FINANCIAL ENGINES, INC. CONSULTING AGREEMENT
Exhibit 10.5
This CONSULTING AGREEMENT dated as of March 5, 1998 (the “Agreement”), is entered into by and
between FINANCIAL ENGINES, INC., a California corporation (with its wholly owned subsidiary
Financial Engine Advisors LLC, a Delaware limited liability company, the “Company”), and XXXXXXX
X. XXXXXX (“Consultant”).
RECITALS:
A. Xxxxxxx X. Xxxxxx Associates, a California corporation (“WFSA”) owned by
Consultant and Consultant’s spouse, has provided asset allocation advisory consulting services to
California Public Employees’ Retirement System (“CalPERS”), Xxxxxx Xxxxxx (“PM”), AT&T
Pension Fund (“AT&T”), United Technologies Corporation (“UT”) and Hewlett-Packard
Pension Fund (“HP”) (CalPERS, PM, AT&T, UT and HP are collectively referred to as the
“Specified Clients”) under Asset Allocation Advisory Agreements with such Specified Clients
(the “Prior Agreements”);
B. The Specified Clients and WFSA wish to have the Company assume and perform
WFSA’s obligations under the Prior Agreements either by WFSA assigning the Prior Agreements
to the Company or by terminating the Prior Agreements and the Company providing the services
thereunder to the Specified Clients under new agreements to be entered into with the Specified
Clients (such assigned or new contracts between the Company and the Specified Clients, along
with any extensions, renewals or amendments thereof are referred to as the “Specified
Agreements”);
C. It is contemplated that Consultant will assist the Company in providing Services to
the Specified Clients under the Specified Agreements;
D. The Company may wish to provide similar services to other potential clients under
other asset allocation advisory agreements (the “Other Agreements”; the Specified Agreements
and the Other Agreements are collectively referred to as the “Advisor Agreements”) and the
Company and Consultant may wish to provide for Consultant to assist the Company in performing
under the Other Agreements;
NOW, THEREFORE, the Company and Consultant hereby agree as follows:
1. Consulting Relationship. During the term of this Agreement, Consultant will
provide investment advisory consulting services (“Services”) to the Company in connection with
the Company’s and Consultant’s performance of their respective obligations under the Specified
Agreements and the Other Agreements as the parties shall agree. Consultant shall use Consultant’s
commercially reasonable best efforts to perform Services in a manner reasonably satisfactory to
the Company.
2. Fees. For so long as Consultant is providing Services under this Agreement, as
consideration for Services to be provided by Consultant and other obligations of Consultant
hereunder, the Company will compensate Consultant as follows:
(a) Certain Specified Agreements. With respect to Services provided
pursuant to each Specified Agreement with PM, AT&T, HP and UT, the Company will pay
Consultant an annual consulting fee in an amount equal to the sum of: (i) the service fees
attributable to any year and collected by the Company pursuant to such Specified Agreement up
to $50,000, plus (ii) 25% of the next $50,000 of service fees attributable to such year and
collected by the Company under such Specified Agreement; and no more regardless of whether
the Company collects any additional fees under such Specified Agreement with respect to such
year.
(b) CalPERS Agreement. With respect to Services provided pursuant to the
Specified Agreement with CalPERS, the Company will pay Consultant an annual consulting fee in
an amount equal to the service fees attributable to any year and collected by the Company
pursuant to such Specified Agreement up to $100,000, and no more regardless of whether the
Company collects any additional fees under such Specified Agreement with respect to such year.
(c) Other Agreements with Consultant. With respect to Services provided
pursuant to Other Agreements which specifically provide for the involvement of Consultant, the
Company and Consultant shall negotiate in good faith the consulting
fee to be paid to Consultant
and other terms relating to performance of the duties by the Company and Consultant (including
analytic and computational support, facilities and space to be provided to Consultant). No
Other
Agreement shall specifically provide for the involvement of Consultant without the express
written consent of Consultant.
(d) Other Agreements without Consultant. With respect to Services
provided pursuant to Other Agreements which do not specifically provide for the involvement of
Consultant, Consultant shall not be paid any consulting fee.
