EXHIBIT 10.1
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CONSULTANT AGREEMENT
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THIS AGREEMENT is entered into as of June 18, 1998 (the "Effective Date"),
by and between Dataware Technologies, Inc., a Delaware corporation with its
offices at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"Company"), and Xxxxxxx Xxxxxxxxx, Inc., a Massachusetts corporation with its
offices at 00 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 (the "Consultant").
WHEREAS, the Company wishes to engage Consultant and Consultant wishes to
enter into a consultant relationship with the Company and to cause Xxxxxxx
Xxxxxxxxx ("Xxxxxxxxx"), Chief Executive Officer of Consultant, to perform
certain functions and services for Company on behalf of Consultant; and
WHEREAS, the parties desire to set forth the terms and conditions under
which Consultant shall be engaged, and pursuant to which Consultant shall be
compensated by the Company.
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
promises and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Consultant agree as follows:
ARTICLE 1
ENGAGEMENT TERM
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1.1 Office. The Company hereby agrees to engage Consultant, and
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Consultant hereby accepts such engagement and agrees to cause Xxxxxxxxx to serve
the Company, as Vice President, Finance and Administration, and Chief Financial
Officer of the Company during the Engagement Term (as hereinafter defined).
Consultant's engagement shall, unless earlier terminated in accordance herewith,
continue until December 31, 1999. Such engagement term, regardless of any
earlier termination, is referred to herein as the "Engagement Term."
1.2 Responsibilities. Xxxxxxxxx shall be engaged as Vice President,
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Finance and Administration, and Chief Financial Officer of the Company pursuant
to and in accordance with the terms of this Agreement, subject to the direction
and control of the President and the Board of Directors of the Company (the
"Board of Directors") with such authority, duties and responsibilities as are
commensurate with such position, provided that the Company may alter Xxxxxxxxx'x
position in the Company if warranted based on Xxxxxxxxx'x performance.
Xxxxxxxxx shall devote four (4) business days per week to his responsibilities
to the Company. It is anticipated that Xxxxxxxxx shall devote his time to the
Company in the proportions stated on Exhibit A hereto.
1.3 End of Engagement Term. At the end of the Engagement Term the Company
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may, without any obligation, (i) terminate Consultant's engagement with the
Company or (ii) retain Consultant as a consultant of the Company. Consultant
may elect to terminate its
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relationship with the Company at that time. If the Consultant is retained by the
Company following the end of the Engagement Term its relationship thereafter
will continue from month to month until terminated in accordance herewith (and
following the end of the Engagement Term that continued term shall be referred
to as the "Engagement Term").
1.4 Time Commitment. Subject to the commitment stated in Section 1.2,
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Xxxxxxxxx will serve the Company faithfully and to the best of his ability and
will devote his time, attention and best efforts to the affairs of the Company
during the Engagement Term; provided, however, that Xxxxxxxxx may engage in
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other business consulting activities and director and advisor positions at other
companies, speaking and similar activities if and to the extent that such other
activities do not inhibit or prohibit Xxxxxxxxx from devoting his time,
attention and best efforts to the affairs of the Company as contemplated by
Section 1.2 during the Engagement Term or conflict in any material way with the
business of the Company. Schedule 1.4 attached hereto states all current
business commitments Xxxxxxxxx currently has with other entities.
1.5 Indemnification. The Company shall, to the fullest extent permitted
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by the General Corporation Law of the State of Delaware, as amended from time to
time and in accordance with the Company's Certificate of Incorporation, as
amended from time to time, and By-laws, as amended from time to time, indemnify
Xxxxxxxxx if Xxxxxxxxx is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was an officer of the Company, against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him or on his behalf in connection with such action, suit or proceeding and
any appeal therefrom.
ARTICLE 2
COMPENSATION AND BENEFITS
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2.1 Payment; Bonus. During the Engagement Term, Consultant shall receive
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(i) a payment of eleven thousand dollars ($11,000) per month, payable on the
same schedule as salary is paid by the Company to other senior executive
officers, and (ii) a bonus of three thousand five hundred dollars ($3,500) per
month, at 100% of the bonus plan, pro rata for the portion of time Consultant
was engaged at the Company in the calendar year for which such bonus is being
paid. The payment of this bonus will be subject to the achievement of the
performance targets set forth by the Company and will be payable, to the extent
earned by achievement of such performance targets, on the same schedule as
bonuses are paid by the Company to other senior executive officers.
