EXHIBIT 10.10.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into
effective as of September 4, 1996, by and between XXXXXX X. XXXXXXXXX
(hereinafter "CONSULTANT"), and MISSION CRITICAL SOFTWARE, INC., a Delaware
corporation having its principal office at 000 Xxxxx xxxx Xxx Xxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000 (hereinafter "COMPANY").
W I T N E S S E T H:
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This Agreement is made and entered into under the following circumstances:
(1) Whereas, Company intends to carry out the business plan developed and
implemented by Company for the development, marketing and sale of the software
products and systems sold by Mission critical Software I, Inc. to Company which
products and systems are known as the "Enterprise Administrator" for the
administration of security systems for access to networked personal computer
systems and any other products, systems or services that Company may hereafter
develop, market or sell (the "BUSINESS ACTIVITIES"); and
(2) Whereas Company desires, on the terms and conditions stated herein, to
engage Consultant; and
(3) Whereas Consultant desires, on the terms and conditions stated herein,
to be engaged by Company.
NOW, THEREFORE, in consideration of the foregoing recitals, and of the
promises, covenants, terms and conditions contained herein, the parties hereto
agree as follows:
1. ENGAGEMENT AND TERM. Company hereby engages Consultant, and Consultant
hereby accepts engagement as a consultant by the Company commencing September 4,
1996 (hereinafter the "EFFECTIVE DATE") and continuing until terminated as
provided in Section 7 hereof (hereinafter the "TERM OF ENGAGEMENT").
2. DUTIES. Consultant shall serve as a consultant to the Company with
respect to Company's Business Activities. Company agrees that Consultant's
engagement with Company shall not be the exclusive, full-time engagement of
Consultant and Consultant may engage in other full time employment.
3. BASE COMPENSATION AND INCENTIVE COMPENSATION. During the Term of
Engagement, Consultant shall be entitled to annual base fees as set forth on
SCHEDULE A, payable in equal semi-monthly installments. Consultant shall be
entitled to incentive compensation as set form on SCHEDULE A.
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4. STATUS OF CONSULTANT. The parties expressly acknowledge that
Consultant, in the performance of services hereunder, is an independent
contractor. Accordingly, Company shall not deduct from fees paid to Consultant
pursuant to this Agreement any sums required by law or any other requirement of
any governmental body to be deducted as employee withholding or otherwise.
5. CONSULTING TIME. Company and Consultant shall mutually agree on the
times Consultant shall be available for consulting which time shall not be fewer
than 50 hours per month.
6. FRINGE BENEFITS. Consultant is not an employee and shall not be
entitled to any fringe benefits.
7. TERMINATION. Notwithstanding any other provisions of this Agreement,
the Term of Engagement shall terminate upon:
a. the death of Consultant; or,
b. Consultant's "disability" (For purposes of this Agreement, the term
"disability" shall mean the inability of Consultant, arising out of any
medically determinable physical or mental impairment, to perform the services
required of him hereunder for a period of sixty (60) consecutive days during
which sixty (60) day period Consultant's compensation hereunder shall continue);
c. six (6) months' prior written notice from Company to Consultant,
without cause, provided that, in lieu of such notice, Company shall pay to
Consultant six (6) months; salary as severance compensation, payable either in a
lump sum or over such six month period in accordance with Company's usual
compensation practices (the "Severance Amount"); or
d. thirty (30) days prior written notice from Consultant to Company.
e. at Company's option, immediately upon the existence of "cause." For
purposes of this Agreement, the term "cause" shall be defined as:
(1) the willful engaging by Consultant in misconduct which is materially
injurious to Company or its affiliates, monetarily or otherwise;
(2) any dishonesty by Consultant in his dealings with the Company, the
commission of fraud by Consultant, or negligence in the performance of the
duties of Consultant;
(3) the arrest or conviction (or plea of guilty or nolo contendere) of
Consultant of any felony or other crime involving dishonesty or moral
turpitude;
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(4) any violation of any covenant or restriction contained in Section 11 or
Section 12 hereof; or
(5) unlawful use of narcotics or other controlled substances, or use of
alcohol or other drugs in a manner the Company reasonably determines to be
adverse to the best interests of the Company.
