CONSULTING SERVICES AGREEMENT
Exhibit 10.3
This
Consulting Services Agreement (“Agreement”) is entered into
effective as of the effective date set forth on the signature page
to this Agreement (“Effective
Date”) by and between AutoWeb, Inc., a Delaware
corporation (“Company”), and the individual
identified as the consultant on the signature page to this
Agreement (“Consultant”).
Background
The
Company is engaged in the business of providing internet marketing
services for the automotive industry. Consultant was formerly
employed by the Company as its President and Chief Executive
Officer until April 12, 2018 (“Employment Termination Date”). The
Company wishes to engage Consultant to provide the transition
services described herein on a consulting basis, and Consultant
wishes to be engaged to provide such transition
services.
In
consideration of the covenants and agreements set forth herein, the
parties hereto agree as follows.
ARTICLE I
CONSULTING SERVICES
1.1
Consulting
Services. The Company hereby engages Consultant to perform
the transition services (“Consulting Services”) set forth on
the Consulting Services Schedule attached hereto as Exhibit A
(“Consulting Services
Schedule”), and Consultant hereby accepts the
engagement, upon the terms and conditions hereinafter set forth.
The parties acknowledge that in deciding to engage Consultant, the
Company has relied solely on the experience, expertise and
reputation of Consultant. All Consulting Services are to be
provided solely by the Consultant and no other employees of or
contractors for Consultant.
1.2
Term. The
engagement of Consultant hereunder shall commence effective as of
the Effective Date and shall continue for a period of thirteen (13)
months until the thirteenth month anniversary of the Effective Date
(“Agreement Expiration
Date”). This Agreement may be terminated prior to the
Agreement Expiration Date (i) by Consultant for any reason, with or
without cause, upon thirty (30) days prior written notice to
Company; or (ii) by either party by reason of a material breach of
this Agreement by the other party upon thirty (30) days prior
written notice detailing the breach by the breaching party and
breaching party fails to cure such breach within thirty (30) days
following such written notice. The period commencing with the
Effective Date and ending on the earlier of (i) the Agreement
Expiration Date and (ii) the effective date of any termination of
this Agreement by a party prior to the Agreement Expiration Date in
accordance with the provisions of this Section 1.2 is referred to
herein as the “Consulting
Term.” The provisions of Sections 1.5, Articles III
and IV shall survive any termination of this
Agreement.
1.3
Standards of Care
and Conduct. In the performance of the Consulting Services
under this Agreement, Consultant shall adhere to those fiduciary
standards, ethical practices and standards of care and competence
which are customary for professionals rendering consulting and
advisory services of the type provided for in this Agreement. In
performing the Consulting Services, Consultant shall comply with
(i) all applicable laws, rules, regulations and order;
(ii) reasonable instructions and directions from the Company;
and (iii) the Company’s Code of Conduct and other similar
policies. Consultant shall avoid engaging in any consulting,
employment or other business arrangements with third parties that
may constitute or give rise to a conflict of interest with respect
to the Company’s engagement of Consultant or in the provision
of the Consulting Services. Consultant represents and warrants to
the Company that Consultant currently does not have any such
arrangements that constitute or may give rise to a conflict of
interest, and Consultant shall disclose to Company any proposed
arrangements that constitute or may give rise to a conflict of
interest conflicts of interest prior to entering into any such
arrangement. The Company may at its discretion (i) request
Consultant to terminate any arrangement that the Company believes
does or may constitute a conflict of interest for Consultant in
connection with Consultant’s engagement by the Company or in
the performance of the Consulting Services; or (ii) if Consultant
does not terminate such arrangement, terminate this Agreement.
Consultant represents and warrants that Consultant’s entering
into this Agreement and performing the Consulting Services will not
conflict with or constitute a breach of any other agreements or
obligations Consultant has with or to any third party.
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1.4
Independent
Contractor.
(a)
Consultant will perform all Consulting Services as an independent
contractor and not as an employee of the Company. Consultant
acknowledges and agrees that Consultant is a self-employed
independent contractor and that nothing in this Agreement shall be
considered to create an employer-employee relationship between the
Company and Consultant. Consultant is not eligible to receive and
will not receive or participate in any compensation or employee
benefit plans or arrangements of any type in which employees of the
Company may participate, including but not limited to, any (i)
retirement, pension, savings, profit-sharing or other similar plans
or arrangements; (ii) any stock option, stock purchase or other
equity participation plans or arrangements; (iii) any long-term or
short-term bonus or other compensation plans or arrangements; (iv)
sick pay, paid non-working holidays, or paid vacations or leave
days; (v) overtime; (vi) any life, accident, disability, health or
dental insurance or reimbursement plans or arrangements; and (vii)
workers’ compensation. If Consultant is found, by a court of
competent jurisdiction to be an “employee” of the
Company, notwithstanding the foregoing, Consultant voluntarily
waives any and all rights, if any, to all such compensation or
benefits.
(b)
As an independent contractor, Consultant is solely responsible for
the payment of any and all self-employment taxes and/or assessments
imposed on account of the payment of compensation to, or the
performance of the Consulting Services by, Consultant pursuant to
this Agreement, including, without limitation, any state, federal
or foreign unemployment insurance tax, income tax, Social Security
(FICA) payments, and disability insurance taxes. The Company shall
not, by reason of Consultant's status as an independent contractor
and the representations contained herein, make any withholdings or
payments of said taxes or assessments with respect to compensation
paid Consultant hereunder; provided, however, that if required by
law or any governmental agency, the Company shall withhold any such
taxes or assessments from the compensation due Consultant, and any
such withholding shall be for Consultant's account and shall not be
reimbursed by the Company to Consultant. Consultant expressly
agrees to treat any compensation earned under this Agreement as
self-employment income for federal and state tax purposes, and to
make all payments of federal and state income taxes, unemployment
insurance taxes, and disability insurance taxes as, when, and to
the extent the same may become due and payable with respect to such
self-employment compensation earned under this
Agreement.
