Employer.
SECTION 2.4 - DUTIES: Employee shall serve as President of Employer, and be
responsible for the U.S. operations of Employer. Employee shall perform the
duties ("Duties") customarily associated with such capacity and from time to
time, and at such place or places as Employer shall designate, provided that
Employer shall not require Employee to permanently relocate from a 00-xxxx
xxxxxx xx Xxxxx, Xxxxxxx without Employee's prior consent.
ARTICLE III
COMPENSATION
SECTION 3.1 - BASE SALARY: Employer shall pay to Employee during the Term a
salary of One hundred two thousand dollars ($102,000) per annum (such annual
compensation and any increases thereto, referred to as "Base Salary"), from
which applicable withholding will be made for taxes, in accordance with the law.
Base Salary will be paid in periodic installments at such time as Employer
customarily pays its other employees holding comparable positions, but in any
event not less than monthly. Base Salary will be reviewed each year and may be
amended (but not decreased below the amount specified above) at the sole
discretion of the Board of Directors of Employer. Nothing herein shall be
considered as a promise or guaranty of increase in Base Salary, nor shall any
such increase act as a promise or guaranty of future increases in Base Salary.
SECTION 3.2 - BONUS: Employee shall receive bonuses (in cash or property) as
may, from time to time, be determined by the Board of Directors of Employer.
SECTION 3.3 - STOCK OPTION: Employee shall, at the Effective date, be awarded an
option to purchase 2,000,000 shares of the Company's Common Stock. Such option
can be exercised in whole or part at a purchase price of $0.135 per share. Such
option shall be for the Term of this Employment Agreement, and any extension
thereof.
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ARTICLE IV
TERMINATION
SECTION 4.1 - GROUNDS FOR TERMINATION:
(a) TERMINATION UPON DEATH. This Agreement shall terminate immediately upon
the death of Employee.
(b) TERMINATION BY EMPLOYER FOR CAUSE. This Agreement shall terminated
immediately upon written notice by Employer to Employee that Employee has
been terminated for "Cause." "Cause" shall mean one or more of the
following.
(i) The perpetration of a fraud on the Company;
(ii) Conviction of a felony or other crime involving moral turpitude;
(iii) Habitual insobriety or use of illegal drugs interfering with
performance of the Duties; or,
(iv) Other than a failure resulting from Disability, Employee's failure
or refusal to perform the Duties or to carry out any reasonable and
lawful directives of Employer with respect to the Duties or the
manner in which the Duties are to be rendered; provided, however,
that (A) such failure of refusal is material to this Agreement and
repetitive, and (B) Employee has been given 10-days written notice
and explanation of a refusal or failure, as well as 10-days to cure
such refusal or failure, and no cure has been effected within such
10-days.
SECTION 4.2 - EFFECTS OF TERMINATION:
(a) General Provisions. Upon the termination of this Agreement for any reason
specified in this Article IV;
(i) Effective upon the date or termination, Employee's Duties will
cease. Employee will be deemed to have given his resignation from
all offices then held by him, and will immediately provide Employer
with confirmation of same, and Employee will immediately return all
keys and all information required to be returned by Article VII
hereof.
(ii) The obligation of Employer to pay Base Salary or bonus as provided
in Section 3.1 and 3.2 hereof will cease effective upon the date of
termination.
(iii) Employer will reimburse Employee for all properly reimbursable
expenses incurred through the date of termination..
(iv) Employee shall continue to be bound by all of the provisions of
Article VII hereof for the periods provided therein.
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(b) TERMINATION FOR CAUSE; VOLUNTARY TERMINATION BY EMPLOYEE: In the event
that this Agreement is terminated by Employee, Employee will receive no
further compensation hereunder, whether by bonus, severance pay or salary.
(c) TERMINATION DUE TO DEATH OF EMPLOYEE: In the event that this Agreement is
terminated by reason of the death of Employee:
(i) Employee's beneficiaries will receive no further compensation
hereunder provided, however, that any life insurance payable
pursuant to Section 6.3 to Employee's beneficiaries shall be so paid
in accordance with any such policy. Further provided, that any stock
option granted, any salaries earned, or bonus which has been awarded
(but not paid) by the Board of Directors of Employer to Employee,
prior to Employee's death shall be promptly paid or transferred to
Employee's estate.
ARTICLE V
DISABILITY
SECTION 5.1 - DEFINITION AND DETERMINATION OF DISABILITY: "Disability" or
"Disabled" shall mean any sickness or injury that, in the opinion of a physician
acceptable to Employer and Employee, renders Employee unable to perform the
major duties of his regular occupation with Employer.
(a) A Disability which continues for a period of ninety (90) days or more
shall conclusively be presumed permanent and shall be a "Permanent
Disability" for purposes of this Agreement. Successive periods of
disability shall be considered one period of continuing disability unless
separated by a return to employment for a period of at least thirty (30)
days.
