MANAGEMENT CONSULTING AGREEMENT
EXHIBIT
10.1
This
Management Consulting Agreement (the “Agreement”) is made as of October 22,
2007, by and between Xxxxxx X. Xxxxxx (“Xxxxxx”) and Datawatch
Corporation (the “Company”).
WHEREAS,
Xxxxxx is the
President and Chief Executive Officer (the “CEO”) of the Company;
and
WHEREAS,
the Company and Xxxxxx desire to provide for consulting services relating to
the
transition from Xxxxxx to the Company’s newly elected President and CEO (the
“New CEO”) effective January 1, 2008;
NOW,
THEREFORE, in consideration of the foregoing and the agreements herein
contained, and intending to be legally bound, the parties hereby agree as
follows:
1. Continuation
as CEO. Xxxxxx agrees to continue to serve as the CEO of the
Company from the date of this Agreement until December 31, 2007 (the “Interim
Period”), unless earlier terminated as specified in Section 5. During
this period, Xxxxxx shall devote substantially all of his business time,
attention and energies to the Company’s business and shall not engage in any
other business activity without the Board of Directors’ approval. As
of January 1, 2008, or earlier, upon either the termination of Xxxxxx’x
employment by the Company without Cause (as defined herein) or by Xxxxxx for
Good Reason (as defined herein), the Company will reimburse Xxxxxx for
relocation expenses in connection with his relocation to Europe in accordance
with the Company’s relocation policy, in an amount not to exceed
$30,000. The date of January 1, 2008 is referred to herein as the
“Transition Date.”
2. Consulting
Services. Unless the relationship is earlier terminated as
provided in Section 6 hereof, for a period of 12 months after the Transition
Date (the “Consulting Period”), Xxxxxx or, at his option, a corporation or other
entity of which Xxxxxx is an employee or principal (the “Consulting Company”)
(Xxxxxx or the Consulting Company, as the case may be, in their role as
consultant each are hereinafter referred to as the “Consultant”), will provide
consulting services to the Company as provided herein. Consultant
will be available as reasonably requested by the Company, to provide such
services and duties as the Company reasonably requests, with respect to
training, advice and assistance to the Company and the New CEO in the transition
to the position of Chief Executive Officer for the Company. The
issues on which Consultant may be requested to provide training, advice and
assistance include SEC rules, regulations, filings and compliance, investor
relations, banking facilities, the status of customer contracts and general
business advice. Consultant will determine his own hours and method
of performing the consulting services; he may perform the services from any
location; he will generally use his own tools and equipment; and he will not
be
supervised or controlled in the performance of his tasks by the
Company. Consultant agrees to perform his consulting services well
and faithfully and to the best of his ability. Consultant agrees to
take no action prejudicial to the interests of the Company during the Consulting
Period.
3. Consulting
Fee. As compensation for the provision of consulting services
hereunder, the Company shall pay a consulting fee to Consultant during the
Consulting Period on a monthly basis at the rate of $25,000 per
month. In addition, Consultant will be reimbursed by the Company for
all reasonable and properly documented expenses incurred in connection with
providing the consulting services, subject to the approval of the New CEO and
in
accordance with the Company’s expense reimbursement policies. Other
than as set forth in this Agreement or as otherwise required by law, neither
Xxxxxx nor the Consultant will be entitled to any other benefit or compensation
in connection with the termination of Xxxxxx’x employment by the Company or the
performance of the consulting services hereunder.
4. Independent
Contractor Relationship. The parties expressly understand and
agree that, during the Consulting Period, Consultant’s status in relation to the
Company will be that of an independent contractor, and that neither this
Agreement nor the services to be rendered hereunder by Consultant will for
any
purpose whatsoever create an employment relationship between the
parties. Consultant will have exclusive responsibility for payment of
all federal, state, and local income taxes, as well as all unemployment and
disability insurance, social security, and other taxes, applicable to the
compensation to be provided to him hereunder by the
Company. Consultant acknowledges that he will not receive any
employee benefits from the Company, and that, as an independent contractor,
Consultant will have exclusive responsibility to obtain and make payment for
health insurance, life insurance, and any other benefits that he wishes to
receive. Further, Consultant agrees that, except as specifically
authorized by the Company, he will not seek to bind the Company under any
contract or other obligation.
5. Termination
of Employment. During the Interim Period, Xxxxxx’x employment may be
terminated at any time by the Company, either with or without Cause (as defined
herein), or by Xxxxxx, either with or without Good Reason (as defined
herein). In the event of the termination of Xxxxxx’x employment by
the Company for Cause, Xxxxxx’x resignation from employment without Good Reason,
or his death or Disability (as defined herein), in each case prior to the
commencement of the Consulting Period, this Agreement shall immediately and
automatically terminate and the Company shall have no further obligations to
Xxxxxx hereunder. For purposes of this Agreement, “Cause”
shall mean Xxxxxx (i) engaging in willful and repeated gross negligence
or gross
misconduct, (ii) breaching a material fiduciary duty to the Company or
(iii) being convicted of a felony, in any such case, to the demonstrable and
material injury to the Company. For purposes hereof, no act, or
failure to act, on Xxxxxx’x part, shall be deemed “willful” unless done, or
omitted to be done, by Xxxxxx not in good faith and without reasonable belief
that any act or omission was in the best interest of the Company. For
purposes of this Agreement, Xxxxxx’x termination of his employment by the
Company will be considered for “Good Reason” if he terminates upon the
occurrence of any one or more of the following events: (i) a
reduction in his base salary; (ii) a substantial reduction in his benefits
without a similar reduction of the benefits of the other executive officers
of
the Company; or (iii) without his express written consent, his assignment
to duties substantially inconsistent with his current position with the Company
or a substantial reduction in his duties other than in connection with the
employment of the New CEO. For the purposes of this Agreement,
“Disability” shall mean any physical incapacity or mental incompetence
(i) as a result of which Xxxxxx is unable to perform the essential functions
of
his position as CEO for an aggregate of 90 days, whether or not
consecutive, during any calendar year, and (ii) which cannot be reasonably
accommodated by the Company without undue hardship.