(c)
Consultant is not an agent of the Company. Unless otherwise
directed by the Company in writing, Consultant is not authorized to
(i) waive any right or to incur, assume, or create any debt,
obligation, contract, or release of any kind whatsoever in the name
or on behalf of the Company or any affiliated entity nor (ii) to
hold Consultant out as an employee or agent of the Company or any
affiliated entity or to make any statement or representation that
Consultant has any such authority.
(d)
Consultant shall maintain adequate general liability, errors and
omissions and other insurance covering Consultant as required by
applicable law, rule or regulation (e.g., workers’
compensation).
(e)
Consultant represents and warrants to the Company that Consultant
is authorized to provide the Consulting Services under applicable
laws, rules and regulations.
(f)
Consultant shall comply with all applicable laws, rules and
regulations in the performance of the Consulting Services, and on
request, Consultant shall furnish the Company with appropriate
assurances or certificates of compliance.
(e)
Consultant shall retain the right to determine the method, details
and means of performing the Consulting Services.
1.5
Indemnification.
(a) Each
party to this Agreement will defend, indemnify and hold harmless
the other party and each of its parent company, affiliate
companies, officers, directors, employees and agents against and in
respect of any loss, debt, liability, damage, obligation, claim,
demand, fines, penalties, forfeitures, judgment, or settlement of
any nature or kind, known or unknown, liquidated or unliquidated,
including without limitation all reasonable costs and expenses
incurred (legal, accounting or otherwise) (collectively,
“Damages”)
arising out of, resulting from or based upon any claim, action or
proceeding by any third party, including any governmental or
regulatory body, alleging facts or circumstances constituting a
breach of the obligations, representations or warranties of the
indemnifying party set forth in this Agreement.
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(b) If
a party entitled to indemnification under this Section 1.5 (an
“Indemnified
Party”) makes an indemnification request to the other
party, the Indemnified Party shall permit the other party (the
“Indemnifying
Party”) to control the defense and disposition or
settlement of the matter at its own expense; provided, however,
that the Indemnifying Party may not enter into any settlement
thereof with the Indemnified Party’s prior written consent
(not to be unreasonably withheld or delayed) unless the Indemnified
Party is fully and unconditionally released from such claims
without any admission of liability and the Indemnified Party is not
subject to any injunctive or other equitable relief or other
obligations. The Indemnified Party shall be permitted to
participate in such defense and represent itself at its own expense
with counsel of its own choosing. The Indemnified Party shall
notify the Indemnifying Party promptly of any claim for which
Indemnifying Party is responsible and shall cooperate with the
Indemnifying Party in every commercially reasonable way to
facilitate defense of any such claim; provided that the Indemnified
Party’s failure to notify Indemnifying Party shall not
diminish Indemnifying Party’s obligations under this Section
1.5 except to the extent that Indemnifying Party is materially
prejudiced as a result of such failure.
ARTICLE II
CONSULTING CONSIDERATION AND EXPENSES
2.1
Consulting
Fees. In consideration for the performance of the Consulting
Services, Consultant shall receive the fees and other consideration
set forth on the Consulting Services Schedule (“Consulting
Consideration”).
2.2
Expenses.
Except as may otherwise be set forth on the Consulting Services
Schedule, (i) the Consulting Consideration payable to Consultant
include any and all costs, fees and expenses which may be incurred
by Consultant in its performance of the Consulting Services; and
(ii) Consultant shall not be reimbursed for any costs or expenses
unless authorized by the Company in writing in advance of
Consultant incurring the costs, fees or expenses. As to expenses
for which the Company will reimburse Consultant as set forth on the
Consulting Services Schedule, the Company shall pay or reimburse
Consultant for all reasonable and authorized business expenses
incurred by Consultant while engaged under this Agreement so long
as said expenses have been incurred for and promote the business of
the Company and are normally and customarily incurred by
consultants performing similar consulting services in the same or
similar market. As a condition to reimbursement under this Section
2.2, Consultant shall furnish to the Company adequate records and
other documentary evidence required by federal and state statutes
and regulations for the substantiation of each expenditure.
Consultant must submit proper documentation for each such expense
within thirty (30) days after the date that Consultant incurs such
expense, and the Company will reimburse Consultant for all eligible
expenses within thirty (30) days thereafter. Consultant
acknowledges and agrees that failure to furnish the required
documentation may result in the Company denying all or part of the
expense for which reimbursement is sought.
2.3
Payments.
Payment of Consulting Fees and approved costs and expenses shall be
made on a monthly basis in accordance with the Company’s
customary accounts payable practice.
2.4
Reporting.
Concurrently with the execution and delivery of this Agreement, the
Consultant has provided Company with a completed IRS Form W-9 for
Consultant. The Company will provide Consultant with an IRS Form
1099 each year reflecting the payments made to Consultant under
this Agreement.
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ARTICLE III
CONFIDENTIALITY AND PROPRIETARY RIGHTS
3.1
Confidential
Information.
(a)
Consultant acknowledges and agrees that the Company has developed
and uses and will develop and use Confidential Information and that
Consultant will have access to and will participate in the creation
or development of Confidential Information in the performance of
the Consulting Services. All Confidential Information shall be and
remain the sole property of the Company notwithstanding that
Consultant may participate in the creation or development of the
Confidential Information. For purposes of this Agreement, the term
“Confidential
Information” shall mean all Company business methods,
techniques, plans, and know-how; budgets, financing and accounting
techniques and projections; advertising, proposals, applications,
marketing materials and concepts; customer files and other
non-public information regarding customers; methods for developing
and maintaining business relationships with customers, suppliers,
vendors, and partners; customer and prospect lists; procedure
manuals; employees and personnel information.
