CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement"), dated as of October 22,
1996, is by and between Xxxxxxx X. Xxxx, a resident of the State of Maryland
("Xxxx"), and The Ashton Technology Group, Inc., a Delaware corporation
("Ashton").
WHEREAS, Xxxx is (i) the President, Chairman of the Board, Chief
Executive Officer, Treasurer, and Principal Financial and Accounting Officer of
Ashton, (ii) a member of the Board of Directors and the Executive Vice
President, Principal Financial Officer and Secretary of UTTC and (iii) Chariman
of the Board of CSI;
WHEREAS, Xxxx and Ashton are parties to an Employment Agreement
effective January 1, 1996 (the "Employment Agreement"); and
WHEREAS, Xxxx and Ashton and its Subsidiaries wish consensually to
terminate the Employment Agreement and sever the employment relationship between
Xxxx and Ashton and its Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises hereinafter provided and of the actions taken pursuant
thereto, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement:
(i) "Affiliate" means, with respect to a Person, any other Person
controlled by or, as of the date of this Agreement, controlling or under common
control with, such Person. "Control" (including the terms "controlling",
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, the
holding of proxies, by contract or otherwise.
(ii) "Financial Market Participants" means any Person who
participates, in any capacity, in the Financial Markets, including, without
limitation, investment banking companies, broker dealers, investment companies,
banks, commercial trust companies, thrift institutions, savings and loan
associations, mutual savings banks and credit unions, life insurance companies,
property and casualty insurance companies, reinsurance companies, pension funds,
and state and government retirement funds.
(iii) "Financial Markets" means (A) all U.S. and foreign
registered national securities exchanges, the Nasdaq market systems, markets for
securities, physical commodities in commercially accepted bulk units,
commodities and other futures, derivatives, options, currencies and commercial
paper, (B) clearing corporations and depository trust companies, (C) wire
transfer systems including, without limitation, the Federal wire and S.W.I.F.T,
and (D) electronic market information systems, including, without limitation,
Instinent, Bloomberg, Investment Technology Group, Dow Xxxxx, Telerate and
Reuters.
(iv) "Financial Services Industry" means all U.S. and foreign
Financial Markets
and Financial Market Participants to the extent, and only to the extent, such
Financial Markets and Financial Market Participants involve, execute or engage
in the trading, by electronic or other means, of securities, physical
commodities in commercially accepted bulk units, commodities and other futures,
derivatives, options, currencies and commercial paper.
(v) "License Agreement" means the License Agreement of even date
herewith between Xxxx and Ashton.
(vi) "Licensed Technology" shall have the meaning set forth in the
License Agreement.
(vii) "Person" means any individual, corporation, partnership,
limited liability company or partnership, firm, joint venture, association,
joint stock company, trust, unincorporated organization, governmental entity or
other entity or organization.
(viii) "SUBSIDIARIES" means Universal Trading Technologies
Corporation and Computer Science Innovations, Inc. and each corporation as to
which the Company directly or indirectly owns a majority of the outstanding
shares of stock or other ownership interests having voting power under ordinary
circumstances to elect a majority of directors of such corporation or other
Persons performing similar functions for such entity.
2. EFFECTIVE DATE. This Agreement shall be executed and become
effective on the date (the "Effective Date") of the closing of the transactions
contemplated by that certain Settlement Agreement dated October 22, 1996 by and
among Xxxx, Xxxxx X. Xxxx, as trustee for the Xxxxxx Xxxxxxx Xxxx Trust, Xxxxx
X. Xxxx, as trustee for the Xxxxx Xxxxxxxxx Xxxx Burrowbridge Trust and Xxxxx X.
Xxxx, as trustee for the Xxxxxxxxx Xxxx Xxxxxxx Trust (collectively the "Xxxx
Trusts"), Xxxxxx X. Xxxxxx, Xxxx X. Xxxxx, Xxxxxxx X. Xxxxxxxxxxx, The Dover
Group, Inc., X. X. Xxxxxxx, Xx., X. X. Xxxxxxx, Xx., X.X. Xxxxxxxxxxx, Xx., and
Xxx Xxxxxxxxxxx as trustee for Xxxxxx X. Xxxxxxxxxxx, Xxxxxx Xxxxxxx and Xxxx
Xxxxxxx (the "Settlement Agreement").
