EXHIBIT 10.16
CONSULTING AGREEMENT
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THIS CONSULTING AGREEMENT (this "Agreement") is entered into this ____
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day of February, 1999, by and between Xxxxxx.xxx Inc., a Delaware corporation
(the "Company"), and Xxxxx Xxxxx, an individual ("Consultant").
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RECITALS
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A. The Company is in the business of developing, designing,
programming and implementing an online postage system.
B. Consultant has expertise in U.S. Postal Service marketing
strategy.
C. The Company desires to engage Consultant, as an independent
contractor, to perform the services hereinafter set forth and Consultant desires
to perform such services for the Company and its clients, in accordance with the
terms and conditions set forth herein.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties agree as follows:
1. Consulting Services. Consultant agrees to render consulting
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services ("Consulting Services") to the Company, for the term of this Agreement,
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devoting his best efforts on a part time basis to the Company's business.
Consultant shall report to Company's Chief Executive Officer ("CEO") and Senior
Vice President of Marketing ("SVP Marketing"), performing the following services
and such other services as may be requested from time to time by the CEO or SVP
Marketing:
a. development of a strategic marketing plan related to the
Company's SOHO and corporate customer acquisition efforts in conjunction with
Company's marketing and strategic planning team;
b. providing temporary executive consulting services to Company
until Company has hired the SVP Marketing, performing work which would otherwise
be undertaken by the SVP Marketing;
c. providing marketing consulting related to U.S.Postal Service
offerings;
d. assisting in strategic planning regarding Company's
relationship with the U.S. Postal Service;
e. participating in Company's government affairs program with
respect to the U.S. Postal Service and legislative lobbying efforts;
f. collaborating with Company's management team to propose and
facilitate the implementation of U.S. Postal Service-related Company
initiatives;
g. providing consumer and corporate marketing consulting
regarding Company's products and services;
h. assisting Company in development of its international
strategic plan, including development of business models for working with
international postal services;
i. developing relationships for Company at the most senior levels
of the U.S. Postal Service, to enhance Company's ability to achieve its
strategic goals and objectives; and
j. working with management and Xxxxxx Xxxxxx to recruit and hire
a SVP Marketing and to recruit other senior executives.
2. Board Services. Consultant agrees to serve on Company's board of
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directors ("Board Services"), when elected to that position, for the term for
which he is elected, and to perform the following services in his capacity as a
board member:
a. attendance at one board meeting in Southern California each
month;
b. service on one board committee, as appointed thereto from time
to time by the board;
c. providing such services as are rendered by Company's other
board members, including without limitation periodic availability to attend to
telephone conferences, correspondence, and e-mail.
3. Standard of Care. Consultant shall utilize the highest
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professional standards of practice in performing the Consulting Services and
Board Services for the Company.
4. Part-time Services. In addition to such time as Consultant
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devotes to the Board Services, he shall spend an average of 1.5 to 2 days per
week performing the Consulting Services, although Consultant recognizes and
agrees that he may be called upon to devote more time than this average to
Company's business during the initial interim period before Company hire its SVP
Marketing. Consultant shall work at least two full days each month at Company's
Southern California offices.
5. Term. This Agreement shall have a term of two years, beginning
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March 1 and terminating on February 28, 2001, unless terminated earlier in
accordance with the provisions of Section 14 hereof.
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6. Compensation and Expenses.
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a. Company shall pay Consultant annual compensation of
$120,000.00 ("the Compansation"), payable in equal increments once per
month over the term of this Agreement.
b. Company shall grant Consultant the following stock options
for his Board Services and Consulting Services, which will be separately
memorialized in Company's usual form of option grants:
(1) Board Services Options. Company shall grant Consultant
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options to purchase 72,000 shares of its common stock with a strike price
of fifty cents per share. No options will vest until Consultant has
completed one full year of Board Services. The options will vest ratably
each month for the thirty six months which follow the first year of
Consultant's Board Services.