(b)
Consultant shall maintain the confidentiality of the Confidential
Information and shall not (i) disclose to any other person or
entity Confidential Information in any manner or for any purpose;
or (ii) use Confidential Information in any manner or for any
purpose which is directly or indirectly in competition with or
injurious or adverse to the Company.
(c)
Upon termination of this Agreement for any reason, Consultant will
promptly surrender to the Company all copies of Confidential
Information in Consultant's possession or under Consultant's
control, whether any such Confidential Information was prepared by
Consultant or by others.
(d)
The obligations of Consultant under this Section 3.1 shall continue
during the term of this Agreement and for a period of five (5)
years after termination of this Agreement; provided that in the
case of Confidential Information constituting trades secrets, the
obligations shall continue for as long as such Confidential
Information remains trade secrets.
3.2
Ownership of
Intellectual Property.
(a)
(i) All Intellectual Property, whether or not patentable or
copyrightable, made, conceived, written, developed or first reduced
to practice by Consultant, whether solely or jointly with others,
during the period of Consultant's engagement by the Company under
this Agreement or prior to the Effective Date and which result from
the performance of the Consulting Services or similar services
performed for the Company or any predecessor company or business,
shall be the sole and exclusive property of the Company. To the
extent Consultant may retain any interest in any such Intellectual
Property by operation of law or otherwise, Consultant hereby
irrevocably assigns and transfers to the Company all of
Consultant's entire right, title and interest in and to all such
Intellectual Property. All copyrights and copyrightable material
shall be deemed works for hire, and the Company shall have all
right, title and interest in such material, including all moral
rights, and shall be the author thereof for all purposes under
applicable copyright laws. For purposes of this Agreement, the term
“Intellectual
Property” shall mean all inventions, improvements,
discoveries, ideas, designs, software, trademarks, trade names,
copyrights and copyrightable subject matter, patents, know-how,
mask works, programs, documents, data, trade secrets and
Confidential Information.
(ii)
Without limiting the generality of the forgoing provisions of this
Section 3.2(a), all articles, documents, reports, manuals,
programs, software or computer programs and components thereof, and
any other deliverables or work products arising from or related to
the Consulting Services or similar services or similar services
performed for the Company or any predecessor company or business
prior to the Effective Date (“Materials”) developed or authored
by Consultant for the Company under this Agreement or under the
provision of similar services performed for the Company or any
predecessor company or business prior to the Effective Date, are to
be considered Works Made for Hire as that term is defined in
Section 101 of the Copyright Act (17 U.S.C. §101) and are and
shall be the sole and exclusive property of the Company. Consultant
agrees that any and all proprietary rights to the Materials
developed hereunder or prior to the Effective Date, including, but
not limited to, patent, copyright, trademark and trade secret
rights, to the extent they are available, are the sole and
exclusive property of the Company, free from any claim or retention
of rights thereto on the part of Consultant or any employee or
agent of Consultant, as of the Effective Date of this
Agreement.
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(b) To
the extent that any Materials or Intellectual Property developed,
authored, created or produced under this Agreement or under the
provision of similar services performed for the Company or any
predecessor company or business prior to the Effective Date may not
be considered Works Made for Hire, or to the extent that Section
3.2(a)(i) or Section 3.2(a)(ii), is declared invalid either in
substance or purpose, in whole or in part, Consultant hereby
assigns and agrees to irrevocably assign, transfer, grant, convey
and relinquish exclusively to the Company, any and all of
Consultant’s right, title and interest, including ownership
of copyright and/or patent rights to any material developed by
Consultant under this Agreement or under the provision of similar
services performed for the Company or any predecessor company or
business prior to the Effective Date without consideration beyond
the mutual promises set forth in this Agreement and the payment of
fees as provided for by this Agreement. All right, title and
interest of every kind and nature, whether now known or unknown, in
and to the copyrights, patents, ideas and creations created,
written and developed by either Consultant or the Company in the
course of providing the Consulting Services under and pursuant to
this Agreement or under the provision of similar services performed
for the Company or any predecessor company or business prior to the
Effective Date, shall be the exclusive property of the Company for
any and all purposes and uses, and Consultant shall have no right,
title or interest of any kind or nature in or to such material. As
part of this Agreement, Consultant agrees to do all things
necessary to protect this assignment, including but not limited to,
executing an assignment of Consultant’s copyright and/or
patent interests in the Material and Intellectual Property created,
authored and/or developed pursuant to this Agreement or under the
provision of similar services performed for the Company or any
predecessor company or business prior to the Effective
Date.
(c) Consultant
represents and warrants that all Materials and Intellectual
Property produced under this Agreement or under the provision of
similar services performed for the Company or any predecessor
company or business prior to the Effective Date were and shall be
of original authorship by Consultant or that Consultant has the
legal right to convey the entire right, title and interest in such
Materials and Intellectual Property as is contemplated by this
Agreement. Consultant further represents and warrants no other
person, firm, corporation or entity has any rights or interest in
the Materials and Intellectual Property Consultant submits or has
submitted to the Company or under the provision of similar services
performed for the Company or any predecessor company or business
prior to the Effective Date. Consultant further warrants that its
execution and performance of this Agreement, including, but not
limited to, the tangible or intangible products produced as a
result of it, shall not infringe upon or violate any patent,
copyright, trade secret or other proprietary right of any third
party and shall not constitute a defamation or invasion of the
right of privacy or publicity.
(d)
Consultant hereby appoints the Company, for the period of
Consultant's engagement by the Company, and for five years
thereafter, as Consultant's attorney-in-fact for the purpose of
executing, in Consultant's name and on Consultant's behalf, such
instruments or other documents as may be necessary to transfer,
confirm and perfect in the Company the rights Consultant has
granted to the Company pursuant to this Section 3.2.
