EXECUTIVE EMPLOYMENT AGREEMENT

Exhibit 10.2

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

 

RECITALS:

 

A. The Company desires to continue to employ Executive in the role set forth herein below and Executive desires to remain 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 as Vice President of Marketing, 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 Vice President of Marketing, 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 firm 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 CEO of the Company, shall be permitted to serve on the boards of non-competitive companies provided that these endeavors do not impede Executive’s job performance, and Executive shall be entitled to retain all compensation paid to him 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 Effective Date, 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 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. Unless 60 days’ advance written notice is given by one party to the other regarding termination of Executive’s employment hereunder, at the expiration of the Initial Term, and any renewal term, the term of this Agreement shall automatically extend for an additional one year.

 

4. Compensation and Benefits. The Company shall pay compensation to Executive consisting of an annual base salary, any applicable bonuses and other benefits as described in this Agreement. In addition to the financial compensation and benefits set forth below, Executive shall be reimbursed 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 $100,000. 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.

 

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(b) Benefits. Executive shall be entitled to participate in such life insurance, disability, medical, dental, stock options, stock grants, and 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”).

 

(c) Bonuses/Commissions. Executive shall be eligible to receive quarterly bonuses in accordance with the Company’s 2005 Executive Bonus Plan (Exhibit A) and consistent with the criteria set forth in Section 2(b).

 

(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, but only to the extent that Executive submits to the Company an 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. Stock Option Grant. Executive has received options to purchase 100,000 shares of Rainmaker’s common stock (the “Options”) pursuant to Rainmaker’s 2003 Stock Incentive Plan. The Options shall vest in accordance with Rainmaker’s standard vesting schedule.

 

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). 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

 

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Affiliates or to the clients of the Company or any of its Affiliates; provided, however, that this Section shall not apply to any trade secret, information, data, know how, knowledge, or Discovery that is or becomes generally available to the public through no fault or action of Executive.

 

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.

 

11. Non-Competition.

 

(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.

 

(b) Competitive Business Defined. The term “Competitive Business” means any business which is similar to or competitive with the business of the Company 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.

 

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(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) Noncompetition. During Executive’s employment with the Company and for the defined duration set forth below following the termination of 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 cause others to or assist others in engaging in any Competitive Business in the foregoing manner;

 

ii. employ or otherwise engage, or attempt to employ or otherwise engage, in or on behalf of Executive or any Competitive Business, any person who is employed or engaged as an employee, consultant, agent or representative of the Company or any of its Affiliates as of the date of Executive’s termination or at any time during the one-year period following such termination; or

 

iii. solicit directly or indirectly on behalf of Executive or any Competitive Business, the customer business or account of any Existing Client.

 

If termination is by the Company without Cause the foregoing covenant shall remain in effect for four months unless there has been a Change of Control (defined below) and Executive’s employment is terminated without Cause during the 120 day period following the Change of Control, or otherwise ends, the foregoing covenant shall remain in effect for six months.

 

(e) Non-Competition Exception. Following the termination of Executive’s employment, Executive’s obligation to not compete with the Company as set forth above is solely dependent upon the Company’s paying to Executive all amounts due and payable to Executive under this Agreement (the “Payments Due”) within ten business days following the due dates therefore. The failure to make the Payments Due payments within such cure period shall serve as a waiver of Executive’s obligations under the covenant not to compete; provided, however, that such waiver shall not waive the Company’s obligation to make the Payments Due, and provided further that if the Payments Due are resumed within 30 days after the expiration of the cure period provided for herein, Executive’s obligation not to compete as provided herein shall resume until the expiration of the applicable period; and provided further,

 

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that if Executive has commenced employment in a Competitive Business prior to the Company making the Payments Due, Executive shall not be obligated to resign such employment.

 

(f) Specific Enforcement. Subject to Section 11 (e), the foregoing covenants shall be specifically enforceable; provided, however, that the covenants shall not be construed to prohibit ownership of not more than 5% of the equity of any publicly held entity engaged in direct competition with the Company, so long as the Executive is not otherwise engaged with such entity in any of the other activities specified in the foregoing clauses.

 

(g) Severability. If any court shall determine that the duration, geographic limitations, subject or scope of any restriction contained in this Section is unenforceable, it is the intention of the parties that this Section 11 shall not thereby be terminated but shall be deemed amended to the extent required to make it valid and enforceable, such amendment to apply only with respect to the operation of this Section in the jurisdiction of the court that has made the adjudication.

 

(h) Employability. Executive acknowledges (i) that Executive has sufficient abilities and talents to be able to obtain, upon the termination of Executive’s employment, comparable employment from another business while fully honoring and complying with the above covenants concerning confidential information and contacts with the Company’s or any of its Affiliates’ customers or employees, and (ii) the importance to the Company and its Affiliates of the above covenants. Accordingly, for the duration of the applicable period of Executive’s covenant not to compete as set forth above and upon the Company’s reasonable request of Executive, Executive shall advise the Company of the identity of Executive’s new employer and shall provide a general description, in reasonable detail, of Executive’s new duties and responsibilities sufficient to inform the Company of its need to request a court order to enforce the above covenants.

 

(i) Remedies. The parties acknowledge that the damages sustained by the Com