Exhibit 10.14
Employment Agreement dated July 25, 1996 between
The CyberLaw Office, Inc. and Xxxx X. Xxxx
The CyberLaw Office, Inc.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGGREEMENT is entered into effective as of the 25th day of July,
1996, by and between The CyberLaw Office, Inc., a Minnesota corporation
("Employer") and Xxxx Xxxx ("Employee").
WHEREAS, Employer is in the business of providing an online legal forum for
consumers, corporations, law firms and individual lawyer practitioners;
WHEREAS, The parties desire to enter into this Agreement to provide for the
terms and conditions of Employee's employment as CEO and President of the
Employer;
WHEREAS, the parties acknowledge that the terms and provisions of this
Agreement, including the severance package and stock options contained herein,
provide separate and valuable consideration for the Non-Compete Covenant
contained herein.
NOW, THEREFORE, in consideration of the premises, it is agreed as follows:
1. Duties. Employee agrees to serve as an employee of Employer in the capacity
of President. Employee agrees to faithfully and diligently perform the acts
and duties of his office and devote his best efforts on a full-time basis.
Employee shall also perform such other duties as are consistent with his
position as are reasonably assigned to him by the BOD of the Employer.
Employer recognizes that Employee has existing business interests and they
are expected to continue.
2. Term. The term of Employee's employment under this Agreement will begin
immediately and will be for a fixed period of three (3) years. This
agreement shall expire on July 25, 1999.
3. Compensation and Related Matters. Employer shall pay Employee compensation
and benefits as follows:
Base Compensation. During the Employment Period, Employer shall pay to
Employee an annual base salary of $100,000. Employee's salary may be
further reviewed and adjusted periodically. Bonus. Beginning May 15, 1996,
Employee shall also be entitled to a bonus, payable quarterly, equal to 1%
of the increase in gross revenue, plus 4% of the increase in Profit Before
Taxes ("PBT"), in the prior quarter over the corresponding quarter in the
prior year. For example, the bonus in 2nd quarter 1997 will be equal to 1%
of the difference between 1st quarter 1997 gross revenue and 1st quarter
1996 gross revenue, plus 4% of the difference between 1st quarter 1997 PBT
and 1st quarter 1996 PBT. The 4th quarter bonus, if any, shall be equal to
the difference between (i) the applicable percentage increase in gross
revenue and net revenue for the year then ended over the prior year and
(ii) the sum of the three preceding quarterly bonuses paid to Employee in
the year then ended, it being understood that if such annual computation
discloses that the Company has overpaid Employee, Employee shall promptly
refund to the Company the overpaid amount. Notwithstanding anything stated
previously in this paragraph, the Board of Directors reserves the final
authority to decide the appropriateness of this bonus on a quarterly basis.
Signing Bonus. Employer shall pay to Employee a $10,000 bonus upon the
execution of this Agreement. This payment is waived by the employee.
Options. 50,000 LRC shares, granted and vesting immediately, market price
as of July 26, 1996. This option grant is hereby waived by the employee, in
that an already vested grant for 50,000 LRC shares at $2.00 was effective
to the employee as of May 15, 1996. Employee is additionally being granted
the immediate right to purchase 15% of the shares of employer, outstanding
after an anticipated future Initial Public Offering ("IPO") for a purchase
price of $120.00. The purchase price
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these shares at time of execution of this agreement. If the total shares
outstanding after the IPO of the employer, as detailed in Exhibit A,
attached herewith and hereby made a part of this agreement, differ from the
15% of the total per this agreement, the employer and the employee agree to
an adjustment of the number of shares to be sold under this agreement to
the employee. The adjustment shall be made by an appropriate stock split,
if necessary, or any other appropriate legal transaction so that the
employee owns 15% of the outstanding shares after the IPO.
Expenses. During the Employment Period, Employee shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by
Employee in performing services hereunder; provided, however, that Employee
complies with Employer's policies and procedures established from time to
time to document such expense.
Vacation and Other Benefits. Employee shall be entitled to such paid
vacation and other benefits as shall be in effect from time to time for
senior executive officers of Legal Research Center.
4. Termination and Compensation Due on Termination. For the term of this
agreement, employee's employment hereunder may not be terminated without
cause, but may be terminated subject to the following provisions and
obligations:
(a) Death or Disability. Employee's employment hereunder shall terminate
upon his death, or in the event that Employee becomes disabled by
reason of a medical condition (physical or nonphysical) pursuant to
which he cannot timely perform the material duties of his position
with Employer (such determination to be made in the discretion of the
Board), and no further payment of salary, any benefits or other
payment in connection with Employee's employment shall be due from
Employer to Employee or Employee's estate under this Agreement
thereafter, except for salary and bonus accrued, and Options vested
through the date of death or disability.
