CIO Employment Agreement - M. Rowley

ONVIA.COM, INC.
EMPLOYMENT AND NONCOMPETITION AGREEMENT


(Matthew S. Rowley)


THIS EMPLOYMENT AND NONCOMPETITION AGREEMENT (this "Agreement") is being
--------- entered into as of September 24, 2001 ("Effective Date") by and between
-------------- Onvia.com, Inc., a Delaware corporation ("Onvia"), and Matthew S. Rowley, an
----- individual ("Employee"). Certain capitalized terms in this Agreement not
-------- otherwise defined are defined in Exhibit A attached hereto.
---------


Recitals


A. Onvia is a leading exchange helping businesses secure additional revenue by buying and selling products and services to other businesses and government entities.


B. Employee is currently employed by Onvia as its Chief Information Officer.


C. Onvia wants to enter into this Agreement to provide additional incentive to Employee to serve as an employee of Onvia, and to encourage Employee's continued service with Onvia.


Agreement


In consideration of the mutual covenants and agreements contained herein, the parties agree as follows:


1. Employment.
----------


1.1 Term; Duties.
------------


(a) Term. Employee agrees to serve as an employee of Onvia during the
---- period (such period, including any extensions thereto, the "Employment Term")
--------------- commencing as of the date of this Agreement and ending on the first anniversary of this Agreement, and this Agreement shall be automatically extended for an additional one year term on each subsequent anniversary unless either party provides the other with written notice at least thirty (30) days prior to the expiration of any such one year term. Notwithstanding the foregoing, this Agreement may be terminated at any time pursuant to Section 2 hereof.


(b) Duties.
------


(i) During Employee's employment, Employee shall serve as Chief Information Officer of Onvia and shall perform such duties and functions as the President and CEO shall reasonably determine from time to time; and in the performance of Employee's duties, Employee shall comply with all directions given by the President and CEO to the best of Employee's abilities and in a manner consistent with the ethical and legal performance of such duties.


-1-


(ii) Employee agrees to serve Onvia faithfully and to the best of Employee's ability, and to devote the substantial majority of Employee's working time, attention and efforts to the business and affairs of Onvia. Employee represents and warrants to Onvia that he/she is under no contractual commitments inconsistent with Employee's obligations set forth in this Agreement. Employee and Onvia acknowledge and agree that Employee, upon notice to Onvia, may serve on behalf of other entities as a board member, advisor, etc. so long as it does not, in the good faith discretion of Onvia, materially conflict with Employee's duties and obligations under this Agreement.


1.2 Salary. In consideration of all services to be rendered by Employee to
------ Onvia during the Employment Term, Onvia shall pay to Employee during the Employment Term a minimum salary of One Hundred Seventy Thousand Dollars ($170,000) per year, payable at such times as other salaried Onvia employees receive their regular salary payments on Onvia's regular payroll ("Annual Base Salary"). Onvia shall be entitled to withhold from the salary payments otherwise required to be made to Employee such amounts as Onvia may be required to withhold under applicable tax laws and other applicable legal requirements.


1.3 Priority Task Bonus. Employee shall be eligible to receive a priority
------------------- task bonus of up to Twenty-Five Percent (25%) of Employee's Annual Base Salary, minus all applicable withholdings and taxes, based on criteria determined by the President and CEO of Onvia in good faith.


1.4 Performance Bonus.
-----------------


(a) If Onvia has met its quarterly performance metrics set forth on Exhibits B-1, B-2, and B-3 and Employee is a full-time employee of Onvia on July ------------ --- --- 1, 2002, in full compliance with all of his/her duties and obligations to Onvia, Employee shall receive a lump sum payment equal to half of Employee's Annual Base Salary, minus all applicable withholdings and taxes ("Performance Bonus"). This Performance Bonus shall be paid by July 31, 2002. If, prior to July 1, 2002, Onvia terminates Employee's employment (i) without Cause, (ii) when Employee is performing his/her job duties satisfactorily (see Section 1.4(d) below), or (iii) Employee resigns for Good Reason, Employee shall receive100% of the Performance Bonus, provided that Onvia has met its quarterly performance metrics for the quarter previous to the one during which termination of employment occurred. If Onvia terminates Employee's employment (i) without Cause, (ii) when Employee is performing his/her job duties satisfactorily (see Section 1.4(d) below), or (iii) Employee resigns for Good Reason during the fourth quarter of 2001, Employee shall receive 100% of the Performance Bonus whether or not Onvia has met its quarterly performance metrics set forth on Exhibit B-1). -----------


(b) If, prior to July 1, 2002, there is a Change of Control (as that term is defined in the Amended and Restated 1999 Stock Option Plan (the "Plan")) or a Liquidation of Onvia, and Onvia has met its quarterly performance metrics set forth on Exhibits B-1, B-2, and B-3, Employee shall receive 100% of the
------------ --- --- Performance Bonus in addition to all the other rights and benefits provided under this Agreement (i.e. upon a Change of Control or a Liquidation of Onvia on April 1, 2002, Employee shall receive 100% of the Performance Bonus if Onvia has met its performance metrics set forth on Exhibits B-1 and B-2, but upon a Change
------------ --- of Control or a Liquidation of Onvia during the fourth quarter of 2001, Employee shall receive 100% of the Performance Bonus whether or not Onvia has met its quarterly performance metrics set forth on Exhibit B-1.
-----------


-2-


(c) If Onvia terminates Employee's employment with Cause or Employee resigns without Good Reason, Employee shall not receive the Performance Bonus.


