EXHIBIT 10.5
10.5 Employment Agreement, dated April 17, 1999 by and between
Mirage Holdings, Inc. and Xxxxx Xxxxxx
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made, entered into, and
effective as of April 17, 1999 (the "Effective Date"), by and between Mirage
Holdings, Inc., a Nevada corporation ("Company"), and Xxxxx Xxxxxx, an
individual ("Employee").
RECITALS
A. Company is engaged in the technology industry and maintains an
office in Santa Monica, California.
B. Company desires to have an employment agreement with Employee for the
position set forth in SCHEDULE A subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties hereto hereby agree as follows:
AGREEMENT
19. TERM AND DUTIES. Company hereby employs Employee in the position set out on
SCHEDULE A to this Agreement, and Employee agrees to fulfil the duties and
responsibilities as the Chief Executive Officer (UK) and Chief Operating Officer
(USA) of the Company, subject to changes consistent with the usual duties and
responsibilities of that position as may be reasonably prescribed by the Board
of Directors of the Company (the "Board") from time to time. Employee shall
devote such time and attention to the business of Company as shall be required
to perform the required services and duties. Employee at all times during the
employment term shall strictly adhere to and obey all policies, rules and
regulations established from time to time governing the conduct of employees of
Company.
20. DUTIES OF EMPLOYEE.
20.1 Employee agrees to perform Employee's services efficiently and to the
best of Employee's ability. Employee agrees throughout the term of this
Agreement to devote his time, energy and skill to the business of the Company
and to the promotion of the best interests of the Company.
20.2 Employee agrees that he shall not at any time, either during or
subsequent to his employment term, unless expressly consented to in writing by
Company, either directly or indirectly use or disclose to any person or entity
any confidential information of any kind, nature or description concerning any
matters affecting or relating to the business of Company, including, but not
limited to, information concerning the customers of Company, Company's marketing
methods, compensation paid to employees, independent contractors or suppliers
and other terms of their employment or contractual relationships, financial and
business
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records, know-how, or any other information concerning the business of
Company, its manner of operations, or other data of any kind, nature or
description. Employee agrees that the above information and items are
important, material and confidential trade secrets and these affect the
successful conduct of Company's business and its goodwill. This
non-disclosure obligation does not apply to any information which is
presently in the public domain, or any information that subsequently becomes
part of the public domain through no fault of Employee.
2.3 Employee will not, during his employment with the Company, engage in
any business, enterprise or activity that is contrary to or detracts from the
business of the Company or the proper fulfilment of his duties and
responsibilities to the Company.
2.4 Employee will comply with all the restrictions set forth below at all
times during his employment and for a period of eighteen months after the
termination of his employment:
a. Employee will not, either individually or in conjunction
with any person, as principal, agent, director, officer, employee, investor or
in any other manner whatsoever, directly or indirectly engage in or become
financially interested in any competitive business within North America and the
United Kingdom, except as a passive investor holding not more than one percent
of the publicly traded stock of a corporation in which Employee is not involved
in management;
b. Employee will not, either directly or indirectly, on its
own behalf of on behalf of others, solicit, divert or appropriate or attempt to
solicit, divert or appropriate to any competitive business, any business or
actively sought prospective business of the Company or any customers with whom
the Company or any affiliate of the Company has current agreements relating to
the business of the Company, or with whom Employee has dealt, or with whom
Employee has supervised negotiations or business relations, or about whom
Employee has acquired confidential information in the course of Employee's
employment;
c. Employee will not, either directly or indirectly, on
Employee's behalf or on behalf of others, solicit, divert or hire away, or
attempt to solicit, divert, or hire away, any independent contractor or any
person employed by the Company or any affiliate of the Company or persuade or
attempt to persuade any such individual to terminate his or her employment with
the Company; and,
d. Employee will not directly or indirectly impair or seek to
impair the reputation of the Company or any affiliate of the Company, nor any
relationship that the Company or any affiliate of the Company has with its
employees, customers, suppliers, agents or other parties with which the Company
or any other affiliate of the Company does business or has contractual
relations;
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e. Employee will not receive or accept for its own benefit,
either directly or indirectly, any commission, rebate, discount, gratuity or
profit from any person having or proposing to have one or more business
transactions with the Company or any affiliate of the Company, without the prior
approval of the Board, which may be withheld; and,
f. Employee will, during the term of this employment with the
Company, communicate and channel to the Company all knowledge, business and
customer contacts and any other information that could concern or be in any way
beneficial to the business of the Company. Any such information communicated to
the Company as aforesaid will be and remain the property of the Company
notwithstanding any subsequent termination of Employee's employment.
