Exhibit 10.24
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") dated as of the 1st day of June,
1996, is entered into by and between VIDEOLAN TECHNOLOGIES, INC., a Delaware
corporation (the "Company") and XXXXXXX X. XX XXXXX (the "Consultant") under the
following circumstances:
A. The Consultant desires to provide certain consulting services to
the Company on an individual basis; and
B. The Company desires to obtain such services directly from the
Consultant, as more fully set forth below.
NOW, THEREFORE, based on the foregoing and the mutual promises set forth
below, the Company and the Consultant hereby agree as follows:
1. Services. The Consultant shall, upon reasonable request of the Chairman
of the Board of the Company, or such other person designated by the Chairman of
the Board, provide services (the "Services") to the Company in Louisville,
Kentucky or other locations as directed by the Board relating to international
market development, strategic planning, operational guidance to the Company's
chief executive officer, alliances and partnering, and acquisitions. The
Consultant shall perform the services as reasonably requested by the Company in
a professional manner within the time frames agreed to by the Company and the
Consultant, to the extent that the performance of such services would not
require more than 12 full working days during any calendar month or such
different number of working days as are agreed to by the Company and the
Consultant.
2. Independent Contractor. The Consultant acknowledges and agrees that he
shall be acting as an independent contractor and shall not be considered or
deemed to be an agent, employee, joint venturer or partner of the Company. The
Consultant shall not have the authority to contract for or bind the Company in
any manner, and he shall not represent himself as an agent of the Company or as
otherwise authorized to act for or on behalf of the Company. The Consultant
shall have no status as an employee of the Company, nor shall he any right to
any benefits that the Company grants its employees. The Consultant acknowledges
and agrees that he is fully responsible for paying federal, state and local
taxes assessed by reason of any claims that he is rendering services pursuant to
this Agreement as an employee of the Company. The Company and the Consultant
expressly agree that he shall not be deemed to be an employee of the Company,
and the Company agrees that it shall not withhold any amount that would normally
be withheld from an employee's pay.
3. Compensation for Services.
A. The Company hereby agrees to pay the Consultant in consideration
for his performance of Services Eight Thousand Three Hundred Thirty-Four
Dollars ($8,334.00) per month during the term of this Agreement. At least
semiannually, the Board of Directors of the Company shall review the
compensation payable hereunder and may in its sole discretion increase the
amount thereof. Any compensation payable hereunder shall be paid in regular
intervals in accordance with the Company's payroll practices.
B. Provided that this Agreement is approved by the Board of Directors
of the Company, the Company will grant the Consultant options to purchase
30,000 shares of Company's Common Stock (the "Options") on a date (the
"Grant Date") selected by the Board of Directors on or before September 1,
1996 provided the Consultant executes and delivers an Option Agreement in
the form of Exhibit A attached hereto. The exercise price of the shares
shall be the closing price of the Company's Common Stock on the Grant Date
as reported by Nasdaq. Options with respect to 10,000 shares (the "Initial
Options") shall vest and be exercisable on June 1, 1997; provided, however,
if this Agreement is terminated pursuant to Section 7.D or 7.E hereof prior
to June 1, 1997, the Initial Options shall vest on the date of such
termination and shall be exercisable on June 1, 1997. Options with respect
to an additional 10,000 shares shall vest and be exercisable on June 1,
1998. Options with respect to the remaining 10,000 shares shall vest and be
exercisable on June 1, 1999. Upon termination of this Agreement for any
reason, all unvested Options (other than the Initial Options in the event
this Agreement is terminated pursuant to Section 7.D or 7.E hereof) shall
be cancelled effective upon the date of such termination and all vested
Options shall terminate on the later of (a) July 1, 1997 or (b) thirty (30)
days after the date of such termination.
4. Expenses. Subject to the Company's prior approval, which approval shall
not be unreasonably withheld, the Company shall reimburse the Consultant for
reasonable out-of-pocket expenses incurred by the Consultant in performing the
Services under this Agreement. Upon request, the Consultant shall provide the
Company with receipts for such expenses.
5. Effective Date. The term of this Agreement shall commence on the date
first written above (the "Effective Date").
6. Term. The term of this Agreement shall commence on the Effective Date
and shall continue until June 1, 1999, unless sooner terminated pursuant to
Section 7 hereof.
7. Termination. This Agreement shall be terminated:
A. Upon the death of the Consultant;
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B. By the Consultant, upon at least thirty (30) days prior notice;
C. By the Company because of the Consultant's inability to perform his
duties on account of disability or incapacity for a period of thirty (30)
or more consecutive days;
D. By the Company at any time after December 1, 1996, upon at least
six (6) months prior notice;
E. By the Company at any time after December 1, 1996, upon less than
six (6) months prior notice provided, however, if this Agreement is
terminated pursuant to this Section 7.E, the Consultant shall be entitled
to continue to receive compensation pursuant to Section 3.A for six (6)
months following such notice; and
F. By the Company at any time "for cause," such termination to take
effect immediately upon written notice from the Company to the Consultant.
