Independent Contractor Agreement - NextCard Inc. and Tim Coltrell
INDEPENDENT CONTRACTOR AGREEMENT
This INDEPENDENT CONTRACTOR Agreement, together with any exhibits hereto
(collectively, the "AGREEMENT") is entered into as of as of January 1, 2001 (the
"EFFECTIVE DATE") by and between Tim Coltrell ("COLTRELL") and NextCard, Inc., a
Delaware Corporation, (the "COMPANY"). The parties agree as follows:
1. INDEPENDENT CONTRACTOR
1.1 CONTRACTOR. Coltrell, who voluntarily terminated his employment
with the Company, effective as of December 31, 2000, shall
provide certain general business consulting services (the
"SERVICES"), as directed by Jeremy Lent, John Hashman and Yinzi
Cai, officers of the Company. Coltrell shall deliver to the
Company his work product (the "DELIVERABLES"), and will act
solely as an independent contractor. Coltrell will not be
considered, under the provisions of this contract, as having an
employee status, or the status of an agent or partner of the
Company.
2. COMPENSATION
2.1 PAYMENTS. As full compensation for Coltrell's Services and
Deliverables, the Company will pay $10,500 per month for an
average of 80 hours per month of consulting, for an 18 month
period from the Effective Date through June 30, 2002.
2.2 TAX STATUS. As an independent contractor, Coltrell will be solely
responsible for all Federal and State taxes, of whatever
character. The Company will prepare and file a Form 1099 for each
taxable year in which Coltrell supplies consulting services.
2.3 EXPENSES. The Company will reimburse Coltrell for all reasonable
expenses related to providing his Services, provided that
expenses above $1,500 must be approved in advance by the Company.
Appropriate receipts must be provided.
2.4 OTHER COMPENSATION. If, on occasion, the Company requests that
Coltrell work more than an average of 80 hours per month in
providing the Services, the Company will compensate Coltrell for
the additional hours at the rate of $125 per hour. In the case
where Coltrell spends materially less time per month providing
the Services for the Company, the Company will deduct
compensation at the $125 per hour rate. Coltrell shall not be
entitled to any compensation, benefits, expenses or other
payments, other than those specifically provided for in the
Agreement.
3. VESTING AND SALE OF SHARES.
3.1 SALE OF SHARES. Coltrell's sale of shares will not exceed the sum
of (a) up to 225,000 shares sold and to be sold in the first
quarter of 2001 and (b) the following amounts for the following
periods:
3.1.1 April 1 -- June 30, 2001 -- up to 100,000. shares
3.1.2 July 1 -- September 30, 2001 -- up to 100,00. shares
3.1.3 October 1 -- December 31, 2001 -- up to 100,000.
shares.
3.1.4 After December 31, 2001 -- no volume limitation
1 of 5
<PAGE>
provided, that unused amounts from a prior period may be carried
forward into a subsequent period, such that total sales under
this provision shall not exceed 525,000 shares in 2001.
3.2 WRITTEN AFFIRMATION. Coltrell shall not have violated any
applicable securities laws or Company policies associated with
the sale of shares of the Company's stock.
3.3 ADDITIONAL VESTING OF SHARES. During Coltrell's employment, he
was granted employee stock options, through Option Grants Nos. 1
and 3, for 315,000 shares and 562,500 shares, respectively. The
Company will vest 50,000 of Coltrell's remaining unvested options
to purchase shares of the Company's stock on July 1, 2002, if
Coltrell does not violate any portion of the Agreement during its
term. The remaining 48,720 of Coltrell's remaining unvested
options to purchase shares of the Company's stock will vest in
equal portions of 1/18 (i.e., approximately 2,706.667) for each
month during which this Agreement is in effect.
4. PROPRIETARY RIGHTS
DISCLOSURE. Coltrell understands that as part of this Agreement,
Coltrell may be asked to create or contribute to the creation of ideas,
concepts, themes, inventions, designs, improvements, developments,
discoveries and other work product, relating to and including the
Services to be rendered and the Deliverables to be provided in the
Agreement (collectively, the "WORK PRODUCT"). Coltrell acknowledges that
the Work Product, shall be the sole and exclusive property of the
Company. All files, records, documents, drawings, specifications,
equipment and similar items related to the Company's business and the
Work Product, whether prepared by Coltrell or otherwise coming into
Coltrell's possession, shall remain the exclusive property of the
Company.
4.1 SUBSEQUENT ENGAGEMENT. For a period of 18 months, from the
Effective Date through June 30, 2002, Coltrell shall not have
become employed by, render services to, become associated with,
create, or invest in (other than investments in public companies
at the level of not more than 1%) any of the following
businesses:
4.1.1 businesses directly competing with the Company or
businesses involving the direct marketing of consumer
credit financial services via the Internet channel. For
purposes of the Agreement, such companies include, but
are not limited to: Providian Financial, Capital One
Financial, American Express, MBNA Corp., Juniper
Financial (including Juniper's parent, Canadian
Imperial Bank of Commerce) or FirstUSA. The Company
reserves the right to waive this condition in
particular cases, as requested by Coltrell. Any
competition by Coltrell that violates the foregoing
conditions will result in the loss of the accelerated
vesting rights described above, in Section 3.3
(Additional Vesting of Shares) to which he is not
otherwise entitled. Coltrell and The Company
acknowledge and agree that the foregoing conditions are
not covenants of Coltrell. For example, the foregoing
is not a "non-compete" agreement.