21. COMPENSATION.
21.1 Subject to the termination of this Agreement as provided herein,
Company shall compensate Employee for his services hereunder at an annual salary
set forth in SCHEDULE A, subject to changes by mutual agreement, payable in
accordance with the Company's standard salary payment schedule. Payment of
Employee's Salary will be subject to income tax source deductions and other
deductions required by applicable laws.
21.2 Employee is also eligible to receive such additional compensation as
the Board of Directors of Company determines is proper in recognition of
Employee's contributions and services to Company. Such additional compensation
shall be paid to Employee on the anniversary date of this Agreement during the
Employment Term, and at such other times as may be determined by the Board of
Directors.
3.3 Employee shall be entitled to stock options each year of employment
for the term of his employment as set forth in summary in Schedule A. The
details of the stock options are set forth in the Company's Employee Stock
Option Plan.
3.4 In addition to the compensation set forth above, Employee shall be
entitled to participate in or to receive benefits under all of Company's
employee benefit plans made available by Company now or in the future to
similarly situated employees, subject to the terms, conditions and overall
administration of such plans.
(a) Employee shall be entitled to participate in or to receive
benefits under all of Company's employee benefit plans made available by Company
or in the future to similarly situated employees, subject to the terms,
conditions and overall administration of such plans. Including but not limited
to 401(k) plans, XXX plans, E.R.I.S.A Plans, any other retirement or benefit
plans that the Company has made available to similarly situated employees.
(b) Upon receipt of the bills or other evidence of expenses,
Company shall reimburse Employee for all medical, dental and hospital expenses
incurred by Employee for
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himself and for his dependant(s), if any, pursuant to the medical care plan
adopted by the Company.
22. EXPENSES. Company shall reimburse Employee for all reasonable business
related expenses incurred by Employee in the course of his normal duties on
behalf of the Company. In compensating Employee for expenses, the ordinary and
usual business guidelines and documentation requirements shall be adhered to by
Company and Employee.
(a) Employee will be required to incur travel, meals, entertainment and
other business expenses on behalf of the Company in the performance of
Employee's duties hereunder. Company will reimburse Employee for all such
reasonable business expenses incurred by Employee in connection with Company's
business upon presentation of receipts or other acceptable documentation of the
expenditures.
23. VACATION. Employee shall be entitled to the period of vacation set forth on
SCHEDULE A to this Agreement. Vacation should be taken at such times as may be
convenient to Company and Employee. Any vacation time not used in any one year
may be carried forward to subsequent employment years. For purposes of this
Agreement, "employment years" shall mean the successive one (1) year periods
beginning on the Effective Date of this Agreement and on each anniversary date
of the Effective Date of this Agreement during the term of this Agreement.
24. ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS. As consideration for your
employment with Company, Employee covenants and agrees as follows:
(a) Employee will make prompt and full disclosure to the Company of any
discovery, processes, inventions, patents, computer software, copyrights,
trademarks and other intangible rights (collectively referred to as
"Intellectual Property") that may be conceived, made, improved upon, developed,
or participated by Employee, solely or jointly, in the course of, arising from
or relating to any Intellectual Property Rights of the Company, or his
employment with the Company or any affiliate of the Company (the "Work
Products").
(b) The Company will hold all Intellectual Property Rights in respect of
the Work Products for the exclusive benefit of the Company and Employee agrees
not to claim or apply for registration or challenge the Company's registration
of, any such Intellectual Property Rights. Employee's acceptance of the terms of
this Agreement constitutes an absolute, unconditional and irrevocable
assignment, transfer and conveyance of all past, present and future right,
title, benefit and interest in and to all Intellectual Property Rights in
respect of the Work Products. Employee hereby waives, in favor of the Company,
all claims of any nature whatsoever that Employee now or hereafter may have for
infringement of any Intellectual Property Rights for the Work Products so
assigned to the Company. To the extent that copyright may subsist in the Work
Products, Employee hereby waives all past, present and future moral rights he
may have.