(e)
Consultant will assist the Company to obtain for its own benefit
patents, copyrights and/or trademarks thereon in any and all
jurisdictions as may be designated by the Company, and Consultant
will execute when requested, patent, trademark and/or copyright
applications and assignments thereof to the Company or persons
designated by the Company, and any other lawful documents deemed
necessary by the Company to carry out the purposes of this
Agreement. Consultant will further assist the Company in every way
to enforce any patents, copyrights, trade secrets, and other
intellectual property rights of the Company, including, without
limitation, testifying in any suit or proceeding involving any of
the Intellectual Property or executing any documents deemed
necessary by the Company, all without further consideration, but at
the expense of the Company.
(f)
The obligations and undertakings stated in this Section 3.2 shall
continue beyond the termination of Consultant's engagement by the
Company, but if Consultant is called upon to render such assistance
after the termination of Consultant's engagement, then Consultant
shall be entitled to a reasonable per diem fee in addition to
reimbursement of any out-of-pocket expenses incurred at the request
of the Company.
3.3
Prohibition on
Interference with Relationships. During the term of this
Agreement and for a period of three (3) years thereafter,
Consultant shall not, directly or indirectly, without the Company's
prior written consent, solicit any person or entity having
contractual or other business relationships with the Company,
including without limitation, any customer or client, lessee,
supplier, business partner or independent contractor, for the
purpose of having such person or entity terminate or modify such
person's or entity's contractual and/or business relationship with
the Company, nor shall Consultant interfere with any of such
contractual or business relationships.
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3.4
Prohibition on
Solicitation of Company Employees. During the term of this
Agreement and for a three (3)-year period following termination or
expiration of this Agreement, Consultant will not directly or
indirectly, without the Company's prior written consent, (i)
solicit or recruit any of the Company's employees to leave the
employ of the Company; or (ii) hire as an employee or engage as an
independent contractor, any employee of the Company.
3.5
Covenants
Reasonable. The parties hereto agree that the nature and
duration of the covenants set forth in this Article III are
reasonable under the circumstances. In the event any court or
arbitrator determines that the nature of any covenant or the
duration of any covenant, or both, are unreasonable and to that
extent is unenforceable, the parties agree that such covenant shall
remain in full force and effect to the greatest extent and duration
as would not render the covenant unenforceable.
3.6
Cooperation and
Assistance. Consultant agrees to reasonably assist and
cooperate (including, but not limited to, providing information to
the Company and/or testifying in a proceeding) in the investigation
and handling of any internal investigation, legislative matter, or
actual or threatened court action, arbitration, administrative
proceeding, or other claim involving any matter that arose during
Consultant’s period of employment by the Company or during
the Term of this Agreement. Consultant’s agreement to
assist and cooperate shall not affect in any way the content of
information or testimony provided by Consultant.
3.7
Right
to Injunctive and Equitable Relief. Consultant's obligations
under this Article III are of a special and unique character which
gives them a special value to the Company. The Company cannot be
reasonably or adequately compensated in damages in an action at law
in the event Consultant breaches such obligations. Therefore,
Consultant expressly agrees that the Company shall be entitled to
injunctive and other equitable relief in the event of such breach
in addition to any other rights or remedies which the Company may
possess at law or in equity. The obligations of Consultant and the
rights and remedies of the Company under this Article III are
cumulative and in addition to, and not in lieu of, any obligations,
rights or remedies created by applicable law, including without
limitation, applicable copyright and patent laws and laws relating
to misappropriation or theft of trade secrets or confidential
information.
ARTICLE IV
GENERAL PROVISIONS
4.1
Notices. Any
notice required or permitted under this Agreement will be
considered to be effective in the case of (i) certified mail, when
sent postage prepaid and addressed to the party for whom it is
intended at its address of record, three (3) days after deposit in
the mail; (ii) by courier or messenger service, upon receipt by
recipient as indicated on the courier's receipt; or (iii) upon
receipt of an Electronic Transmission by the party that is the
intended recipient of the Electronic Transmission. The record
addresses, facsimile numbers of record, and electronic mail
addresses of record for the parties are set forth below, for the
Company, or on the Consulting Services Schedule, for Consultant and
may be changed from time to time by notice from the changing party
to the other party pursuant to the provisions of this Section
4.1.
If to
the Company:
00000
XxxXxxxxx Xxxx., Xxxxx 000
Xxxxxx,
Xxxxxxxxxx 00000-0000
Attention: Legal
Department
Facsimile No.:
949.862.1323
If to
Consultant: As set forth on the Consulting Services
Schedule
For
purposes of this Section 4.1, "Electronic Transmission” means a
communication (i) delivered by facsimile, telecommunication or
electronic mail when directed to the facsimile number of record or
electronic mail address of record, respectively, which the intended
recipient has provided to the other party for sending notices
pursuant to this Agreement and (ii) that creates a record of
delivery and receipt that is capable of retention, retrieval, and
review, and that may thereafter be rendered into clearly legible
tangible form.
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4.2
Entire
Agreement. This Agreement constitutes the entire agreement
of the parties and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings, and negotiations
between the parties with respect to the subject matter hereof.
Notwithstanding the foregoing, this Agreement is not intended by
the parties to supersede, and does not supersede, any prior or
contemporaneous agreements or understandings entered into by the
parties in connection Consultant’s prior employment with the
Company or the termination of such employment, including without
limitation that certain Employee Confidentiality Agreement dated as
of April 26, 2010 between Company and Consultant, that certain
Mutual Agreement To Arbitrate dated April 26, 2010 between Company
and Consultant and that certain Confidential Separation and Release
Agreement dated as of the Effective Date between Company and
Consultant, all of which agreements remain in full force and effect
in accordance with their terms.
