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EXECUTIVE EMPLOYMENT AGREEMENT

Employee Retention Agreement

EXECUTIVE EMPLOYMENT AGREEMENT | Document Parties: RAINMAKER SYSTEMS INC | Rainmaker Systems, Inc You are currently viewing:
This Employee Retention Agreement involves

RAINMAKER SYSTEMS INC | Rainmaker Systems, Inc

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Title: EXECUTIVE EMPLOYMENT AGREEMENT
Governing Law: California     Date: 7/2/2008
Industry: Computer Services     Sector: Technology

EXECUTIVE EMPLOYMENT AGREEMENT, Parties: rainmaker systems inc , rainmaker systems  inc
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Exhibit 99.1

EXECUTIVE EMPLOYMENT AGREEMENT

 

DATE:    June 9, 2008 (the “Effective Date”)
  

PARTIES:

  

Rainmaker Systems, Inc.

900 E. Hamilton Ave.

Campbell, CA 95086

  

Attention:

   Phil Johnson
  

Telephone:

   (408) 626-2601
  

(the “Company”)

  

and

  

Mark de la Vega

  

(“Executive”)

RECITALS:

A. The Company desires to employ Executive in the role set forth herein below and Executive desires to be employed by the Company.

AGREEMENT:

In consideration of the foregoing recitals (which are incorporated herein), and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Employment; Duties. The Company shall employ Executive, and Executive accepts such employment, under the terms and conditions set forth in this Agreement. Executive’s duties shall be consistent with those of a Senior Vice President of Products, as defined from time to time by the Chief Executive Officer of the Company.

2. Full-Time Best Efforts.

(a) Time and Effort. Executive shall devote Executive’s full professional time and attention to the performance of Executive’s obligations under this Agreement, and shall at all times faithfully, industriously and to the best of Executive’s ability, experience and talent perform all of Executive’s obligations hereunder. So long as this Agreement is in effect, Executive shall not be employed or engaged by any other person or entity other than the Company unless otherwise authorized in writing by the Chief Executive Officer of the Company. Notwithstanding the foregoing, Executive, upon receiving written permission from the Company’s Chief Executive Officer, shall

 


be permitted to serve on the boards of companies that do not compete with the Company, provided that these endeavors do not impede Executive’s job performance, and Executive shall be entitled to retain all compensation paid to him or her in connection with such endeavors.

(b) Performance Standards; Underperformance. Within 180 days after the Effective Date, the Chief Executive Officer of the Company shall establish performance expectations and standards, which shall (i) be reasonably acceptable to Executive, (ii) may change from time to time as the needs of the Company change, and (iii) shall serve as a basis to evaluate Executive’s performance from time to time. Within six months following the establishment of performance expectations and standards, and at least annually thereafter, the CEO and the Executive shall meet in order for the CEO to provide a formal evaluation of Executive’s performance. “Underperformance” shall mean Executive’s failure to meet some or all of the then-current performance expectations and standards, and can be the basis for a change in job description, salary and benefits, or termination of Executive’s employment under this Agreement if such Underperformance is not cured within 60 days’ following the date on which notice of the elements of such Underperformance has been given to Executive by the Company.

3. Term. The term of this Agreement shall begin on the Effective Date and shall end on the second anniversary of the Effective Date (the “Initial Term”) unless terminated prior to that date as provided herein. Notwithstanding the Initial Term, Executive shall be an at-will employee who may resign or be terminated at any time, with or without Cause (as defined below). Nothing in this Agreement shall give Executive the right to continued Company employment. Executive’s at-will status can be altered only by a written document signed by a duly authorized Company executive and Executive.

4. Compensation and Benefits. The Company shall pay compensation to Executive consisting of an annual base salary, any applicable discretionary bonuses and other benefits as described in this Agreement. In addition to the financial compensation and benefits set forth below, Executive shall be reimbursed in accordance with subsection (d) below for any approved business-related expenses and shall receive vacation, sick leave and other time off as is customary and usual for executives of Executive’s status in the Company.

(a) Base Salary; Unpaid Wages. Executive’s annual base salary as of the Effective Date is $230,000.00. Executive’s base salary shall be reviewed annually in conjunction with Executive’s annual performance review and may be adjusted as appropriate in light of Executive’s performance. Executive’s annual base salary shall be paid in accordance with the standard payroll practices of the Company.

(b) Benefits. Executive shall be entitled to participate in such life insurance, disability, medical, dental, stock options, stock grants, retirement plans and other programs as may be made generally available from time to time by the Company for the benefit of executives of Executive’s level or its employees generally (the “Benefits”). Executive understands and acknowledges that some Benefits will not apply to non-U.S. residents/employees.

 

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(c) Discretionary Bonuses. Executive may be eligible to receive an aggregate annual bonus of $100,000, payable quarterly, based on the achievement of certain individual goals and the Company performance. The decision whether to award a bonus, and the amount of the bonus, are to be determined at the sole discretion of the Company’s Chief Executive Officer or the Compensation Committee of the Board of Directors.

(d) Expense Reimbursement. The Company shall reimburse Executive for all reasonable and necessary out-of-pocket expenses properly incurred in the performance of this Agreement and in accordance with the Company’s applicable policies, but only to the extent that Executive submits to the Company a detailed itemized account of such expenses. Reimbursement for such expenses shall occur promptly after their approval and receipt by the Company of such documentary evidence of such expenses as the Company may reasonably require.