For all purposes of this Agreement, termination for "cause" shall be deemed
to have occurred if Consultant's resignation when, because of existing facts and
circumstances, subsequent termination for "cause" can reasonably be foreseen.
For all purposes of this Agreement, no act, or failure to act, on Consultant's
part shall be considered "willful" unless done, or omitted to be done, by him
not in good faith and without reasonable belief that his action or omission was
in, or not opposed to, the best interest of Company or its affiliates.
Upon termination of this Agreement, Consultant or Consultant's estate, as
appropriate, shall be entitled to receive (in addition to any fringe benefits
payable upon death in the case of Consultant's death) the compensation provided
for in Section 3 hereof (prorated on a daily basis) up to and including the
effective date of termination.
8. EFFECTS OF TERMINATION. Upon termination of this Agreement, neither
party shall have any further obligations hereunder except for (i) obligations
accruing prior to the date of termination and (ii) obligations, promises or
covenants contained herein which are expressly made to extend beyond the term of
this Agreement, including, without limitation, confidentiality of information,
indemnities and Consultant's covenants not to compete (which covenants and
agreements shall survive the termination or expiration of this Agreement). The
termination of this Agreement, for whatever reason, shall not extinguish those
obligations of Consultant specified in the Restrictive Covenants (hereinafter
defined), nor shall the same extinguish the right of either party to bring an
action, either in law or in equity, for breach of this Agreement by the other
party.
9. TRANSITION FOLLOWING NOTICE OF TERMINATION. Following any notice of
termination of engagement hereunder, whether given by Company or Consultant,
Consultant will fully cooperate with Company in all matters relating to the
winding up of Consultant's pending work on behalf of Company and the orderly
transfer of such work to the other professional employees of Company. On or
after the giving of notice of termination hereunder and during any notice
period, Company will be entitled to such full-time or part-time services of
Consultant as Company may reasonably require in accordance with the terms
hereof, and Company will specifically have the right to terminate the active
services of Consultant at the time such notice is given and to pay to Consultant
the Severance Amount if such amount is due pursuant to Section 7(c) hereof.
10. TERRITORY. In recognition of the existing and potential worldwide
Business Activities of Company, Company and Consultant agree that the terms of
this Agreement shall apply to any Prohibited Activities (as defined below)
engaged by Consultant anywhere in the world including all states and territories
of the United Sates of America. Prohibited Activities
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shall include (without limitation) any activities which would be in breach of
the covenants contained in Sections 11 and 12 below.
11. NON-COMPETITION. While Consultant is employed by Company and for a
period of one (1) year after termination or cessation such engagement for any
reason Consultant shall not, without employer's prior written consent, as a
principal, employee, consultant, partner, or stockholder of, or in any other
capacity with, any "business enterprise" (as that term is defined below) (other
than in any capacity as a holder of not more than 1% of the combined voting
power of the outstanding stock of a publicly held company) (a) engage in
competition with Company, (b) conduct a business of the type or character
engaged in by Company at the time of termination or cessation of Consultant's
engagement, or (c) develop, market, sell, and/or distribute products or services
competitive with those of Company. As used herein, the term "business
enterprise" shall mean any corporation, partnership, association, sole
proprietorship or any other entity competing with Company or directly involved
in the development, marketing, sales, and/or distribution of products or
services which, during the time of Consultant's employment by Company, were
developed, under active development, under consideration for development,
marketed, sold, and/or distributed by Company.