3. TERMINATION OF EMPLOYMENT AGREEMENT. As of the Effective Date,
the Employment Agreement shall be deemed terminated and shall have no further
force or effect. Xxxx and Ashton agree that there are no existing defaults by
either party under the Employment Agreement and that, as of the Effective Date,
each party had fully performed all of its obligations to the other party under
the Employment Agreement. Without limiting the effect of the foregoing two
sentences, Ashton specifically agrees that, as of the Effective Date, except as
otherwise expressly provided in this Agreement, all of the restrictions on Xxxx
under the Employment Agreement shall be terminated.
4. RESIGNATIONS AND TERMINATION OF EXISTING EMPLOYMENT RELATIONSHIP.
As of the Effective Date, Xxxx shall be deemed to have resigned from all
corporate offices and the Board of Directors of Ashton, and from all offices and
directorships of Ashton's Subsidiaries, joint ventures, and affiliated companies
and organizations. Except for purposes of the matters set forth in Sections 6,
7 and 8 hereof, Xxxx'x employment by Ashton shall be deemed to have terminated
as of 5:00 p.m. on the Effective Date.
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5. CORPORATE RECORDS AND BANK ACCOUNTS. Immediately after the
Effective Date, Ashton shall take such steps as may be necessary to (a) reflect
in the corporate records of Ashton, its Subsidiaries, joint ventures, and
affiliated companies and organizations that Xxxx has resigned as an officer and
director of Ashton and as an officer and director of Ashton's Subsidiaries,
joint ventures, and affiliated companies and organizations, and (b) remove Xxxx
and his family members, if any, as an authorized signatory on all corporate bank
accounts.
6. CONSULTING COMPENSATION. Ashton shall pay Xxxx (or, in the event
of his death, his estate) during the period from the Effective Date through
December 31, 1996, $40,000 , in substantially equal bi-weekly payments, with
Federal and state wage-type withholding deductions in accordance with applicable
law and Xxxx'x elections. Ashton shall pay to Xxxxxxx Xxxx Associates, Inc.
during the period from the Effective Date through December 31, 1998, $120,000
per annum, in substantially equal bi-weekly payments.
7. CONSULTATION. During the period from the Effective Date until
December 31, 1998, Ashton hereby retains Xxxx to consult with CSI, such
consultations to be at times reasonably convenient to both Xxxx and CSI;
PROVIDED, HOWEVER, that Xxxx'x consultation obligations hereunder shall not
require more than five hours per week of Xxxx'x time. Unless otherwise agreed
by the parties hereto, such consultations shall not be deemed to involve a
transfer of any intellectual property or intangible property rights to Ashton or
CSI. Ashton shall reimburse Xxxx for reasonable documented expenses incurred in
connection with his consultation with CSI during the period from the Effective
Date through December 31, 1998.
8. CONTINUING ROLE IN CSI. As of the Effective Date, Ashton shall
name Xxxx Chairman Emeritus of the Board of Directors of CSI.
9. NON-COMPETITION AND NON-SOLICITATION. (a) Except with the
prior written consent of Ashton, Tate shall not, during the period ending
December 31, 1998, directly or indirectly manage, operate, control, be
employed by, participate in, invest in, or be connected in any manner with,
the management, operation, ownership or control of any business or venture to
the extent such business or venture competes with products or services of
Ashton or its Subsidiaries in the Financial Services Industry, provided that
nothing herein shall prohibit Xxxx from owning up to 5% of the outstanding
voting securities of any issuer the securities of which are listed or traded
on a U.S. national stock exchange, the NASDAQ system, or a comparable foreign
exchange or system.
(b) During the period ending December 31, 1998, Xxxx and his
Affiliates shall not:
(i) Hire any employee of the Company or any Person who was an employee of
the Company within the 6-month period prior to the Closing Date except employees
(other than Xxxxxxx Xxxxxxx) who work at the Company's headquarters in Maryland;
(ii) Hire or enter into any consulting arrangement, joint venture or other
business relationship with any Person, or attempt to do or assist any other
Person in entering into or attempting to enter into any of the foregoing with
any Person, for
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the purpose of developing, marketing, producing, creating, directly or
indirectly, products or services for use in the Financial Services Industry; or
(iii) Solicit the business of either (i) any customer of the Company or
its Subsidiaries to whom Xxxx or the Company or its Subsidiaries rendered
services during either (x) the 12-month period prior to the Closing Date or (y)
12-month period prior to termination of this Agreement (a "Specific Customer");
or (ii) any Person whose business the Company or Xxxx solicited during either
(x) the 6-month period prior to the Closing Date or (y) the 6-month period prior
to the termination of this Agreement (a "Specific Contact"), in either case for
the purpose of developing, marketing, producing, creating, directly or
indirectly, products or services for use in the Financial Services Industry.