The following actions, failures or events by or affecting the Consultant
shall constitute "cause" for termination within the meaning of the foregoing
paragraph: (1) conviction of having committed a felony, (2) acts of dishonesty
or moral turpitude that are materially detrimental to the Company, (3) acts or
omissions which the Consultant knew or should have reasonably known were likely
to materially damage the business of the Company and did in fact materially
damage the Company, (4) failure by the Consultant to obey the reasonable and
lawful directions of the Company's Board of Directors or Chief Executive
Officer, (5) gross negligence by the Consul tant in the performance of his
obligations hereunder, or continuing failure by the Consultant to perform his
obligations hereunder more than 30 days after the Consultant has been provided
with written notice of his failure to perform such obligations, or (6) the
Consultant's willful breach of any material agreement or covenant of this
Agreement or any fiduciary duty owed to the Company.
8. Confidentiality, etc. The Consultant hereby covenants, agrees and
acknowledges as follows:
A. "Proprietary Information" means information disclosed to or
otherwise made available to the Consultant or known by him as a consequence
of or through the Consultant's providing Services to the Company and
related to any technologies, applications, patents, patent applications
and/or claims, products, processes or services in which the Company is
currently or is likely to become engaged, and which gives the Company a
competitive advantage, including, without limitation, information relating
to patents, patent applications, research, development and inventions.
B. The Consultant recognizes and acknowledges that all information
defined herein as Proprietary Information, is valuable, special and unique
belonging solely to the Company. The Consultant shall not, during the term
of this Agreement or at any time
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thereafter, directly or indirectly, use or disclose Proprietary Information
whether or not specifically described above except (i) as required in
connection with the performance of Services or (ii) as permitted, in
writing, by the Board of Directors of the Company.
C. The obligation of the Consultant to protect and not to disclose the
Proprietary Information disclosed to him shall not apply to information
that is:
(1) Actually known by the Consultant before being obtained from
the Company;
(2) Independently developed by, known or in the possession of the
Consultant at the time of disclosure hereunder;
(3) Generally available to the public prior to its disclosure by
the Company or that becomes generally available to the public after
disclosure by the Company through no fault of the Consultant;
(4) Obtained or acquired by the Consultant from a third party in
possession of such information who is not under obligation to the
Company not to disclose the information; or
(5) Ordered by a court of competent jurisdiction or governmental
agency to be produced by the Consultant; provided, however, that upon
the receipt of any such order, the Consultant shall immediately notify
the Company of such order so that an appropriate protective agreement
or order can be sought.
9. Competition, etc. During the term of this Agreement and (a) during the
two (2) year period following the termination of this Agreement pursuant to
Section 7.A, 7.B or 7.C hereof and (b) during the six month period following the
termination of this Agreement pursuant to Section 7.D or 7.E hereof:
A. The Consultant will not make any statement or perform any act
intended to advance an interest of any existing or prospective competitor
of the Company in any way that will or may injure an interest of the
Company in its relationship and dealings with existing or potential
suppliers, customers or clients, or solicit or encourage any other employee
of the Company to do any act that is disloyal to the Company or
inconsistent with the interest of the Company or in violation of any
provision of this Agreement;
B. The Consultant will not make any statement or do any act intended
to cause any existing or potential customers or clients of the Company to
make use of the services or purchase the products of any existing or future
business in which the Consultant has or expects to acquire a proprietary
interest or in which the Consultant is or expects to be made an employee,
officer, director, manager, consultant, independent contractor, advisor or
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otherwise, if such services or products in any way compete with the
services or products sold or provided or expected to be sold or provided by
the Company to any existing or potential customer or client;
C. The Consultant will not directly or indirectly (as an employee,
officer, director, manager, consultant, independent contractor, advisor or
otherwise) engage in competition with, or acquire any proprietary interest
in, perform any services for, lend his name to, participate in or be
connected with any business involved in the research, development,
commercialization, manufacture, assembly, sale, licensing, sublicensing,
distribution, supplying or marketing of any service or product which in any
way compete with the services or products sold or provided or expected to
be sold or provided to any existing or potential customer or client, as
such services or products currently exist or are developed in the future,
including, without limitation, desktop video conferencing and video
services products, from any location in the United States of America or
elsewhere where the Company conducts business during the term of this
Agreement; provided, however, the Consultant may continue to serve as a
director of or consultant to MultiLink Inc. so long as such corporation
only engages in the activities set forth on Addendum A hereto.