12. NON-DISCLOSURE: NON-SOLICITATION. Except in the performance of his
duties hereunder, at no time during the Term of Employment or at any time
thereafter shall Consultant, individually or jointly with others, for the
benefit of Consultant or any third party, publish, disclose, use of authorize
anyone else to publish, disclose or use, any secret or confidential material or
information relating to any aspect of the business or operations of Company or
any information regarding the business methods, business policies, procedures,
techniques, or trade secrets, or other knowledge or processes of or developed by
Company (and/or any other Consultant or agent of Company), any affiliate of the
Company, or any entity in which the Company has an interest, including, without
limitation, any secret or confidential information relating to the business,
customers, financial position, trade or industrial practices, trade secrets,
technology or know-how of the Company or Company's affiliates. Moreover, while
Consultant is employed by Company and for a period of two years thereafter,
Consultant shall not directly or in any other capacity, employ any person or
hire or contract with, as a consultant or other independent agent or independent
contractor, any person or entity (other than Consultant) who was employed by or
acted as an agent for, consultant to, or independent contractor of the Company,
any affiliate of the Company, or any entity in which the Company has an
interest, at any time during the Term of Employment; provided that the
prohibitions contained in this sentence shall exclude persons or entities not
directly involved in the development, marketing, sales, and/or distribution of
products or services which, during the time of Consultant's employment by
Company, were developed, under active development, under consideration for
development, marketed, sold and/or distributed by Company. In addition, while
Consultant is employed by Company and for a continuous period of two (2) years
thereafter, Consultant shall not solicit, divert or take away, or attempt to
divert or take away, the business or patronage of any of the clients, customers
or accounts, or prospective clients, customers or accounts, of Company which
were contacted, solicited or served by Consultant while employed by Company in
connection with products or services which, during the time of Consultant's
employment by
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Company, were developed, under active development, under consideration for
development, marketed, sold, and/or distributed by Company.
13. REASONABLENESS OF RESTRICTIONS; REFORMATION; ENFORCEMENT. The parties
hereto recognize and acknowledge that the geographical and time limitations
contained in Sections 11 and 12 hereof (hereinafter the "RESTRICTIVE COVENANTS")
are reasonable and properly required for the adequate protection of Company's
interest. Consultant acknowledges that Company will provide to Consultant
confidential information concerning the Company's and Company's affiliates'
business methods and operating practices in reliance on the covenants contained
in the Restrictive Covenants. It is agreed by the parties hereto that if any
portion of the restrictions contained in the Restrictive Covenants are held to
be unreasonable, arbitrary or against public policy, then the restrictions shall
be considered divisible, both as to the time and to the geographical area, with
each month of the specified period being deemed a separate period of time and
each radius mile of the restricted territory being deemed a separate
geographical area, so that the lesser period of time or geographical area shall
remain effective so long as the same is not unreasonable, arbitrary or against
public policy. The parties hereto agree that if any court of competent
jurisdiction determines the specified period or the specified geographical area
of the restricted territory to be unreasonable, arbitrary or against public
policy, a lesser time period or geographical area which is determined to be
reasonable, nonarbitrary and not against public policy may be enforced against
Consultant. If Consultant shall violate any of the covenants contained herein
and if any court action is instituted by the Company to prevent or enjoin such
violation, then the period of time during which the Consultant's business
activities shall be restricted, as provided in this Agreement, shall be
lengthened by a period of time equal to the period between the date of the
Consultant's breach of the terms or covenants contained in this Agreement and
the date on which the decree of the court disposing of the issues upon the
merits shall become final and not subject to further appeal.
14. NO REMEDY AT LAW. Consultant agrees that the remedy at law for any
breach by him of the Restrictive Covenants will be inadequate and would be
difficult to ascertain and therefore, in the event of the breach or threatened
breach of any such covenants, the Company, in addition to any and all other
remedies, shall have the right to enjoin Consultant from any threatened or
actual activities in violation thereof; and Consultant hereby consents and
agrees that temporary and permanent injunctive relief may be granted in any
proceedings which might be brought to enforce any such covenants without the
necessity of proof of actual damages and without necessity of posting a bond in
cash or otherwise. If Company does apply for such an injunction, Consultant
shall not raise as a defense thereto that the Company has an adequate remedy at
law.
15. ASSIGNABILITY. This Agreement and the rights and duties created
hereunder shall not be assignable or delegable by Consultant. Company may, at
Company's option and without consent of Consultant, assign its rights and duties
hereunder to any successor entity or transferee of Company's assets.
