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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
AGREEMENT entered into as of July 1, 1997 by and between One Up
Corporation, a Texas corporation with its principal offices at 00000
Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx Xxxxxx, Xxxxx 00000, the
"Employer" or "One Up" and Xxxx X. Xxxxxxx, an individual residing at
0000 Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx 00000, (the "Employee").
WHEREAS, the Employee has been accepted for employment by One Up
as Chief Operating Officer, which position shall be deemed by One Up to
be a key position within the corporation; and,
WHEREAS, One Up desires to have the Employee make their services
available to One Up; and,
WHEREAS, One Up shall employ the Employee on the condition that,
in so doing, it shall have protected its goodwill, trade secrets and
other proprietary or confidential information, business accounts and
patronage; and,
WHEREAS, the Employee desires to render such services on the terms
and conditions set forth herein and agrees to protect One Up's
goodwill, trade secrets and other proprietary or confidential
information, business accounts and patronage.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. DUTIES, COMPENSATION, VACATION, TRAVEL, AND EXPENSES
(a) The Employee shall be responsible to perform the duties of
Chief Operating Officer and such other activities as One Up
may, from time to time, reasonably assign to him/her. The
Employee agrees to perform such duties to the best of their
ability and to exclusively devote their energies and skill to
the performance of their duties during business hours and for
such additional time as may be necessary to perform such
duties. During the Term of Employment, the Employee shall be
governed by the terms of this Agreement and subject to the
supervision and direction of the Board of Directors of One
Up. One Up reserves the right to reasonably change, from time
to time, the nature and scope of the Employee's duties and
the place where such duties shall be performed;
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(b) One Up agrees to employ the Employee and the Employee agrees
to accept employment by One Up on a full time basis at a
starting annual salary of $125,000.00, which salary shall be
paid in semi-monthly installments on the 15th and last day of
each month or such other pay periods established from time to
time by One Up pursuant to its standard employment practices
during the term of Employment as hereinafter defined;
(c) The Employee shall be eligible under one or more group
policies of health insurance, life insurance and disability
insurance on the same terms and conditions as the benefits
normally provided to its employees by One Up;
(d) Such other compensation including participation in Cash Bonus
and the Employee Stock Option Plan as defined in Exhibit A
hereto and such other incentives as One Up's Board of
Directors may, from time to time, in its sole discretion,
determine;
(e) Each year the salary payable to the Employee shall be
reviewed and may be adjusted upward as One Up may deem
reasonable and warranted by the efforts of the Employee on
behalf of One Up, provided, however, that this provision
shall not be construed as creating any obligation on the part
of One Up to award or pay any salary increase or bonus to the
Employee;
(f) The Employee shall receive a paid vacation of 10 business
days during each year of the Term of Employment as published
in the One Up Employee Manual; and,
(g) The Employee, throughout the term of this Agreement, shall be
reimbursed for reasonable travel and other expenses incurred
and accounted for in the conduct of One Up business pursuant
to, and in accordance with, One Up's normal practice.
2. TERM OF EMPLOYMENT
(a) The "Term of Employment" as used herein means that period
during which One Up will employ the Employee in its business,
and the Employee will work for One Up beginning from the date
hereof and for a period of one year thereafter. After the
expiration of the term described above, the Term of
Employment shall continue from year to year unless or until:
(i) such employment shall have been terminated as hereinafter
provided; (ii) this Agreement shall have been renewed or
replaced by mutual agreement of the parties hereto; or,
(iii) the Employee shall have resigned their position; (iv)
or upon thirty (30) days written notice by either party at
the end of the term of employment (initial or renewal term);
(b) Notwithstanding any provision of the Agreement, the
employment of the Employee shall be terminated upon: (i)
resignation of the Employee from employment, (ii) the death
or inability of the
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Employee to continue to provide his services by reason of
permanent disability, or, (iii) for just cause upon notice of
such termination of the Employee. The term "just cause" as
used in this Agreement means: That the Employee is unable to
fulfill their duties under this Agreement because of the
continued abuse of alcohol or use of a controlled substance;
That the Employee has become unable to perform their duties
under this Agreement for a period of at least three
consecutive calendar months as a result of illness or
otherwise; The commission by the Employee of an act of fraud
or embezzlement against One Up; The Employee having been
convicted of a felony involving moral turpitude; or the
Employee shall resign from employment or the Employee and One
Up shall mutually agree to terminate this Agreement.
