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EXHIBIT 6.5
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), effective as of July 1,
1997, by and between Neutral Posture Ergonomics, Inc. ("NPE"), a Texas
corporation, located at 0000 X. Xxxxx Xxxxxx, Xxxxx, Xxxxx 00000, and Xx.
Xxxxxx Xxxxxxxxx ("Xx. Xxxxxxxxx") of 00000 Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxx,
Xxxxx 00000.
WHEREAS, NPE has engaged Xx. Xxxxxxxxx, and Xx. Xxxxxxxxx has agreed,
to assist NPE in certain matters described below.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto, NPE and Xx. Xxxxxxxxx hereby agree as follows:
ARTICLE 1
TERM OF EMPLOYMENT
1.01 NPE hereby engages Xx. Xxxxxxxxx, and Xx. Xxxxxxxxx hereby
agrees to become a consultant with NPE, subject to the terms and conditions of
this Agreement, for a period of ten (10) years, beginning on the 1st day of
July, 1997.
ARTICLE 2
DUTIES OF XX. XXXXXXXXX
GENERAL DESCRIPTION
2.01 Subject to the terms and conditions of this Agreement, Xx.
Xxxxxxxxx is hereby engaged by NPE as a consultant to invent, discover, develop
and improve designs, methods, formulas, machines and devices relating in any
manner whatsoever to ergonomic devices (including chairs) and to otherwise
advise and assist NPE in the furtherance of its business interests. The
services of Xx. Xxxxxxxxx shall be performed at any laboratory, research
facility, manufacturing plant or other facility or location at
CONSULTING AGREEMENT - PAGE 1
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which NPE conducts its business. Whenever Xx. Xxxxxxxxx invents, discovers,
develops or improves any of the designs, methods, formulas, machines and
devices described above, Xx. Xxxxxxxxx shall immediately make a full disclosure
of the subject matter to NPE and shall keep NPE fully informed at all times of
all progress in connection with the process and product.
TRAVEL
2.02 During the term of this Agreement, Xx. Xxxxxxxxx shall be
available to and shall travel on NPE business no more than twenty-five (25)
days each calendar year, prorated for any period of partial service. Such
travel shall be at NPE's expense and under such terms and conditions and to
such places as directed by NPE.
ENGAGEMENT IN OTHER EMPLOYMENT
2.03 NPE understands that Xx. Xxxxxxxxx is an Associate Professor
at Texas A&M University and at no time shall NPE request Xx. Xxxxxxxxx to
perform any service that is in conflict with his responsibilities as an
Associate Professor at Texas A&M University. Xx. Xxxxxxxxx shall not perform
any services hereunder, either solely or jointly with others, during the course
of his regularly assigned duties as an Associate Professor at Texas A&M
University System ("TAMUS") or with the utilization of any TAMUS facilities or
services or in the performance of sponsored work under a contract or grant
administered by TAMUS or any component thereof. Xx. Xxxxxxxxx agrees that if
any conflict of interest between NPE and Texas A&M University shall arise during
the term of the Agreement, Xx. Xxxxxxxxx shall promptly notify NPE and NPE may,
at its option, immediately cancel this Agreement.
INDEPENDENT CONTRACTOR STATUS
2.04 The parties hereby acknowledge and covenant that (i) Xx.
Xxxxxxxxx is an independent contractor and has acted exclusively as an
independent contractor and not as an employee of NPE in performing the duties
assigned hereunder, and (ii) the parties do not intend, and will not hold out
that
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there exists, any company, joint venture, undertaking for a profit or other
form of business venture or any employment relationship among the parties other
than that of an independent contractor relationship.
ARTICLE 3
COMPENSATION OF XX. XXXXXXXXX
BASIC COMPENSATION
3.01 As compensation for services under this Agreement, Xx.
Xxxxxxxxx shall be paid $90,000.00 annually, payable in equal bimonthly
installments of $3,750.00 on the first and fifteenth day of each month during
the period of service, prorated for any partial service period.