10. OTHER MATTERS.
(a) Xxxx has cancelled the Ashton American Express account
heretofore maintained for the benefit of Xxxx and other employees of Ashton and,
following the Effective Date, will not incur any further charges under such
American Express card.
(b) The parties shall use their best efforts to cause the
automobile lease under which Ashton is the lessee and which relates to the jeep
driven by Xx. Xxxx as an employee of Ashton (the "Automobile Lease") to be
transferred to Xxxx such that Xxxx shall be the lessee thereunder and Ashton
shall be released from its obligations under such lease. Ashton shall pay any
transfer fee payable under the Automobile Lease up to $150 and, if Ashton is
released from the Automobile Lease and Xxxx assumes such lease, Ashton shall pay
to Xxxx an automobile allowance at the rate of $500 per month during the period
from the Effective Date through December 31, 1998. If Ashton is not released
from the Automobile Lease, use of the jeep and payment of all amounts due under
the Automobile Lease shall be as agreed by Xxxx and Ashton.
(c) Xxxx shall have the right to purchase individual items of
furniture and equipment owned by Ashton and located at Ashton's headquarters
office space in Columbia, Maryland, at a price equal to the lower of the book
value or appraised value of such furniture and equipment. Such furniture and
equipment shall be specified by Xxxx in writing on or before the Effective
Date. At Xxxx'x option, the amounts due from Xxxx to Ashton in respect of such
furniture and equipment may be offset against Ashton's obligations to Xxxx
under Section 6 hereof. Otherwise, Xxxx shall pay Ashton the purchase price of
such furniture and equipment within 30 days after agreement as to the price
thereof.
11. INDEMNIFICATION AND DIRECTORS AND OFFICERS INSURANCE COVERAGE.
(a) Ashton acknowledges that its By-Laws include provisions
designed to provide to former officers and directors indemnification in respect
of threatened and commenced actions, suits and proceedings in which an
individual is a party or is threatened to be made a party by reason of the fact
that he is or was an officer or director of Ashton or its Subsidiaries. Ashton
shall, and shall cause its Subsidiaries to, continue to provide indemnification
to Xxxx under such provisions to the maximum extent permitted by applicable
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law. Ashton shall provide indemnification to Xxxx only as authorized in a
specific case upon a determination by Ashton or a court of competent
jurisdiction that indemnification of Xxxx is proper in the circumstances because
he has met the applicable standard of conduct under the Delaware General
Corporation Law (the "DGCL"). Xxxx shall be entitled to mandatory advancement
of expenses (including attorneys' fees) as contemplated by Section 145(e) of the
DGCL in advance of a final determination as to whether Xxxx is entitled to be
indemnified by Ashton; PROVIDED, HOWEVER, that Xxxx hereby agrees to repay any
such advanced expenses if it shall ultimately be determined by a court of
competent jurisdiction that Xxxx is not entitled to be indemnified by Ashton as
authorized by Section 145(e) of the DGCL.
(b) Following the Effective Date, Ashton shall continue to
maintain its existing directors and officers liability insurance policies in
effect in at least the same amounts and against the same risks that are in
effect as of the Effective Date. If, for any reason, Ashton shall not continue
to have in effect directors and officers liability insurance coverage, on terms
substantially comparable to those presently in effect, Ashton shall provide Xxxx
with written notice of the reduction, cancellation, nonrenewal or other
modification of such coverage not less than 20 days prior to the effectiveness
of such reduction, cancellation, nonrenewal or other modification.
12. PROPRIETARY INFORMATION AND BUSINESS AND PERSONAL PROPERTY.
Xxxx hereby disclaims and waives for himself and his Affiliates
any ownership rights or title to, and will not directly or indirectly disclose,
any confidential records, information, documents, data, formulae,
specifications, know-how, technology, intellectual property, trademarks, trade
names, service marks, copyrights, patents, trade secrets and other intangible
rights owned by Ashton and its Subsidiaries, or to the use of any such
information, except pursuant to a valid court order, subpoena or discovery
request (and in the case of such disclosure Xxxx will provide Ashton with
written notice of the same). The immediately preceding sentence shall not apply
to information: (i) related to the Licensed Technology; (ii) disclosure of which
is required by law or by process lawfully issued; (iii) which has been disclosed
to Xxxx or to a third party by a person not under a duty of confidentiality with
respect to that information; or (iv) which later enters the public domain
through no fault or breach of duty by Xxxx.
