EXHIBIT 10.10
CONSULTANT AGREEMENT
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This AGREEMENT is dated as of January 1, 1995, by and between Xxxxxxx X.
Xxxxx ("CONSULTANT") and Visual Numerics, Inc., ("VNI" or the "COMPANY").
VNI desires to obtain the consulting services of Consultant in performing
the duties of President and Chief Executive Officer of VNI and Consultant
desires to provide VNI with such consulting services during the term of this
Agreement in his capacity as an independent contractor.
Now, therefore, for good and valuable consideration, the legality and
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
A. Description of Services.
1. (a) Consultant shall provide his services as President and Chief
Executive Officer to VNI (the "Services"). Consultant's specific services in
this capacity are outlined in Exhibit A, attached hereto.
(b) Consultant shall not delegate, subcontract or employ any
other person or entity in the performance of the Services without the prior
written consent of the Board of Directors or Chairman of VNI.
(c) Consultant shall use his best efforts in the performance of
the Services and agrees to perform the same to the best of his ability. It is
agreed that a substantial portion of Consultant's services shall be performed at
locations other than VNI facilities.
(d) Consultant and Company understand and accept that the
performance of the Services shall not require Consultant's efforts on an
exclusive basis. Consultant shall be free to accept other consulting and
management engagements not otherwise inconsistent with the terms of this
Agreement or any other agreement between the Company and Consultant.
Notwithstanding the nonexclusive nature of his Services for the Company,
Consultant understands and agrees that he has a continuing obligation during the
term of this Agreement to act at all times in the best interests of the Company
and its stockholders and to preserve and maximize the value of the Company's
assets.
2. Compensation to Consultant.
(a) Cash Compensation. As compensation for Consultant's Services,
as described in Exhibit A, over the term of this Agreement, VNI shall pay
Consultant a monthly retainer at the rate of twenty-five thousand dollars
($25,000.00) per month for the duration of this Agreement.
(b) Bonuses. In addition to the monthly retainer described in
Paragraph 2(a) above, Consultant shall be eligible to receive bonuses from VNI
in accordance with the following eligibility criteria:
(i) an annual target bonus of $150,000, payable in
cash or short-term debt as determined by VNI, upon the attainment of revenue
goals as determined each year by the parties. The revenue targets for 1995 are
set forth on Exhibit B, attached hereto.
(ii) In addition, Consultant shall receive a bonus of
$100,000 relating to his 1994 services, which shall be payable on January 1,
1995 in cash or promissory note.
(c) Healthcare. VNI shall provide to Consultant at Company's
expense coverage under health insurance programs which provide equivalent
benefits to Consultant as are available to officers or employees of the Company.
Such healthcare benefits shall be provided throughout the term of this Agreement
and for a period of twelve (12) months following termination thereof.
(d) Insurance. VNI shall maintain the following insurance
coverage for Consultant at Company's expense, for a period of three (3) years
from the Effective Date of this Agreement:
(i) term life insurance of one and one-half million
dollars ($1,500,000);
(ii) personal disability income insurance providing
income protection to Consultant of Fifteen Thousand dollars ($15,000) a month;
(e) Annual Physical Examination. VNI shall pay an amount up to
$1,500 on an annual basis for the normal and reasonable cost of a complete
physical examination for Consultant from the doctor or medical clinic of
Consultant's choice.
(f) Reimbursement of Expenses. VNI shall also reimburse
Consultant for the reasonable out-of-pocket business costs and expenses incurred
by Consultant in the performance of the Services, including the costs and
expenses of travel, meals and lodging incurred by Consultant while performing
the Services under this Agreement. Consultant shall xxxx VNI monthly for all
such reimbursable expenses and VNI shall pay Consultant's invoices therefor no
later than thirty (30) days from the date of receipt thereof, unless otherwise
agreed in writing.
3. Stock Options. As an inducement to sign this Agreement, Consultant
was granted, on November 23, 1994, a nonstatutory option to purchase 100,000
shares of the Company's Common Stock pursuant to the Company's 1993 Incentive
Stock Option Plan, in accordance with the terms of such plan, at an exercise
price of $0.39 per share. A total of 75,000 of such shares are immediately
exercisable with the balance vesting fully on November 23, 1995. Consultant
shall also be eligible to receive additional option grants under such plan as
long as he continues to serve as a consultant to the Company.