(e) Payment. The Company shall pay Consultant all consulting fees due
hereunder no later than 15 days following the date of receipt of immediately available funds
relating to the underlying fee being paid by the client upon which Consultant’s consulting fee
is
based.
(f) Records;
Audit. Within 15 days after the end of each calendar month in which the
Company bills or collects fees (and if relevant under the applicable Advisor Agreement, earns
fees) from clients as to which consulting fees are or may be payable, the Company shall provide
to Consultant reports setting forth such fees billed and collected during such calendar month.
Consultant shall be permitted access to the Company’s books and
records to audit such amounts.
Consultant shall bear its costs in connection with any such audit; provided that if the
audit establishes that the amount due Consultant is more than 10% greater than the amount paid
then the Company shall reimburse Consultant for the reasonable costs (including reasonable
accountants’ and/or attorneys’ fees) incurred by Consultant in connection with such audit.
2
3. Expenses. Consultant shall be reimbursed by the Company for any expenses incurred on
behalf of the Company provided such expenses are approved in advance by the Company’s President.
As a condition to receipt of reimbursement, Consultant shall submit to the Company reasonable
evidence that the amount involved was expended and related to Services provided under this
Agreement.
4. Term and Termination.
(a) Term. Consultant shall provide Services as a consultant to the
Company hereunder for a period commencing on the date hereof and terminating on the date
on which Consultant ceases to provide Services to the Company hereunder. Upon ten days’
advance written notice, either party may terminate Consultant’s obligation to provide
Services and the Company’s obligation to pay for such Services.
(b) Certain Terminations. Upon the termination of Consultant’s provision
of Services hereunder, generally or with respect to any Specified Client, by: (i) his
death, (ii) his disability, (iii) his retirement, (iv) his voluntary termination, or (v)
the Company for Cause (as defined below); no additional payments shall be made by the
Company to Consultant hereunder, generally or with respect to such Specified Client,
respectively.
(c) Termination without Cause. Upon the Company’s termination without
Cause of Consultant’s provision of Services hereunder, generally or with respect to any
Specified Client, and without terminating the Company’s Specified Agreement with such
Specified Client,
Consultant shall, at his election by written notice delivered to the Company within 30 days
following such date of termination:
(i) be permitted to compete with the Company in performing Services for such
Specified Clients notwithstanding Section 5(a) of this Agreement; or
(ii) be
paid by the Company, for each of the periods following the date of such
termination set forth below, the following respective percentages of the fees
Consultant would have received under Sections 2(a), 2(b) and 2(c) of this Agreement had
Consultant not been so terminated without Cause:
| Period Following | Percentage | |||
| Date of Termination | of Fees | |||
0 to 12 months |
80 | % | ||
13 to 24 months |
60 | % | ||
25 to 36 months |
40 | % | ||
37 to 48 months |
20 | % | ||
48 to 60 months |
10 | % | ||
;
provided that if Consultant shall not have timely made an election pursuant to this
Section 4(c) he shall be deemed to have elected to be treated pursuant to Section
4(c)(i).
3
(d) Definition of Cause. For the purposes of this Agreement, “Cause” for Consultant’s
termination will exist at any time after the happening of one or more of the following events:
(i) Consultant’s willful misconduct or gross negligence in performance of any of his
material duties hereunder, including Consultant’s refusal to comply in any material respect with
the legal directives of the Company’s Board of Directors so long as such directives are not
inconsistent with the Consultant’s position and duties, and such refusal to comply is not
remedied within 15 working days after written notice from the Company, which written notice shall
state that failure to remedy such conduct may result in termination for Cause;
(ii) Dishonest or fraudulent conduct related to the Company’s activities, a deliberate
attempt to do an injury to the Company, or conduct that materially discredits the Company or is
materially detrimental to the reputation of the Company, including conviction of a felony; or
(iii) Consultant’s incurable material breach of any element of the Company’s Confidentiality
Agreement, including without limitation, Consultant’s theft or other misappropriation of the
Company’s proprietary information.
