Exhibit 10.5
EMPLOYMENT AGREEMENT
This Agreement sets for the terms and conditions of your employment with Law
Office Information Systems, Inc. (XXXX). The attached confidentiality and
equipment loan Agreement are an integral part of this Agreement. This Agreement
constitutes the entire understanding between the parties hereto and any prior
written or oral promises or modifications hereto are hereby merged into and
become a part of this Agreement.
Position: You are an employee of Law Office Information Systems, Inc. Your
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principal job will be to market XXXX to prospective customers, high priests,
Court systems, Bar Associations, CLE Organizations, and the like. You are
expected to work to develop new states, new products and establish the
relationships set forth above, as well as working on ventures with other
publishers. The nature of your responsibilities and your job position may
change from time to time. You will also work in presenting the company to the
financial community, as needed. The nature of your responsibilities will
require extensive travel both within and outside the U.S.
Salary and Benefits: Your compensation will be $10,000 per month, and may be
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increased from time to time upon the approval of the Board of Directors. You
and your family will also be covered by the Company's health and dental plan.
XXXX will also reimburse you for ordinary and necessary travel and other
business expenses relating to your business activities with XXXX. The Company's
philosophy is to operate with minimum operating expense, therefore, it is
important that you work in a manner that minimizes these expenses.
Duration Requirement. You agree to remain employed by XXXX for a minimum of two
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(2) years after the date of an offering requiring registration under the
Securities Act of 1934 ("Public Offering") by XXXX, or until August 1, 1999,
whichever comes first. In the event of a merger of XXXX with or into another
corporation, or the sale of substantially all of the assets of the Company, then
and in that event, this Duration Requirement is hereby removed, if agreed to by
the other party to such transaction.
Equity: Upon the execution of this Agreement, you will be granted options by
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the Xxxxxx Trust to purchase 140,000 shares of XXXX stock at an exercise price
of $2.50 per share. You will be able to exercise these options according to the
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conditions outlined below.
1. If XXXX makes a Public Offering: Subject to the requirements of the
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Securities and Exchange Commission, after August 1, 1999 or two years after
the date of the Public Offering, whichever occurs sooner, you will be able
to exercise options to purchase 105,000 shares. The remaining options to
purchase 35,000 shares shall be exercisable without restriction,
immediately upon the date the Company files a registration statement for
the Public Offering.
2. If XXXX is acquired or merged: In the event of the merger of XXXX with or
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into another corporation, or the sale of substantially all of the assets of
the Company, you may exercise options to purchases all 140,000 shares
immediately prior to or concurrent with the completion of that sale or
merger, with the understanding that you agree to sell or exchange your
entire interest in XXXX stock to the acquiring party in a transaction
recommended by the Board of Directors. The proceeds from the exercise of
105,000 of your options shall remain
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in the Xxxxxx Trust until August 1, 1999, unless the acquiring party agrees
to remove the Duration Requirement detailed above. If the Duration
Requirement is removed, the proceeds from your 105,000 shares shall be paid
directly to you. In all instances, the proceeds from the sale of the
remaining 35,000 shares shall be paid directly to you.
3. If the event that items 1 or 2 (above) do not occur: You will be able to
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exercise all 140,000 options on August 1, 1999 or at any time thereafter
until August 1, 2009, and accrue all proceeds directly to you.
Further, it is agreed that while the Duration Requirement is in effect you may
instruct the Xxxxxx Trust to sell shares for which you hold options in any
Public Offering or in the public marketplace, subject to approval of the
Company's underwriters and compliance with applicable securities laws. In such
event, the proceeds from these sales, less the exercise price, shall be held in
your account in the Xxxxxx Trust and invested in an financial institution
selected by the Xxxxxx Trust. The amount of this account together with any
interest earned on these funds shall be distributed to you after your satisfying
all conditions of exercise.
You may also sell your stock if the Company does not elect to make a Public
Offering or is not acquired or merged. In that event, XXXX or the Xxxxxx Trust
has the first right of refusal to match any bona fide offer of purchase. XXXX
or the Xxxxxx Trust shall be notified in writing of said intent to sell; the
party making said purchase; and the amount of said purchase. Within 15 days
thereafter and neither XXXX or the Xxxxxx Trust has matched the offer, you can
sell to the party with the bona fide offer.
Additional Equity and Dilution: During your employment you may be able to gain
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additional equity interest in the Company through participation in the Company's
Stock Option Plan. The amount of options, if any, that you may receive will be
determined by the Board of Directors. It is also understood that from time to
time, the Company may issue additional shares of stock, which will dilute your
ownership in the Company.
Termination and Severance: If you elect to terminate your employment with XXXX
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within 2 years after completion of a Public Offering, or August 1, 1999,
whichever comes first, all options under this Agreement shall lapse. You also
agree that you will not be entitled to any severance from XXXX or any
governmental institution or agency if you terminate this agreement.
If XXXX terminates your employment without "legal cause," then and in that
event, you shall receive a severance package equal to the amount of your monthly
salary plus health benefits, payable for a period of 6 months. Thereafter, you
agree that you will not file for any unemployment benefits with any governmental
agency or institution. Furthermore, options held by you at the time of such
termination which would be exercisable but for the requirement for continued
employment described in the previous paragraphs, shall be exercisable for 30
days following termination. In the event that you had instructed the Xxxxxx
Trust to sell stock subject to an option covered in this agreement, you shall
receive those moneys within 30 days.
If XXXX terminates your employment for "legal cause" during said time period
mentioned in the preceding sentence, all unexercised options shall be terminated
and your entitlement to any funds
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held in the Xxxxxx Trust shall be forfeited. Termination for legal cause shall
mean termination for any of the following reasons: Willful breach or habitual
neglect of duty, or; conviction of any crime, or; conduct lacking moral
turpitude, or; dishonesty, or; violation of any statutory or common law duty,
or; violation of a fiduciary duty to XXXX, or; accepting any item of value in
the aggregate in excess of $1,000.00 from any direct or indirect competitor of
XXXX for any reason, unless approved by the Board of Directors.
The Agreement is deemed to have been signed and executed on July 2, 1996.
Accepted as to form and content: Accepted as to form and content:
/s/ Xxxx X. Xxxxxx /s/ X. Xxxxx Xxxxxx
Xxxx X. Xxxxxx, W. Xxxxx Xxxxxx
President and C.E.O.,
Law Office Information Systems, Inc.
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