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EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of April 2, 1999 between BUILDNET INC., a
corporation organized and existing under the laws of the State of North
Carolina ("BuildNet") and Xxxxxx X. Xxxxxx, III ("Employee").
WHEREAS, BuildNet desires to employ Employee and Employee desires to
accept such employment on the terms and conditions hereinafter set forth; and
WHEREAS, the parties hereby acknowledge that the goodwill, continued
patronage, names, addresses and specific business requirements of BuildNet's
clients and customers, and the designs, procedures, systems, strategies,
business methods and know-how of BuildNet, having been acquired through
BuildNet's efforts and/or the expenditure of considerable time and money, are
among the principal assets of BuildNet; and
WHEREAS, the parties hereby acknowledge that as a result of the
position in which Employee will be employed by BuildNet, Employee will develop
special skills and knowledge peculiar to BuildNet's business, whereby Employee
has become and will continue to become, through Employee's employment with
BuildNet, acquainted with the identities of the clients and customers of
BuildNet, and has acquired and will continue to acquire access to the
techniques of BuildNet in carrying on its business, as well as other
confidential and proprietary information; and
WHEREAS, the parties hereto acknowledge that the covenants set forth
in Sections 8 through 11 (the "Covenants") of this Agreement are necessary for
the reasonable and proper protection of BuildNet's confidential and proprietary
information (as defined herein), customer relationships, and the goodwill of
BuildNet's business, and that such Covenants constitute a material portion of
the consideration for Employee's employment hereunder;
NOW, THEREFORE, in consideration of the premises and mutual promises
and covenants contained herein, and for other good and valuable consideration,
the receipt and legal sufficiency of which are hereby acknowledged, the parties
agree as follows.
1. Position; Employment. BuildNet agrees to employ Employee, and
Employee agrees to be employed, as President and Chief Operating Officer of
BuildNet, or in such other position as the Board of Directors may from time to
time assign. The employment of Employee shall commence as of the date of this
Agreement and continue for the period beginning on the date hereof and ending
as provided in Section 7 hereof. Employee shall also be entitled to a seat on
the Board of Directors of BuildNet for so long as he shall be employed as
President and Chief Operating Officer, and shall be elected as a member of the
Board of Directors as soon as practicable after the effective date hereof.
2. Relocation; Performance of Duties. Employee agrees to use his
best efforts to relocate his residence to the Raleigh/Durham area as soon as
his house at 0 Xx Xxxxxx'x Xxxxx xx Xxxxxx, Xxxxx is sold. Until such
relocation, Employee shall devote his time to the business of
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BuildNet and to the performance of the services and duties as he may be
assigned from time to time by the Board of Directors of BuildNet, it being
understood that Employee will use his best efforts to devote his entire time
and best efforts, skill, ability and attention to the business and affairs of
BuildNet.
In the performance of his responsibilities as President and Chief
Operating Officer, Employee shall be subject to all of BuildNet's policies,
rules and regulations applicable to its employees of comparable status.
Employee shall report directly to and be subject to the direction of the Chief
Executive Officer and Board of Directors of BuildNet. Employee shall perform
the duties consistent with Employee's knowledge, experience, and position and
the duties of BuildNet employees of comparable status. Employee shall have such
other duties and responsibilities consistent with his position as the Board of
Directors of BuildNet shall from time to time reasonably assign to him. In
performing such duties, Employee shall be subject to and shall substantially
abide by all policies and procedures developed by BuildNet.
3. Compensation.
(a) Base Salary. In consideration of Employee's services
hereunder, BuildNet shall pay Employee a minimum annual base salary of Three
Hundred Thousand Dollars ($300,000) per annum, less applicable statutory
deductions, payable in accordance with BuildNet's normal payroll practices (the
"Base Salary"). Employee's Base Salary shall be reviewed by the Board of
Directors of BuildNet on an annual basis and may be increased as the Board of
Directors of BuildNet deems appropriate in its sole discretion.
(b) Bonus. Employee may receive a bonus each calendar year
during his continued employment comparable to bonuses paid to other similarly
situated officers of BuildNet and as determined by the Board of Directors in
its sole discretion.
4. Stock Options. As of April 2, 1999, BuildNet shall grant to
Employee incentive stock option to purchase up to an aggregate of One Hundred
Sixty-five Thousand (165,000) shares of the Common Stock of Buildnet, with an
exercise price equal to the fair market value of the Common Stock of BuildNet
at the time of such grant. Options to purchase all such shares shall begin to
vest upon the effective date of this Agreement in monthly installments over
four (4) years. Such options shall become immediately fully exercisable in the
event of (a) a sale of all or substantially all the assets of BuildNet or a
merger or consolidation involving BuildNet in which the shareholders of
BuildNet prior to such transaction own less than a majority of the voting
securities of the entity surviving such transaction, or (b) any transaction or
series of related transactions pursuant to which a person, entity or persons or
entities under common control or acting as a group within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended, acquires
securities constituting at least a majority of the voting power of BuildNet.