(c) It is agreed and acknowledged that in the event Employee
voluntarily terminates their employment with Employer or
Employer terminates Employee for "just cause," the Employer's
obligation to pay any compensation (base salary or
commission, if any) to Employee shall cease upon the
effective date of such termination.
3. NONDISCLOSURE COVENANTS
The Employee, during the Term of Employment under this
Agreement, shall have access to and become familiar with
various trade secrets consisting of, but not limited to,
processes, computer programs, compilations of information,
records, sales procedures, customer requirements, pricing
techniques, customer lists, methods of doing business and
other confidential information (collectively referred to as
the "Trade Secrets"), which are owned by Employer and
regularly used in the operation of its business. Employee
shall not use in any way or disclose any of the Trade
Secrets, directly or indirectly, either during the term of
the Agreement or at any time thereafter, except as required
in the course of their employment under this Agreement. All
files, records, documents, information, data, and similar
items relating to the business of Employer, whether prepared
by Employee or otherwise coming into their possession, shall
remain the exclusive property of the Employer and shall not
be removed from the premises of the Employer under any
circumstance without the prior written consent of an
authorized officer of the Employer (except in the ordinary
course of business during Employee's period of active
employment under this Agreement), and in any event shall be
promptly delivered to the Employer (without Employee
retaining any copies) upon termination of the Agreement.
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4. NON-COMPETITION COVENANTS
(a) Without the prior written consent of the Employer, the
Employee shall not, during the term of employment with
Employer, directly or indirectly, as a director, officer,
agent, employee, consultant, or independent contractor, or in
any other individual or representative capacity, (i) invest
(other than investments in publicly owned companies which
constitute not more the 1% of the outstanding securities of
any such company) or engage in any business or activity that
is in competition with the business of Employer or any of its
affiliates, (ii) accept employment with, or render services
to, a competitor of the Employer or any of its affiliates, or
(iii) take any action inconsistent with the fiduciary
relationship of an employee to an employer. As used in this
Agreement, "affiliates" shall mean persons or entities that,
directly or indirectly through one or more intermediaries,
control or are controlled by, or are under common control
with, the Employer;
(b) Upon termination of the Employee's employment with the
Employer for just cause or upon voluntary resignation, and
for a period of one year thereafter, the Employee shall not,
directly or indirectly, as a director, officer, agent,
employee, consultant, or independent contractor, or in any
other individual or representative capacity, (i) invest
(other than investments in publicly-owned companies which
constitute not more that 1% of the outstanding securities of
any such company) or engage as an owner or equity participant
in any business or activity that is competition with the
business of Employer or any of its affiliates, (ii) accept
employment with or render services to a competitor or
intending to compete with the Employer or any of its
affiliates, or (iii) while or for the purpose of engaging in
competition with the Employer or any of its affiliates in any
area whatsoever, contact, solicit, or attempt to solicit or
accept business from any of the customers of the Employer or
any of its affiliates during the term of the Employee's
employment with the Employer or the Employee's termination or
cessation of employment with the Employer, or from any person
or entity whose business the Employer or any of its
affiliates were actively soliciting as such time without the
written consent of the Employer. The Employer shall provide
the Employee with the names of such customers of the Employer
and its affiliates described in clause (iii) of this
Paragraph 4 upon request therefore, or upon termination of
the Employee's employment (but failure to do so shall not
release Employee from obligations under this Section); such
names shall be for all purposes and at all times be
considered Trade Secrets subject to the covenants set forth
in Section 4 hereof. As used herein, a person or entity is in
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"competition" with or is a "competitor" of Employer or any of
its affiliates if such person or entity is in the business of
migration, conversion, or porting software, assistance or
services, or providing, or planning to provide the same or
similar services, products, or systems as the Employer.
5. COVENANT NOT TO HIRE
For a period of two (2) years after the termination of
employment with the Employer for any reason whatsoever, the
Employee shall not, on their behalf or on behalf of any other
person, partnership, association, corporation, or other
entity, hire, or solicit any employee of Employer or any of
its affiliates, or in any manner attempt to influence or
induce any employee of Employer or any of its affiliates, to
leave the employment of the Employer or its affiliates, nor
shall the Employee use or disclose to any person,
partnership, association, corporation, or other entity any
information obtained while an employee of the Employer
concerning the names and addresses of the Employer's or any
of its affiliates' employees.
