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Exhibit 10.5
EMPLOYMENT AGREEMENT
(▇▇▇▇▇▇ ▇▇▇▇)
This Employment Agreement (this "Agreement") is entered into effective
as of the _____ day of February, 2000 (the "Effective Date"), by and between
RateXchange, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇
("Employee"). The Company and Employee agree as follows:
1. Employment. The Company hereby employs Employee, and Employee
accepts such employment, upon the terms and conditions set forth in this
Agreement.
2. Position and Duties. During Employee's employment hereunder, he
shall serve as the Company's Chief Financial Officer, and shall perform such
employment duties as the Company shall assign to him from time to time. Employee
agrees to serve the Company faithfully and to the best of his ability and to
devote his full time, attention, and efforts to the business and affairs of the
Company during the term of his employment. Employee hereby confirms that he is
under no contractual commitments inconsistent with his obligations set forth in
this Agreement. Employee agrees that, during the term of this Agreement, he will
not render or perform any services for any corporation, firm, entity, or person,
other than the Company, without the prior written consent of the Company, except
that Employee shall be entitled without prior written consent to hold positions
on the Board of Directors of entities that do not compete with the Company.
Employee has, as of the date of this Agreement, disclosed to the Board of
Directors of the Company the positions Employee currently holds on other Boards
of Directors, and the Company has consented to such positions.
3. Term. Unless terminated at an earlier date in accordance with
Section 5 of this Agreement, the term of this Agreement (the "Term") shall be
three years commencing on the Effective Date.
4. Compensation. As compensation for all services to be rendered by
Employee under this Agreement, the Company shall provide to Employee the
following:
4.01 Base Salary. The Company shall pay to Employee an annual
base salary of Two Hundred Thousand Dollars ($200,000), less legally required
deductions and authorized withholdings, payable in periodic installments in
accordance with the standard payroll practices of the Company in effect from
time to time. Employee shall be eligible for annual salary increases which shall
be determined by the Company in its sole discretion.
4.02 Incentive Bonus. Employee shall be eligible for an annual
incentive bonus (a "Bonus") of up to 50% of his annual base salary, less legally
required or legally authorized deductions and withholdings. The amount of any
Bonus paid to Employee shall be based upon criteria upon which the Employee and
the Company shall mutually agree. The amount of any Bonus payable to Employee
for the remaining years of the Term shall be determined by the Company in its
sole discretion, based upon the eligibility criteria upon which the Company and
Employee have agreed.
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4.03. Stock Options. Employee shall be entitled to receive a
grant of options to acquire Two Hundred Fifty Thousand (250,000) shares of
Company stock pursuant to the terms and subject to the conditions of the stock
plan in which the Company employee's participate.
5. Termination.
5.01 Termination Due to Employee's Death or Disability.
Employee's employment pursuant to this Agreement shall terminate automatically
prior to the expiration of the Term in the event of Employee's death or
Disability, as defined herein. "Disability" shall mean a physical or mental
impairment of Employee which results in Employee's inability to perform one or
more of the essential functions of Employee's position, with or without
reasonable accommodation, provided Employee has exhausted Employee's entitlement
to any applicable leave, if Employee desires to take such leave and satisfies
all eligibility requirements for such leave.
5.02 Termination by the Company for Cause. Company may
terminate Employee's employment pursuant to this Agreement prior to the
expiration of the Term in the event that there is "Cause" to terminate
Employee's employment, which shall be defined as any of the following:
(a) Employee's material breach of any obligation to
the Company under the terms of this Agreement;
(b) Employee's conviction, or the entry of a plea of
guilty or nolo contendere by Employee of any felony or any crime involving moral
turpitude; or
(c) Any acts of Employee constituting gross
negligence or misconduct in connection with his employment with the Company, or
Employee's breach of any fiduciary duty to the Company or Employee's failure to
carry out any reasonable directive of the Company, any conduct by Employee which
is detrimental to the Company, or any failure by Employee to comply with any of
the policies or performance standards of the Company.
The Company's determination that there is Cause to terminate Employee's
employment shall be subject to the dispute resolution procedures pursuant to
Section 16 of this Agreement.