6. Termination
of Consulting Arrangement. In the event, after the commencement
of the Consulting Period, of the Consultant’s material breach of any term of
this Agreement, or Xxxxxx’x death or Disability (as defined herein), this
Agreement shall immediately and automatically terminate and the Company shall
have no further obligations to the Consultant.
7. Other
Agreements. Xxxxxx understands and agrees that he remains subject
to the Proprietary Information and Inventions Agreement, dated August 21, 2001,
which remains in full force and effect. The parties agree that the
Employment Agreement between the Company and Xxxxxx dated as of July 9, 2001
has
expired by its terms and that all provisions of the Employment Agreement,
including without limitation the provisions relating to the payment of severance
to Xxxxxx in the event of the termination of his employment after the
termination of the Employment Agreement, are terminated and are of no further
force and effect.
8. Conflicting
Agreements. Xxxxxx hereby 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 or by which Xxxxxx is a party
or
is bound and that Xxxxxx is not now subject to and will not enter into any
agreement, including, without limitation, any covenants against competition
or
similar covenants that would affect the performance of his obligations
hereunder.
9. Withholding;
Taxes. All payments made by the Company under this Agreement
shall be subject to and reduced by any federal, state and/or local taxes or
other amounts required to be withheld by the Company under any applicable
law.
10. Miscellaneous.
10.1. Assignment. Except
as provided in Section 2 hereof with respect to the Consulting Company, Xxxxxx
shall not assign this Agreement or any interest herein. The Company
may assign this Agreement in connection with the sale of the Company or the
sale
of substantially all of the Company’s assets. This Agreement shall
inure to the benefit of the Company and shall be binding upon the Company and
Xxxxxx and their respective successors, executors, administrators, heirs and
permitted assigns.
10.2. Severability. 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
application of such provision in such circumstances shall be modified to permit
its enforcement to the maximum extent permitted by law, and both the application
of such portion or provision in circumstances other than those as to which
it is
so declared illegal or unenforceable and the remainder of this Agreement 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.
10.3. Waiver;
Amendment. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure
of the Company to require the performance of any term or obligation of this
Agreement, or the waiver by the Company 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. This Agreement may be amended or
modified only by a written instrument signed by Xxxxxx and another officer
of
the Company authorized by the Board of Directors.
10.4. Notices. All
notices, requests and other communications provided for by this Agreement shall
be in writing and shall be effective when delivered in person or three (3)
business days after being deposited in the mail of the United States, postage
prepaid, registered or certified, and addressed (a) in the case of Xxxxxx,
to the address set forth underneath his signature to this Agreement, or
(b) in the case of the Company, to the attention of the Chairman of the
Board at 000 Xxxx Xxxx, Xxxxxx Xxxxxx Xxxx, Xxxxxxxxxx, XX 00000, and/or to
such
other address as either party may specify by notice to the other.
10.5. Entire
Agreement. This Agreement and the Proprietary Information and
Inventions Agreement constitute the entire agreement between the Company and
Xxxxxx with respect to the terms and conditions of Xxxxxx'x employment with
the
Company and supersede all prior communications, agreements and understandings,
written or oral, between them.
10.6. Counterparts. This
Agreement may be executed in counterparts, each of which shall be original
and
all of which together shall constitute one and the same instrument.
10.7. Governing
Law. This Agreement, the relationships contemplated herein and
any claim arising from such relationships, whether or not arising under this
Agreement, shall be governed by and construed in accordance with the internal
laws of the Commonwealth of Massachusetts without giving effect to any choice
or
conflict of laws provision or rule thereof.
10.8. Consent
to Jurisdiction. Each of the Company and Xxxxxx, by its or his
execution hereof, hereby irrevocably submits to the exclusive jurisdiction
of
the state or federal courts of the Commonwealth of Massachusetts for the purpose
of any claim or action arising out of or based upon this Agreement, Xxxxxx’x
employment with the Company and/or the termination thereof, the consulting
relationship contemplated herein and/or the termination thereof, or relating
in
any other manner to the subject matter hereof, and agrees not to commence any
such claim or action other than in the above-named courts.
IN
WITNESS WHEREOF, this Agreement has been executed by the Company, by
its duly authorized representative, and by Xxxxxx, as of the date first above
written.
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DATAWATCH
CORPORATION
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By:
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XXXXXX
X. XXXXXX
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By:
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