CONSULTING AGREEMENT
This Agreement is made and entered into by and between Dynamics
Research Corporation, a Massachusetts corporation (the "Company"), and
Xxxxxx Xxxx (the "Consultant") as of 22nd day of April, 1997.
WHEREAS Consultant has been employed by the Company for many years,
most recently as its President and Chief Executive Officer, and is
eligible to retire from such employment; and
WHEREAS, in view of Consultant's valuable experience as an
executive employee, the Company wishes to retain Consultant to provide
consulting services to the Company for a period of time following
retirement of the Consultant.
NOW THEREFORE, in consideration of the foregoing premises and the
mutual promises, terms, provisions and conditions contained in this
Agreement, the parties agree as follows:
1. Term. Subject to earlier termination, as hereinafter
provided, the term of this Agreement shall be for a period of five (5)
years, commencing as of the date of retirement of the Consultant from
the employ of the Company (such period is referred to hereafter as "the
term hereof" or "the term of this Agreement.")
2. Relationship of the Parties.
a. It is expressly understood and agreed by the parties that
the Consultant will be an independent contractor in the performance of
each and every part of this Agreement and that nothing contained in this
Agreement is intended, or shall be construed, to constitute the
Consultant as the employee, agent, partner or joint venturer of the
Company or as constituting the exercise by the Company of control or
direction over the manner or method by which the Consultant performs the
services which are the subject of this Agreement.
b. During the term of this Agreement, the Consultant shall
have no right, power or authority in any way to bind the Company to the
fulfillment of any condition, contract or obligation or to create any
liability binding on the Company. The Company shall not be responsible
for any expenses or liabilities incurred by the Consultant during the
term of this Agreement, other than business expenses expressly
authorized in writing by a duly authorized representative of the
Company.
3. Consultant's Services. During the term hereof, the Consultant
shall provide such advice and other consulting services on such subjects
familiar to the Consultant as the Company may from time to time request,
upon reasonable notice to the Consultant, oral or in writing. Services
shall be provided during normal business hours, unless otherwise
mutually agreed. The Consultant shall devote such business time as is
necessary or appropriate to fully perform hereunder; provided, however,
that Consultant shall not be obligated hereunder to provide consulting
services more than three (3) days per month. During the term of this
agreement, the Consultant shall be free to engage in other employment or
self-employment (subject to paragraph 7 below) provided that such other
duties are compatible with the Consultant's commitments to the Company
under this paragraph. The Consultant shall be free to move his
residence during the term of this Agreement.
4. Compensation.
a. During the term hereof, as full compensation for all
services performed by Consultant for the Company and subject to the
Consultant's performance hereunder, the Company agrees to pay the
Consultant a fee (the "Consulting Fee") at the rate of Sixty Thousand
Dollars ($60,000) per year, payable in approximately equal monthly
installments in arrears during the term hereof.
b. As an independent contractor, the Consultant shall be
solely responsible for all incidents of employment for himself and his
employees and agents, including without limitation workers' compensation
insurance, unemployment insurance, withholding and payment of all
federal and state income taxes and social security and Medicare taxes
and other legally-required payments on sums received from the Company.
5. No Eligibility for Employee Benefits. The Consultant
understands that he is an independent contractor and, as such, neither
he nor any dependent or other individual claiming through him will be
eligible as a result of this Agreement to participate in, or receive
benefits under, any of the employee benefit plans, programs and
arrangements maintained by the Company (collectively, the "Plans"). The
Consultant hereby waives irrevocably any and all rights as a result of
this Agreement to participate in, or receive benefits under, any of the
Plans. Nothing herein shall limit the Consultant's rights to any
benefits to which he may be entitled pursuant to the Company's tax-
qualified retirement or other benefit plans as a result of his previous
employment with the Company.
6. Insurance. The Consultant acknowledges that the Company will
not maintain any comprehensive general liability, workers' compensation
or other insurance on behalf of the Consultant as a result of this
Agreement and that it is the sole responsibility of the Consultant to
obtain and keep in force such insurance as Consultant determines
appropriate. The Consultant assumes all risk in connection with the
adequacy of any and all such insurance which he elects to obtain.
7. Confidential Information; Non-Competition. The Consultant
agrees that some restrictions on his activities during and after the
term of this Agreement are necessary to protect the Confidential
Information, good will and other legitimate interests of the Company, as
follows:
a. During the term hereof, the Consultant shall not,
directly or indirectly, compete with the Company, whether as a
contractor, consultant, agent, partner, principal, investor, employee or
otherwise. Specifically, but without limiting the generality of the
foregoing, the Consultant agrees that he shall not, directly or
indirectly, solicit or encourage any customer of the Company to
terminate or diminish its relationship with the Company or to conduct
with himself or with any other person, organization or other entity any
business or activity which such customer conducts or could conduct with
the Company. Notwithstanding the foregoing, nothing herein shall
prevent Consultant from owning up to 5% of the outstanding equity
securities of any company traded on a national securities exchange or
quoted on the NASDAQ National Market. Consultant further agrees that,
during the term hereof, he shall not, directly or indirectly, hire or
attempt to hire any employee of the Company, assist in such hiring by
any other person or entity, or encourage any such employee to terminate
his or his relationship with the Company.
