EXHIBIT 10.6
DIRECTOR DESIGNATION AGREEMENT
This Director Designation Agreement, dated as of January 15, 1996, is by
and between Xxxxxxx X. Xxxxxxxx, a resident of Texas ("Xxxxxxxx"), and Xerox
Corporation, a New York corporation ("Xerox"), (Xxxxxxxx and Xerox being
collectively referred to herein as the "Stockholders").
WITNESSETH:
WHEREAS, the Stockholders own shares of capital stock and/or options to
purchase capital stock (collectively "ISI Stock") of Image Sciences, Inc.
("ISI"); and
WHEREAS, ISI is a party to an Agreement and Plan of Merger, of even date
herewith (the "Merger Agreement"), which contemplates that, pursuant to the
merger described therein (the "Merger"), shares of ISI Stock will be converted
into shares and/or options to purchase shares of capital stock ("Company Stock')
of DocuCorp, Inc., a Delaware corporation (the "Company"); and
WHEREAS, Xerox and certain other parties who will become stockholders of
the Company upon consummation of the Merger have entered into a Stockholders'
Agreement of even date herewith (the 'Stockholders' Agreement"), pursuant to
which Xerox is entitled to designate three members to the Board of Directors
("Board") of the Company; and
WHEREAS, Xxxxxxxx and Xerox are parties to a Voting and Lockup Agreement,
of even date herewith, pursuant to which each has agreed to vote in favor of the
Merger, based upon the parties entering into this Agreement;
NOW, THEREFORE, in consideration of the representations, covenants and
agreements contained herein, and certain other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. The Stockholders shall vote their respective shares of Company Stock
and any other shares of voting securities of the Company acquired or controlled
by them that they have the right to vote generally in the election of directors
of the Company (collectively "Voting Stock") and otherwise use commercially
reasonable efforts as stockholders of the Company, at all times until the
Termination Date (as defined in the Stockholders' Agreement), to cause and
maintain the election to the Board of the following persons as the three
designees of Xerox under the Stockholders' Agreement: (i) one designee of
Xxxxxxxx (who shall initially be Xxxxxxx X. Xxxxxxxx), one designee of Xerox
(who shall initially be Xxxxx Xxxxxx) and (iii) one designee (the "Third
Designee") who is mutually acceptable to Xxxxxxxx and Xerox. In the event that
Xxxxxxxx and Xerox are unable to mutually agree upon the Third Designee, they
shall promptly select an independent arbitrator to select an independent person
with expertise in corporate governance and in the software industry, whose
determination shall be binding and whose arbitration action shall be conducted
in accordance with the rules of the American Arbitration Association. Each of
the Stockholders will thereafter vote his shares of Voting Stock in accordance
with the results of the arbitration.
2. Notwithstanding the Stockholders' Agreement, Xerox shall not have the
right to remove the designee of Xxxxxxxx without the prior written consent of
Xxxxxxxx. Neither Xxxxxxxx nor Xerox will remove the Third Designee without the
prior written consent of the other. If Xxxxxxxx designates someone other than
himself to serve as his designee, Xxxxxxxx shall have the right to remove such
person as a director at any time without the consent or vote of any other party
being required, and Xerox will take all such actions necessary and appropriate
to cause such director to be removed.
3. If any vacancy occurs in the Board for any reason, including but not
limited to the death, disability, resignation, retirement or removal of a
director designated in accordance with this Agreement, the Stockholder or
Stockholders who designated the person creating such vacancy shall nominate a
successor, Xerox shall promptly designate such nominee pursuant to the terms of
the Stockholders' Agreement, and all Stockholders shall vote their
Voting Stock in favor of the election of such successor to the Board. Any
vacancy that occurs shall be filled as promptly as possible upon the request of
the Stockholder having the right to nominate a person to fill such vacancy.
4. No Stockholder shall vote his Voting Stock in favor of an amendment or
repeal of the Company's Bylaws or Certificate of Incorporation or for the
adoption of new Bylaws or Certificate of Incorporation by the Company if such
amendment or repeal of or new Bylaws or Certificate of Incorporation would
adversely affect the rights granted to any Stockholder hereunder. Further,
Xerox shall in no event amend, terminate, modify or waive any right under the
Stockholders' Agreement, if such action would adversely affect the rights
granted to Xxxxxxxx hereunder.
5. No Stockholder shall give any proxy or power of attorney to any person
or entity that permits the holder thereof to vote in his discretion on any
matter that may be submitted to the Company's stockholders, as the case may be,
for their consideration and approval, unless such proxy or power of attorney is
made expressly subject to and is exercised in conformity with the provisions of
this Agreement.
6. The parties hereto recognize that the Company Stock cannot be readily
purchased or sold on the open market and that it is to the benefit of the
Company and the parties to this Agreement for the terms and provisions hereof to
be carried out; and for those and other reasons, the parties hereto would be
irreparably damaged if this Agreement is not specifically enforced in the event
of a breach hereof. If any controversy concerning the rights or obligations to
purchase, sell or vote any of the Company Stock arises, or if this Agreement is
breached, the parties hereto hereby agree that remedies at law might be
inadequate and that, therefore, such rights and obligations, and this Agreement,
shall be enforceable by specific performance. The remedy of specific
performance shall not be an exclusive remedy, but shall be cumulative of all
other rights and remedies of the parties hereto at law, in equity or under this
Agreement.
7. The parties hereto shall cause any transferee of any Company Stock
owned by a Stockholder to execute an agreement to be bound by the terms and
conditions of the Agreement.
8. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, together with their respective executors, administrators,
successors, personal representatives, heirs and assigns.
9. This Agreement shall become effective upon, and shall be conditioned
upon the occurrence of, the Merger. Once effective, this Agreement shall
continue until, and shall terminate immediately upon the occurrence of the
Termination Date (as defined in the Stockholders' Agreement).
10. Any notice required or permitted to be given hereunder shall be deemed
to be given upon the earlier of the business day when received at (by hand
delivery or fascimile transmission), or the third day after the date when sent
by certified or registered mail or the next following business day when sent by
Federal Express or similar overnight delivery service to the respective
addresses or fascimile numbers (as the case may be) of the Stockholders set
forth opposite their signatures below.
11. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one instrument.
12. This Agreement may be amended, modified or supplemented only by a
written instrument executed by all of the parties hereto.
13. This Agreement shall be deemed to have been made in and shall be
governed by, and interpreted in accordance with, the laws of the state of
Delaware. Venue in connection with the resolution of any disputes arising
hereunder shall lie exclusively in the courts of the state of Delaware.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
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Xxxxxxx X. Xxxxxxxx
Address:
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
XEROX CORPORATION
By:
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Address:
X.X. Xxx 0000
Attention:
Xxxxxxxx, Xxxxxxxxxxx 00000-0 600
Fax: (000) 000-0000