5.03 Termination by the Company without Cause. The Company may
terminate Employee's employment at any time prior to the expiration of the Term,
without prior notice and for any reason including, but not limited to, a sale,
merger, or change of control in the ownership of the Company, provided the
Company pays to Employee the severance pay described in Section 5.05(d).
5.04 Termination by Employee. Employee may terminate his
employment at any time during the term of this Agreement by giving sixty (60)
days' prior written notice thereof to the Company's Board of Directors. In the
event of termination by Employee under this Section, the Company may at its
option elect to have Employee cease to provide services immediately, provided
that during such 60-day notice period Employee shall be entitled to continue to
receive his base salary.
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5.05 Effect of Termination.
(a) Survival of Provisions. Notwithstanding any
termination or expiration of this Agreement, or any termination of Employee's
employment with the Company pursuant to Section 5, Employee, in consideration of
Employee's employment hereunder to the date of such termination or expiration,
shall remain bound by the provisions of this Agreement which specifically relate
to periods, activities, or obligations upon or subsequent to the termination of
Employee's employment, including, but not limited to, the provisions of Sections
6, 7, and 8.
(b) Termination due to Death or Disability. In the
event Employee's employment terminates prior to the expiration of the Term due
to his death or Disability, Employee shall not be entitled to any further
compensation under the provisions of this Agreement, except for his base salary
earned through the date of termination, and the portion of any annual Bonus
under Section 4.02 of this Agreement which previously had been approved by the
Company but was unpaid as of Employee's death or Disability. Employee (or, in
the event of death, Employee's estate) shall be entitled to such unpaid portion
of any approved Bonus only if Employee (or the authorized representative of
Employee's estate) signs a comprehensive general release of claims in a form
acceptable to Company. Payments of such approved but unpaid annual Bonus shall
not commence until after Employee (or the authorized representative of his
estate) signs such a release, and after any revocation period referenced in such
release has expired. If Employee (or the authorized representative of his
Estate) does not sign such a general release of claims, Employee (or his estate)
shall not be entitled to receive any compensation under the provisions of this
Agreement except for Employee's base salary earned through the date of death or
Disability. In the case of Disability, if Employee violates any of the
provisions of Sections 7 or 8 of this Agreement, the Company's obligations to
pay the unpaid portion of any approved Bonus to Employee shall cease on the date
of such violation.
(c) Termination for Cause. In the event of a
termination for Cause under Section 5.02, Employee shall not be entitled to
receive any further compensation under the provisions of this Agreement, except
for his base salary earned through the date of termination.
(d) Termination without Cause. In the event of
termination without Cause under Section 5.03, Employee shall be entitled to
severance pay consisting of the following: (1) base salary continuation for 12
months following the date of termination, at the rate in effect at the time of
termination, which shall be paid on the Company's regular paydays; and (2) a
lump sum payment of $100,000. Employee shall only be entitled to the foregoing
severance pay if Employee signs a comprehensive general release of claims in a
form acceptable to the Company. Employee's severance pay shall not commence
until the first payday after Employee signs such a release, and after any
revocation period referenced in such release has expired. If Employee does not
sign such a general release of claims, Employee shall not be entitled to receive
any compensation under the provisions of this Agreement except for his base
salary earned through the date of termination. If Employee violates any of the
provisions of Sections 7 or 8 of this Agreement, the Company's obligations to
pay severance pay to Employee shall cease on the date of such violation.
(e) Termination Occasioned by Employee. In the event
Employee terminates his employment under Section 5.04, Employee shall not be
entitled to receive any further
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compensation under the provisions of this Agreement, except for his base salary
earned through the date of termination.
6. Return of Proprietary Property. Employee agrees that all property in
Employee's possession that he obtains or is assigned in the course of his
employment with the Company, including, without limitation, all documents,
reports, manuals, memoranda, customer lists, credit cards, keys, access cards,
and all other property relating in any way to the business of the Company, is
the exclusive property of the Company, even if Employee authored, created, or
assisted in authoring or creating such property. Employee shall return to the
Company all such property immediately upon termination of employment or at such
earlier time as the Company may request.