COST OF LIVING INCREASE
3.02 Upon the completion of each calendar year during which Xx.
Xxxxxxxxx is engaged by NPE, he shall be paid additional compensation in the
form of a cost of living increase computed by multiplying the base salary by
the consumer price index (CPI) as reported in the Wall Street Journal. Such
cost of living increases shall be cumulative.
ARTICLE 4
REIMBURSEMENT OF EXPENSES INCURRED BY XX. XXXXXXXXX
BUSINESS EXPENSES
4.01 Xx. Xxxxxxxxx is authorized to incur reasonable business
expenses for promoting the business of NPE, including expenditures for
entertainment and travel at NPE's request. NPE will reimburse Xx. Xxxxxxxxx
from time to time for all such business expenses, provided that Xx. Xxxxxxxxx
presents to NPE:
(a) An account book in which Xx. Xxxxxxxxx recorded at or
near the time each expenditure was made:
(i) The amount of the expenditure;
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(ii) The time, place and designation of the type
of the entertainment and travel or other
expenses;
(iii) The business reason for the expenditure and
the nature of the business benefit derived or
expected to be derived as a result of the
expenditure; and
(iv) The names, occupations, addresses and other
information concerning each person who was
entertained, sufficient to establish a
relationship to NPE.
(b) Documentary evidence, such as a receipt or a paid
xxxx, that states sufficient information to establish
the amount, date, place and the essential character
of the expenditure, for each expenditure of $25.00 or
more and for lodging while traveling away from home.
SPECIFICATION OF BUSINESS EXPENSES IN NPE'S RULES
4.02 This meaning of "business expenses," as used in this
Agreement, is limited to those expenditures specified in the rules and
regulations issued by NPE now in effect or as subsequently modified,
notwithstanding anything else to the contrary in this Agreement.
ARTICLE 5
PROPERTY RIGHTS OF THE PARTIES
INVENTIONS AND PATENTS
5.01 Xx. Xxxxxxxxx agrees that he will promptly and fully inform
and disclose to NPE all inventions, designs, improvements and discoveries that
Xx. Xxxxxxxxx may have during the term of this Agreement that pertain or relate
to the business of NPE or to any experimental work carried on by NPE, whether
conceived by Xx. Xxxxxxxxx alone or with others. Xx. Xxxxxxxxx agrees to
assign and hereby does assign to NPE all right, title and interest in and to
any such inventions, designs, improvements, or discoveries conceived, developed
or reduced to practice, either individually or jointly with others, during the
term of this Agreement. Xx. Xxxxxxxxx shall assist NPE in obtaining patents on
all such inventions, designs, improvements and discoveries deemed patentable by
NPE and shall execute all
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documents and do all things necessary to obtain such patents and vest title in
any such inventions, designs, improvements or discoveries in NPE.
CONFIDENTIAL INFORMATION
5.02 Xx. Xxxxxxxxx, while engaged by NPE hereunder or at any time
thereafter, will not, without the express written consent of NPE, directly or
indirectly communicate or divulge, or use for the benefit of Xx. Xxxxxxxxx or
of any other person, firm, association or company, any of NPE's trade secrets,
proprietary data or other confidential information, which trade secrets and
confidential information were communicated to or otherwise learned or acquired
by Xx. Xxxxxxxxx in the course of Xx. Xxxxxxxxx'x engagement with NPE, except
that Xx. Xxxxxxxxx may disclose such matters to the extent that disclosure is
required (a) in the course of Xx. Xxxxxxxxx'x engagement with NPE or (b)
pursuant to any deposition, interrogatory, request for documents, subpoena,
civil investigative demand, or similar process. Xx. Xxxxxxxxx will not use
such trade secrets or confidential information in any way or in any capacity
other than as a consultant of NPE and to further NPE's interests.