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(c) The Work Products and all related Intellectual Property Rights will be
the absolute and exclusive property of the Company. The Company may apply for
patent, copyright or other intellectual property protection in the Company's
name or, where such procedure is proper, in Employee's name, anywhere in the
world. Employee will, at the Company's request, execute all documents and do all
such acts and things considered necessary by the Company to obtain, confirm or
enforce any Intellectual Property Rights in respect of the Inventions. In case
the Company requires, but is unable to secure Employee's signature for any such
purpose in a timely manner, Employee hereby irrevocably designate and appoint
the Company and any duly authorized officer or agent of the Company as
Employee's agent and attorney, to act for Employee and in Employee's behalf an
stead to execute any such documents and to do all other lawfully permitted acts
to carry out the intent of this provision, with the same legal force and effect
as if executed or done by Employee. This power of attorney is coupled with an
interest.
25. DISABILITY OF EMPLOYEE.
25.1 Employee shall be considered disabled if, due to illness or injury,
either physical or mental, Employee is unable to perform Employee's customary
duties as an employee of Company for more than thirty (30) days in the aggregate
out of a period of twelve (12) consecutive months. The disability shall be
determined by a certification from a physician.
25.2 If Employee is determined to be disabled, Company shall continue to
pay Employee's base salary for the initial ninety (90) days of "disability." The
continuation of the salary compensation after the initial ninety (90) days shall
be determined by the Board of Directors of the Company.
26. TERMINATION BY COMPANY.
26.1 Unless terminated earlier as provided in this Agreement, Employee
shall be employed for a term set forth in SCHEDULE A. Thereafter, the employment
term shall continue on an at will basis until terminated at the option of
Company or Employee upon thirty (30) days prior written notice. This Agreement
may be terminated at any time by written agreement between the parties, or as
provided in Section 8.2 below. This Agreement will terminate immediately upon
Employee's death.
26.2 Company may terminate this Agreement for cause at any time without
notice. For purposes of this Agreement, the term "cause" shall include, but not
be limited to, the following: a material breach of or failure to perform any
covenant or obligation in this Agreement, disloyalty, dishonesty, neglect of
duties, unprofessional conduct, acts of moral turpitude, disappearance,
felonious conduct or fraud, the use of illegal drugs or the habitual and
disabling use of alcohol and drugs, embezzlement or similar conduct.
27. NOTICE. Any notice, request, demand, or other communication given pursuant
to the terms of this Agreement shall be deemed given upon delivery, if hand
delivered, or
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forty-eight (48) hours after deposit in the United States mail, postage
prepaid, and sent certified or registered mail, return receipt requested,
correctly addressed to the addresses of the parties indicated below or at
such other address as such party shall in writing have advised the other
party.
If to Company: Mirage Holdings, Inc.
000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attn.: Xxxxxx Xxxxxx, President
Copy to: Xxxxxxx & Xxxx
Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn.: Xxxxxxxx X. Xxxxxxx, Esq.
If to Employee: Xxxxx Xxxxxx
__________________________
__________________________
Copy to: __________________________
__________________________
__________________________
10. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto their respective devisees, legatees, heirs, legal
representatives, successors, and permitted assigns. The preceding sentence shall
not affect any restriction on assignment set forth elsewhere in this Agreement.
11. ARBITRATION. If a dispute or claim shall arise with respect to any of the
terms or provisions of this Agreement, or with respect to the performance by
either of the parties under this Agreement, other than a dispute with respect to
Section 2 of this Agreement, then either party may, with notice as herein
provided, require that the dispute be submitted under the Commercial Arbitration
Rules of the American Arbitration Association ("AAA"). Each party shall bear
one-half (1/2) of the cost of appointing the arbitrator and of paying such
arbitrator's fees. The written decision of the arbitrator(s) ultimately
appointed by or for both parties shall be binding and conclusive on the parties.
Judgment may be entered on such written decision of the single arbitrator in any
court having jurisdiction. Any arbitration undertaken pursuant to the terms of
this section shall occur in the county of the Company's office in Los Angeles,
California.
12. ASSIGNMENT. Subject to all other provisions of this Agreement, any attempt
to assign or transfer this Agreement or any of the rights conferred hereby, by
judicial process or
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otherwise, to any person, firm, Company, or corporation without the prior
written consent of the other party, shall be invalid, and may, at the option
of such other party, result in an incurable event of default resulting in
termination of this Agreement and all rights hereby conferred.
13. CHOICE OF LAW. This Agreement and the rights of the parties hereunder shall
be governed by and construed in accordance with the laws of the State of
California including all matters of construction, validity, performance, and
enforcement and without giving effect to the principles of conflict of laws.
14. INDEMNIFICATION. Company shall indemnify, defend and hold Employee harmless,
to the fullest extent permitted by law, for all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorney's fees that Employee shall
incur or suffer that arise from, result from or relate to the discharge of
Employee's duties under this Agreement.