4. Severance Benefits.
(a) Change of Control; Stock Options. Upon the occurrence of a
Change of Control, notwithstanding any other plan or agreement to the contrary,
vesting of all outstanding stock options, restricted stock and other long-term
incentive compensation awards
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held by Consultant shall be accelerated such that all options, restricted stock
and other long-term incentive compensation awards shall be fully exercisable or
otherwise vested effective as of the date of such Change of Control and any such
options shall remain exercisable until the earlier to occur of (i) two years
from the date of the Change of Control or (ii) the original expiration date of
such option.
(b) Termination of Service. In the event Consultant's service
with the Company terminates for any reason, either prior to or after the
occurrence of a Change of Control, then Consultant shall be entitled to receive
severance benefits as follows:
(i) Voluntary Resignation. If Consultant's service
with the Company terminates by reason of Consultant's voluntary resignation (and
is not an Involuntary Termination or a Termination for Cause), then Consultant
shall not be entitled to receive severance payments. Consultant's benefits will
be continued under the Company's then existing benefit plans and policies in
accordance with such plans and policies in effect on the date of termination and
in accordance with the terms of this Agreement.
(ii) Involuntary Termination. If Consultant's service
with the Company is terminated as a result of Involuntary Termination other than
for Cause, Consultant will be entitled to receive a severance payment equal to
twelve (12) months of Consultant's then current monthly retainer payment. Such
payment shall be a lump sum payment. Health insurance benefits including the
same coverages provided to Consultant prior to the termination (e.g. medical,
dental, optical, mental health) and in all other respects significantly
comparable to those in place immediately prior to the termination will be
provided at the Company's cost until two (2) years after the date of
termination. Life insurance providing the same dollar amount of coverage and in
all other respects significantly comparable to that in place immediately prior
to the termination will be provided at the Company's cost until two (2) years
after the date of termination, or as otherwise agreed to by Consultant and the
Company. Notwithstanding any other plan or agreement to the contrary, vesting of
all outstanding stock options, restricted stock and other long-term incentive
compensation awards held by Consultant shall be accelerated such that all
options, restricted stock and other long-term incentive compensation awards
shall be fully exercisable or otherwise vested effective as of the date of
termination and any such options shall remain exercisable until the earlier to
occur of (A) two (2) years after the date of termination or (B) the original
expiration date of such option.
(iii) Involuntary Termination for Cause. If Consultant's
service with the Company is terminated for Cause, then Consultant shall not be
entitled to receive severance payments. Consultant's benefits will be continued
under the Company's then existing benefit plans and policies in accordance with
such plans and policies in effect on the date of termination and in accordance
with the terms of this Agreement.
5. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings.
(a) Change of Control. "Change of Control" shall mean the
occurrence of any of the following events:
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(i) Ownership. Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing fifty-one
percent (51%) or more of the total voting power represented by the Company's
then outstanding voting securities; or
(ii) Composition of Board. A change in the composition
of the Board of Directors of the Company, as a result of which fewer than a
majority of the directors are Incumbent Directors. "Incumbent Directors" shall
mean directors who either (A) are directors of the Company as of the date
hereof, or (B) are elected, or nominated for election, to the Board of Directors
of the Company with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination (but shall not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company); or
(iii) Merger/Sale of Assets. The stockholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
(iv) Death of Xxxxxxx X. Xxxxxxx and Xxxxxxxx X.
Xxxxxxx. The death of Xxxxxxx X. Xxxxxxx and Xxxxxxxx X. Xxxxxxx (collectively
"the Johnsons") at a time when the Johnsons own a majority of the total voting
power represented by the Company's then outstanding voting securities. For
purposes of this provision, the term death shall include the disability of the
Johnsons which results in transfer of control of the total voting power
represented by the Company's then outstanding voting securities held by the
Johnsons at the time of such disability to a guardian or a trustee.