Xx. Xxxxxxxxx recognizes that NPE has received, and in the future will
receive, from third parties their confidential or proprietary information
subject to a duty on NPE's part to maintain the confidentiality of such
information and to use it only for certain limited purposes. Xx. Xxxxxxxxx
agrees that Xx. Xxxxxxxxx owes NPE and such third parties, during the term of
Xx. Xxxxxxxxx'x engagement hereunder and thereafter, a duty to hold all such
confidential or proprietary information in the strictest confidence and not to
disclose it to any person, firm or corporation (except as necessary in carrying
out work for NPE consistent with NPE's agreement with such third party) or to
use it for the benefit of anyone other than for NPE or such third party
(consistent with NPE's agreement with such third party) without the prior
consent of an authorized representative of NPE.
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TRADE NAME OR TRADEMARK
5.03 Xx. Xxxxxxxxx shall not, without the express written consent
of NPE, either during the term of this Agreement or at any time after its
termination, use or permit the use of NPE's name, or in connection with the
trade name or trademark of any enterprise other than NPE's, whether it is a
sole proprietorship, partnership, firm or corporation.
COPYRIGHTS
5.04 Xx. Xxxxxxxxx further agrees to assign and does hereby assign
to NPE all right, title and interest in and to any copyrightable subject matter
embodied in any of his work product pursuant to this Agreement. Xx. Xxxxxxxxx
shall execute all documents necessary to vest title to any such copyrights in
NPE.
ARTICLE 6
NONCOMPETITION AND NONSOLICITATION
6.01 (a) During the term of this Agreement, NPE agrees to
provide Xx. Xxxxxxxxx with continued access to
confidential information, including confidential
information regarding refinements in NPE's
proprietary technologies and strategic planning for
new products and refinements to existing products and
attendance at the training programs conducted by NPE
regarding sales and marketing and underwriting and
purchasing of new and existing products.
(b) Except as set forth in paragraph 6.01(c) below, as an
inducement for NPE's agreement in paragraph 6.01(a)
above and in exchange for the other consideration
provided by NPE under this Agreement, during the term
of this Agreement and for a period of 18 months from
the last day of the term of this Agreement:
(i) Xx. Xxxxxxxxx shall not, directly or
indirectly, engage or invest in, own, manage,
operate, finance, control, or participate in
the ownership, management, operation,
financing, or control of, be employed by,
associated with, or in any manner connected
with, or render services or advice to any
business that is involved in the design,
manufacturing, marketing, distribution or
sale of ergonomic chairs and other office
products (the "Business") in any foreign
country or state in the United States where
(as of the end of the term) NPE or any
affiliate is engaged in the Business, or
where Xx. Xxxxxxxxx has been involved in
strategic planning on behalf of NPE or any
affiliate to do the Business; provided,
however, in each case, that Xx. Xxxxxxxxx may
purchase or otherwise
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acquire up to (but not more than) five
percent of any class of securities of any
enterprise (but without otherwise
participating in the activities of such
enterprise) if such securities are listed on
any national or regional securities exchange
or have been registered under Section 12(g)
of the Securities Exchange Act of 1934. Xx.
Xxxxxxxxx agrees that this covenant is
reasonable with respect to its duration,
geographical area, and scope and that his
skills and experience will allow him to earn
a substantial income while still abiding by
the restrictions contained in this Agreement.
(ii) Xx. Xxxxxxxxx shall not, directly or
indirectly, either for himself or any other
person (A) induce or attempt to induce any
employee of NPE or any affiliate to leave the
employ of NPE or any affiliate; (B) in any
such way interfere with the relationship
between NPE or any affiliate and any employee
thereof; (C) induce or attempt to induce any
customer, supplier, licensee, or business
relation of NPE or any affiliate to cease
doing business with NPE or any affiliate, or
in any way interfere with the relationship
between any customer, supplier, licensee, or
business relation of NPE or any affiliate;
and
(iii) Xx. Xxxxxxxxx shall not, directly or
indirectly, either for himself or any other
person, solicit the business of any person
known to Xx. Xxxxxxxxx to be a customer or
potential customer of NPE (meaning a person
with which NPE has contacted or has developed
plans to contact regarding establishing a
customer relationship) or any affiliate,
whether or not Xx. Xxxxxxxxx had personal
contact with such person, with respect to
products, services or other business
activities which compete in whole or in part
with the products, services or other business
activities of NPE or any affiliate of NPE;
(c) In the event that this Agreement is terminated by Xx.