6. SEVERABILITY
Notwithstanding anything to the contrary herein, or in any
exhibit hereto the Employee agrees that the non-competition
covenants, nondisclosure covenants, and covenant not to hire
set forth above each constitute separate agreements
independently supported by good and adequate consideration,
the actual receipt and adequacy of which are hereby
acknowledged by the Employee, and shall be severable from
other provisions of, and shall survive, this Agreement. The
existence of any claim or cause of action of the Employee
against the Employer, whether predicated on the Agreement or
otherwise, shall not constitute a defense to the enforcement
by the Employer of the covenants and agreements of the
Employee contained in the non-competition, nondisclosure, or
non-hiring covenants. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present
or future laws effective during the term hereof, such
provision shall be fully severable and this Agreement shall
be construed as enforced as if such illegal, invalid, or
unenforceable provision never comprised a part of this
Agreement; and the remaining provisions of this Agreement
shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision
or by its severance herefrom. Furthermore, in lieu of such
illegal, invalid, or unenforceable provision, there shall be
added automatically as part
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of this Agreement a provision as similar in its terms to such
illegal, invalid or unenforceable provisions may be possible
and be legal, valid, and enforceable.
7. INVENTIONS
The Employee shall promptly disclose, grant, and assign to
Employer for its sole use and benefit any and all inventions,
improvements, technical information, and suggestions relating
in any way to the products of the Employer or any of its
affiliates or capable of beneficial use by the Employer or
any of its affiliates, which the Employee has in the past
conceived, developed, or acquired, or may conceive, develop,
or acquire during the term hereof (whether or not during
usual working hours), together with all patent applications,
letter patents, copyrights, and reissues thereof that may at
any time be granted for or upon any such inventions,
improvement, or technical information. In connection
therewith, Employee shall promptly at all times during and
after the term hereof:
(a) Execute and deliver such applications, assignments,
descriptions, and other instruments as may be necessary or
proper in the opinion of Employer to vest title to such
inventions, improvements, technical information, suggestions,
patent applications, patents, copyrights and reissues thereof
to Employer and to enable it to obtain and maintain the
entire right and title thereto throughout the world; and
(b) Render to the Employer, at its expense, all such assistance
as it may require in the prosecution of applications,
aforesaid patents, copyrights, and reissues thereof, in the
prosecution or defense of interference which may be declared
involving any said applications, copyrights, or patents, and
in any litigation in which the Employer may be involved
relating to any such inventions, improvements, technical
information, suggestions, patent applications, patents,
copyrights and reissues thereof.
8. REMEDIES
The Employee acknowledges and recognizes that a violation of
the restrictions, agreements, or covenants contained in
Sections 3, 4, 5 and 7 of this Agreement will cause such
damage to Employer as will be irreparable and that Employer
will have no adequate remedy at law for such violation or
threatened violation. Accordingly, the Employee agrees that
the Employer shall be entitled, as a matter of right, to seek
and obtain an injunction from any court of competent
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jurisdiction, restraining any further violation or threatened
violation of such restrictions, agreements, or covenants and
granting mandatory relief compelling Employee to carry out
obligations hereunder. Such right to injunctive and mandatory
relief shall be cumulative and in addition to whatever other
remedies the Employer may have at law or in equity.
9. MISCELLANEOUS
(a) NOTICES. Any notices, consents, demands, requests, approvals,
and other communications to be given under this Agreement by
any party to the other shall be deemed to have been duly
given if given in writing and personally delivered or sent by
mail, registered or certified, postage prepaid with return
receipt requested, at the address specified beside each
party's signature at the end of this Agreement. Notices
delivered personally or by telegram, telex, or telecopy shall
be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of 10:00 a.m. on the third
business day after mailing. Any party may change its address
for notice hereunder by giving notice of such change in the
manner provided in this paragraph.
(b) ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or written, between the parties
hereto with respect to the subject matter hereof and contains
all of the covenants and agreements between the parties with
respect thereto.
(c) MODIFICATION AND WAIVER. No change or modification of this
Agreement shall be valid or binding upon the parties hereto,
nor shall any waiver of any term or condition in the future
be so binding, unless such change or modification or waiver
shall be in writing and signed by the party against whom or
which such waiver is sought to be enforced. The waiver by the
Employer of a breach of any provision of this Agreement by
the Employee shall not operate or be construed as a waiver of
any subsequent breach by the Employee.
(d) GOVERNING LAW. This Agreement, and the rights and obligations
of the parties hereto, shall be governed by and construed in
accordance with the laws of the State of Texas and shall be
performable in Dallas, Texas. Venue of any litigation arising
hereunder shall be in a court of competent jurisdiction in
Dallas, Texas.