D. The Consultant agrees that, when the Consultant has or expects to
acquire a proprietary interest in, or is or expects to be made an employee,
officer, director, manager, consultant, independent contractor, advisor or
otherwise of, any existing or future business that provides or may provide
services or products which in any way compete with the services or products
sold or provided or expected to be sold or provided by the Company to any
existing or potential customer or client, the Consultant will immediately
furnish to the Company all information that may reasonably be of assistance
to the Company in acting promptly to protect its relationships with any
existing or potential suppliers, customers or clients with whom the
Consultant has had any dealings as a result of his employment by the
Company;
E. The Consultant will not directly or indirectly solicit for
employment, or advise or recommend to any other person that they employ or
solicit for employment, any employee of the Company; and
F. The Consultant will not directly or indirectly hire, engage, send
any work to, place orders with, or in any manner be associated with any
supplier, contractor, subcontractor or other person or firm which rendered
manufacturing or other services, or sold any products, to the Company if
such action by him would have a material adverse effect on the business,
assets or financial condition of the Company.
In connection with the foregoing provisions of this Section 9, the
Consultant represents that his experience, capabilities and circumstances are
such that such provisions will not prevent him from earning a livelihood. The
Consultant further agrees that the limitations set forth in this Section 9
(including, without limitation, any time or territorial limitations) are
reasonable and properly
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required for the adequate protection of the businesses of the Company. It is
understood and agreed that the covenants made by the Consultant in Sections 8
and 9 hereof shall survive the expiration or termination of this Agreement.
For purposes of this Section 9, proprietary interest in a business is
ownership, whether through direct or indirect stock holdings or otherwise, of
one percent (1%) or more of such business. The Consultant shall be deemed to
expect to acquire a proprietary interest in a business or to be made an
employee, officer, director, manager, consultant, independent contractor,
advisor or otherwise of such business if such possibility has been discussed
with any officer, director, employee, agent, or promoter of such business.
The Consultant acknowledges and agrees that a remedy at law for any breach
or threatened breach of the provisions of Sections 8 and 9 hereof would be
inadequate and, therefore, agrees that the Company shall be entitled to
injunctive relief in addition to any other available rights and remedies in
cases of any such breach or threatened breach; provided, however, that nothing
contained herein shall be construed as prohibiting the Company from pursuing any
other rights and remedies available for any such breach or threatened breach.
10. Data. Upon termination of this Agreement for any reason, the Consultant
or his personal representative shall promptly deliver to the Company all books,
memoranda, plans, records, information and written data, and all copies of same,
of every kind relating to the business and affairs of the Company which are then
in his possession.
11. Waiver of Breach. Any waiver of any breach of this Agreement shall not
be construed to be a continuing waiver or consent to any subsequent breach on
the part either of the Consultant or of the Company.
12. Notices. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing and delivered in person or sent by
certified mail or overnight express courier to the Company at its then current
principal place of business to the attention of the President or to the
Consultant at his residence as shown on the Company's records.
13. Assignment. Neither party hereto may assign his or its rights or
delegate his or its duties under this Agreement without the prior written
consent of the other party.
14. Severability. If any provision of this Agreement is held to be
unenforceable for any reason, the remainder of this Agreement shall,
nevertheless, remain in full force and effect.
15. Entire Agreement. On the Effective Date, the terms and provisions of
this Agreement and the Option Agreement constitute the entire agreement between
the Company and the Consultant with respect to the subject matter hereof and
thereof, and shall supersede any and all prior agreements or understandings
between the Company and the Consultant, with respect to the subject
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matter hereof and thereof, whether in writing or oral. This Agreement may be
amended or modified only by a written instrument executed by the Consultant and
the Company.
16. Governing Law. This Agreement shall be governed by, and its provisions
construed and enforced in accordance with, the laws of the Commonwealth of
Kentucky.
17. Release. The Consultant hereby releases any and all rights which he may
have with respect to the Company's Proprietary Information, technology, patents
and patent applications.
18. Affiliates. For purposes of Sections 8 and 9 of this Agreement, any
reference to the "Company" includes the Company and/or any entity which (i)
directly or indirectly controls the Company, (ii) is controlled, directly or
indirectly, by the Company, or (iii) is under common control, directly or
indirectly, with the Company.
19. Actions as Director. The Consultant shall not participate in any
discussions of the Board of Directors or vote as a director of the Company with
respect to any matter as to any proposed action recommended by the Consultant.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
VIDEOLAN TECHNOLOGIES, INC.
By: _____________________________________
Title:_____________________________________
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Xxxxxxx X. xx Xxxxx
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