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EXHIBIT 10.16
CONSULTING AGREEMENT
This CONSULTING AGREEMENT is made as of June 1, 1997 by and between
Teradyne, Inc., a Massachusetts corporation (the "Company"), and Xxxxx X.
Xxxxxxxxxx (the "Consultant").
WITNESSETH:
WHEREAS, the Consultant has been employed by the Company since 1969 and is
an Executive Vice President and a Vice Chairman of the Board of Directors of the
Company;
WHEREAS, the Consultant has previously submitted his resignation as an
Executive Vice President and a Vice Chairman of the Board of Directors of the
Company, and the Board of Directors of the Company has authorized the acceptance
of such resignation;
WHEREAS, the Consultant shall remain as a non-employee member of the Board
of Directors of the Company;
WHEREAS, the Company desires to continue to receive the benefits of the
Consultant's experience and knowledge of the Company's business by consulting
with and receiving advice from the Consultant, and the Consultant has agreed to
provide such consulting services to the Company, subject to and upon the terms
and conditions set forth in this Agreement; and
WHEREAS, in consideration for the Consultant providing consulting services
to the Company, the Consultant has been granted options to purchase up to 90,000
shares of Common Stock of the Company under the Company's 1991 Employee Stock
Option Plan, as amended, which options shall continue to vest over the period of
this Agreement, unless terminated earlier by either party pursuant to Section 5
hereof.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. CONSULTING AGREEMENT. Subject to the terms of this Agreement, for a
period from the date hereof until the earlier of (a) the third anniversary of
the date hereof and (b) the effective date of any termination of this Agreement
pursuant to Section 5 hereof (the "Consulting Period"), the Consultant shall
serve as a consultant to the Company. During the Consulting Period, the
Consultant shall render such services of an advisory or consulting nature as the
Chairman of the Board of Directors or President of the Company, and/or their
respective designees, may, from time to time, reasonably request, in order that
the Company may continue to have the benefit of the Consultant's experience and
knowledge of the Company's business and industry including, without limitation,
advising and consulting with the Company with respect to the initiation,
negotiation and consummation of acquisitions of businesses in and the
development of the software testing business (the "Consulting Services"). The
Consultant shall
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at all times perform and discharge his duties and responsibilities under this
Agreement faithfully, diligently and to the best of his ability.
2. CONFIDENTIALITY. The Consultant agrees that, for the benefit of the
Company and each of its Affiliates (as defined below), during the Consulting
Period, he shall not (nor shall the Consultant assist any other person to)
directly or indirectly furnish, divulge, reveal, report, publish or disclose
(other than as may be required under applicable law) any Confidential
Information (as hereinafter defined) to any person, firm, corporation or other
entity, or hereafter use (or assist any person to use) such Confidential
Information; PROVIDED, HOWEVER, that the Consultant may use or disclose
Confidential Information as directed by the Company in connection with the
provision of the Consulting Services under this Agreement. For purposes of this
Agreement, the term "Confidential Information" means all information or material
not generally known to the public, which gives the Company and any of its
Affiliates some competitive business advantage or the opportunity of obtaining
such advantage or the disclosure of which could be detrimental to the interests
of the Company and any of its Affiliates, including, without limitation, trade
secrets, inventions, technical and other proprietary information, research and
development and test results, marketing techniques and materials, marketing and
development plans, price lists, pricing policies, business plans, information
relating to customers and/or suppliers' identities, characteristics and
agreements, financial information and projections, and employee files.
"Confidential Information" also includes any information described above which
the Company or any of its Affiliates obtains from another party and which the
Company or such Affiliate treats as proprietary or designates as Confidential
Information, whether or not owned or developed by the Company or such Affiliate.
For purposes of this Agreement, the term "Affiliate" shall mean, with respect to
any person or entity (herein the "first party"), any other person or entity that
directly or indirectly controls, or is controlled by, or is under common control
with, such first party. The parties hereto acknowledge that the obligations of
the Consultant pursuant to this Section 2 shall be interpreted in a manner which
is consistent with the standards applicable generally to the Company's executive
officers.
3. PAYMENT/BENEFITS. (a) During the Consulting Period, as compensation in
full for providing the Consulting Services under this Agreement, the Company
shall pay the Consultant $22,353.00 per month, or such other amount as is
determined by the Compensation Committee of the Board of Directors of the
Company upon agreement with the Consultant.
(b) The Consultant acknowledges and agrees that as a consultant to the
Company he will no longer be eligible to participate in the Company's Variable
Compensation Plan, Cash Profit Sharing Plan or Supplemental Savings Plan or to
otherwise receive any cash compensation from the Company other than pursuant to
clause (a) of this Section 3 (or otherwise in connection with serving on the
Company's Board of Directors); provided, however, that the Consultant will be
eligible to receive his pro rata portion for fiscal 1997 of the benefits
afforded under such plans to the Consultant while he was an employee of the
Company.