(2) Consulting Services Options. Company shall grant
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Consultant options to purchase an additional 90,000 shares of its common
stock with a strike price of fifty cents per share. Twenty thousand options
will vest each of the first three years after the option grant; those
options will vest ratably each month over that three year interval. Thirty
thousand shares will vest in the fourth year after the option grant; those
options will likewise vest ratably each month during that year. However, if
Company
(a) achieves a customer base of at least 250,000 customers
and
(b) completes an initial public offering of its stock
which yields the Company at least $20 million in revenue,
and if both those events occur before conclusion of the fourth anniversary
of Company's grant of the Consulting Services options, then vesting of the
final 30,000 options will be accelerated. If Company or Consultant elect
early termination of the Consulting Services (i.e., before the second
anniversary of this Agreement), then Consultant's options shall continue to
vest monthly for ninety days following the date on which the Consulting
Services terminate, and no all remaining options shall then lapse and shall
never vest.
c. The Company shall reimburse Consultant for reasonable costs
and expenses incurred by Consultant in providing the Consulting Services,
in accordance with the Company's expense reimbursement guidelines. Any
single expense which will exceed $7,500 must be approved in advance by the
Company's CEO, or the Company may elect at its sole discretion not to
reimburse Consultant for that expense.
7. Proprietary Information. Consultant understands that the Company
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possesses and will possess Proprietary Information (as defined below) which is
important to its business. For purposes of this Agreement, "Proprietary
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Information" is information that was or
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will be developed, created, or discovered by or on behalf of the Company, or
which became or will become known by, or was or is conveyed to the Company,
which has commercial value in the Company's business. "Proprietary Information"
includes, but is not limited to, information about operations, services, trade
secrets, computer programs, algorithms, application programming interfaces,
design, technology, ideas, know-how, processes, formulas, compositions, data,
techniques, improvements, inventions (whether patentable or not), works of
authorship, business and product development plans, customers and other
information concerning the Company's actual or anticipated business, research or
development, or which is received in confidence by the Company or for the
Company from any other person or entity. Consultant hereby acknowledges and
agrees that all such Proprietary Information shall be the sole and exclusive
property of the Company. At all times, both during the term of this Agreement
and after its termination, Consultant will keep in confidence and trust and will
not use any Proprietary Information without the prior written consent of an
officer of the Company except as may be necessary and appropriate in the
ordinary course of performing the Consulting Services under this Agreement.
Consultant acknowledges that any disclosure or unauthorized use of Proprietary
Information will constitute a material breach of this Agreement and cause
substantial harm to the Company for which damages would not be a fully adequate
remedy, and, therefore, in the event of any such breach, in addition to other
available remedies, the Company shall have the right to obtain injunctive
relief.
8. Company Materials. Consultant hereby acknowledges and agrees that
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all Company Materials (as defined below) shall be the sole and exclusive
property of the Company. Consultant will not remove any Company Materials from
the business premises of the Company or deliver any Company Materials to any
person or entity outside the Company, except as required in connection with
performance of the Consulting Services under this Agreement. Consultant further
agrees that, immediately upon the Company's request and in any event upon
completion of the Consulting Services, Consultant shall deliver to the Company
all Company Materials, any document or media that contains Results (as defined
below), apparatus, equipment and other physical property or any reproduction of
such property, excepting only Consultant's copy of this Agreement. For purposes
of this Agreement, "Company Materials" are documents or other media or tangible
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items that contain or embody Proprietary Information or any other information
concerning the business, operations or plans of the Company, whether such
documents have been prepared by Consultant or by others. "Company Materials"
include, but are not limited to, blueprints, drawings, photographs, charts,
graphs, notebooks, customer lists, computer media or printouts, sound recordings
and other printed, typewritten or handwritten documents, as well as samples,
prototypes, models, products and the like. For the purposes of this Agreement,
"Results" means any and all deliverables or results of the Consulting Services
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including, without limitation, all Inventions.
9. Exclusivity. During the term of this Agreement and for so long as
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Consultant continues to perform Consulting Services or Board Services, whichever
is longer, Consultant shall not engage in any commercial activities or endeavors
on behalf of any person or entity other than Company which is active in IBI
mailing markets.
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10. Nonsolicitation. Consultant hereby agrees that during the term
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of this Agreement and for a one (1) year period thereafter, Consultant will not
encourage or solicit any customer, employee or consultant of the Company to
leave the Company for any reason or to begin doing business with any competitor
of the Company.
11. Independent Contractor. Consultant shall act in the capacity of
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an independent contractor with respect to the Company. Consultant shall not be,
nor represent himself or herself as being, an agent of the Company, and shall
not be, nor represent himself or herself as being authorized to bind the
Company. As an independent contractor, Consultant shall not have the status of
an employee of the Company and shall not be eligible to participate in any
employee benefit plans or group insurance plans or programs. Company shall not
provide Social Security, unemployment compensation, disability insurance,
worker's compensation or similar coverage, nor any statutory benefits, to
Consultant. Consultant shall be solely responsible for all taxes, withholdings,
and other similar statutory obligations, including, but not limited to, Workers'
Compensation Insurance.