(b) Cause. "Cause" shall mean gross negligence or willful
misconduct where such gross negligence or willful misconduct has resulted or is
likely to result in substantial and material damage to the Company or its
subsidiaries. Anything contained in this Section 5(b) to the contrary
notwithstanding, Consultant shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to Consultant a copy of a
resolution duly adopted by the Board of Directors of the Company, after
reasonable notice to Consultant and an opportunity for Consultant, together with
Consultant's counsel, to be heard before the Board, finding that in the good
faith opinion of the Board, Consultant has engaged in the conduct described in
this Section 5(b).
(c) Current Compensation. "Current Compensation" shall mean (i) an
amount equal to the greater of (A) Consultant's highest annual base compensation
for the year preceding the year in which the termination occurs, or (B)
Consultant's annual base compensation at any time during the year in which the
termination occurs.
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6. Excise Tax Payments. If an excise tax is imposed pursuant to
Section 4999 of the Internal Revenue Code of 1986 or any corresponding provision
of state income tax law on any payments or benefits received by Consultant under
any provision of this Agreement (other than this Section 6), the Company will
pay Consultant an additional amount equal to the amount of such tax, plus any
interest, penalties or additions to tax which may be imposed with respect
thereto. Consultant will not be entitled to receive any payment with respect to
any such excise tax which may be imposed on payments received under this Section
6.
7. Business and Technical Information. VNI shall furnish to
Consultant, on a continuing basis and at no charge to Consultant, such
technical, scientific, marketing, legal and financial information and other data
as may be necessary for the performance of the Services.
8. VNI's Responsibilities. VNI shall use its commercially reasonable
efforts to assist Consultant in directing the growth and development of VNI
through the performance of the Services set forth herein.
9. Disclosure and Confidentiality.
(a) Consultant shall keep in confidence and shall not disclose or
make available to third parties or make any use of any information or documents
relating to Consultant's Services under this Agreement or to the products,
methods of manufacture, trade secrets, processes, business or affairs or
confidential or proprietary information of VNI (other than information in the
public domain through no fault of Consultant), except with the prior written
consent of VNI or to the extent necessary in performing tasks assigned to
Consultant by VNI. Upon termination of this Agreement, Consultant will, to the
best of his ability and at the Company's expense, return to VNI all documents
and other materials related to the services provided hereunder or furnished to
Consultant by VNI. Consultant's obligations under this Paragraph 9(a) shall
survive termination of this Agreement for any reason.
(b) Consultant shall promptly disclose and hereby transfers and
assigns to VNI all right, title and interest in and to all techniques, methods,
processes, formulae, improvements, inventions and discoveries made or conceived
or reduced to practice by or on behalf of Consultant, solely or jointly with
others, in the course of providing services hereunder or with the use of
materials or facilities of VNI during the period of this Agreement or which
relate to VNI's business or its actual or demonstrably anticipated research or
development (except as otherwise provided below), and in and to all of
Consultant's intellectual property rights therein, including without limitation,
patents, trademarks, copyrights, trade secrets and moral rights. When requested
by VNI, Consultant will make available to VNI all notes, drawings, data and
other information relating to the above. Consultant will promptly sign any
documents (including U.S. and foreign patent assignments) requested by VNI
related to the above assignment of rights and inventions and will cooperate with
VNI at VNI's request and expense in preparation and prosecution of any U.S. or
foreign patent applications related to such rights and inventions. Consultant's
obligations under this Paragraph 9(b) shall survive termination of this
Agreement for any reason. This Agreement does not apply to inventions which were
made prior to the date of this Agreement and which are listed on Exhibit C
attached hereto (if any).
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10. Conflicting Obligations. Consultant represents that he is not a
party to any agreement which conflicts with the terms of this Agreement or which
materially and adversely affects Consultant's ability to perform the Services
for VNI; and Consultant agrees that he shall not enter into any such agreement
during the term hereof. The Company acknowledges that Consultant is the Chairman
and sole owner of Diablo Management Group, and that Consultant regularly engages
in consulting and management services for other businesses and organizations,
which services are and will be continuing during the term of this Agreement.