(d) If Onvia terminates Employee's employment for non-performance or unsatisfactory job performance of his/her job duties (as determined by the President and CEO of Onvia in good faith), after such non-performance or unsatisfactory job performance has been unremedied for thirty (30) days after Employee receives written notice of such non-performance or unsatisfactory job performance, then Employee shall not receive the Performance Bonus.


1.5 Other Benefits. During Employee's employment, Onvia shall provide to
-------------- Employee the same benefits that Onvia makes generally available to its employees (e.g., participation in Onvia's 401(k) plan, stock option plan, employee stock purchase plan and cash incentive programs), subject to Employee's satisfaction of the respective eligibility requirements for such benefits. In respect of all such benefits, Onvia shall retain the discretion to determine the amount or value of the benefit to Employee, if such benefit is discretionary in nature in respect of similarly situated Onvia personnel.


1.6 Change of Control.
-----------------


(a) Acceleration of Stock Options. In lieu of the benefits provided in
----------------------------- Section 12(c) of the Plan, the following provision will apply in the event of a Change in Control (as that term is defined in the Plan):


Upon consummation of a Change in Control, 25% of the total number of
then unvested shares underlying all options granted to Employee shall
vest and become exercisable. If, within twelve (12) months after
consummation of a Change in Control, Employee is terminated without
Cause or resigns for Good Reason, then 100% of the total number of
then unvested shares underlying all options granted to Employee shall
vest and become exercisable upon such resignation or termination.
Employee waives his/her rights to benefits under Section 12(c) of the
Plan in exchange for the benefits provided in this Section 1.6(a).


(b) Severance. If, within twelve (12) months after consummation of a
--------- Change in Control transaction, Employee is terminated without Cause or resigns for Good Reason, then Employee shall be entitled to the monthly salary payments specified in Section 1.2 above on Onvia's regular payroll and then existing benefits under Section 1.5 above for (i) four (4) months following the effective date of such termination if Employee has completed less than one (1) year of employment with Onvia, or (ii) six (6) months following the effective date of such termination if Employee has completed more than one (1) year of employment with Onvia.


-3-


(c) Assumption of Obligations. If this Agreement is excluded as a
------------------------- liability upon a Change of Control transaction, Onvia shall pay to Employee the Severance as set forth in Section 1.6(b) above, minus all applicable withholdings and taxes.


1.7 Assignment Agreement. The effectiveness of this Agreement is
-------------------- conditioned upon Employee's execution, and delivery to an officer of Onvia, of a Proprietary Information and Inventions Agreement in the form attached hereto as Exhibit C. ---------


1.8 No Other Compensation. Employee acknowledges and agrees that he/she
--------------------- shall not be entitled to receive from Onvia, or from any Affiliate of Onvia, any salary, bonus or other compensation or benefit of any nature (whether relating to any period prior to the date of this Agreement or relating to any period after the date of this Agreement), except as expressly provided in Sections 1.2, 1.3, 1.4, 1.5, and 1.6 above or as otherwise authorized by Onvia's Board of Directors.


1.9 Policies. Employee agrees to be subject to and comply with such
-------- corporate policies and guidelines of Onvia as are generally applicable to Onvia employees. In the event of any conflict between Onvia policies and this Agreement, this Agreement shall govern.


2. Termination.
-----------


2.1 Right to Terminate. Onvia shall have the right to terminate Employee's
------------------ employment, and Employee may resign, with or without Cause at any time during or after the Employment Term. Upon Onvia's termination of Employee's employment: (a) Onvia shall have no further monetary obligation or other obligation of any nature to Employee under Section 1 with respect to Employee's employment, except as set forth in Section 1.4 above and Section 2.2 below, and (b) Employee shall have no further obligation to Onvia under Section 1.1. Except as expressly set forth in this Section 2.1, the termination of Employee's employment pursuant to this Section 2.1 shall not limit or otherwise affect any of Employee's obligations under this Agreement, all of which shall remain in full force and effect as provided herein.


2.2 Termination.
-----------


(a) If (i) Onvia terminates Employee's employment without Cause, or Employee resigns for Good Reason, during the Employment Term, (ii) Employee satisfies all of Employee's obligations relating to the termination of Employee's employment under this Agreement (including Employee's obligations under Section 5.1 below), (iii) Employee executes and delivers to Onvia a general release (reasonably satisfactory in form and substance to Onvia) of any rights or claims that he/she may have or has ever had against Onvia or any of Onvia's Affiliates, and (iv) Employee continues to satisfy all of Employee's obl ...