5. Confidentiality
Agreement; Competition.
(a) Confirmation of Agreement. Prior to the date hereof, Consultant signed a
Confidential Information and Invention Assignment Agreement substantially in the form attached to
this Agreement as Annex A (the “Confidentiality Agreement”). Subject to the provisions of this
Agreement, the terms thereof shall remain in full force and effect. Consultant acknowledges his
obligations under Section 5(a) of the Confidentiality Agreement; provided that Consultant
will not provide advisory services to Specified Clients except pursuant to or as otherwise
permitted by this Agreement.
(b) Termination by Client. Notwithstanding the provisions of the
Confidentiality Agreement or Section 5(a) of this Agreement, if: (i) Consultant shall have elected
to be treated pursuant to Section 4(c)(i) of this Agreement, or (ii) the Company ceases to provide
Services to any Specified Client or to any client or customer under any of the Other Agreements for
any reason other than Consultant’s termination for Cause; then Consultant may perform such Services
for such Specified Client or other client or customer.
6. License of Intellectual Property; Retained Rights.
(a) Grant to Company. Consultant hereby grants to the Company an exclusive,
perpetual, royalty-free license to (i) use the software, trade secrets and other intellectual
property that, prior to the date hereof, have been used by Consultant to provide services to the
Specified Clients under the Prior Agreements (collectively, the “Technology”) and (ii) to amend,
modify and create derivative works of the Technology. Any such amendments, modifications or
derivative works of the Technology shall be owned by the Company. The parties acknowledge that
any software, trade secrets and other intellectual property developed by the
4
Company prior to the date hereof including amendments, modifications and derivative works thereof
shall not constitute “Technology” under this Agreement.
(b)
General Retained Use; Limitation. Consultant shall retain the right to use the
Technology licensed by Consultant to the Company hereunder but only for Consultant’s personal use
and as part of Consultant’s Academic Activities (as defined in Section 3(a) of Confidentiality
Agreement).
(c) Other Permitted Uses Following Termination. Notwithstanding the limitation on use
contained in paragraph (b) of this Section 6, Consultant shall have the right to use the Technology
and any amendments, modifications and derivative works thereof developed by or with Consultant’s
assistance, for the purpose of performing Services for Specified Clients permitted pursuant to
Section 4(c)(i) or Section 5(b) of this Agreement.
7. Support. For so long as Consultant is providing Services under this Agreement, the
Company will provide Consultant with such analytical and computational support, facilities and
space as the parties mutually agree shall reasonably be required for the Company and Consultant to
perform properly their respective obligations under the Advisor Agreements.
8. Compliance and Record Keeping. The Company will perform all regulatory compliance
required in connection with the performance of the Company’s obligations under the Advisor
Agreements, including all record keeping and storage requirements under such Advisor Agreements and
under applicable law.
9. Independent
Contractor. Consultant’s relationship with the Company will be that
of an independent contractor and not that of an employee. Consultant in his capacity as a
Consultant hereunder will not be eligible for any employee benefits, nor will the Company make
deductions from payments made to Consultant for taxes, all of which will be Consultant’s
responsibility. Consultant agrees to indemnify and hold the Company harmless from any liability
for, or assessment of, any such taxes imposed on the Company by relevant taxing authorities.
Consultant in his capacity as Consultant hereunder will have no authority to enter into contracts
that bind the Company or create obligations on the part of the Company without the prior written
authorization of the Company.
10. Supervision of Consultant’s Services. All Services to be performed by Consultant
will be as agreed between Consultant and the Company’s President. Consultant will be required to
report to the President concerning Services performed under this Agreement. The nature and
frequency of these reports will be left to the reasonable discretion of the President.
11. Conflicts with this Agreement. Consultant represents and warrants that neither
Consultant nor any of Consultant’s partners, employees or agents is under any pre-existing
obligation in conflict or in any way inconsistent with the provisions of this Agreement.