2.2 Stock Options. On June 18, 1998, the Board of Directors granted to
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Xxxxxxxxx a nonstatutory stock option to purchase fifty four thousand (54,000)
shares of Common Stock, $0.01 par value, of the Company (the "Common Stock")
under the Company's 1993 Equity Incentive Plan at a price equal to the fair
market value of the Common Stock. Such options shall be exercisable as to three
thousand (3,000) of the shares in monthly installments commencing on each
monthly anniversary after June 30, 1998 and ending on the earlier of the end of
the Engagement Term or the Date of Engagement Termination (as hereinafter
defined), and contain such other terms and conditions consistent with the
Company's form of stock option certificate,
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except that, upon a Change of Control (as hereinafter defined), such options
shall immediately vest in Xxxxxxxxx, and Xxxxxxxxx may exercise such options and
purchase the balance of the outstanding shares thereunder.
2.3 Benefits; Other Compensation. Neither Consultant nor Xxxxxxxxx shall
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be entitled during the Engagement Term to any benefits, including but not
limited to, a car allowance or health insurance coverage.
2.4 Expenses. Consultant will be reimbursed for reasonable business
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related expenses. Business travel expenses will be reimbursed in accordance
with the Company travel policy. Mileage reimbursements for business related
travel by private car will be at the latest Internal Revenue Service approved
rate.
2.5 Non-Disclosure Agreement. Consultant and Xxxxxxxxx will execute the
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Company's standard Non-Disclosure Agreement which is attached hereto as Exhibit
B. For the purposes of such Non-Disclosure Agreement, the term "employment"
shall mean "Engagement Term," and the term "employee" shall mean "consultant."
ARTICLE 3
TERMINATION OF ENGAGEMENT
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3.1 Termination by Company. Prior to December 31, 1999, Consultant may be
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terminated from its engagement by the Company on the following grounds:
(a) The Company may terminate Consultant with or without Cause. The
Company shall have "Cause" for termination of Consultant's engagement if any of
the following have occurred:
(i) Consultant and/or Xxxxxxxxx shall have willfully failed and
continued to fail substantially to perform the duties of its/his position,
including the duties set forth in Section 1.2 hereof (other than any such
failure resulting from incapacity due to physical or mental illness), for
ten (10) days after a written demand for performance is delivered to
Consultant on behalf of the Company; or
(ii) Consultant and/or Xxxxxxxxx shall have engaged in (A) any material
misappropriation of funds, properties or assets of the Company, (B) any
damage or destruction of any property or assets of the Company, whether
resulting from Consultant's or Xxxxxxxxx'x willful actions or omissions or
Consultant's or Xxxxxxxxx'x xxxxx negligence, or (C) any falsification of
any books, records, documents or systems of the Company; or
(iii) Consultant and/or Xxxxxxxxx shall (A) have been convicted of a crime
involving moral turpitude or constituting a felony or entered a guilty or
nolo contendere plea with respect thereto or (B) commit or knowingly allow
to be committed any illegal action on any premises of, or involving any
property or assets of, the Company; or
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(iv) Consultant and/or Xxxxxxxxx shall have breached any provisions of
this Agreement and such breach shall remain uncured by Consultant for ten
(10) days after receipt of notice from the Company specifying such breach;
provided that no such cure period shall be required for any such breach
that cannot be cured.
(b) The Company may terminate Consultant on account of a Disability. The
term "Disability" shall mean the inability of Xxxxxxxxx to perform substantially
his duties hereunder due to physical or mental disablement which continues for a
period of ninety (90) consecutive days or for an aggregate of one hundred and
eighty (180) days during any twelve (12) consecutive months during the
Engagement Term, as reasonably determined by an independent qualified physician.
3.2 Termination by Consultant. Consultant may terminate its engagement as
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follows:
(a) any material failure by the Company to comply with any of the
provisions of Article 2 of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and that
is remedied by the Company promptly after receipt of notice thereof given
by Consultant;
(b) Consultant's engagement hereunder may be terminated by Consultant
within three (3) months after the occurrence of any one of the following
(each, a "Change of Control") but prior to the end of the Engagement Term:
(i) the acquisition by any "person" (as such term is defined in Section
3(a)(9) of the Securities Exchange Act of 1934) of any amount of the
Company's Common Stock so that it holds or controls fifty percent (50%) or
more of the Company's Common Stock;
(ii) a merger or consolidation after which fifty percent (50%) or more of
the voting stock of the surviving corporation is held by persons who where
not stockholders of the Company immediately prior to such merger or
combination; or
(iii) the election by the stockholders of the Company of twenty percent
(20%) or more of the directors of the Company other than pursuant to
nomination by the Company's management; or
(c) Consultant's engagement may be terminated by Consultant without cause.
