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Exhibit 10.10
MICRONICS COMPUTERS, INC.
CONSULTING AGREEMENT
This Agreement is entered into on September 5, 1997, by and between
Micronics Computers, Inc., a Delaware corporation ("Micronics"), and Xxxxxxx
Xxxxxxxx ("Xxxxxxxx").
X. Xxxxxxxx is an officer, director and employee of Micronics and has
notified Micronics that he intends to terminate his relationship as an
officer, director and employee.
B. The parties to this Agreement desire to terminate Munshani's Employment
Agreement, dated March 14, 1997 (the "Employment Agreement"), to provide
for a consulting arrangement acceptable to both, to preserve the
goodwill which exists between them and to enter into a mutual general
release.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises set forth below, the parties hereto agree as follows.
1. STATUS AS OFFICER, DIRECTOR AND EMPLOYEE. Xxxxxxxx and the Company
hereby agree that Munshani's term as a director of the Company will terminate on
September 7, 1997 and his term as an officer and employee of the Company will
terminate on September 7, 1997 (the "Termination Date"). The parties agree that
the Employment Agreement is hereby terminated and is replaced with this
Agreement.
2. FUTURE CONSULTING RELATIONSHIP.
2.1 CONSULTING AGREEMENT. Commencing on the Termination Date,
Xxxxxxxx will hold himself available to provide consulting services to Micronics
until the close of business on June 14, 1998 (the "Consulting Period").
Consulting services will be provided during the Consulting Period, upon the
request of Micronics, for no more than ten (10) hours per week (any period
shorter than one week will include a proportionate number of hours) at such
times and places as are mutually convenient to Xxxxxxxx and Micronics. However,
Munshani's services will be performed at times and places that do not reasonably
conflict with Munshani's responsibilities to his then current employer.
Munshani's duties as a consultant will be to perform management service and to
help transition relationships and knowledge of Micronics' business directly to
other representatives of Micronics identified by the Micronics Board of
Directors.
2.1.1 Termination by Xxxxxxxx. Xxxxxxxx, in his sole
discretion, may terminate this consulting arrangement prior to the end of the
Consulting Period at any time upon giving the Company written notice.
2.1.2 Termination by the Company. The Company, in its
sole discretion, may terminate this consulting arrangement prior to the end of
the Consulting Period, but only for "Good Cause," by giving written notice of
such termination to Xxxxxxxx. "Good Cause" shall mean (a) habitual neglect or
malfeasance of duty after 90 days notice during which
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Xxxxxxxx shall have an opportunity to cure such defect, (b) dishonesty, (c)
conviction of a felony, (d) failure to cure or cease repeated or a serious
violation or violations of the Company's written rules, or of the directions of
the Board of Directors of Micronics, after 90 days notice during which Xxxxxxxx
shall have an opportunity to cure such defect (e) repeated or a serious
violation of the Company's Xxxxxxx Xxxxxxx Policy, or (f) material or repeated
breach of this Agreement, or of the Proprietary Rights and Confidentiality
Agreement, dated November 12, 1994, between the Company and Xxxxxxxx (the
"Confidentiality Agreement").
2.2 INDEPENDENT CONTRACTOR. Munshani's services as a consultant
will be performed as an independent contractor with the customary and usual
independence associated therewith, and he will not be deemed an employee or
agent of Micronics or have the authority to bind, or to enter into any contract
on behalf of, Micronics, unless expressly authorized in writing to do so. In
accordance with such status as a consultant, Xxxxxxxx agrees to be responsible
for payment of all income, social security and other taxes incurred in
connection with payments to him under the consulting arrangement described under
the provisions of this Section 2. However, Micronics will aid Xxxxxxxx, at his
request, in obtaining forms necessary to calculate the estimated tax and file
the relevant tax estimate forms for federal and California tax purposes.
2.3 CONSULTING COMPENSATION. In return for Munshani's
availability and requested services, and while the Consulting Period continues,
Micronics will pay to Xxxxxxxx $19,166.67 on the 5th day of each calendar month
commencing with October 5, 1997 (with any period shorter than one month to
include a proportionate amount of the monthly compensation). Such amounts will
be paid as earned and will be hand delivered or mailed on the payment date to
Xxxxxxxx at his address set forth on the signature page to this Agreement. No
additional payments will be due for hours actually worked.
3. TRANSITIONAL PROVISIONS.
3.1 EFFECTIVE DATE OF TERMINATION. Xxxxxxxx acknowledges that his
employment with Micronics terminates on the Termination Date. Except as set
forth in Sections 1 and 2 of this Agreement, Xxxxxxxx has no further obligation
or right to provide services to Micronics and Micronics will have no further
right or obligation to engage his services at any time in the future.
3.2 COMPENSATION. Compensation earned by Xxxxxxxx as an employee,
officer and director, consisting of all salary and accrued but unused vacation
pay through the Termination Date, is to be paid to him on or before the end of
the day on September 10, 1997, subject to applicable payroll and tax withholding
deductions.