5. Employee Benefits. During the Term of this Agreement, Employee
shall be eligible to receive and/or participate in all employee benefits that
are offered by BuildNet to its employees generally.
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6. Reimbursement of Expenses. BuildNet shall reimburse Employee for
reasonable and documented expenses associated with Employee's relocation to the
Raleigh/Durham area, including, without limitation (a) fees paid to any
relocation service; (b) moving expenses, which shall include packing and moving
of household items and up to sixty (60) days' temporary living expenses for
Employee and his family; and (c) reasonable closing costs incurred by Employee
in connection with the sale of his home in Dallas, Texas (including but not
limited to sales commissions not to exceed six percent (6%) of the selling
price) and the purchase of a home in the Raleigh/Durham area. Notwithstanding
the provisions of this Section 6, no expense will be reimbursed by BuildNet
without prior consent of the Chief Executive Officer of BuildNet if such
expense is greater than $5,000.
7. Term and Termination. The term of the Employee's employment
under this Agreement (the "Term of Employment") shall commence as of the date
hereof and continue through the date five (5) years from such date, unless
earlier terminated in accordance with the provisions of this Agreement. This
Agreement shall terminate prior to the expiration of the Term of Employment
upon the occurrence of any one of the following events.
(a) Cause. BuildNet may terminate this Agreement, at any time,
for Cause, with or without prior notice to Employee, in which event all
payments under this Agreement shall cease, except as provided in Section 7(d)
below. The term "Cause" as used herein shall mean (i) Employee, in carrying out
his duties hereunder, has been guilty of gross negligence or wilful and wanton
misconduct which in either case results in material harm to the financial
condition, business, assets, or prospects of BuildNet; (ii) the conviction of,
or the entering of a plea of no contest by, Employee for a felony or crime
involving moral turpitude, (iii) any act involving dishonesty in the
performance of Employee's duties hereunder, including, without limitation,
fraud, misappropriation or embezzlement, (iv) any material breach of this
Agreement by Employee, which failure cannot be cured or shall not have been
cured within thirty (30) days after receipt by Employee of written notice from
BuildNet specifying in reasonable detail the nature of such breach; or (v)
Employee fails to carry out directions (consistent with his position as set
forth in Section 1 above) of the Board of Directors of BuildNet, which failure
cannot be cured or shall not have been cured within thirty (30) days after
receipt by Employee of written notice from BuildNet specifying in reasonable
detail the failure to so carry out such directions.
(b) Death. This Agreement shall terminate if Employee dies
during the Term of Employment. In such event, BuildNet shall pay to the
Employee's executors, legal representatives or administrators an amount as set
forth in Section 7(d) below.
(c) Disability. BuildNet may terminate this Agreement if
Employee shall suffer a Disability, in which event all payments under this
Agreement shall cease, except as provided in Section 7(d) below. For purposes
of this Agreement, "Disability" shall mean that Employee has not performed his
full-time duties with BuildNet for six (6) consecutive months or an aggregate
of six (6) months within a twelve (12) month period as a result of his
incapacity due to physical or mental illness.
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(d) Certain Payments Upon Termination. If, during the Term of
Employment, BuildNet terminates the employment of Employee for Cause, Employee
voluntarily terminates his employment with BuildNet, or upon the death or
Disability of Employee during the Term of Employment, the Term of Employment
shall terminate immediately thereafter, and BuildNet shall pay Employee or his
beneficiary such Base Salary as he may be entitled to receive for services
rendered prior to the date of such termination. In the event of any such
termination, BuildNet shall not be liable for any other payments to Employee.
8. Restrictive Covenants.
(a) Noncompetition. During the term of his employment, and for
a period of two (2) years after the termination or cessation of Employee's
employment with BuildNet, regardless of manner or cause of termination,
Employee agrees that, within the geographic area described in Section 8(e)
hereof, he will not: (i) engage in, manage, operate, control or supervise, or
participate in the management, operation, control or supervision of, any
business or entity which provides products or services directly competitive
with those then currently provided by BuildNet; or (ii) have any ownership or
financial interest, directly or indirectly, in any entity which provides
products or services competitive with those then currently provided by
BuildNet, including, without limitation, as an individual, partner, shareholder
(other than as a shareholder of a publicly-owned corporation in which Employee
owns less than 1% of the outstanding shares of such corporation), officer,
director, employee, member, associate, principal, agent, representative or
consultant, and shall not in any other manner, directly or indirectly, compete
to any extent with such business of BuildNet.