(b) In the event the Parties fail to agree on whether Employee is Disabled or
fail to locate a physician who is acceptable to both Parties to make a
determination in this regard, the following will apply:
(i) If Employer owns a policy of disability insurance covering the
Employee, a determination of such insurance company shall be binding
upon the Parties; or
(ii) If the Employer does not own a policy of disability income insurance
covering the Employee, the Employee and the Employer shall each
designate an arbitrator, and the two arbitrators so selected shall
designate a third arbitrator and the decision of majority of such
arbitrators shall be binding upon the parties; the arbitrators shall
be entitled to receive and rely on any medical evidence or other
information which they shall deem necessary to enable them to make a
determination as to Disability; or
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(iii) Employee shall further be considered Disabled if he has been found
by a court of competent jurisdiction to be incompetent or if a
guardian or conservator of his affairs is appointed.
SECTION 5.2 - EFFECTS OR DISABILITY: In the event that the Employee becomes
Disabled, as defined in Section 5.1, while he is employed by the Employer then
during the period of such Disability or until the end of the period set forth
below, whichever period ends first, he shall be compensated as follows:
(a) The Employee shall receive his Base Salary for a period of three (3)
months.
(b) Thereafter, the Employee shall receive fifty percent (50%) of his Base
Salary for an additional period of three (3) months.
(c) Thereafter, all payments by Employer will cease and this Agreement will be
terminated.
ARTICLE VI
EXPENSES, BENEFITS, PERQUISITES
SECTION 6.1 - EXPENSES: Employer will reimburse Employee for all ordinary,
necessary and reasonable out-of-pocket expenses related to his performance of
the Duties during the Term. Reimbursement of such expenses will be made in
accordance with Employer's normal expense approval procedures in effect from
time to time.
SECTION 6.2 - HOLIDAYS: VACATION: Employee shall be entitled to all legal
holidays plus four (4) weeks paid vacation per year. Employee shall, subject to
current business circumstances, attempt to schedule such vacation, two weeks in
December and two weeks during the summer months, but in no event, in a single
four (4) week period. Any vacation not used within the calendar year is carried
forward into the next year and is used up to a maximum of six (6) weeks of
vacation per year, provided that Employee may in the alternative elect within
sixty (60) days after the calendar year-end to receive additional compensation
at the then current Base Salary rate in lieu of any unused vacation time.
SECTION 6.3 - BENEFITS: Employee shall be eligible for any health,
hospitalization, dental care, disability insurance, stock option plan,
retirement, income or pension plan or other future or present group employee
benefit plan for which executives of the Company would be eligible. The
inclusion of this provision does not obligate the Company to institute any of
the above plans.
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ARTICLE VII
NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL
INFORMATION AND NON-COMPETITION.
SECTION 7.1 - NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION:
Employee recognized the interest of Employer in maintaining the confidential
nature of its proprietary matter and agrees that he will not, directly or
indirectly, during the Term, nor at any time after the termination of this
Agreement, disclose or use for his own purposes (or for purposes other than
those of Employer) any confidential or proprietary matter or trade secret of
Employer, including, but not limited to, software, technical processes, customer
and mailing lists, records, files, data, methods, formulae, compositions,
products, apparati, activity reports, plans, files, data, methods,
specifications, price lists, notebooks, reports, and logbooks, and any other
information (and similar information received from third parties) which is or
reasonably may be construed to be proprietary or confidential to the Employer.
The Parties recognize that it is not the intent of this paragraph to include
herein information, data and methods of operation which become part of the
public domain without breach of confidentiality by Employee. All customer and
mailing lists, records, files, data, drawings, documents, equipment and all
other property of Employer shall be and remain Employer's sold property and
shall not be removed from Employer's premises without written consent.
SECTION 7.2 - NON-COMPETITION:
In consideration of this Agreement and the right to participate in any future
Employer's Stock Incentive Plan, Employee covenants and agrees that he will not,
during the Term of this Agreement, either directly or indirectly, for himself or
for any other person, whether as principal, agent, stockholder, officer,
director or employee, or through any corporation, partnership or other entity,
have any interest in, engage in, or otherwise be involved with any business or
enterprise in the United States and in Mexico, which directly competes with (or
proposes or plans to directly compete with) the Employer in any line of business
engaged in or under development by the Employer ("Direct Competitor"), nor shall
Employee entice, induce or encourage any of the Employer's other Employees to
engage in any activity which, were it done by the Employee, would violate any
provision of this Section 7.2 As used in this Section 7.2, the phrase "any line
of business engaged in or under development by the Employer" shall be applied as
of the date of termination of Employee's employment.
SECTION 7.3 - NON-SOLICITATION:
Employee covenants and agrees he will not, during the Term and for a period of
one (1) year following the termination of this Employment Agreement, either
directly or indirectly, for himself or any other person, whether as principal,
agent or employee, or through any corporation, partnership or other entity,
solicit or contact for, or seek to engage in any business dealings or
communications with, any then-current or any other prospective customer of
Employee.
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SECTION 7.4 - FORMER EMPLOYERS.
(a) Employee represents that his employment under this Agreement does not
conflict with any agreement with a former employer.
(b) If Employee is in possession of confidential information arising out of
any prior employment, other than the Company, Employee will not disclose
such information to any officer, director, agent or employee of the
Employer.