3.3 EXPENSES. If Xxxxxxxx has personally incurred any reasonable
and necessary business expenses on behalf of Micronics, such amounts will be
reimbursed on or before September 10, 1997 against Munshani's delivery to
Micronics of an expense reimbursement request, substantiated by receipts.
Expenses incurred by Xxxxxxxx during the Consulting Period must be pre-approved
by Micronics.
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3.4 BENEFITS; COBRA RIGHTS. Munshani's current employee benefits
will continue to be provided by Micronics through the Termination Date. Medical
or disability insurance coverage provided to Micronics employees generally will
be continued for Xxxxxxxx and his immediate family, under COBRA, and any life
insurance coverage that is currently carried by Micronics for Xxxxxxxx and that
can be continued for a non-employee, until the Consulting Period expires or is
terminated, at Micronics' expense. After that date, Micronics has a continuing
obligation to make available to Xxxxxxxx any medical or disability insurance
coverage, at Munshani's expense, under policies Micronics carries for its
employees generally.
3.5 OPTIONS. Xxxxxxxx has been granted five stock options for the
purchase of shares of Micronics' Common Stock as follows:
Date of Grant Number of Shares Exercise Price Per Share
------------- ---------------- ------------------------
11/14/94 50,000 $4.75
08/01/95 50,000 $4.00
11/30/95 50,000 $3.375
01/17/96 50,000 $3.375
03/31/97 75,000 $2.4375
Since Xxxxxxxx will continue to provide substantial services to the Company
after the Termination Date, such options will continue to vest during the
Consulting Period in accordance with their terms, but will terminate 30 days
after termination or expiration of such period. Such options may be exercised,
to the extent they are vested prior to the time they terminate; however Xxxxxxxx
understands that the exercise of any "Incentive Stock Option" that is exercised
90 days or more after the Termination Date will constitute the exercise of a
"Non-qualified Stock Option" with different tax effects. Except for the options
currently issued to Xxxxxxxx that are described above, he has no right to
purchase from Micronics, directly or indirectly, any Micronics capital stock and
holds no option, warrant or other right to acquire any such capital stock.
3.6 RETURN OF PROPERTY. As of the end of the Consulting Period,
or sooner at the request of Micronics, Xxxxxxxx represents and agrees that he
will return to Micronics all credit cards, computer hardware, back-up tapes,
computer listings, customer lists, supplier lists, financial information, office
and other keys and all other tangible property or intangible property on a
tangible media belonging to Micronics that are in his possession, custody or
control and that Xxxxxxxx has not relinquished, nor will relinquish, custody or
control of any such property to any third party or parties.
3.7 CONFIDENTIALITY; XXXXXXX XXXXXXX POLICY. Xxxxxxxx
acknowledges that as an officer and employee of Micronics, Xxxxxxxx has a
fiduciary obligation to keep confidential and not use any confidential, trade
secret or proprietary information of Micronics, except as necessary to perform
his duties with Micronics. He also acknowledges that, except as permitted above,
the terms of the Confidentiality Agreement that will be deemed a part of this
Agreement, require him to continue to keep confidential and not use any such
information he has received during his employment, or will receive while serving
as a consultant, and to avoid certain unfair business practices, such as
solicitation of Micronics' employees. The existence of this Agreement and its
terms and conditions will be deemed the confidential information of Micronics.
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Finally, Xxxxxxxx acknowledges that, Xxxxxxxx is obligated to comply with the
Company's Xxxxxxx Xxxxxxx Policy as in effect from time to time through the end
of the Consulting Period.
3.8 PRESERVATION OF RELATIONSHIP. In order to preserve the
goodwill which currently exists among the parties to this Agreement, neither
Xxxxxxxx nor Micronics shall, in any way, directly or indirectly, publicly or
privately, malign, denigrate or disparage the other, or any of the other's
associates, employees or staff, and all parties shall respond to inquiries
regarding Munshani's departure by indicating that Xxxxxxxx left Micronics as his
sole choice to pursue other interests in a mutually agreeable and amicable
manner.
4. GENERAL RELEASE.
4.1 GENERAL RELEASE. Micronics on the one hand, and Xxxxxxxx on
the other hand, on behalf of themselves, and their respective representatives,
heirs, executors, attorneys, partners, officers, directors, agents, successors,
assigns, shareholders and employees (collectively, "Affiliates"), hereby forever
mutually release and discharge each other, and their respective Affiliates, of
and from any and all causes of action, suits, debts, liens, agreements,
liabilities, claims, demands, losses, damages, costs or expenses, including
without limitation, court costs and attorneys' fees, that either may have
against the other as of the date hereof, whether known or unknown. However
nothing contained in this Section 4 shall release or terminate (a) the
continuing obligations of the parties under that certain Indemnification
Agreement dated November 4, 1994 between Micronics and Xxxxxxxx, (b) the
continuing obligations of Micronics and Xxxxxxxx under the Confidentiality
Agreement, (c) the consequences of any actions of Xxxxxxxx that may constitute a
misdemeanor or a felony nor (d) the continuing obligations of Micronics and
Xxxxxxxx under this Agreement.