(c) The Consultant acknowledges and agrees that as a consultant to the
Company he (i) will no longer be eligible to receive health, disability or life
benefits from the Company but (ii) will be eligible, as of June 1, 1997, to
begin receiving payments under each of
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the Company's Retirement Plan and Supplemental Executive Retirement Plan
pursuant to the terms and conditions of such plans.
4. EXPENSE REIMBURSEMENT. The Company shall, in addition to the payments
contemplated by Section 3 hereof, reimburse the Consultant for all reasonable
out-of-pocket, costs and expenses incurred by the Consultant in connection with
the performance of the Consulting Services hereunder. Such reimbursement shall
be made in accordance with Company policies and procedures applicable to all
employees.
5. TERMINATION. Either party may terminate this Agreement upon 60 days'
prior written notice to the other party. Upon the effective date of any such
termination, the Consultant shall no longer be eligible to receive the
compensation provided for in clause (a) of Section 3 hereof.
6. STATUS. The Company and the Consultant agree that the Consultant shall
be an independent contractor of the Company and that nothing in this Agreement
shall be construed or deemed to create any other relationship. Without limiting
the foregoing, the relationship between the Company and the Consultant shall not
be that of any employer-employee. The Company shall not make any deductions or
withholdings from the Consultant's compensation as might otherwise be required
by federal or state laws. The Consultant expressly understands and agrees that
he shall be solely responsible for all withholding and income taxes in
connection with the payment of all consulting fees, and that he will not be
covered by FICA, SDI or Workmen's Compensation laws during the Consulting
Period. The Consultant agrees to provide the Company with written evidence of
compliance with federal and state withholding requirements upon request.
7. OFFICER INDEMNIFICATION. The Company agrees that the Consultant shall
continue to be entitled to indemnification by the Company against liabilities
arising out of claims based upon action taken or omitted by the Consultant in
his capacity as an officer or director of the Company or while serving as such
or by reason of the fact that he was an officer of the Company and continues to
be a member of the Board of Directors of the Company, to the fullest extent
permitted under the Massachusetts Business Corporation Law, under the Articles
of Organization or By-Laws of the Company, any indemnification agreement between
the Consultant and the Company or votes adopted by its Board of Directors. The
Company also agrees that the Consultant shall be entitled to indemnification by
the Company against liabilities arising out of claims based upon action taken or
omitted by the Consultant while acting as a consultant to the Company to the
same extent as if the Consultant were an executive officer of the Company.
8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without regard to
the conflicts or choice of law provisions thereof.
9. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of,
and be binding upon, the successors of the Company by way of merger,
consolidation or transfer of all or substantially all of the assets of the
Company, and may not be assigned by the Consultant.
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10. NO CONFLICTING OBLIGATIONS. The Consultant hereby represents and
warrants to the Company that he is not now under, or bound to be under in the
future, any obligation to or agreement with any person, firm or corporation
which is or would be inconsistent or in conflict with this Agreement or would
prevent, limit or impair in any way the full and absolute performance by the
Consultant of his obligations hereunder. In addition, the Consultant covenants
that he will not enter into any such agreement during the Consulting Period
without the prior written agreement of the Company.
11. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement (together with the
Stock Option Agreement dated May 15, 1997 and any other option agreements
entered into by the Consultant and the Company) constitutes the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements, representations, negotiations and
understandings of the parties, whether oral or written. No supplement,
modification or amendment to this Agreement shall be binding unless executed in
writing by all the parties hereto.
12. WAIVERS. The failure of any party to require the performance or
satisfaction of any term or obligation of this Agreement, or the waiver by any
party of any breach of this Agreement, shall not prevent subsequent enforcement
of such term or obligation or be deemed a waiver of any subsequent failure or
breach.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
14. NOTICES. All notices hereunder shall be in writing and shall be
delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:
If to the Company, to: Teradyne, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
If to the Consultant, at the Consultant's address set forth on the
signature page hereto.
15. RETIREMENT BENEFITS. Nothing contained herein shall be deemed to
modify, diminish or affect any rights or benefits that the Consultant may have
as a retiree from the Company under the Company's compensation and benefit plans
and policies applicable to all Company employees or directors.
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IN WITNESS WHEREOF, the parties have duly executed this Consulting
Agreement as of the date and year first written above.
TERADYNE, INC.
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Name:
Title:
CONSULTANT:
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Xxxxx X. Xxxxxxxxxx
00000 X. Xxxx Xxxx Xxxxx
Xxx Xxxx Xxxx, Xxxxxxx 00000