11. Term; Termination. This Agreement shall commence on the 1st day
of January, 1995, and may be terminated by either party, with or without cause,
on thirty (30) days written notice to the other party.
12. Indemnity. VNI and Consultant shall indemnify, and hold harmless
each other and each party's agents, employees, officers and directors from and
against any and all damage, loss, liability, obligations, cost or expense,
caused directly or indirectly, by or as a result of any wrongdoing, negligence,
error or omission under the terms of this Agreement.
13. Miscellaneous.
(a) Independent Contractor. Consultant and VNI are independent
contractors under the terms of this Agreement and neither shall be deemed to be
an employee of the other.
(b) Taxes. VNI shall pay the transaction, excise or other taxes
which may result from its execution of this Agreement and Consultant shall be
responsible for the payment of withholding and other taxes resulting from the
payment of any compensation by VNI to Consultant hereunder, except as provided
in Section 6 of this Agreement.
(c) Notices. All notices given under this Agreement shall be by
personal service, facsimile or by first class United States mail, postage
prepaid, return receipt requested, addressed to the parties at the following
addresses:
If to Consultant:
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Xxxxxxx X. Xxxxx
c/o Diablo Management Group
X.X. Xxx 0000
Xxxxxxxx, XX 00000
Fax number: (000) 000-0000
Phone number: (000) 000-0000
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If to VNI:
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Visual Numerics, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Fax number: (000) 000-0000
Phone number: (000) 000-0000
or to such addresses as may be specified by like notice and shall be deemed to
have been duly given or made when delivered or deposited postage-prepaid in the
U.S. mails.
(d) Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Texas.
(e) Sole Agreement. This Agreement, including the Exhibits
thereto, constitutes the sole agreement of the parties and supersedes all oral
negotiations and prior writings with respect to the subject matter hereof.
(f) Waivers, etc. No amendment of this Agreement, and no waiver
of any one or more of the provisions hereof, shall be effective unless set forth
in writing by such person against whom enforcement is sought.
(g) Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company's business and/or assets
shall assume the obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to the same extent
as the Company would be required to perform such obligations in the absence of a
succession. The terms of this Agreement and all of Consultant's rights hereunder
shall inure to the benefit of, and be enforceable by, Consultant's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
(h) No Duty to Mitigate. Consultant shall not be required to
mitigate the amount of any payment contemplated by this Agreement (whether by
seeking a new consulting arrangement or in any other manner), nor shall any such
payment be reduced by any earnings that Consultant may receive from any other
source.
(i) Severability. If any term or provision of this Agreement or
the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions of this Agreement or the application of such terms and
provisions to circumstances other than those as to which it is held invalid or
unenforceable, and a suitable and equitable term or provision shall be
substituted therefor to carry out, insofar as may be valid and enforceable, the
intent and purpose of the invalid or unenforceable term or provision.
(j) Legal Fees and Expenses. The Company shall reimburse
Consultant for all reasonable professional fees and expenses as incurred by
Consultant in con-
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nection with negotiating and executing this Agreement. In the event an action is
brought to enforce any provision of this Agreement, Consultant's legal fees and
expenses shall be paid by the Company as incurred by Consultant, unless
Consultant brings a claim which is determined by the arbitrator or court, as the
case may be, to be frivolous, in which case, Consultant shall repay the Company
all amounts advanced by the Company to Consultant in connection with such claim
within thirty days of such determination.
(k) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, VNI and Consultant have executed this Agreement as of
the day and year written above.
VISUAL NUMERICS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Title: Xxxxxxx X. Xxxxxxx, Chairman of the
Board of Directors
XXXXXXX X. XXXXX
/s/ Xxxxxxx X. Xxxxx
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EXHIBIT A
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DESCRIPTION OF SERVICES
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EXHIBIT B
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1995 ANNUAL BONUS REVENUE TARGETS
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To be determined by February 1, 1995.
EXHIBIT C
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INVENTIONS MADE PRIOR TO THIS AGREEMENT AND EXCLUDED FROM
PARAGRAPH 9(b) (IF NONE, SO STATE):
None
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