4.3
Modifications,
Amendments, Waivers and Extensions. This Agreement may not
be modified, changed or supplemented, nor may any obligations
hereunder be waived or extensions of time for performance granted,
except by written instrument signed by the party to be charged or
by its agent duly authorized in writing or as otherwise expressly
permitted herein. No waiver of any default or breach of any
agreement or provision herein contained shall be deemed a waiver of
any preceding or succeeding default or breach thereof or of any
other agreement or provision herein contained. No extension of time
for performance of any obligations or acts shall be deemed an
extension of the time for performance of any other obligations or
acts.
4.4
Governing
Law. This Agreement shall be governed by, interpreted under,
and construed and enforced in accordance with the internal laws,
and not the laws pertaining to conflicts or choice of laws, of the
State of California applicable to agreements made and to be
performed wholly within the State of California.
4.5
Partial
Invalidity. Any provision of this Agreement which is found
to be invalid or unenforceable by any court in any jurisdiction
shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability, and the invalidity or
unenforceability of such provision shall not affect the validity or
enforceability of the remaining provisions hereof.
4.6
Dispute
Resolution, Forum.
(a) The
parties consent to and agree that any dispute or claim arising
hereunder shall be submitted to binding arbitration in Orange
County, California, and
conducted in accordance with the Judicial Arbitration and Mediation
Service (“JAMS”)
rules of practice then in effect or such other procedures as the
parties may agree in writing, and the parties expressly waive any
right they may otherwise have to cause any such action or
proceeding to be brought or tried elsewhere. The parties hereunder
further agree that (i) any request for arbitration shall be made in
writing and must be made within a reasonable time after the claim,
dispute or other matter in question has arisen; provided however,
that in no event shall the demand for arbitration be made after the
date that institution of legal or equitable proceedings based on
such claim, dispute or other matter would be barred by the
applicable statue(s) of limitations; (ii) the appointed arbitrator
must be a former or retired judge or attorney at law with at least
ten (10) years experience in commercial matters; (iii) costs and
fees of the arbitrator shall be borne by both parties equally,
unless the arbitrator or arbitrators determine otherwise; (iv)
depositions may be taken and other discovery may be obtained during
such arbitration proceedings to the same extent as authorized in
civil judicial proceedings; and (v) the award or decision of the
arbitrator, which may include equitable relief, shall be final and
judgment may be entered on such award in accordance with applicable
law in any court having jurisdiction over the matter.
(b) TO
THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(c) The
parties acknowledge and agree that money damages may not be a
sufficient remedy for a breach of certain provisions of this
Agreement, including but not limited to, Article III, and
accordingly, a non-breaching party may be entitled to specific
performance and injunctive relief as remedies for such violation.
Accordingly, notwithstanding the other provisions of this Section
4.6, the parties agree that a non-breaching party may seek relief
in a court of competent jurisdiction for the purposes of seeking
equitable relief hereunder, and that such remedies shall not be
deemed to be exclusive remedies for a violation of the terms of
this Agreement but shall be in addition to all other remedies
available to the non-breaching party at law or in
equity.
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(d) In
any action, arbitration or other proceeding by which one party
either seeks to enforce its rights under this Agreement or seeks a
declaration of any rights or obligations under this Agreement, the
prevailing party will be entitled to reasonable attorneys’
fees, and subject to Section 4.6(a), reasonable costs and expenses
incurred to resolve such dispute and to enforce any final
judgment.
(e) No
remedy conferred on either party by any of the specific provisions
of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy will be cumulative and will be in
addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise. The
election of one or more remedies by a party will not constitute a
waiver of the right to pursue other available
remedies.
4.7
Interpretation.
Titles and headings of sections of this Agreement are for
convenience of reference only and shall not affect the construction
of any provision of this Agreement. No provision of this Agreement
shall be construed in favor of or against any party by reason of
the extent to which the party or the party’s counsel
participated in the drafting hereof.
4.8
Assignment.
This Agreement and the rights, duties, and obligations hereunder
may not be assigned or delegated by any party without the prior
written consent of the other party. Any assignment or delegation of
rights, duties, or obligations hereunder made without the prior
written consent of the other party shall be void and be of no
effect. Notwithstanding the foregoing provisions of this Section
4.8, the Company may assign or delegate its rights, duties and
obligations hereunder to any person or entity controlling,
controlled by, or under common control with the Company or any
person or entity which acquires substantially all of the business
or assets of the Company.
4.9
Successors and
Assigns. This Agreement and the provisions hereof shall be
binding upon and shall inure to the benefit of each of the parties
and their respective permitted successors and assigns.
4.10
Counterparts.
This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which taken together shall
constitute but one and the same instrument. Signatures on this
Agreement may be communicated by facsimile or PDF transmission and
shall be binding upon the parties transmitting the
same.
-8-
IN
WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first written above.
Effective
Date: April 13, 2018
Company
By: /s/ Xxxxx X. Xxxxxx
Xxxxx
X. Xxxxxx
EVP,
Chief Legal and Administrative
Officer
and Secretary
“Consultant”
Xxxxxxx
X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx
X. Xxxxx
-9-
Exhibit A
Consulting Services Schedule
Consultant Name:
Xxxxxxx X.
Xxxxx
Consultant Contact Information
for Notice
Purposes:
Xxxxxxx X.
Xxxxx
[Personal
Residence Address
Redacted]
Consulting Services: Consultant will make himself available
on an as-needed basis (subject to reasonable notice and at
reasonable times not interfering with Consultant’s subsequent
employment with any new employer), to provide, and will provide,
transition support services for the Company’s chief
executive, governmental reporting, strategic transactions and
investor relation functions and such other related areas as may be
requested by the Company’s Chief Executive Officer or Board
of Directors.