Xxxxxxxxx for NPE's breach, the terms of paragraph
6.01(b) shall be null and void.
REMEDIES
6.02 Xx. Xxxxxxxxx acknowledges that in view of the nature of the
business in which NPE is engaged, the restrictions contained in Articles 5 and
6 above are reasonable and necessary in order to protect the legitimate
interests of NPE. Xx. Xxxxxxxxx further acknowledges that Xx. Xxxxxxxxx may
have access to certain confidential information of NPE that constitutes
valuable, special, and unique property of NPE.
Xx. Xxxxxxxxx therefore hereby agrees that for violation of any of the
provisions of Articles 5 and 6 of this Agreement, NPE shall be entitled to the
following remedies:
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(a) Damages from Xx. Xxxxxxxxx; and
(b) Injunctive or other equitable relief to restrain any
breach or threatened breach or otherwise to
specifically enforce the provisions of Articles 5 and
6 of this Agreement, it being agreed that money
damages alone would be inadequate to compensate NPE
and would be an inadequate remedy for such breach.
ARTICLE 7
EFFECT OF NPE'S MERGER, TRANSFER OF ASSETS, OR DISSOLUTION
7.01 This Agreement shall not be automatically terminated by:
(a) Merger when NPE is not the surviving corporation; or
(b) Transfer of all or substantially all of the assets of
NPE.
In the event of any such merger or transfer of assets, the surviving
or resulting corporation or the transferee of NPE's assets shall be bound by
and shall have the benefit of the provisions of this Agreement, except that Xx.
Xxxxxxxxx shall have the option to terminate this Agreement by giving the
surviving or resulting corporation 60 days written notice of his intent to
terminate. Such notice to terminate must be made within 60 days of the
effective date of the merger or transfer. In the event of such termination by
Xx. Xxxxxxxxx, he shall be entitled to compensation as set out in Article 8.
ARTICLE 8
MUTUAL TERMINATION AND EFFECT ON COMPENSATION
8.01 This Agreement may be terminated at any time by the written
mutual agreement of the parties hereto, or by either party in the event that
the other party has committed a material breach of any of the provisions of
this Agreement and such breach has not been cured within 30 days of written
notice thereof. In the event of the termination of this Agreement, as set
forth in this paragraph, prior to the completion of the term herein specified
in Article 1, Xx. Xxxxxxxxx shall be entitled to the compensation earned by him
prior to the date of termination as provided for in Article 3 and the business
expenses incurred by him prior to the date of termination as provided for in
Article 4, and thereafter NPE shall have no further liability under this
Agreement to Xx. Xxxxxxxxx.
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ARTICLE 9
GENERAL PROVISIONS
ENTIRETY OF AGREEMENT
9.01 This Agreement supersedes all other agreements, either oral or
in writing, between the parties with respect to the services of Xx. Xxxxxxxxx
by NPE and contains all of the covenants and agreements between the parties
with respect to such engagement. Each party to this Agreement acknowledges
that no representations, inducements, promises or agreements, oral or
otherwise, have been made by any party, or anyone acting on behalf of any
party, that are not embodied in this Agreement, and that no other agreement,
statement, or promise shall be valid or binding.
LAW GOVERNING AGREEMENT
9.02 This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
VALIDITY
9.03 The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
COUNTERPARTS
9.04 This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which shall constitute one and
the same agreement.
AMENDMENTS
9.05 This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by each of the parties hereto.
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ASSIGNABILITY
9.06 This Agreement shall inure to the benefit of NPE and its
successors and assigns. This Agreement shall not be assignable by Xx.
Xxxxxxxxx and shall not be subject to attachment, execution, pledge or
hypothecation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
NEUTRAL POSTURE ERGONOMICS, INC.
By: /s/ XXXXXXX XXXXXXX
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Name: Xxxxxxx Xxxxxxx
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Its: Chief Executive Offficer
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/s/ XXXXXX X. XXXXXXXXX
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Xx. Xxxxxx Xxxxxxxxx
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