Consultant warrants that Consultant has the right to disclose or use all ideas, processes,
techniques and other information, if any, which Consultant has gained from third parties, and which
Consultant discloses to the Company in the course of performance of this Agreement, without
liability to such third parties. Consultant represents and warrants that Consultant has not
granted any rights
5
or licenses to any intellectual property or technology that would conflict with Consultant’s
obligations under this Agreement. Consultant will not knowingly infringe upon any copyright,
patent, trade secret or other property right of any former client, employer or third party in the
performance of Services required by this Agreement.
12. Miscellaneous.
(a) Amendments and Waivers. Any term of this Agreement may be amended or waived only
with the written consent of the parties.
(b) Sole Agreement. This Agreement, including the Exhibits hereto,
constitutes the sole agreement of the parties and supersedes all oral negotiations and prior
writings with respect to the subject matter hereof.
(c) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight
delivery service or confirmed facsimile, or forty-eight (48) hours after being deposited in the
regular mail as certified or registered mail (airmail if sent internationally) with postage
prepaid, if such notice is addressed to the party to be notified at such party’s address or
facsimile number as set forth below, or as subsequently modified by written notice.
(d) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of California, without giving effect to the
principles of choice or conflict of laws.
(e) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.
In the event that the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of
the Agreement shall be enforceable in accordance with its terms.
(f) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.
(g)
Arbitration. Any dispute or claim arising out of or in connection with any
provision of this Agreement, excluding Section 5(a) hereof, will be finally settled by binding
arbitration in San Mateo County, California, in accordance with the rules of the American
Arbitration Association by one arbitrator appointed in accordance
with said rules. The arbitrator
shall apply California law, without reference to rules of choice or conflicts of law or rules of
statutory arbitration, to the resolution of any dispute. Judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing,
the parties may apply to any court of competent jurisdiction for preliminary or interim equitable
relief, or to compel arbitration in accordance with this paragraph, without breach of this
arbitration provision. This Section 12(g) shall not apply to the Confidentiality Agreement. In
6
connection with any such dispute, the prevailing party shall recover reasonable fees and
disbursements of counsel to the extent deemed appropriate and ordered by the arbitrator.
(h) Advice of Counsel. EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT,
SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ
AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE
CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.
[Signature Page Follows]
7
The parties have executed
this Agreement as of the date first above written.
| FINANCIAL ENGINES, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxxxxxxx | |||
| Xxxxxxx X. Xxxxxxxxxxxx President |
||||
| Address: 0000 Xxxxxxxxxxx Xxxx Xxxxx 000 Xxxx Xxxx, XX 00000 |
||||
| /s/ Xxxxxxx X. Xxxxxx | ||||
| Xxxxxxx X. Xxxxxx | ||||
| Address: <Address> <Address> |
||||
SIGNATURE
PAGE TO FINANCIAL ENGINES CONSULTING AGREEMENT
ANNEX A
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
INVENTION ASSIGNMENT AGREEMENT
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
INVENTION ASSIGNMENT AGREEMENT
As a condition of my acting as an advisor and director of Financial Engines, Inc., a
California corporation, or by any of its current or future subsidiaries, affiliates, successors or
assigns (collectively, the “Company”), and in consideration of my advisory and director
relationship with the Company, I agree to the following:
1. Advisory
Relationship. I understand and acknowledge that this Agreement does not
alter, amend or expand upon any rights I may have to continue as an advisor to and director of, or
the duration of my advisory and/or director relationship with, the Company under any existing
agreements between the Company and me or under applicable law. Any advisory or director
relationship between the Company and me, whether commenced prior to or upon the date of this
Agreement, shall be referred to herein as the “Relationship.”