b. The Consultant acknowledges that, during the course of his
performance under this Agreement, the Consultant may develop
Confidential Information for the Company and may learn of Confidential
Information developed or owned by the Company or entrusted to it by
others. The Consultant agrees that he will not, during the term of this
Agreement or at any time thereafter, use or disclose any Confidential
Information without the prior written consent of the Chief Executive
Officer of the Company. (For purposes of this Agreement, "Confidential
Information" means any and all information of the Company that is not
generally available to the public. Confidential Information includes
but is not limited to (i) the Company's development, research and
marketing activities, (ii) the Company's products and services, (iii)
the Company's costs, sources of supply and strategic plans, (iv) the
identity and special needs of the Company's customers and (v) the people
and organizations with whom the Company has business relationships and
those relationships. Confidential Information also includes such
information as the Company may receive or has received belonging to
customers or others who do business with it.)
8. No Conflicting Agreements. The Consultant hereby represents
and warrants that the execution of this Agreement and the performance of
his obligations hereunder will not breach or be in conflict with any
other agreement to which the Consultant is a party or is bound and that
the Consultant is not now subject to any covenants against competition
or similar covenants that would affect the performance of his
obligations hereunder. The Consultant will not disclose to or use on
behalf of the Company any proprietary information of any third party
without such party's consent.
9. Termination. Notwithstanding the provisions of Section 1 hereof,
this Agreement shall terminate under the following circumstances and no
others:
a. Death. In the event of the Consultant's death during the term
hereof, this Agreement shall immediately and automatically terminate.
b. Termination by the Company For Cause. The Company may
terminate this Agreement for Cause at any time upon notice to the
Consultant setting forth in reasonable detail the nature of such Cause.
The following, as determined by the Board of Directors of the Company in
its reasonable judgment, shall constitute Cause for termination:
i. The Consultant's willful and continued failure substantially to
perform his duties and responsibilities hereunder (other than by
reason of disability) after specific written demand for performance
which failure is or will be demonstrably and materially injurious
to the Company;
ii. Consultant's dishonesty, gross negligence or other
willful misconduct related to this Agreement which is or will be
demonstrably and materially injurious to the Company; or
iii. Consultant's material and continued breach of Section 7
hereof after specific written demand for performance.
c. Effect of Termination. Upon termination of this Agreement in
accordance with this Section 9 or by expiration of the term, the Company
shall have no further obligations to the Consultant, other than for the
Consulting Fee prorated through the date of termination.
10. Enforceability. If any portion or provision of this
Agreement shall to any extent be declared illegal or unenforceable by a
court of competent jurisdiction, then the remainder of this Agreement,
or the application of such portion or provision in circumstances other
than those as to which it is so declared illegal or unenforceable, shall
not be affected thereby, and each portion and provision of this
Agreement shall be valid and enforceable to the fullest extent permitted
by law.
11. Assignment. This Agreement shall be binding upon the
Company and any successor thereto by merger, consolidation, sale of
assets or otherwise. Executive's rights and obligations under this
Agreement may not be assigned, pledged, hypothecated, or otherwise
transferred or alienated in any way.
12. Waiver. No waiver of any provision hereof shall be
effective unless made in writing and signed by the waiving party. The
failure of either party to require the performance of any term or
obligation of this Agreement, or the waiver by either party of any
breach of this Agreement, shall not prevent any subsequent enforcement
of such term or obligation or be deemed a waiver of any subsequent
breach.
13. Notices. Except as otherwise expressly provided herein, any
notices, requests, demands or other communications provided for by this
Agreement shall be in writing and shall be effective when delivered in
person or mailed, postage prepaid, and addressed to the Consultant at
his last known address on the books of the Company or, in the case of
the Company, to it at its main office, attention: President or to such
other address as either party may specify to the other by written notice
actually received.
14. Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements,
whether written or oral, with respect to the services to be provided by
the Consultant to the Company and all matters related thereto,
provided, however, that this Agreement shall not terminate or supersede
any additional obligations of the Consultant pursuant to any other
agreement with respect to confidentiality or any restrictions on the
activities of the Consultant or the like.
15. Amendment. This Agreement may be amended or modified only by
a written instrument signed by the Consultant and by a duly authorized
representative of the Company.
16. Captions and Counterparts. The captions and headings in this
Agreement are for convenience only and in no way define or describe the
scope or content of any provision of this Agreement. This Agreement may
be executed in two or more counterparts, each of which shall be an
original and all of which together shall constitute one and the same
instrument.
17. Governing Law. This is a Massachusetts contract and shall be
construed and enforced under and be governed in all respects by the laws
of The Commonwealth of Massachusetts, without regard to the conflict of
laws principles thereof.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Company, by its duly authorized representative, and by
the Consultant, as of the date first written above.
THE CONSULTANT: THE COMPANY:
Dynamics Research Corporation
______________________ By: ___________________________
Xxxxxx Xxxx Name:
Title:
