EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of December 10, 1997, by and between
XXXX XXXXXXXXX (the "Employee") and SCIENT CORPORATION, a California corporation
(the "Company").
1. Term of Employment.
(a) Basic Rule. The Company agrees to continue the Employee's
employment, and the Employee agrees to remain in employment with the Company,
from the date of this Agreement until the date when the Employee's employment
terminates pursuant to Subsection (b), (c) or (d) below. Either the Employee or
the Company shall be entitled to terminate the Employee's employment at any time
and for any reason, with or without Cause. Any contrary representations which
may have been made to the Employee shall be superseded by this Agreement. This
Agreement shall constitute the full and complete agreement between the Employee
and the Company on the nature of the Employee's employment, which may only be
changed in an express written agreement signed by the Employee and a duly
authorized officer of the Company.
(b) Without Cause. Subject to Section 6, the Company may terminate
the Employee's employment, with or without Cause, by giving the Employee thirty
(30) days' advance notice in writing. The Employee may terminate his employment
by giving the Company thirty (30) days' advance notice in writing. The
Employee's employment shall terminate automatically in the event of his death.
Any waiver of notice shall be valid only if it is made in writing and expressly
refers to the applicable notice requirement of this Section 1.
(c) Cause. Employee may be terminated for Cause if, in the reasonable
determination of the Company's Board of Directors, Employee is convicted of a
felony involving the Company or its property, or participates in any fraud
against the Company, or willfully breaches his duties to the Company, or
intentionally damages any property of the Company, or wrongfully discloses any
trade secrets or other confidential information of the Company, or materially
breaches any material provision of the Proprietary Information and Inventions
Agreement, dated as of the date hereof, between Employee and the Company (the
"Proprietary Information and Inventions Agreement").
(d) Permanent Disability. The Company may terminate the Employee's
active employment due to Permanent Disability by giving the Employee thirty (30)
days' advance notice in writing. For all purposes under this Agreement,
"Permanent Disability" shall mean that the Employee, at the time notice is
given, has failed to perform substantially all of his duties under this
Agreement for not less than 270 days in the most recent fiscal year of the
Company as the result of his incapacity due to physical or mental illness. The
determination regarding whether the Employee is physically unable to regularly
perform his duties under this paragraph shall be made by the Board of Directors.
Employee's inability to be physically present
on the Company's premises shall not constitute a presumption that he is unable
to perform such duties.
(e) Rights Upon Termination. Except as expressly provided in Section
6, upon the termination of the Employee's employment pursuant to this Section 1,
the Employee shall only be entitled to the compensation, benefits and
reimbursements described in Sections 3, 4 and 5 for the period preceding the
effective date of the termination. The payments under this Agreement shall fully
discharge all responsibilities of the Company to the Employee.
(f) Termination of Agreement. This Agreement shall terminate when all
obligations of the parties hereunder have been satisfied. The termination of
this Agreement shall not limit or otherwise affect any of the Employee's
obligations under Section 7.
(g) Notice. Any notice required to be given pursuant to this Section
1 shall be given in accordance with the provisions of Section 10 (a) hereof. The
exercise of either party's right to terminate this Agreement pursuant to
Subsections (b) or (c) above shall not abrogate the rights and remedies of the
terminating party regarding the breach, if any, giving the rise to such
termination.
2. Duties and Scope of Employment.
(a) Position. The Company will employ Employee in an executive
capacity as President and Chief Executive Officer, or such other executive
position as shall be mutually agreed upon, and perform the duties customarily
associated with such capacity from time to time and at such place or places as
the Company shall reasonably designate or as shall be reasonably appropriate and
necessary in connection with such employment.
(b) Obligations. Employee will, to the best of his ability, devote
his full time and best efforts to the performance of his duties hereunder and
the business and affairs of the Company. Employee agrees to serve as Chairman of
the Board of Directors of the Company if elected by the shareholders and the
Board, as the case may be, and to perform such executive duties as may be
assigned to him by the Company's Board of Directors from time to time. The
Company agrees to elect Employee to the Company's Board of Directors, as
Chairman of such Board, for so long as Employee remains an employee, director or
consultant of the Company. Employee will duly, punctually, and faithfully
perform and observe any and all rules and regulations which the Company may now
or shall hereafter establish governing the conduct of its business.
3. Cash and Incentive Compensation.
(a) Salary. The Company agrees to pay the Employee as compensation
for his services a base salary at an annual rate of $200,000. Such salary shall
be payable in accordance with the Company's standard payroll procedures. (The
annual compensation specified in this Subsection (a), together with any
increases in such compensation that the Company may grant from time to time, is
referred to in this Agreement as "Base Compensation.")
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(b) Bonus Opportunity. The Employee shall have the opportunity to
earn an annual bonus. The amount and manner of payment of such bonus shall be
determined by the Board.
4. Employee Benefits. During the term of his Employment, the Employee
shall be eligible to participate in the employee benefit plans maintained by the
Company (the "Company Plans"), subject in each case to the generally applicable
terms and conditions of the plan in question and to the determinations of any
person or committee administering such plan.
5. Business Expenses. During the term of his Employment, the Employee
shall be authorized to incur necessary and reasonable travel, entertainment and
other business expenses in connection with his duties hereunder. The Company
shall reimburse the Employee for such expenses upon presentation of an itemized
account and appropriate supporting documentation, all in accordance with the
Company's generally applicable policies.
6. Stock Purchases. Employee has entered into a Restricted Stock Purchase
Agreement that provides, among other things, (i) that the Common Stock of the
Company held by Employee shall be subject to repurchase by the Company (the
"Repurchase Right") at the price paid for such stock under certain circumstances
and (ii) that the Repurchase Right shall lapse in its entirety upon a charge in
control of the Company, or (B) upon involuntary termination of the Employee's
employment without Cause.
7. Severance Benefits.
(a) Severance Payment. If, at any time during the term of this
Agreement, the Company terminates the Employee's Employment without his consent
for any reason other than Cause or Permanent Disability, then the Company shall
pay the Employee a lump sum equal to 100% of the greater of (i) his annual Base
Compensation (at the rate then in effect) or (ii) his actual Base Compensation
plus bonus for the most recent completed fiscal year of the Company.
(b) Employee Benefits. If the Employee becomes entitled to a
severance payment under Subsection (a) above, then the Employee shall also be
entitled to continue participating in each Company Plan which permits continuing
participation by former employees. The Employee's participation in such Company
Plan shall continue until the date 12 months following the termination of his
Employment.
(c) Computer Equipment. If the Employee becomes entitled to a
severance payment under Subsection (a) above, then the Company shall provide
Employee with a computer and peripherals substantially equivalent to his primary
working computer and peripherals as of the date of such termination.
(d) Communications. If the Employee becomes entitled to a severance
payment under Subsection (a) above, then the Employee shall also be entitled to
continuing access to the Company's telephone and e-mail systems until the date
six (6) months following the termination of his Employment.
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8. Proprietary Information and Inventions. The Employee has entered into
the Proprietary Information and Inventions Agreement with the Company.
9. Indemnification. The Company and Employee shall enter into an
Indemnification Agreement, which, among other things, will indemnify Employee
for claims and liabilities arising out of Employee's actions while an employee,
director or consultant of the Company regardless of when such claims or
liabilities may arise.
10. Successors.
(a) Company's Successors. This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.
(b) Employee's Successors. This Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by, the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
11. Miscellaneous Provisions.
(a) Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered mail, return receipt
requested and postage prepaid. In the case of the Employee, mailed notices shall
be addressed to him at the home address which he most recently communicated to
the Company in writing. In the case of the Company, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Secretary.
(b) Waiver. No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by an authorized officer of the Company
(other than the Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.
(c) Whole Agreement; Modifications. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement and the
Proprietary Information and Inventions Agreement contain the entire
understanding of the parties with respect to the subject matter hereof. A
modification of this Agreement shall be valid only if it is made in writing and
executed by both parties hereto.
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(d) Withholding Taxes. All payments made under this Agreement shall
be subject to reduction to reflect taxes or other charges required to be
withheld by law.
(e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California (except their provisions governing the choice of law).
(f) Severability. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision hereof, which shall remain in full force and effect.
(g) Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled in San Francisco,
California, by arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association. The decision of the arbitrator shall be
final and binding on the parties, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The parties
hereby agree that the arbitrator shall be empowered to enter an equitable decree
mandating specific enforcement of the terms of this Agreement. The Company and
the Employee shall share equally all fees and expenses of the arbitrator;
provided, however, that the Company or the Employee, as the case may be, shall
bear all fees and expenses of the arbitrator and all of the legal fees and out-
of-pocket expenses of the other party if the arbitrator determines that the
claim or position of the Company or the Employee, as the case may be, was
without reasonable foundation. The Employee hereby consents to personal
jurisdiction of the state and federal courts located in the State of California
for any action or proceeding arising from or relating to this Agreement or
relating to any arbitration in which the parties are participants.
(h) No Assignment. This Agreement and all rights and obligations of
the Employee hereunder are personal to the Employee and may not be transferred
or assigned by the Employee at any time. The Company may assign its rights under
this Agreement to any entity that assumes the Company's obligations hereunder in
connection with any sale or transfer of all or a substantial portion of the
Company's assets to such entity.
(i) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12. Remedies. Employee's duties under the Proprietary Information and
Inventions Agreement shall survive termination of his employment with the
Company. Employee acknowledges that a remedy at law for any breach or
threatened breach by Employee of the provisions of the Proprietary Information
and Inventions Agreement would be inadequate and therefore agrees that the
Company shall be entitled to injunctive relief in case of any such breach or
threatened breach.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of the Company by its duly authorized officer, as of the day and
year first above written.
SCIENT CORPORATION
By
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Title:
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EMPLOYEE
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Xxxx Xxxxxxxxx
[SIGNATURE PAGE TO XXXX XXXXXXXXX EMPLOYMENT AGREEMENT]