2. Confidential Information.
(a) Company Information. I agree at all times during the term of my Relationship with
the Company and thereafter, to hold in strictest confidence and not to use or disclose to any
person, firm or corporation, except for the benefit of the Company or with prior written
authorization of the Board of Directors of the Company, any Confidential Information of the Company
which I obtain from the Company. I further agree not to make copies of such Confidential
Information except as authorized by the Company. I understand that “Confidential
Information” means any Company proprietary information, technical data, trade secrets or
know-how, including, but not limited to, research, product plans, products, services, suppliers,
customer lists and customers (including, but not limited to, customers of the Company on whom I
called or with whom I became acquainted during the term of my employment), prices and costs,
markets, software, developments, inventions, processes, formulas, technology, designs, drawings,
engineering, hardware configuration information, marketing, licenses,
finances, budgets or other
business information disclosed to me by the Company either directly or indirectly in writing,
orally or by drawings or observation of parts or equipment. I understand that “Confidential
Information” includes, but is not limited to, information pertaining to any aspects of the
Company’s Business (as defined below) which is either information not known by actual or potential
competitors of the Company or is proprietary information of the Company or its customers or
suppliers, whether of a technical nature or otherwise. I further understand that Confidential
Information does not include any of the foregoing items which was previously known to me or which
has become publicly known and made generally available through no wrongful act of mine. When I
communicate with employees of the Company, I will be entitled to assume that their communications
will not include any Confidential Information to me unless they inform me prior to such disclosure.
(b) Obligations to Third Parties. I have in the past provided, and continue to
provide, consulting services and board of director services for several pension funds, money
managers, and mutual funds as listed on Exhibit A, including a prior relationship with
Xxxxx Fargo
as described thereon. I represent that, to the best of my knowledge, my activities as an advisor
and director of the Company do not conflict with any of my past or ongoing obligations to any
third parties, including the consulting relationships listed on Exhibit A hereto, and I
have not breached and will not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by me in confidence or trust prior or subsequent to the commencement of
my Relationship with the Company, and I have not and will not disclose to the Company, or induce
the Company to use, any inventions, confidential or proprietary information or material belonging
to any previous employer or any other party to whom I owe a confidentiality obligation.
(c) Third Party Information of the Company. I recognize that the Company has
received and in the future will receive from third parties their confidential or proprietary
information subject to a duty on the Company’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes. I agree to hold all such
confidential or proprietary information in the strictest confidence and not to disclose it to any
person, firm or corporation or to use it except as necessary in carrying out my work for the
Company consistent with the Company’s agreement with such third party.
3. Inventions.
(a)
Academic Interests. I am currently a full-time professor at Stanford University.
I understand that I shall be able to continue to do academic research, publish and teach in the
field of finance and economics, communicate with students or others and directly or indirectly in
connection with these activities disseminate information other than Confidential Information into
the public domain (collectively, the “Academic Activities”). In addition, I shall comply with
Stanford’s policies regarding non-University activities of full time professors and the use of
Stanford facilities and other matters on such activities. I have informed Xxxxxxx Xxxxxx, the
xxxx of the Stanford Graduate School of Business, in writing of my involvement with the Company and
have not received any objections from Stanford to my involvement with the Company. To the best of
my knowledge, I am currently in compliance with the Stanford policies, and I agree to continue to
comply with such policies as long as they are applicable to me.
(b)
No Transfer of Third Parties Rights. I have done extensive consulting and academic
work for various third parties, and this Agreement does not purport to transfer any rights that may
belong to those third parties.
(c) Assignment of Inventions. Subject to the provisions in Section 3(a) above, I
agree that I will promptly make full written disclosure to the Company, will hold in trust for the
sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my
right, title and interest in and to any and all inventions, original works of authorship,
developments, concepts, improvements or trade secrets, whether or not
patentable or registrable
under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to
practice, or cause to be conceived or developed or reduced to practice, during the period of time
in which I am an advisor and director of the Company that relate at the time of conception or
reduction to practice of the invention to the Company’s Business, or actual or demonstrably
anticipated research or development of the Company (collectively
referred to as “Inventions”),
except as provided in Section 3(f) below. I further acknowledge that all Inventions which are made
by me (solely or jointly with others) within the scope of and during the period of my Relationship
with the Company are “works made for hire,” and that the Company will be the owner of all
copyrights, subject to Section 3(a). The Company’s “Business” means the business of providing
portfolio investment software tools and advice to individual
investors. I acknowledge and agree
that the Company shall be the sole vehicle through which any Inventions shall be commercialized
and that the Company is entitled to all of the commercial benefits and profits arising from or
incident to my activities as an advisor and director of the Company, provided however that
I shall be allowed to continue to consult and hold directorships pursuant to the consulting
arrangements, including those listed on Exhibit A hereto, that are permitted under Section
5(a).