7. Confidential Information. Except as permitted or directed by the
Company's Board of Directors, during the time Employee is employed by the
Company or at any time thereafter, Employee shall not divulge, furnish, or make
accessible to anyone or use in any way (other than in the ordinary course of the
business of the Company) any confidential or secret information or knowledge of
the Company, whether developed by himself or by others. Such confidential and/or
secret information encompassed by this Section 7 includes, but is not limited
to, the Company's customer and supplier lists, business plans, and financial,
marketing, and personnel information. Employee agrees to refrain from any acts
or omissions that would reduce the value of any confidential or secret knowledge
or information to the Company, both during his employment hereunder and at any
time after the termination of his employment. Employee's obligations of
confidentiality under this Section 7 shall not apply to any knowledge or
information that is now published publicly or that subsequently becomes
generally publicly known, other than as a direct or indirect result of a breach
of this Agreement by Employee.
8. Patent and Related Matters.
8.01 Disclosure and Assignment. Employee agrees to promptly
disclose in writing to the Company complete information concerning each and
every invention, discovery, improvement, device, design, process, or product
made, developed, perfected, devised, conceived, or first reduced to practice by
Employee, either solely or in collaboration with others, during Employee's term
of employment by the Company, or within six months thereafter, relating to the
business, products, practices, or techniques of the Company (hereinafter
referred to as "Developments"). Employee, to the extent that Employee has the
legal right to do so, hereby acknowledges that any and all of said Developments
are the property of the Company and hereby assigns and agrees to assign to the
Company any and all of Employee's right, title, and interest in and to any and
all of such Developments.
8.02 Limitation. The provisions of this Section 8 shall not
apply to any Development meeting the following conditions:
(a) such Development was developed entirely on
Employee's own time; and
(b) such Development was made without the use of any
Company equipment, supplies, facilities, or trade secret information; and such
Development does not relate at
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the time of conception or reduction to practice to (i) to the business of the
Company, or (ii) to the Company's actual or demonstrably anticipated research or
development; and
(c) such Development does not result from any work
performed by Employee for the Company.
8.03 Assistance of Employee. Upon request and without further
compensation therefor, but at no expense to Employee, and whether during the
term of Employee's employment by the Company or thereafter, Employee will do all
lawful acts, including, but not limited to, the execution of papers and the
giving of testimony, that in the opinion of the Company, its successors, or
assigns, may be necessary or desirable in obtaining, sustaining, reissuing,
extending, or enforcing Letters Patent, and for perfecting, affirming, and
recording the Company's complete ownership and title thereto, and to cooperate
otherwise in all proceedings and matters relating thereto.
9. Confidentiality of this Agreement. Employee agrees to keep the terms
of this Agreement confidential, and not to disclose such terms to any other
RateXchange, Inc., employee, other than authorized members of the Board of
Directors of the Company.
10. Assignment. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. Employee may not assign this Agreement or any rights
hereunder. Any purported or attempted assignment or transfer by Employee of this
Agreement or any of Employee's duties, responsibilities, or obligations
hereunder shall be void.
11. Governing Law, Construction, and Severability. This Agreement is
made under and shall be governed by and construed in accordance with the laws of
the State of California. In the event any provision of this Agreement (or
portion thereof) shall be held illegal or invalid for any reason, such
illegality or invalidity will not in any way affect the legality or validity of
any other provision (or portion thereof) of this Agreement.
12. Company Remedies. Employee acknowledges that the remedy at law for
any breach of any of the provisions of Sections 6 or 7 will be inadequate, and
that the Company shall be entitled, in addition to any remedy at law or in
equity, to preliminary and permanent injunctive relief and specific performance.
13. Entire Agreement. This Agreement contains the entire agreement
between the Company and Employee with respect to his employment by the Company
and there are no undertakings, covenants, or commitments other than as set forth
herein. This Agreement may not be altered or amended, except by a writing
executed by the party against whom such alteration or amendment is to be
enforced. This Agreement supersedes, terminates, replaces, and supplants any and
all prior understandings or agreements between the parties relating in any way
to the hiring or employment of Employee by the Company.