2 of 5
<PAGE>
5. CONFIDENTIAL INFORMATION
5.1 NONDISCLOSURE OF TRADE SECRETS. Coltrell shall keep the Company's
Trade Secrets (and Trade Secrets of any company or client
contracted to the Company), whether or not prepared or developed
by Coltrell, in the strictest confidence. Coltrell will not use
of disclose such secrets to others without the Company's written
consent, except when necessary to perform Coltrell's obligations
under this Agreement. "Trade Secrets" means information or
material that is commercially valuable to the Company, and not
generally known in the industry including, without limitation,
and all:
5.1.1 Information concerning the Company's products and
services, including product data and specifications,
diagrams, flow charts, drawings, test results,
know-how, processes, inventions, research, projects,
product development and similar information relating
thereto;
5.1.2 Information concerning the Company's business,
including cost information, profits, sales information,
accounting and unpublished financial information,
business plans, markets and marketing information and
advertising strategies;
5.1.3 Versions of the Company's proprietary computer software
(including source code and object code), hardware,
firmware and documentation;
5.1.4 Information concerning the Company's employees,
including their salaries, strengths, weaknesses and
skills;
5.1.5 Information submitted by the Company's clients,
suppliers, employees, independent contractors,
Contractors or co-venturers with the Company for study,
evaluation of use;
5.1.6 Any and all information related to the Services of
Coltrell.
5.1.7 Any other information not generally known to the public
which, if misused or disclosed, could reasonable be
expected to adversely affect the Company's business.
5.2 NO BREACH, ETC. Coltrell shall not have breached any contractual
obligation to the Company and, for a period of eighteen months
after the Effective Date, Coltrell shall not have directly or
through others caused an employee of the Company to leave the
employ of the Company.
5.3 MARKETING PARTNERS. For a period of eighteen months after the
Effective Date, Coltrell shall not have directly or through
others caused, instigated or played a material role in any of the
Company's marketing partners having terminated their
relationships with the Company.
3 of 5
<PAGE>
6. CONTRACTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS
6.1 RIGHTS IN SERVICES. Coltrell represents and warrants that
Coltrell will (a) not infringe upon any copyright, patent, trade
secret or other property right of the Company, any former
employer of other third party in the performance of the Services
required by this Agreement; (b) has not accepted and will not
accept directly or indirectly from any person or entity, other
than the Company, any money, service, or other valuable
consideration for the inclusion of all or any part of the
Services of Coltrell in any product, program or service.
6.2 AUTHORITY. Coltrell represents and warrants that Coltrell has the
full power and authority to execute and deliver this Agreement
and to perform its obligations hereunder; and this Agreement
constitutes a valid and binding Agreement between the parties,
enforceable according to its terms, except as limited by
applicable bankruptcy laws and other laws of general application
relating to insolvency or the protection of creditor's rights.
7. TERM AND TERMINATION
7.1 TERM OF AGREEMENT. This Agreement becomes effective on the
Effective Date and will remain in effect, through June 30, 2002,
or until terminated as set forth in Section 7.2.
7.2 TERMINATION OF AGREEMENT. If the Company's Chief Executive
Officer determines, at any time during the term of this
Agreement, that Coltrell's consultancy should be terminated, he
will so advise Coltrell, in writing, and Coltrell's consultancy
will terminate at the end of the calendar month in which such
notice is delivered.
7.2.1 Except as otherwise provided in the Agreement, upon
termination of the Agreement for any reason, each party
shall be released from all obligations and liabilities
to the other occurring or arising after the date of
termination; provided, that no termination of this
Agreement shall affect the continuing obligations of
the parties, as set forth in Sections 3, 4, 5 and 6.
8. This Agreement and the respective rights and obligations of the parties
shall inure to the benefit of and be binding on their respective
successors, assigns and legal representatives, including Coltrell's
estate, executors, administrators, heirs, legatees or devisees.
9. This Agreement has been duly authorized, executed and delivered by the
parties hereto and constitutes the valid and binding obligation of the
parties, enforceable against the parties in accordance with its terms.
This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of California without reference to
any conflict of law provisions.
4 of 5
<PAGE>
10. Other than as expressly set forth herein, this Agreement supersedes all
proposals, oral or written, any employment agreements, all negotiations,
conversations, or discussions between or among the parties relating to
the subject matter of this Agreement and all past dealing or industry
custom. No changes, modifications, or waivers are to be made to this
Agreement unless evidenced in writing and signed for and on behalf of
both parties. In the event that any provision of this Agreement shall be
determined to be illegal or unenforceable, that provision will be
limited or eliminated to the minimum extent necessary so that this
Agreement shall otherwise remain in full force and effect and
enforceable.
ACKNOWLEDGED AND AGREED TO:
NextCard, Inc.
-----------------------------------
Timothy Coltrell
By:
--------------------------------
Its: Chief Executive Officer
5 of 5