(b) Restriction on Solicitation of Customers. Employee agrees
that he will not (in addition to any other restriction on his activities), for
a period of two (2) years immediately following Employee's termination, on his
own behalf or on behalf of any other person or entity, directly or indirectly
call on or otherwise contact customers of BuildNet on or prior to the date of
termination or cessation of Employee's employment with BuildNet (the
"Restricted Customers") within the geographic area described in Section 8(e)
hereof, for the purpose of selling products or services to the Restricted
Customers that are competitive with those provided by BuildNet.
(c) Restriction on Solicitation of Employees. Employee agrees
that he will not, for a period of two (2) years immediately following
Employee's termination, directly or indirectly contact, solicit, interfere with
or attempt to entice in any form, fashion or manner any employee of BuildNet:
(i) for the purpose of inducing that employee to work with or for Employee (or
with a person or business entity with which employee is affiliated); or (ii) to
terminate his employment with BuildNet.
(d) Confidentiality. Employee will not at any time, whether
during or after the termination of his employment, reveal to any person or
entity any of the trade secrets or confidential information concerning the
organization, business or finances of BuildNet or of any third party that
BuildNet is under an obligation to keep confidential (including but not limited
to trade secrets or confidential information respecting inventions, research,
products, designs, methods, know-how, formulae, techniques, systems, processes,
software programs, works of authorship, customer lists, projects, plans and
proposals), except as may be required in the
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ordinary course of performing his duties as an employee of BuildNet, and
Employee shall keep secret all matters entrusted to him and shall not use or
attempt to use any such information in any manner that may injure or cause loss
to BuildNet.
(e) Geographic Scope of Restrictive Covenants. The geographic
area in which Employee shall not engage in any of the prohibited activities
listed in subsections 8(a) and 8(b) hereof shall be limited to the United
States.
9. Employee Developments. If at any time or times during Employee's
employment, Employee shall (either alone or with others) make, conceive,
discover or reduce to practice any invention, modification, discovery, design,
development, improvement, process, software program, work of authorship,
documentation, formula, data, technique, know-how, secret or intellectual
property right whatsoever or any interest therein (whether or not patentable or
registrable under copyright or similar statutes or subject to analogous
protection) (herein called "Developments") that relates to the business of
BuildNet or any of the products or services being developed, manufactured or
sold by BuildNet or that may be used in relation therewith, such Developments
and the benefits thereof shall immediately become the sole and absolute
property of BuildNet and its assigns, and Employee shall promptly disclose to
BuildNet each such Development and hereby assigns any rights Employee may have
or acquire in the Developments and benefits and/or rights resulting therefrom
to BuildNet and its assigns without further compensation and shall communicate,
without cost or delay, and without publishing the same, all available
information relating thereto to BuildNet. Upon the request of BuildNet, the
Employee will execute and deliver all documents and do other acts which are or
may be necessary to document such transfer or to enable BuildNet to file and
prosecute applications for and to acquire, maintain, extend and enforce any and
all patents, trademark registrations or copyrights under United States or
foreign law with respect to any such developments.
Notwithstanding the foregoing, this Agreement shall not be construed
to apply to, and shall not create any assignment of, any Developments of the
Employee that are covered by Section 66-57.1 of the North Carolina General
Statutes, a copy of which is attached hereto as Exhibit A.
10. Existing Developments. Employee represents that the
Developments, if any, identified on Exhibit B attached hereto comprise all the
unpatented and uncopyrighted Developments that Employee has made or conceived
prior to or otherwise not in connection with Employee's employment by BuildNet,
which Developments are excluded from this Agreement. Employee understands that
it is necessary only to list the title and purpose of such Developments but not
details thereof.
Employee further represents that Employee's performance of all the
terms of this Agreement and as an employee of BuildNet does not and will not
breach any agreement to keep in confidence proprietary information acquired by
Employee in confidence or in trust prior to Employee's employment by BuildNet.
Employee has not entered into, and Employee agrees he will not enter into, any
agreement either written or oral in conflict herewith.
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11. Return of BuildNet Property. Upon the termination of Employee's
employment with BuildNet for any reason, Employee shall leave with or return to
BuildNet all personal property belonging to BuildNet ("BuildNet Property") that
is in Employee's possession or control as of the date of such termination of
employment, including, without limitation, all records, papers, drawings,
notebooks, specifications, marketing materials, software, reports, proposals,
equipment, or any other device, document or possession, however obtained,
whether or not such BuildNet Property contains confidential or proprietary
information of BuildNet as described in Section 8(d) hereof.