Consulting Time: The Company and Consultant shall agree in
advance upon the number of hours to be spent by Consultant in the
performance of the Consulting Services, which agreement may be in
the form of a “not to exceed” number of hours during
weekly or monthly periods or hours specified for individual
projects. In no event shall Consultant exceed the agreed upon hours
without Company’s prior written approval.
The
Company and Consultant shall agree in advance upon the number of
hours to be spent by Consultant in the performance of the
Consulting Services, which agreement may be in the form of a
“not to exceed” number of hours during weekly or
monthly periods or hours specified for individual projects. In no
event shall Consultant be required or permitted to perform services
under this Agreement at a level during any monthly period that is
greater than twenty percent (20%) of the average level of service
that Consultant performed for the Company during the 36-month
period immediately preceding the Termination Date. The parties
acknowledge that during the 36-month period immediately preceding
the Termination Date, Consultant worked an average of approximately
60 hours per week for the Company.
Consulting Consideration: As consideration for the
performance of the commitments and obligations made by Consultant
in this Agreement, the Company and Consultant agree as
follows:
1. Consulting
Fees. The Company will pay Consultant a monthly consulting
fee equal to Twenty-two Thousand Nine Hundred Sixteen Dollars
($22,916.00) (“Monthly
Consulting Fee”) An amount equal to One Hundred
Thirty-seven Thousand Four Hundred Ninety-six Dollars ($137,496.00)
(“Prepaid Monthly Consulting
Fee”), representing the first six months of the
Monthly Consulting Fee (“Prepaid Fee Period”), shall be
prepaid to Consultant within five (5) business days of the
Effective Date. If prior to the end of the Prepaid Fee Period,
Consultant or Company terminate this Consulting Agreement in
accordance with the termination provisions of Section 1.2,
Consultant shall repay the amount of the Prepaid Monthly Consulting
Fee that equals the total of the Prepaid Monthly Consulting Fee,
prorated based on the number of days in the Prepaid Fee Period
remaining after the effective date of the termination over the
total number of days in the Prepaid Fee Period.
2. Stock
Options.
(a) Any
of the stock options to purchase common stock of the Company listed
below that were awarded to Consultant during Consultant’s
employment by the Company (“Employment Stock
Options”)
(b) Any
post-employment termination exercise windows for Employment Stock
Options that are vested as of the end of the Consulting Term shall
be tolled during the Consulting Term and shall not commence running
until the end of the Consulting Term; provided, however, that in no
event will the post-termination exercise windows extend beyond the
original expiration dates of the Employee Stock Options as set
forth in the stock option award agreements for such Employee Stock
Options. Notwithstanding the foregoing, in no event shall any
Employee Stock Options shall be exercisable after the original
expiration dates of the Employee Stock Options as set forth in the
stock option award agreements for such Employee Stock
Options.
(c) The
applicable provisions of the stock option award agreements for the
Employee Stock Options are hereby amended to provide for the
vesting continuation and post-termination exercise window tolling
as set forth in clauses (a) and (b) of this paragraph
2.
-10-
|
Grant Name
|
Grant Date
|
Xxxxx Xxxxx
|
Original Options Granted
|
Options Vested as of Employment Termination Date
|
Options Unvested as of Employment Termination Date
|
Original
Post Termination of Employment Exercise Window
|
|
Expire Date
|
|
11/03/2008 NQ $0.77
00SO
|
11/3/2008
|
$3.85
|
1,000
|
1,000
|
0
|
May
exercise for a period of three (3) months following termination as
a member of the Board
|
|
11/3/2018
|
|
04/03/2009 NQ $0.35
00SO
|
4/3/2009
|
$1.75
|
63,226
|
30,736
|
0
|
May
exercise for a period of two (2) years following termination
(options will expire prior to 2 year post-term exercise
period)
|
|
4/3/2019
|
|
04/03/2009 NQ $0.35
01RO
|
4/3/2009
|
$1.75
|
36,775
|
36,775
|
0
|
May
exercise for a period of two (2) years following termination
(options will expire prior to 2 year post-term exercise
period)
|
|
4/3/2019
|
|
04/03/2009 NQ $0.35
04RO
|
4/3/2009
|
$1.75
|
100,000
|
100,000
|
0
|
May
exercise for a period of two (2) years following termination
(options will expire prior to 2 year post-term exercise
period)
|
|
4/3/2019
|
|
1/10/12
NQ $0.78 10IP Performance
|
1/10/2012
|
$3.90
|
37,692
|
37,692
|
0
|
May
exercise for a period of 90 days following termination
|
|
1/10/2019
|
|
1/24/13
NQ $4.00 10IP Performance
|
1/24/2013
|
$4.00
|
22,500
|
22,500
|
0
|
May
exercise for a period of 90 days following termination
|
|
1/24/2020
|
|
1/21/14
NQ $17.64 10IP
|
1/21/2014
|
$17.64
|
50,000
|
50,000
|
0
|
May
exercise for a period of 90 days following termination
|
|
1/21/2021
|
|
3/17/14
NQ $14.32 10IP
|
3/17/2014
|
$14.32
|
37,000
|
37,000
|
0
|
May
exercise for a period of 12 months following
termination
|
|
3/17/2021
|
|
1/23/15
NQ $10.20 2014IP
|
1/23/2015
|
$10.20
|
30,000
|
30,000
|
0
|
May
exercise for a period of 90 days following termination
|
|
1/23/2022
|
|
1/21/16
NQ $17.09 2014 IP
|
1/21/2016
|
$17.09
|
150,000
|
150,000*
|
0
|
May
exercise for a period of 12 months following
termination
|
|
1/21/2023
|
|
1/21/16
NQ $17.09 2014 IP - Market Performance
|
1/21/2016
|
$17.09
|
100,000
|
100000*
|
0
|
May
exercise for a period of 12 months following
termination
|
|
1/21/2023
|
*
Options accelerated due to termination without
cause.