SECTION 7.5 - SURVIVAL OF OBLIGATIONS: REMEDIES:
(a) Employee's obligations under this Article VII shall survive the expiration
or termination of Employee's employment under this Agreement (whether
through Employee's resignation or otherwise).
(b) The Employee acknowledges that the restrictions contained in this Article
VII are, in view of the nature of the business of Employer, reasonable and
necessary to protect the legitimate interests of Employer, and that any
violation of any provisions of these Sections will result in irreparable
injury to the Employer and that a remedy at law for any such violation
would be inadequate. The Employee therefore agrees that Employer shall be
entitled to temporary and permanent injunctive relief, without the
necessity of proving actual damages, and to an equitable accounting of all
earnings, profits and other benefits arising from any such violations,
which rights shall be cumulative of and in addition to any other rights or
remedies to which Employer may be entitled.
(c) In the event of any such violation, Employer shall be entitled to commence
an action for temporary and permanent injunctive relief and other
equitable relief in any court of competent jurisdiction. In the event that
said violation by Employee shall be intentional or willful, Employer shall
be entitled to attorney's fees in connection with the enforcement of this
covenant.
ARTICLE VIII
CONCLUDING PROVISIONS
SECTION 8.1 - ENTIRE AGREEMENT: This Agreement contains the entire understanding
of the Parties with respect to the subject matter hereof. There are no oral
understandings, terms or conditions, and no party has relied upon any
representation, express or implied, not contained in this Employment Agreement.
SECTION 8.2 - AMENDMENTS: This Agreement may not be amended in any respect
whatsoever except by a further agreement, in writing, fully executed by each of
the parties.
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SECTION 8.3 - ASSIGNMENTS: This Agreement and the rights and obligations of the
Parties shall bind and inure to the benefit of any successor or successors of
the Employer by reorganization, merger, consolidation or acquisition and any
assignee of all or substantially all of the Employer's business and properties,
but, except as to any such successor or assignee of the Employer, neither this
Agreement nor any rights or benefits hereunder may be assigned by the Employer
or by the Employee, except ;by operation of law.
SECTION 8.4 - CAPTIONS: The captions of this Agreement are for convenience and
reference only and in no way define, describe, extend or limit the scope or
intent of this Agreement at the intent of any provision contained in this
Agreement.
SECTION 8.5 - ARBITRATION: Any controversy or claim arising out of or relating
to this Agreement or for the breach thereof, or for Employee's employment, if
not otherwise settled between the parties, shall be conclusively settled by
arbitration to be held in Miami, Florida, in accordance with the American
Arbitration Association's Employment Dispute Resolution Rules. Arbitration in
accordance with the foregoing shall be parties' exclusive remedy for any such
controversies, claims or breaches. The parties also consent to personal
jurisdiction in Miami, Florida, with respect to such arbitration. Any aware
resulting from such arbitration shall be final and binding upon both parties.
Judgment upon said award may be entered in any court having jurisdiction.
SECTION 8.6 - NOTICE: Any notice, demand, offer, or other written instrument
("Notice") required or permitted to be given shall be in writing signed by the
Party giving such Notice and shall be hand-delivered or sent, postage prepaid,
by certified or Registered Mail, Return Receipt Requested, to the parties at the
addresses as set forth in this Agreement. Any Notice to be given to the estate
of any deceased person shall be addressed to the personal representative of such
deceased person at his address, or if there be no personal representative to the
estate of the deceased person at his address as set forth in this Agreement. Any
Party shall have the right to change the place to which such Notice shall be
sent or delivered, by similar notice sent in like manner to all other parties
hereto.
SECTION 8.7 - GENDERS: Any reference to the masculine gender shall be deemed to
include the feminine and neuter genders and vice versa, and any reference to the
singular shall include the plural, and vice versa, unless the context otherwise
requires.
SECTION 8.8 - GOVERNING LAW: This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Florida.
SECTION 8.9 - COUNTERPARTS: This Agreement may be executed in one or more
counterparts each of which shall be deemed an original.
SECTION 8.10 - REFORMATION: In the event that the provisions of this Agreement
should ever be adjudicated to exceed the time, geographic, service or product
limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic service or product limitations permitted by applicable law.
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SECTION 8.11 - SEVERABILITY: If any provision of this Agreement of application
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or applications or this Agreement that can be given
effect without the invalid or unenforceable provision in any other jurisdiction
or under any other circumstance.
SECTION 8.12 - WAIVERS: If either party should waive any breach of any provision
of this Agreement, such Party shall not thereby be deemed to have waived any
preceding or succeeding breach(es) of the same provision, or have thereby waived
any other provision of this Agreement.
IN WITNESS WHEREOF, THE PARTIES HAVE HEREUNTO SET THEIR HANDS AND SEALS
EFFECTIVE AS PROVIDED HEREIN.
INTERNATIONAL REALTY GROUP, INC.
By: /s/ Xxxxxxxx Xxxxxxxxx Date:
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XXXXXXXX XXXXXXXXX, CHAIRMAN
/s/ Xxxxxxx X. Xxxxxxxx Date: Dec. 18, 1998
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XXXXXXX X. XXXXXXXX