(d) Provision of Records. I agree to provide to the Company upon its reasonable
request any and all notes, records or other written or recorded information that I have created
and are in my possession or under my control regarding possible Inventions made by me (solely or
jointly with others) during the term of my Relationship with the Company.
(e) Patent and Copyright Registrations. I agree to provide reasonable assistance to
the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s
rights in the Inventions and any copyrights, patents, or other intellectual property rights
relating thereto in any and all countries, including the disclosure to the Company of all pertinent
information and data with respect thereto, the execution of all applications, specifications,
oaths, assignments and all other instruments which the Company shall deem necessary in order to
apply for and obtain such rights and in order to assign and convey to the Company, its successors,
assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions,
and any copyrights, patents, mask work rights or other intellectual property rights relating
thereto. I further agree that my obligation to execute or cause to be executed, when it is in my
reasonable power to do so, any such instrument or papers shall continue after the termination of
this Agreement. If the Company is unable because of my mental or physical incapacity or for any
other reason to secure my signature to apply for or to pursue any application for any United
States or foreign patents or copyright registrations covering Inventions or original works of
authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the
Company and its duly authorized officers and agents as my agent and attorney in fact, to act for
and in my behalf and stead to execute and file any such applications and to do all other lawfully
permitted acts to further the prosecution and issuance of letters patent or copyright registrations
thereon with the same legal force and effect as if executed by me. I hereby waive and quitclaim
to the Company any and all claims, of any nature whatsoever, which I now or hereafter have for
infringement of any proprietary rights assigned to the Company.
(f) Exception to Assignments. I understand that the provisions of this Agreement
requiring assignment of Inventions to the Company do not apply to any invention which qualifies
fully under the provisions of California Labor Code Section 2870 (attached hereto as Exhibit
B) and inventions that I may be required to assign to my employer, Stanford University,
pursuant to applicable Stanford policies. I will advise the Company promptly in writing of any
inventions that I believe meet the said provisions.
4. Returning Company Documents. I agree that, upon the Company’s request, at the
time of termination of my Relationship with the Company, I will deliver to the Company all
originals and copies of all documents and other written information in my possession that contain
any Confidential Information.
5. Non-Competition; Solicitation of Employees, Consultants and Other Parties.
(a) Non-Competition. In consideration of my Relationship with the
Company, I agree that I will not render commercial or professional services of any nature to any
person or organization that competes with the Company in the Business, whether or not for
compensation, without the prior written consent of the Company’s Board of Directors (except
pursuant to the consulting agreements and directorships on Exhibit A hereto). Further, I
will not directly or indirectly engage or participate in any business that is competitive in any
manner with the business of the Company. Nothing in this letter agreement shall be construed to
prevent me from performing the Academic Activities or accepting speaking or presentation
engagements in exchange for honoraria or from serving on boards of corporations listed on
Exhibit A hereto or on boards of charitable organizations, or from owning no more than one
percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a
national stock exchange.
(b) Non-Solicitation. I agree that during the term of my Relationship with the
Company, and for a period of twelve (12) months immediately following the termination of my
Relationship with the Company for any reason, whether with or without cause, I shall not either
directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees or
consultants to terminate their relationship with the Company, or take away such employees or
consultants, or attempt to solicit, induce, recruit, encourage or take away employees
or consultants of the Company, either for myself or for any other person or entity. Further, for
a period of twelve (12) months following termination of my Relationship with the Company for any
reason, with or without cause, I shall not solicit any licensor to or customer of the Company or
licensee of the Company’s products, in each case, that are known to me as a result of my
Relationship, with respect to any business, products or services that are competitive to the
products or services offered or under development by the Company as of the date of termination of
my Relationship with the Company.