13. CONFIDENTIALITY. Except as required by law, pursuant to a valid
subpoena or with the prior consultation and prior consent of the parties hereto,
no party to this Agreement or any Person acting for or on their behalf, shall
directly or indirectly make any written or oral statement publicly or privately
to any Person if such statement relates to or concerns (i) this Agreement, (ii)
any matter related to this Agreement, (iii) the management, conduct or affairs
of the Company, its Subsidiaries, Xxxx or any of the Group Members, (iv) the
relationship by and among the parties, or (v) unless expressly directed by the
Company's Board of Directors, the relationship of the Company or its
Subsidiaries with any third party. Notwithstanding the foregoing, a party to
this Agreement may discuss any of the foregoing privately with (a) a member of
such party's immediate family or (b) directors, officers. employees or auditors
of the Company or its Subsidiaries (each an "Authorized Person") if, and only
if, the Authorized Person agrees to be bound by the terms of this Section 13.
If an Authorized Person breaches the terms of this Section 13, the party to this
Agreement who discussed the prohibited matters with the Authorized Person shall
be liable for the Authorized Person's breach of this Section 13.
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Anything in this Section 13 to the contrary notwithstanding, the parties agree
that a press release in the form of Exhibit C to the Settlement Agreement shall
be issued by the Company on the Closing Date.
14. NO ADMISSIONS. Nothing contained in this Agreement shall be
considered an admission by either party of any wrongdoing under any Federal,
state or local statute, public policy, tort law, contract law, common law or
otherwise.
15. NO THIRD PARTY CLAIMS. Each party represents and warrants that
no other person or entity has, or to the best knowledge of such party claims,
any interest in any potential claims, demands, causes of action, obligations,
damages or suits released pursuant to this Agreement; that it or he is the owner
of all other claims, demands, causes of action, obligations, damages or suits so
released; that it or he has full and complete authority to execute this
Agreement; and that it or he has not sold, assigned, transferred, conveyed or
otherwise disposed of any claim, demand, cause of action, obligation or
liability subject to this Agreement.
16. EXPENSES. Each party shall pay its own costs incident to the
negotiation, preparation, performance, execution, and enforcement of this
Agreement, and all fees and expenses of its or his counsel, accountants, and
other consultants, advisors and representatives for all activities of such
persons undertaken in connection with this Agreement.
17. NO THIRD PARTY BENEFICIARIES. Except as expressly stated herein,
the parties do not intend to make any person or entity who is not a party to
this Agreement a beneficiary hereof, and this Agreement should not be construed
as being made for the benefit of any person or entity not expressly provided for
herein.
18. REPRESENTATIONS AND WARRANTIES. Each party represents and
warrants to the other party that (a) the execution, delivery and performance of
this Agreement has been duly authorized and all actions necessary for the due
execution, delivery and performance of this Agreement have been taken, and (b)
this Agreement constitutes the legal, valid and binding obligations of the party
in question enforceable against such party in accordance with its terms.
19. ADVICE OF COUNSEL. The parties acknowledge that they have been
advised by competent legal counsel in connection with the execution of this
Agreement, that they have read each and every paragraph of this Agreement and
that they understand their respective rights and obligations. Xxxx declares
that he has completely read this Agreement, fully understands its terms and
contents, and freely, voluntarily and without coercion enters into this
Agreement.
20. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof, and all
prior negotiations and representations are merged herein or replaced hereby.
21. SEVERABILITY. If any provision of this Agreement is held
illegal, invalid or unenforceable, such illegality, invalidity, or
unenforceability shall not affect any other provision hereof. Any such
provision and the remainder of this Agreement shall, in such circumstances, be
deemed modified to the extent necessary to render enforceable the remaining
provisions hereof.
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22. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the law of the State of Delaware.
23. EFFECTIVENESS. This Agreement has been executed by or on behalf
of Xxxx and Ashton on the dates shown opposite their respective signatures
below, and this Agreement is effective as of the Effective Date.
24. COUNTERPARTS. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement, and shall become
effective on the Effective Date.
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IN WITNESS WHEREOF, Xxxxxxx X. Xxxx and The Ashton Technology Group,
Inc. have executed this Agreement on the date first written above.
THE ASHTON TECHNOLOGY GROUP, INC.
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Director
00000 Xxxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
/s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx
00000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
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