5. Restricted Stock Grant. Subject to the approval of the Compensation Committee of the Board of Directors, Executive shall be granted 50,000 restricted shares of common stock pursuant to Rainmaker’s 2003 Stock Incentive Plan. The restricted shares shall vest in accordance with a vesting schedule to be determined by the Compensation Committee of the Board of Directors at the time of grant.

6. Documents and Materials. Except in the performance of Executive’s duties in the ordinary course of business for which Executive is employed by the Company, Executive shall not make or cause to be made any copies or other reproductions or recordings or any abstracts or summaries of any reports, studies, memoranda, correspondence, manuals, records, plans or other written, printed, computerized or otherwise recorded materials of any kind belonging to or in the possession of the Company or any of its Affiliates (defined below). Nor shall the Executive distribute or disclose such materials to third parties except as necessary to perform his or her duties for the Company and as expressly authorized by the Company. Immediately upon the termination of Executive’s employment with the Company or at any time upon the request of the Company, Executive shall surrender all such material to the Company and execute a document acknowledging that Executive has complied with the provisions of this Agreement.

7. Trade Secrets and Other Confidential Information. Executive shall not at any time, whether during or after the term of this Agreement, use for Executive’s own benefit or purposes or for the benefit or purposes of any other person or entity, or disclose (except in the performance of Executive’s duties in the ordinary course of business for which Executive is employed by the Company) in any manner to any person or entity, any trade secrets, information, data, know how or knowledge (including that relating to service techniques, purchasing and sales organization and methods, client lists, market development and expansion plans, personnel training and development programs and client and supplier relationships) or any other Discoveries (defined below) belonging to or relating to the affairs of the Company or any of its Affiliates or to the clients of the Company or any of its Affiliates.

 

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8. Customers and Vendors. Executive acknowledges that the lists of the Company’s and its Affiliates’ customers and vendors as they may exist from time to time constitute a valuable and unique asset of the Company, and Executive shall not, during or after the term of Executive’s employment, disclose such lists or any part thereof to any person or entity for any reason whatsoever, nor shall Executive use such customer or vendor lists for Executive’s own benefit or purposes or for the benefit or purposes of any business with whom Executive may become associated.

9. Discoveries. Any and all inventions, discoveries, improvements, designs, methods, systems, developments, know how, ideas, suggestions, devices, trade secrets and processes (collectively, “Discoveries”), whether patentable or not, which are discovered, disclosed to or otherwise obtained by Executive during Executive’s employment with the Company are confidential, proprietary information and are the sole and absolute property of the Company. Executive shall disclose promptly to the Company all Discoveries and shall assist the Company in making any application in the United States and in foreign jurisdictions for patents of any kind with respect thereto.

10. Works for Hire. All works and writings of a professional nature that are produced by Executive during Executive’s employment with the Company that relate to the Company’s business or that are produced during regular working hours with the Company or with the use of the Company’s resources constitute works made for hire and are the sole and absolute property of the Company. Executive grants the Company the exclusive right to copyright all such works made for hire in the United States and in foreign jurisdictions. Whenever requested to do so by the Company, Executive shall execute any and all applications, assignments or other instruments that the Company may deem necessary to protect the Company’s interest therein for the works made for hire. To the extent permitted by Section 2870 of the California Labor Code, a copy of which is attached hereto as Exhibit “A,” Executive hereby assigns all rights to all inventions to the Company and agrees that all inventions which he or she invents, conceives, develops or improves shall be the sole property of the Company.

11. Non-Competition/Non-solicitation.

(a) Corporate Relationship . Executive acknowledges (i) that Executive’s employment as a member of the Company’s executive management team creates a relationship of confidence and trust between Executive and the Company with respect to confidential and proprietary information applicable to the business of the Company, its Affiliates and its clients, and (ii) the highly competitive nature of the business of the Company. Accordingly, the Company and Executive agree that the restrictions contained in this Section are reasonable and necessary for the protection of the immediate interests of the Company and that any violation of these restrictions would cause substantial injury to the Company.

 

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(b) Competitive Business Defined . The term “Competitive Business” means any business which is similar to or competitive with the business of the Company or its Affiliates with respect to which Executive has had direct responsibility and which is located in the same regions or markets as the business of the Company or its Affiliates.

(c) Existing Client Defined. The term “Existing Client” means a client for whom the Company or any of its Affiliates is performing services or marketing products as of the date of the termination of Executive’s employment with the Company or for whom the Company or any of its Affiliates performed services or marketed products within the two-year period immediately preceding the termination of Executive’s employment with the Company.

(d) Employment Restrictions . During Executive’s employment with the Company, Executive shall not:

i. own, manage, operate, control, have any financial interest in, or lend Executive’s name to any person or entity engaged in, a Competitive Business or assist others in the ownership, management, operation or control of any Competitive Business; or

ii. solicit directly or indirectly on behalf of any Competitive Business, the business of any Existing Client,

iii. solicit or encourage any employees or independent contractors who are engaged full-time by the Company or any of its Affiliates or temporary employees of the Company or any of its Affiliates to leave the Company or to work for anyone in competition with the Company.

(e). Post Employment Restrictions. Following Executive’s employment with the Company, Executive shall not:

i. solicit, entice or in any way divert any Existing Client, candidate or supplier of the Company to do business with any business or entity in competition with the Company where to do so involves the use or disclosure of Company trade secrets or other confidential information,

ii. for a period of one year afte


 
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