12. Enforcement of the Covenants. Employee acknowledges and agrees
that the Covenants contained in Sections 8 through 11 of this Agreement are
reasonably necessary to the protection of BuildNet's business, that a violation
of any of the Covenants contained in Sections 8 through 11 of this Agreement
would result in immediate and irreparable harm to BuildNet and that BuildNet's
remedies at law and/or the award of monetary damages would be inadequate relief
for such a violation. Therefore, Employee's violation or threatened violation
of any of the Covenants contained in Sections 8 through 11 of this Agreement
will give BuildNet the right to enforce such Covenants through specific
performance, temporary restraining order, preliminary or permanent injunction,
and other equitable relief. These remedies will be cumulative and in addition
to any other remedies that BuildNet may have. In addition, Employee agrees that
the Covenants contained in Sections 8 through 11 will be extended by a length
of time equal to the period of time running from the filing of any action to
enforce or challenge the validity of the Covenants to the date of a final
judgment (after appeals, if any) or settlement of said litigation, or the
expiration of all applicable appeal periods after the entry of judgment in said
litigation, whichever event last occurs.
13. Waiver of Breach. Any waiver by BuildNet of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach of such provision or any other provision hereof.
14. Validity and Survival of the Covenants. Employee acknowledges
and agrees that the Covenants contained in this Agreement are exchanged for
valid and reasonable consideration, are reasonably necessary to protect
BuildNet's legitimate interests, are reasonable with respect to time duration
and geographic scope, do not interfere with the interests of the public, and
that the descriptions of prohibited activities contained in the covenants are
sufficiently precise and definite to inform me of the scope of the Covenants.
The Covenants contained Sections 8 through 11 of this Agreement will survive
termination of Employee's employment. Employee agrees that the existence of any
claim or cause of action that he may have against BuildNet, whether based on
this Agreement or otherwise, will not constitute a defense to BuildNet's
enforcement of the Covenants.
15. Severability. Employee hereby agrees that each provision herein
shall be treated as a separate and independent clause, and the unenforceability
of any one clause shall in no way impair the enforceability of any of the other
clauses herein. Moreover, if one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to scope,
duration, territory, activity or subject so as to be unenforceable at law, such
provision or provisions shall be construed by the appropriate judicial body by
limiting and reducing it or them, so as to be enforceable to the extent
compatible with the applicable law as it shall then appear. In particular, in
the event that the provisions
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of Sections 8(a) and 8(b) are found to be unenforceable or void (either in
whole or in part) then the offending portion shall be construed as valid and
enforceable only to the extent permitted by law, and the balance of this
Agreement will remain in full force and effect. It is the intention of the
parties to restrict the activities of Employee only to the extent necessary to
protect the legitimate business interests of BuildNet and not to deprive
Employee of the right to earn a livelihood. Employee agrees that this Agreement
is reasonably necessary to protect BuildNet's legitimate business interests.
16. Binding Effect. Employee's obligations under this Agreement
shall survive the termination of Employee's employment regardless of the manner
of such termination and shall be binding upon Employee's heirs, executors,
administrators and legal representatives.
17. Assignment. BuildNet shall have the right to assign this
Agreement to its successors and assigns, and all covenants and agreements
hereunder shall inure to the benefit of and be enforceable by said successors
or assigns. This Agreement may be amended only in a writing signed by each of
the parties hereto.
18. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of North Carolina. This Agreement may
be executed in counterparts.
19. Entirety. This Agreement, including any exhibits hereto, as it
may be amended pursuant to the terms hereof, represents the complete and final
agreement of the parties and shall control over any other statement,
representation or agreement by BuildNet (e.g., as may appear in employment or
policy manuals). This Agreement supersedes any prior negotiations or
discussions between the parties with regard to the subject matter hereof.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their seals affixed hereto as of the day and year first
above written.
BUILDNET INC.
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: CEO
EMPLOYEE
/s/ Xxxxxx X. Xxxxxx, III (SEAL)
Xxxxxx X. Xxxxxx, III
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EXHIBIT A
SECTION 66-57.1 OF THE NORTH CAROLINA GENERAL STATUTES
Any provision in an employment agreement which provides that the
[employee] shall assign or offer to assign any of his rights in an invention to
his employer shall not apply to an invention that the employee developed
entirely on his own time without using the employer's equipment, supplies,
facility or trade secret information except for those inventions that:
(i) relate to the employer's business or actual or demonstrably
anticipated research or development, or
(ii) result from any work performed by the employee for the
employer.
To the extent a provision in an employment agreement purports to apply
to the type of invention described, it is against the public policy of this
State and [is] unenforceable. The employee shall bear the burden of proof in
establishing that his invention qualifies under this section.
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EXHIBIT B
PRIOR DEVELOPMENTS BY EMPLOYEE
The following is a complete list of all unpatented and uncopyrighted
Developments relevant to the subject matter of my employment by BuildNet that
have been made or conceived by me prior to or otherwise not in connection with
my employment by BuildNet.
[ ] No inventions or improvements.
[ ] All such inventions as are described below:
[ ] Additional sheets attached.
/s/ Xxxxxx X. Xxxxxx, III
Xxxxxx X. Xxxxxx, III