-11-
Consultant
acknowledges that Consultant shall continue to be governed by and
subject to the Company’s Securities Trading Policy during the
Consulting Term.
Company
Equipment and Use and Access to Company Systems
During
the Term, the Company, in its discretion, may make available to
Consultant a Company-standard laptop computer for use in providing
the Consulting Services. All such Company equipment shall be
returned to the Company at the end of the Term or at any time upon
request by the Company. Consultant agrees that Consultant will
comply with all Company policies and procedures, including those
set forth below, regarding the use of Company equipment and systems
as if Consultant were employed by the Company:
Information Security and Consumer Privacy
The Company has implemented IT Policies and
Procedures to ensure reasonable controls are in place to assure
confidentiality of and to safeguard sensitive and proprietary
information. It is the responsibility of every employee to
understand and follow these IT Policies and Procedures. Any Policy
violations, whether or not resulting in the compromise of sensitive
information or the degradation of computing systems, may be subject
the employee to disciplinary action up to and including termination
of employment, and may also be subject the employee to criminal
prosecution.
Company Tools
The Company entrusts employees with the use of
computers, electronic mail, telephones, mail, written
documentation, and similar property. These items are provided to
the employees to assist with the efficient operations
of the Company. Therefore, all records, files, software, data, and
electronic communications contained in these systems also are the
property of the Company.
Communications Systems
The
Company’s communication systems, including computers,
handheld devices, networks, telephones, voice mail, instant
messaging, and all data, files, and applications, are the property
of the Company. All materials and information created, transmitted
or stored on or through these systems are the property of the
Company, they are not private, and may be accessed by authorized
personnel at any time. Users should not have any expectation of
privacy with respect to such materials and information. Company
communication systems hardware, and any data collected, downloaded
and/or created on Company communication systems as described above
is the exclusive property of the Company and may not be copied or
transmitted to any outside party without prior written management
approval or used for any purpose not directly related to the
business of the Company.
Upon
termination of employment, no employee shall remove any software or
data from Company-owned computers unless the employee’s
supervisor and Human Resources have given authorization. Any
unauthorized access or use of the Company computer or other
communication systems is strictly prohibited.
The
Company reserves the right to assign and/or change
“passwords” and personal codes for voice mail, e-mail,
and computer. The use of passwords to limit access to these systems
is only intended to prevent unauthorized access to these systems
and records. Additionally, these systems are subject to inspection,
search and/or monitoring by Company personnel for any number of
business reasons. Accordingly, these systems and equipment should
not be used to transmit confidential personal
messages.
-12-
System Integrity
Because
files or programs introduced from external sources may expose the
Company to malicious software such as viruses, employees are not
permitted to connect personal computing devices to the Company
network, download from the Internet files or software programs
including freeware or shareware, or use personal disks or copies of
software or data in any form on any Company computer without
written authorization from the IT Operations Supervisor or in
accordance with IT Policies and Procedures.
Any employee who introduces a virus into the
Company’s system via use of unauthorized software or data
shall be deemed guilty of gross negligence and/or willful
misconduct and will be held
responsible for the consequences (in accordance with applicable law), as well as be
subject to disciplinary action, up to and including termination of
employment.
Employees
are prohibited from using Company communication systems in any way
that may be disruptive, embarrassing or offensive to others,
including, but not limited to, the transmission of sexually
explicit messages or cartoons, ethnic or racial slurs, or anything
that may be construed as harassment or disparagement of others. The
Company’s Policy Against Sexual Harassment and Other
Workplace Harassment applies to e-mail usage and other
communications systems usage.
To
ensure that electronic and telephone communication systems and
business equipment are being used properly and in compliance with
this policy and for other business purposes, the Company, without
notice, may periodically access, display, copy or listen to any
information, files, data, message(s), or communication(s) sent,
received, created, or stored through or in its system(s), at any
time, in accordance with applicable law.
E-mail Etiquette
Employees should
use e-mail to deliver messages in the same professional and
courteous business manner they would other messages and
correspondence.
Internet Usage
Internet Usage includes, without limitation, accessing the World
Wide Web, Instant Messaging, Internet email and chat
rooms.
It is the nature of our business to allow Internet usage in daily
activities. However, access to the Internet is provided for
business purposes. Employees are not to access the Internet for
personal reasons during Company time. Employees found to be abusing
this tool may be disciplined, up to and including termination of
employment.
The
Company may monitor Internet use, including reviewing the list of
sites accessed by any individual terminal. Your Internet use is not
private. No employee should have any expectation of privacy
regarding Internet usage. The Company reserves the right to inspect
an employee’s computer anytime or to use monitoring software
in order to monitor Internet and computer use.
All
employees are prohibited from accessing or attempting to access any
sites that contain sexual, vulgar, derogatory, harassing or
offensive material. Unauthorized use of the Internet, including
connecting, posting, or downloading sexually-oriented information,
engaging in computer-hacking and related activities, and attempting
to disable or compromise the security of information contained in
the Company’s communications systems, is strictly
prohibited.
-13-
Using
the Internet to commit or participate in acts that could be
considered sexual harassment, racial harassment, religious
harassment or any other form of prohibited or illegal harassment is
strictly prohibited. The Company’s Policy Against Sexual
Harassment and Other Workplace Harassment applies to Internet
use.
The
Internet should not be used to post, distribute, participate in or
exchange offensive jokes, chain letters, pyramid schemes or other
similar matter. Some specific examples of prohibited uses include
but are not limited to:
●
Sending
confidential or copyrighted materials without prior
authorization.
●
Soliciting
personal business opportunities, or personal
advertising.
●
Gambling
of any kind.
