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Exhibit
99.1
EXECUTIVE EMPLOYMENT
AGREEMENT
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| DATE: |
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June 9, 2008 (the “Effective
Date”) |
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PARTIES:
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Rainmaker Systems,
Inc.
900 E. Hamilton
Ave.
Campbell, CA
95086
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Attention:
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Phil
Johnson |
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Telephone:
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(408)
626-2601 |
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(the “Company”)
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and
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Mark de la Vega
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(“Executive”)
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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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