15. ENTIRE AGREEMENT. Except as provided herein, this Agreement, including
exhibits, contains the entire agreement of the parties, and supersedes all
existing negotiations, representations, or agreements and all other oral,
written, or other communications between them concerning the subject matter of
this Agreement. There are no representations, agreements, arrangements, or
understandings, oral or written, between and among the parties hereto relating
to the subject matter of this Agreement that are not fully expressed herein.
16. SEVERABILITY. If any provision of this Agreement is unenforceable, invalid,
or violates applicable law, such provision, or unenforceable portion of such
provision, shall be deemed stricken and shall not affect the enforceability of
any other provisions of this Agreement.
17. CAPTIONS. The captions in this Agreement are inserted only as a matter of
convenience and for reference and shall not be deemed to define, limit, enlarge,
or describe the scope of this Agreement or the relationship of the parties, and
shall not affect this Agreement or the construction of any provisions herein.
18. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
19. MODIFICATION. No change, modification, addition, or amendment to this
Agreement shall be valid unless in writing and signed by all parties hereto.
20. ATTORNEYS' FEES. Except as otherwise provided herein, if a dispute should
arise between the parties including, but not limited to arbitration, the
prevailing party shall be reimbursed by the non-prevailing party for all
reasonable expenses incurred in resolving such dispute, including reasonable
attorneys' fees exclusive of such amount of attorneys' fees as shall be a
premium for result or for risk of loss under a contingency fee arrangement.
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21. TAXES. Any income taxes required to be paid in connection with the payments
due hereunder, shall be borne by the party required to make such payment. Any
withholding taxes in the nature of a tax on income shall be deducted from
payments due, and the party required to withhold such tax shall furnish to the
party receiving such payment all documentation necessary to prove the proper
amount to withhold of such taxes and to prove payment to the tax authority of
such required withholding.
22. NOT FOR THE BENEFIT OF CREDITORS OR THIRD PARTIES. The provisions of this
Agreement are intended only for the regulation of relations among the parties.
This Agreement is not intended for the benefit of creditors of the parties or
other third parties and no rights are granted to creditors of the parties or
other third parties under this Agreement. Under no circumstances shall any third
party, who is a minor, be deemed to have accepted, adopted, or acted in reliance
upon this Agreement.
23. FACSIMILE SIGNATURES.Facsimile signatures shall be acceptable and binding
as originals.
24. CONFLICT WAIVER. Both Employee and the Company (the "Parties") hereby agree
and acknowledge that the law firm of Xxxxxxx and Beam ("H&B"), which represents
the Company, has drafted this Agreement. The Parties hereto further acknowledge
that they have been informed of the inherent conflict of interest associated
with the drafting of this Agreement by H&B and waive any action they may have
against H&B regarding such conflict. The Parties have been given the opportunity
to consult with counsel of their choice regarding their rights under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the Effective Date.
"Company" "Employee"
Mirage Holdings, Inc., Xxxxx Xxxxxx
a Nevada corporation
/s/ Xxxxxx Xxxxxx /s/ Xxxxx Xxxxxx
---------------------------- --------------------------
BY: Xxxxxx X. Xxxxxx
ITS: President
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SCHEDULE A
EMPLOYEE'S NAME: Xxxxx Xxxxxx
EFFECTIVE DATE AND TERM: Effective date of Employment shall be as of April 17,
1999 for a period of three years from the effective date.
POSITION: Chief Executive Officer (UK) and Chief Operating Officer (USA)
SALARY: $150,000 per year with a signing bonus of $30,000 to be paid upon
execution of this Agreement.
STOCK OPTION:
Specific terms as detailed in the Employee Stock Option Plan with general terms
as follows:
(a) On May 18, 1999, Employee shall be issued 150,000 shares of common
stock of the Company with Rule 144 restriction at an exercise price of
$1.50 per share;
(b) On May 18, 2000, Employee shall be issued 150,000 shares of common
stock of the Company with Rule 144 restriction at an exercise price of
$2.50 per share;
(c) On May 18, 2001, Employee shall be issued 150,000 shares of common
stock of the Company with Rule 144 restriction at an exercise price of
$3.50 per share;
PAID VACATION: Two weeks paid vacation.
"Company" "Employee"
Mirage Holdings, Inc., Xxxxx Xxxxxx
a Nevada corporation
/s/ Xxxxxx Xxxxxx /s/ Xxxxx Xxxxxx
---------------------------- --------------------------
BY: Xxxxxx X. Xxxxxx
ITS: President
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