●
Day
trading, or otherwise purchasing or selling stocks, bonds or other
securities or transmitting, retrieving, downloading or storing
messages or images related to the purchase or sale of stocks, bonds
or other securities.
BLOGS
AND ON-LINE DISCUSSIONS
Personal
Blog Guidelines
AutoWeb
Personal Blog Guidelines have been developed for employees who
maintain personal blogs that contain postings about AutoWeb’s
business, products, or fellow employees and the work that they do.
They are also applicable to employees who post about the Company on
the blogs of others or during employees’ participation in
on-line forums (such as chat rooms, message boards, and discussion
groups). The guidelines outline the legal implications of blogging
about the Company and discussing the Company in on-line forums and
also include recommended practices to consider when posting about
AutoWeb. We encourage employees who want to blog or participate in
on-line forums to think carefully about what they intend to
publish. You should avoid comments about managers or co-workers
that are disrespectful, critical, or could be construed as
harassing or discriminatory in nature. Verify your facts before you
publish. You should not discuss the Company’s customers or
vendors without their explicit prior approval (and you should work
through your supervisor to obtain such approval if necessary). If
your blog or post concerns the Company or your job, you should
prominently display a disclaimer stating that you are expressing
only personal opinions that are not endorsed by and do not
represent the opinion or viewpoints of the Company.
Legal
Liability
You are
legally responsible for anything you post on your blog. Individual
bloggers can be held personally responsible for any commentary
deemed to be defamatory, obscene, proprietary, or libelous whether
they pertain to AutoWeb, its employees, or other people. For those
reasons, bloggers should exercise caution with regard to
exaggeration, colorful language, guesswork, obscenity, copyrighted
materials, legal conclusions, and derogatory remarks or
characterizations. In short, when you blog on your blog or the blog
of others or participate in on-line forums, you post at your own
risk! Outside parties can pursue legal actions against you for your
postings.
Company
Privileged Information
Remember that blogs
and other media may be public and accessible to third parties,
including the Company’s competitors, vendors and customers.
Any and all confidential, proprietary, trade secret information or
material non-public information about the Company as outlined in
the Confidential and Proprietary Information and Inventions
Agreement or its personnel is off-limits and cannot be published.
In addition, AutoWeb logo and trademarks cannot be used, and you
may not publish AutoWeb policies, strategies, or any non-pubic
financial information, product offerings, or similarly private
information.
-14-
Press
Inquiries
Blog
postings may generate media coverage. If a member of the media
contacts you about an AutoWeb related blog posting or requests
AutoWeb information of any kind, please refer the matter to the
Corporate Public Relations Department.
Please
remember that the Company may monitor blogs or Company-related chat
rooms or discussion groups. If you fail to abide by the above
guidelines or the Company’s policies, you may be subject to
legal or disciplinary action by the Company or others. If you have
any questions or concerns about this policy, please contact the
Human Resources Department.
INSTANT MESSAGES
The
Company e-mail systems are the preferred method of business
communication because they comply with our needs for record
keeping. Not all of the instant messaging systems are tracked and
documented as required by SOX for business communications.
Therefore, if you are giving directions, directing activities,
communicating changes to business processes or any other actions
that have a business impact, please use the e-mail system so that
we have appropriate records retention and audit
trails.
Violation
of this policy may result in disciplinary action, up to and
including termination of employment. Please contact the Human
Resources Department with any questions regarding this
policy.
USER FILE STORAGE
Our
“Path to Profitability” includes controlling our
infrastructure costs by managing our resources effectively. As our
online file space grows, so does the cost of storing, maintaining,
and backing up all of this data. The Company is always looking for
ways to be more efficient with resources, but we will need your
help and cooperation to be successful! The following plan outlines
our approach to manage e-mail resources, but the same philosophy
applies to all online file storage.
●
All
users have an allocated amount of storage on the e-mail
servers.
●
All
users have an allocated amount of storage on the file server for
business related material (home directory).
●
Any
accounts using more than their allotted space will be restricted
immediately.
●
Personal
picture and music files must not be placed on the
system.
●
Users
may contact the Service Desk for assistance with setting up storage
options such as achiving .pst files and other business required
data.
●
Users
are prohibited from storing any copyrighted, patented, or
non-business files on their local PC or home directory. This
includes, but is not limited to, MP3 files, movies, sound clips,
and pictures.
●
Non-secure
files relating to job function and needing to be shared should be
placed in an appropriate department or public folder.
●
Storing
consumer or customer information on local PCs or backup media that
is not in accordance with IT Policies or Procedures is strictly
prohibited.
●
When
any assistance is needed please email
“XxxxXx@XxxxXxx.xxx” and the Service Desk will assist
you.
Keep
in mind that there is no personal or private use of computer
equipment in the work environment. All computer resources are the
property of the Company and may be monitored by authorized
personnel at anytime. Employees should have no expectation of
privacy with respect to the Company’s computer
systems.
-15-
PERSONAL TELEPHONE CALLS AND USE OF COMPANY SUPPLIES
We
have a limited number of telephone lines at the Company, and it is
essential that we keep those lines open for business calls.
Therefore, we ask our employees to refrain from making or receiving
personal calls except, of course, in emergencies.
All
employees are also asked to use their personal long distance
calling card or personal credit card when making personal long
distance calls.
Personal use of
Company owned property, such as office supplies, postage, etc., are
prohibited. Use your common sense when using Company owned
property.
Enforcement
Violations of this
policy may result in disciplinary action, up to and including
termination of employment. Employees who damage the Company’s
computer system through its unauthorized use may additionally be
liable for the costs resulting from such damage. Employees who
misappropriate copyrighted or confidential and proprietary
information, or who distribute harassing messages or information,
also may be subject to criminal prosecution and/or substantial
civil monetary damages.
-16-