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16. NOTICES. All notices or other communications provided for herein to
be given or sent to a party by the other party shall be deemed validly given or
sent if in writing and mailed, postage prepaid, by registered or certified
United States mail or hand delivered or sent by facsimile, addressed to the
parties at their addresses hereinabove set forth. Any party may give notice to
the other party at any time, by the method specified above, of a change in the
address at which, or the person to whom, notice is to be addressed.
17. SEVERABILITY. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant or provision
hereof. If that any provision of this Agreement shall be determined to be
invalid or unenforceable, such provision shall be deemed limited by construction
in scope and effect to the minimum extent necessary to render the same valid and
enforceable, and, if such a limiting construction is impossible, such invalid or
unenforceable provision shall be deemed severed from this Agreement, but every
other provision of this Agreement shall remain in full force and effect.
18. WAIVER. The failure of a party to enforce any term, provision or
condition of this Agreement at any time or times shall not be deemed a waiver of
that term, provision or condition for the future, nor shall any specific waiver
of a term, provision or condition at one time be deemed a waiver of such term,
provision or condition for any future time or times.
19. PARTIES. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their heirs, personal representative, legal
representatives, and proper successors and assigns, as the case may be.
20. GOVERNING LAW. The validity, interpretation and performance of this
Agreement shall be governed by the laws of the State of Texas, without giving
effect to the principles of comity or conflicts of laws thereof. Each party
hereto agrees to submit to the personal jurisdiction and venue of the state and
federal courts having jurisdiction over Xxxxxx County, Texas, for a resolution
of all disputes arising in connection with the interpretation, construction, and
enforcement of this Agreement, and hereby waives the claim or defense therein
that such courts constitute an inconvenient forum.
21. CAPTIONS. The captions of this Agreement have been assigned thereto
for convenience only, and shall not be construed to limit, define or modify the
substantive terms hereof.
22. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement constitutes the entire
agreement between the parties hereto concerning the subject matter hereof, and
supersedes all prior agreements, memoranda, correspondence, conversations and
negotiations. This Agreement may be executed in several counterparts that
together shall constitute but one and the same Agreement.
23. COSTS OF ENFORCEMENT. If it is necessary for any party to retain the
services of an attorney or to initiate legal proceedings to enforce the terms of
this Agreement, the prevailing party shall be entitled to recover from the non-
prevailing party, in addition to all other remedies,
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all costs of such enforcement, including reasonable attorneys' fees and costs
and including trial and appellate proceedings.
24. GENDER, ETC. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates is appropriate.
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands on the
date first written above.
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
EMPLOYER:
MISSION CRITICAL SOFTWARE, INC.
a Delaware Corporation
By: /s/ Xxxxx X. Xxxxxxxx
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Name: XXXXX X. XXXXXXXX
-----------------------
Title: President
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SCHEDULE A
COMPENSATION and LEAVE POLICIES
BASE COMPENSATION
Consultant shall be paid a base fee of Forty-two Thousand Dollars
($42,000.00) per annum.
It is expressly understood by Company that Consultant is also engaged as a
consultant by Star Enterprise ("Star") of Houston, Texas and, in connection
therewith, Consultant is expected to render forty (40) hours of consulting
services to Star per week. It is agreed by the parties that if Consultant
reasonably determines that in any week the consulting services required by
Company shall make it unreasonable for Consultant to devote forty hours to the
satisfaction of Consultant's obligations to Star, Consultant may xxxx Company
$69.00 per hour for each hour that Consultant is prevented from consulting with
Star; provided that under no circumstances shall Consultant xxxx Star and
Company for more than forty (40) hours, in the aggregate, of consulting services
in any week in any event.
INCENTIVE COMPENSATION
There shall be no incentive compensation other than participation in such
incentive stock option plans as the Board of Directors or Compensation Committee
may establish from time to time on such terms the Board of Directors or
Compensation Committee may decide.
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