6. Representations and Covenants.
(a) Facilitation of Agreement. I agree to execute any proper oath or verify any
proper document required to carry out the terms of this Agreement.
(b) Conflicts. I represent that my performance of all the terms of this
Agreement will not breach any agreement to keep in confidence proprietary information acquired by
me in confidence or in trust prior to commencement of my Relationship with the Company. I have
not entered into, and I agree I will not enter into, any oral or written agreement in conflict with
any of the provisions of this Agreement.
(c) Voluntary Execution. I certify and acknowledge that I have carefully read and
consulted independent counsel of my choosing with respect to all of the provisions of this
Agreement and that I understand and will fully and faithfully comply with such provision.
7. General Provisions.
(a) Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of California, without
giving effect to the principles of conflict of laws.
(b) Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the Company and me relating to the subject matter herein and merges all prior
discussions between us. No modification or amendment to this Agreement, nor any waiver of any
rights under this Agreement, will be effective unless in writing signed by the party to be charged.
Any subsequent change or changes in my duties, obligations, rights or compensation will not
affect the validity or scope of this Agreement.
(c) Severability. If one or more of the provisions in this Agreement are deemed void
by law, then the remaining provisions will continue in full force and effect.
(d) Successors and Assigns. This Agreement will be binding upon my heirs, executors,
administrators and other legal representatives and will be for the benefit of the Company, its
successors, and its assigns.
(e) Survival. The provisions of this Agreement shall survive the termination of my
employment and the assignment of this Agreement by the Company to any successor in interest or
other assignee.
The parties have executed this Agreement on the respective dates set forth below:
| ADVISOR AND DIRECTOR | ||||||
/s/
Xxxxxxx X. Xxxxxxxxxxxx
|
/s/ Xxxxxxx X. Xxxxxx
|
|||||
By:
XXXXXXX X. XXXXXXXXXXXX |
||||||
Title: President & CEO |
||||||
Date: 3/5/98
|
Date: March 5, 1998 |
EXHIBIT A
CONSULTING ARRANGEMENTS AND DIRECTORSHIPS
Advisor of Pension Funds
| • | AT&T Investment Management Organization — pensions | |
| • | United Technologies — pension fund | |
| • | Xxxxxxx Xxxxxx — pension fund | |
| • | California Public Employees Retirement System | |
| • | Hewlett-Packard — pension fund |
Advisor
| • | Union Bank of Switzerland — institutional asset management, Zurich | |
| • | CM Capital |
Director
| • | Stanford Management Company — board of directors (Stanford University endowment) | |
| • | C*ATS Software (term ends May 1, 1997) (Any further relationship subject to prior Company approval) |
Trustee
| • | Trustee, Xxxxx-Xxxxxxx — mutual funds | |
| • | Trustee, Xxxx Xxxxxxxxx — mutual funds |
In addition to the consulting arrangements described above, I, through a corporation
formerly known as Xxxxxx-Tint Inc., licensed certain software to Xxxxx Fargo Institutional
Trust Company, Xxxxx Fargo Nikko Investment Advisors and Xxxxxxxx X. Tint (jointly and
together with their respective successors and assigns “Xxxxx Fargo”) for its use in
performing money management services. To the best of my knowledge, the software licensed
to Xxxxx Fargo was not designed for use as an investment tool by individual investors, I
have not disclosed any proprietary information of Xxxxx Fargo to the Company, my
activities as an advisor and director of the Company do not conflict with any rights Xxxxx
Fargo may have under the license agreements, and the Company’s pursuit of its business
does not conflict with or violate any of Xxxxx Fargo’s rights pursuant to these license
agreements.
EXHIBIT B
Section 2870 of the California Labor Code is as follows:
(a) Any provision in an employment agreement which provides that an employee shall
assign,
or offer to assign, any of his or her rights in an invention to his or her employer
shall not apply to an
invention that the employee developed entirely on his or her own time without using
the employer’s
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice of the invention to the
employer’s business, or actual or demonstrably anticipated research or development of
the employer.