12. Consultant's Representations. Consultant represents and warrants
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that:
a. Consultant's performance of the Consulting Services or of any
term of this Agreement will not breach any agreement or understanding that
Consultant has with any other person or entity and that there is no other
contract or duty now in existence inconsistent with the terms of this
Agreement;
b. During the term of this Agreement, Consultant shall not be
bound by any agreement, nor assume any obligation, which would in any way
be inconsistent with the Consulting Services to be performed by Consultant
under this Agreement;
c. In performing the Consulting Services, Consultant will not
use any confidential or proprietary information of any other person or
entity or infringe the intellectual property rights (including, without
limitation, patent, copyright, trademark or trade secret rights) of any
other person or entity nor will Consultant disclose to the Company, or
bring onto the Company's premises, or induce the Company to use any
confidential information of any person or entity other than the Company or
Consultant; and
d. Consultant will abide by all applicable laws and the
Company's safety rules in the course of performing the Consulting Services.
13. Indemnification. Consultant will defend, indemnify and hold the
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Company harmless against any and all losses, liabilities, damages, claims,
demands, suits, costs and expenses (including, without limitation, reasonable
attorneys' fees and court costs) arising or resulting, directly or indirectly,
from (a) any act or omission of Consultant or Consultant's breach of any term or
condition of this Agreement, (b) infringement by any Result or Consultant's
performance of the Consulting Services of any third party intellectual property
rights or (c) any failure (alleged or actual) by Consultant to satisfy any of
his tax or withholding obligations (including, without limitation, those
obligations referred to in Section 8 hereunder).
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14. Termination. Consultant's Consulting Services may be terminated
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by the Company at any time, for any reason, with or without cause, or by the
Consultant, upon thirty (30) days prior written notice to the other party. In
the event of such early termination, the Company shall continue to pay
Consultant the Compensation for a period of ninety days following the
termination date, but it shall have no obligation to pay him any remaining
balance of the Compensation referred to in Paragraph 6 above.
15. Miscellaneous Provisions.
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a. Consultant agrees that any dispute in the meaning, effect or
validity of this Agreement shall be resolved in accordance with the laws of the
State of California without regard to the conflict of laws provisions thereof.
b. Consultant agrees that if one or more provisions of this
Agreement are held to be illegal or unenforceable, such illegal or unenforceable
portion(s) shall be limited or excluded from this Agreement to the minimum
extent required and the balance of the Agreement shall be interpreted as if such
portion(s) were so limited or excluded and shall be enforceable in accordance
with its terms.
c. This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective heirs, successors and
assigns; provided, however, that this Agreement and the rights and obligations
hereunder are not assignable by Consultant without the Company's prior written
consent.
d. Notices under this Agreement will be sufficient only if
personally delivered, delivered by a major commercial rapid delivery courier
service with tracking capabilities and costs prepaid or mailed by prepaid
certified or registered mail, return receipt requested, to a party at its
address first set below its signature to this Agreement or as amended by notice
pursuant to this Section 12(d). If not received sooner, notice by mail shall be
deemed received five (5) days after deposit in the U.S. mails.
e. This Agreement contains the entire understanding of the
parties regarding its subject matter and supersedes all prior understandings or
agreements between the parties with regard to its subject matter. This Agreement
can only be modified by a subsequent written agreement executed by both parties
hereto.
f. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements, in addition to
any other relief to which the party may be entitled.
g. This Agreement may be signed in counterparts, each of which
shall be deemed an original.
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h. Consultant shall not export, re-export or otherwise remove
from the United States any Proprietary Information or Company Materials, or any
portion or direct product of the foregoing. This obligation shall survive any
termination or expiration of this Agreement.
i. Notwithstanding anything to the contrary in this Agreement,
Sections ________ and __ hereof shall survive any termination of this Agreement.
IN WITNESS WHEREOF, this Consulting Agreement is entered into on the
date first set forth above.
Accepted and Agreed to:
"COMPANY" "CONSULTANT"
XXXXXX.XXX INC.
By: /s/ Xxxx X. Xxxxx /s/ Xxxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
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Title: CEO/Pres
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