(e) COUNTERPARTS. This Agreement may be executed in counterparts,
including facsimile, each of which shall constitute an
original, but all of which shall constitute one and the same
document.
(f) COST. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the
prevailing party shall be
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entitled to reasonable attorneys' fees, costs, and necessary
disbursements in addition to any other relief to which it may
be entitled.
(g) ASSIGNMENT. Employer shall have the right to assign this
Agreement to its successors or assigns. The terms
"successors" and "assigns" shall include any person,
corporation, partnership, or other entity that buys all or
substantially all of Employer's assets or a controlling
interest of its stock, or with which the Employer merges or
engages in a share exchange. The rights and duties of
Employee hereunder are personal, and no such right may be
assigned or duly delegated by One Up or its successor in
interest.
(h) BINDING EFFECT. This Agreement shall be binding upon the
parties hereto, together with their respective executors,
administrators, successors, personal representative, heirs,
and permitted assigns.
(i) ESTATE. If Employee dies prior to the expiration of the term
of employment, any moneys that may be due from Employer under
this Agreement as of the date of death shall be paid to the
estate.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
EMPLOYER:
Address: ONE UP CORPORATION
00000 Xxxxxxxx Xxxxxxx, Xxxxx 000 By: /s/ XXXXXX XXXXXXXXXX
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Farmers Xxxxxx, Xxxxx 00000 Title: President/CEO
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Address: EMPLOYEE:
0000 Xxxxxx Xxxxx /s/ XXXXX X. XXXXXXX
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Signature
Xxxxxxxxxx, XX 00000 Xxxxx X. Xxxxxxx 6/13/97
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Print Name
Employment Agreement by and Between One Up and Xxxx Xxxxxxx
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EXHIBIT "A"
To the Employment Agreement By and Between
Xxxx Xxxxxxx and One Up
OTHER COMPENSATION
(1) Additional Compensation: Provided the Employee is still employed by the
Employer under the terms of this agreement, the Employee shall be eligible
for participation in the following:
(a) Key Employee Cash Bonus Plan: The Employee shall be eligible for an
annual bonus of $30,000. The prorated bonus for the last half of 1997 is
$15,000. Additionally the employee shall be eligible for a similar bonus in
1998. The employee is eligible for the 1997 bonus if he is an employee as of
12-31-97.
The 1997 bonus will be based upon the following criteria:
Profitability of $100,000.00 net income before taxes for the period of May
1, 1997 through December 31, 1997. The 1998 profitability number will be
determined during the budget process in November 1997. Allocation percentage
50% of the total bonus or $7,500.00. Minimum performance eligibility 60%.
May earn greater than 100% of the bonus by exceeding the goal of
$100,000.00.
Positive Cash Flow of at least $150,000.00 for the last six months of 1997.
Allocation 50% of the total bonus. May not exceed 100%.
A minimum of 80% of the earned bonus will be paid no later than 1-31-98,
with the balance to be paid no later than upon completion of the audit of
the year end financial results.
(b) Key Employee Stock Option Plan: The Employee will be granted options to
purchase 2% of the total amount of shares outstanding (currently
27,446,164) as of the date of this agreement. The exercise price will be
the closing Bid price on the day this agreement is signed. The options
will vest 1/24th each month for 24 months beginning on the date this
agreement is signed. Dilution protection exists for recapitalizations,
stock splits, stock dividends, and for issuance of stock or derivative
securities at below fair market value. Options terminate, whether vested
or not, at the end of the thirty days following the resignation of the
employee, and at the end of twelve months, whether vested or not, in the
event of death or disability as described in this agreement. All options
become fully vested upon sale of the Company. All options terminate
immediately in the event the Employee is terminated for "just cause" as
described in this agreement.
(c) Special Situation: In that the Company is currently in a state of
financial uncertainty, the company will escrow the Employee's first
years annual salary. In the event of business failure the employee will
be entitled to the balance of the escrow account.
(d) Severance Pay: In the event that the Company and the employee do not
reach agreement to renew the Employee's contract at the end of the
initial term or in the event, Employee is terminated without "just
cause" during the initial term, Employee is entitled to receive payment
of salary for the remaining period of the Employment term. Additionally,
Company will pay Employee a severance equal to three months base pay and
pay all normal benefits for a period of three months.
/s/ XXXXX X. XXXXXXX /s/ XXXXXX XXXXXXXXXX
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