(2) Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to require an
employee to
assign an invention otherwise excluded from being required to be assigned under
subdivision (a), the
provision is against the public policy of this state and is unenforceable.
AMENDMENT TO CONSULTING AGREEMENT
This AMENDMENT TO CONSULTING AGREEMENT, dated as of January 11, 2002 (“Amendment”),
is entered into by and between FINANCIAL ENGINES, INC., a California corporation (with its
wholly-owned subsidiary Financial Engine Advisors LLC, a Delaware limited liability
company, the “Company”), and XXXXXXX X. XXXXXX (“Consultant”), and amends the CONSULTING
AGREEMENT, dated as of March 25,1998 (“Agreement”), by and between the Company and
Consultant.
Add the Following as Section 5(c) of the Agreement:
(c)
Consultant’s Activities. During the term of the Agreement,
Consultant may wish to provide Services to other potential clients in addition to
the Specified Clients. In all such instances, Consultant shall first offer to the
Company the option to have Services to such additional clients provided solely
through the Company. The Company agrees to accept such additional clients unless
the Company in good faith determines to reject an additional client. Once accepted
by the Company, such additional clients shall be treated as Specified Clients and
shall be included within the definition of Specified Clients for purposes of this
Agreement. With respect to each additional client accepted by the Company,
Consultant shall be paid all fees up to $100,000 each year, and 25% of all fees
over $100,000 each year. With respect to any additional client(s) the Company does
not accept hereunder, Consultant may perform Services to those clients independent
of the Company (“Separate Clients”) using the Technology, and any amendments,
modifications and derivative works thereof developed by Consultant or with
Consultant’s assistance for the specific purpose of performing the Services for
Specified Clients or Separate Clients (the “Services Technology”). The parties
hereby agree that “Services Technology” shall not include any software, trade
secrets and other intellectual property developed by the Company for purposes other
than the provision of Services, including amendments, modifications and derivative
works thereof, whether developed prior or subsequent to the date hereof. Consultant
shall not otherwise use the Company’s resources to provide Services to Separate
Clients. Consultant may retain all fees received from Separate Clients in
connection with the provision of Services. For as long as Consultant remains
subject to this Agreement, the total number of Specified Clients and Separate
Clients shall not exceed ten (10) clients.
Replace Section 6(c) of the Agreement With the Following:
(c) Other Permitted Uses. Notwithstanding the limitation on use
contained in paragraph (b) of this Section 6 or in the Confidentiality Agreement,
Consultant shall have the right to use the Services Technology as follows:
| (i) | while Consultant is subject to this Agreement, for the purpose of performing Services for Specified Clients or Separate Clients permitted pursuant to Section 4(c)(i), Section 5(b) or Section 5(c), and | ||
| (ii) | after termination of this Agreement, (unless the Agreement is terminated as the result of a voluntary termination by Consultant without a good faith belief on the part of Consultant that the Company cannot or will not |
| adequately provide Services), for the purpose of performing Services to an unlimited number of clients either as an individual or through a corporation majority owned by Consultant to which Consultant may assign his rights hereunder for the purposes permitted by this Section 6(c), subject to Section 4(ii) with respect to Specified Clients if Consultant chooses to be governed by that section with respect to Specified Clients only. |
Add the Following as Section 6(d) of the Agreement:
(d) License Limitation. Consultant and the Company hereby confirm
that the license granted to the Technology in the Agreement was and is for the
limited purpose of providing advisory consulting services and that the Technology
has been, and will be used by the Company only for the purpose of providing
advisory consulting services.
Other than as expressly amended above, the Agreement remains in full force and
effect. The parties have executed this Amendment as of the date first written above.
| FINANCIAL ENGINES, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxxxxxxx | |||
| Xxxxxxx X. Xxxxxxxxxxxx | ||||
| President |
||||
| Address: 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000 Xxxx Xxxx, Xxxxxxxxxx 00000 |
||||
| /s/ Xxxxxxx X. Xxxxxx | ||||
| Xxxxxxx X. Xxxxxx |
||||
| Address: <Address> <Address> |
||||