4.2 AGE DISCRIMINATION WAIVER. Xxxxxxxx acknowledges that his
release set forth in this Section 4 waives any rights he may have under the Age
Discrimination in Employment Act of 1967 and related laws, that his release is
knowing and voluntary, that he may take 21 days to consider this Agreement
(which can be waived by earlier execution of this Agreement), and that he has
been advised to consult with an attorney prior to executing this Agreement.
Xxxxxxxx further acknowledges that he understands he may revoke this Agreement
within seven days after his execution of it and that the provisions in this
Agreement, if not revoked in writing within the seven-day period, will be
effective at the end of that time.
4.3 EXTENT OF RELEASE. This release extends to claims which the
parties do not know or suspect to exist in their favor, which if known by them
would have materially affected their decision to enter into this release. Each
of the parties acknowledges that he or it is familiar with Section 1542 of the
Civil Code of the State of California, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
In connection with this release, each of the parties expressly waives and
relinquishes any right or benefit which he or it has or may have under Section
1542 of the Civil Code, or any other statute
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or legal principle with a similar effect. In connection with such waiver and
relinquishment, the parties hereto acknowledge that, after executing this
Agreement, they may discover claims or facts in addition to, or different from,
those that they now know or believe to exist with respect to the subject matter
of this mutual release, but that it is their intention to settle and release all
of the claims, matters and differences known or unknown, suspected or
unsuspected, which now may exist or previously may have existed between them,
except as specifically provided in this Section 4. The releases given in this
Section 4 shall remain in effect as full and complete mutual releases
notwithstanding the discovery or existence of any such additional or different
claim or fact.
5. GENERAL PROVISIONS.
5.1 ARBITRATION. Xxxxxxxx and the Company shall submit to
binding arbitration in any controversy or claim arising out of, or relating to,
this Agreement or any breach hereof, provided, however, that the Company retains
its right to, and shall not be prohibited, limited or in any other way
restricted from, seeking or obtaining equitable relief from a court having
jurisdiction over the parties. Such arbitration shall be conducted in accordance
with the Rules of the American Arbitration Association in effect at that time,
and judgment upon the determination or award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Costs of the arbitration will
be borne equally by both parties; provided that each party will bear the fees
and costs of its own legal counsel.
5.2 CONSTRUCTION OF AGREEMENT. This Agreement shall be construed
as a whole and in accordance with its fair meaning. This Agreement has been
negotiated by the parties hereto, and its language shall not be construed for or
against any party due to any rule of construction, nor will the terms of this
Agreement be deemed a precedent or practice, or continuation of any precedent or
practice, respecting any officer, director or employee of Micronics.
(a) If any word, clause or provision of this Agreement is
held to be unenforceable for any reason, it shall be adjusted to cause such
provision to be enforceable, to the extent possible in accordance with the
intent of the parties of this Agreement. In such case, all other words, clauses
or provisions of this Agreement shall be deemed valid and enforceable.
(b) The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
(c) Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties to this Agreement and
their permitted successors and assigns, any rights or remedies under, or by
reason of, this Agreement.
5.3 NOTICES. Any and all notices or other communications required
or permitted by this Agreement to be given or delivered to any party hereto
shall be given in writing and shall be deemed effectively given upon personal
delivery or upon deposit in the U.S. Post Office, certified mail, return receipt
requested, with postage and fees prepaid, addressed to the receiving
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party at such party's address shown below his or its signature below or at such
other address as such party may hereafter designate by 10 days' advance written
notice to the other party.
5.4 ENTIRE AGREEMENT. This Agreement constitutes and contains the
entire agreement of the parties with respect to its subject matter. This
Agreement supersedes and terminates any and all prior negotiations,
correspondence, understandings, agreements, duties or obligations among the
parties respecting such subject matter.
5.5 AMENDMENT AND WAIVER. Any term of this Agreement may be
amended and observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the parties. Waiver of any term
or condition of this Agreement by any party shall not be construed as a waiver
of any subsequent breach or failure of the same term or condition or a waiver of
any other term or condition of this Agreement. The failure of any party at any
time to require performance by any other party of any provision of this
Agreement shall not affect the right of any such party to require performance of
such provision or any other provision of this Agreement.
5.6 SUCCESSOR AND ASSIGNS; ASSIGNMENT. The provisions of this
Agreement shall inure to the benefit of, and shall be binding upon, the
successors and assigns of the parties to this Agreement, including, without
limitation, any party to a merger or consolidation with Micronics. This
Agreement may not be assigned by Xxxxxxxx, without the prior written consent of
Micronics, which consent shall not be unreasonably withheld or delayed.
5.7 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, excluding
that body of law relating to conflict of laws.
5.8 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
MICRONICS COMPUTERS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx /s/ Xxxxxxx Xxxxxxxx
---------------------------------------- -------------------------------
Wm. X. Xxxxxxxxx, Authorized Signatory XXXXXXX XXXXXXXX
Address: 00000 Xxxxxxxxx Xxxx Xxxx Address: 0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Attn: Chief Executive Officer
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