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14. Counterparts. This Agreement may be simultaneously executed in any
number of counterparts, and such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.
15. Waivers. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof, or the exercise of any
other right or remedy granted hereby or by any related document or by law. No
single or partial waiver of rights or remedies hereunder, nor any course of
conduct of the parties, shall be construed as a waiver of rights or remedies by
either party (other than as expressly and specifically waived).
16. Dispute Resolution. Any controversy, claim, or dispute of whatever
nature arising out of or relating to this Agreement or Employee's employment,
including but not limited to discrimination claims, whether such controversy,
claim, or dispute is based on statute, contract, tort, common law, or otherwise,
and whether such controversy, claim, or dispute existed prior to or arises after
the date of this Agreement (any such controversy, claim or dispute being a
"Dispute"), shall be resolved in accordance with the procedures set forth in
this Section 16 which procedures shall be the sole and exclusive procedures for
the resolution of any Disputes (except as otherwise provided in Section 12). All
Disputes shall be resolved by arbitration in San Francisco, California, in
accordance with the then current Non-Administered International Arbitration
Rules & Commentary of the CPR Institute by a sole arbitrator who has had both
training and experience as an arbitrator of general corporate, commercial, and
employment matters and who is and for at least ten years has been a partner,
shareholder, or member in a law firm. If the Company and Employee cannot agree
on an arbitrator, then the arbitrator shall be selected by the President of the
CPR Institute in accordance with the criteria set forth in the preceding
sentence. The arbitrator may decide any issue as to whether, or as to the extent
to which, any Dispute is subject to the arbitration and other Dispute resolution
provisions in this Agreement. The arbitrator must: (i) base and render his or
her award on the provisions of this Agreement or applicable law and (ii) render
his or her award in writing including an explanation of the reasons for such
award and the provisions of this Agreement supporting such award. Judgment upon
the award rendered by the arbitrator may be entered by any court having
jurisdiction thereof. The statute of limitations applicable to the commencement
of a lawsuit shall apply to the commencement of an arbitration under this
subsection. The Employee acknowledges and agrees that the Employee has been
given the opportunity to negotiate this provision. No exercise of any rights
under this Section 16 shall limit the right of the Company or the Employee
pursuant to this Agreement to commence any judicial proceeding to obtain
injunctive relief. Reasonable attorney's fees and expenses of arbitration
incurred in any Dispute relating to the interpretation or enforcement of this
Agreement shall be paid by the prevailing party in such Dispute.
17. Notices. All notices, requests, demands, consents, or other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given if delivered by overnight courier or
express mail service or by postage prepaid registered or certified mail, return
receipt requested (the return receipt constituting prima facie evidence the
giving of such notice request, demand or other communication), by personal
delivery, or by fax with confirmation of receipt and a copy mailed with postage
prepaid, to the following address or such
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other address of which a party may subsequently give notice to the other party
in accord with the provisions of this Section. Notice is effective immediately
if by personal delivery or by fax with confirmation received and a copy mailed
the same day. Notice sent by overnight courier or by registered or certified
mail is effective the earlier of actual receipt or the fifth date after the date
mailed as evidenced by the sender's certified or registered receipt.
To the Company: RateXchange, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
To Employee: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
18. Attorneys Fees. Should any party hereto retain counsel for the
purpose of enforcing, or preventing the breach of, any provision hereof
including, but not limited to, the institution of any action or proceeding,
whether by arbitration, judicial or quasi-judicial action, or otherwise, to
enforce any provision hereof, or for damages for any alleged breach of any
provision hereof, or for a declaration of such party's rights or obligations
hereunder, then whether the matter is settled by negotiation, or by arbitration
or judicial determination, the prevailing party shall be entitled to be
reimbursed by the losing party for all costs and expenses incurred thereby,
including, but not limited to, reasonable attorney's fees for the services
rendered to such prevailing party.
IN WITNESS WHEREOF, the parties, intending to be legally bound thereby,
have signed this Agreement.
RATEXCHANGE: EMPLOYEE
RateXchange, Inc.
By: By:
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▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer ▇▇▇▇▇▇ ▇▇▇▇
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