(b) Cause. Employer may terminate Employee's employment hereunder the
"Cause," which shall mean (i) fraud, dishonesty, gross negligence, or
willful malfeasance by Employee in connection with the performance of
his duties hereunder, (ii) conviction of Employee of a felony, (iii)
insubordination or other substantial failure, refusal or negligence by
Employee in fulfilling his duties and obligations hereunder, which
breach or failure Employee fails to remedy within ten (10) days after
written demand from the Board, or (iv) violation of the terms and
conditions of this Agreement, including without limitation, the
Non-Compete Covenant provided in Section 7 hereof. In the event that
Employee's employment is terminated hereunder for Cause, Employer
shall have no further obligations to Employee in connection with
Employee's employment except for salary and bonus accrued, and Options
vested through the date of termination.
(c) Voluntary Termination. Upon any voluntary termination of employment by
Employee, Employer shall have no further obligations to Employee
except for salary and bonus accrued, and Options vested through the
date of termination, and any other obligations provided by law.
5. Nondisclosure of Confidential Information. Employee agrees that he will not
use or disclose, or permit others to use or disclose (other than other
employees or representatives of Employer), any trade secrets, confidential
information, data or records relating to the business, techniques,
operations and conditions (financial or otherwise) of Employer which is not
generally known or available through other lawful sources.
6. Property Rights. Subject to the last sentence in this Paragraph, Employer
shall acquire exclusive right, title, and interest to all inventions,
discoveries, improvements, designs, ideas, know-how, technology and the
like developed, conceived, or invented by Employee, in whole or in part,
whether
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written or in some other form and whether or not patentable or eligible for
protection under any copyright law. Without limiting the generality of the
foregoing, Employee hereby assigns to Employer (i) all rights to any
inventions, or to improvements, and all rights to apply for United States
and/or foreign letters of patent granted upon such inventions; and (ii) any
copyrights Employee may have in materials created by Employee or otherwise
generated during the period in which Employee is performing services for
Employer, and Employer shall have the sole right to apply for and obtain
copyright protection for any materials for which such protection can be
obtained and to obtain such copyright renewals. Despite any of the
foregoing, nothing in this Paragraph 6 shall apply to an invention for
which no equipment, supplies, facility or trade secret information of
Employer is used and which is developed entirely on Employee's own time,
and (i) does not relate (a) directly to a business of Employer or (b) to
Employer's actual or demonstrably anticipated research or development, or
(ii) which does not result from any work performed by Employee for
Employer.
7. Non-Compete Covenant. During the Employment Period and for a period of 18
months after the termination of employment for any reason Employee shall
not (i) directly or indirectly, whether as a principal, owner, agent,
employee or in any other capacity whatsoever, engage in the business of an
online legal forum, (ii) solicit for employment or employ any employee or
independent contractor of Employer, or (iii) contact any present or
contemplated customers of Employer regarding the business of Employer.
8. Remedies for Breach. Employee acknowledges that he has carefully read and
considered all of the terms and conditions of this Agreement. Employee
further acknowledges that money damages would not be a measurable or
adequate remedy for Employee's breach of any of the covenants contained in
this Agreement, and, accordingly, in addition to and without limiting any
other remedy available to Employer in the event of such a breach, Employee
agrees to submit to the equitable jurisdiction of any court of competent
personal and subject matter jurisdiction in connection with any action to
enjoin the Employee form violating any such covenants. In the event that
Employee is found to have breached any of the terms from violating any such
covenants. In the event that Employee is found to have breached any of the
terms and conditions of this Agreement, Employee hereby agrees to pay all
costs and expenses incurred by Employer in enforcing the provisions of this
Agreement, Employee hereby agrees to pay all costs and expenses incurred by
Employer in enforcing the provisions of this Agreement found to have been
breached by Employee, including Employer's attorney's fees.
9. Benefit of Agreement. This Agreement shall inure to the benefit of and be
enforceable by Employer, it's successors, assigns and affiliates.
10. Waiver. The failure of Employer to insist on the strict performance of the
any provision of this Agreement or to exercise any right, power or remedy
upon a breach by Employee shall not constitute a waiver of that or any
other provision of this Agreement. A waiver on any one occasion shall not
be deemed to be a waiver for subsequent occasions.
11. Survival and severability. The terms and conditions of this Agreement shall
survive the termination of Employee's employment with Employer to the full
extent necessary for their enforcement and for the protection of Employer,
it's successors, assigns and affiliates. If for any reason any portion of
any provision of this Agreement is declared invalid, void or unenforceable
by a court of competent jurisdiction, the validity and binding effect of
any remaining provisions of this Agreement shall remain in full force and
effect to the fullest extent possible as if this Agreement had been
executed with the invalid, void or unenforceable portion or provision
eliminated. In the event that any provision of this Agreement relating to
time periods and /or areas of restriction shall be declared by a court of
competent jurisdiction to exceed the maximum time periods or areas such
court deems reasonable and enforceable, said time periods and/or areas of
restriction shall be deemed to become
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and thereafter be the maximum time periods and/or areas which such court
deems reasonable and enforceable.
12. Governing Law. This Agreement shall be governed by the laws of the State of
Minnesota.
IN WITNESS WHEREOF, the undersigned have hereunto affixed their signatures.
The CyberLaw Office, Inc.
By:/s/ C.R. Lungkull
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Its:Chief Executive Officer
/s/Xxxx X. Xxxx
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Xxxx X Xxxx
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