3.3 Date of Engagement Termination. "Date of Engagement Termination" shall
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mean:
(a) if Consultant's engagement is terminated as a result of a Disability,
the thirtieth (30th) day after notice of termination is given (provided that
Xxxxxxxxx shall not have returned to the performance of his duties during such
thirty (30) day period);
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(b) if Consultant's engagement is terminated by the Company for Cause, or
by the Consultant after a Change of Control the date on which notice of such
termination is given; or
(c) if Consultant's engagement is terminated either by the Company without
cause or by Consultant without cause, ninety days after the date on which notice
of such termination is given or when the Company elects to pay the lump sum
payment stated in Section 4.1.
3.4 Notice of Engagement Termination. Any termination of Consultant's
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engagement hereunder (other than upon the death of Xxxxxxxxx) shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 5.2. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon and (ii) if the termination is by the
Company for Cause or by Consultant, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Consultant's
engagement under the provision so indicated. The failure by the Company to set
forth in the Notice of Termination any fact or circumstance which contributes to
a showing of Cause shall not waive any right of the Company hereunder or
preclude the Company from asserting such fact or circumstance in enforcing its
rights hereunder.
ARTICLE 4
COMPENSATION FOLLOWING TERMINATION
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4.1 Without Cause. If Consultant's engagement is terminated by the Company
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without Cause and the Company elects to have the engagement terminate
immediately, Consultant shall receive a lump sum payment equaling three months
base payment.
4.2 Change of Control. If Consultant's engagement with the Company is
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terminated after a Change of Control, Consultant shall receive a lump sum
payment equaling three months base payment.
4.3 With Cause. Upon any other termination of Consultant's engagement,
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Consultant's payment and bonus specified in Article 2 shall cease on the Date of
Engagement Termination; provided that the Company shall pay Consultant, within
fifteen (15) days after the Date of Engagement Termination, all amounts then
accrued under Article 2. If Consultant is terminated with Cause, any bonus
accrued and not paid pursuant to Section 2.1 shall be forfeited by Consultant.
ARTICLE 5
MISCELLANEOUS
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5.1 Status. The Company and the Consultant agree that the Consultant will
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be an independent contractor for all purposes, including but not limited to
payroll and tax purposes. Accordingly, the Consultant shall have sole and
exclusive responsibility for the payment of all federal, state and local income
taxes and for all engagement and disability insurance, social
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security and other similar taxes with respect to any compensation provided by
the Company hereunder.
5.2 Notices. Any notice hereunder by either party to the other shall be
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given in writing by personal delivery, telecopy or registered or certified mail,
return receipt requested, addressed:
(a) if to the Company, to the attention of President at the Company's
executive offices or to such other address as the Company may designate in
writing at any time or from time to time to Consultant, with a copy to Xxxxxxx
X. Xxxxxxx, Xxxxxx & Dodge LLP, Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
(facsimile: (000) 000-0000); and
(b) if to Consultant, to the most recent address on file with the Company.
Notices shall be deemed given, if by personal delivery or if by telecopy, on the
date of such delivery, or, if by registered or certified mail, on the date shown
on the applicable return receipt.
5.3 Modification; Survival. This Agreement constitutes the entire
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understanding and agreement between the parties hereto with regard to the
subject matter hereof, superseding all prior understandings and agreements,
whether written or oral. This Agreement may not be amended or revised except by
a writing signed by the parties hereto.
5.4 Assignment. This Agreement may not be assigned by Consultant. This
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Agreement shall be binding upon the Company's successors and assigns.
5.5 Headings. Headings herein have been inserted solely for convenience
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of reference and in no way define, limit or describe the scope or substance of
any provision of this Agreement.
5.6 Severability. The provisions of this Agreement are severable, and the
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invalidity of any provision shall not affect the validity of any other
provision. In the event that any arbitrator or court of competent jurisdiction
shall determine that any provision of this Agreement or the application thereof
is unenforceable because of the duration or scope thereof, the parties hereto
agree that said arbitrator or court in making such determination shall have the
power to reduce the duration and scope of such provision to the extent necessary
to make it enforceable, and that the Agreement in its reduced form shall be
valid and enforceable to the full extent permitted by law.
5.7 Governing Law. This Agreement shall be governed by the laws of the
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Commonwealth of Massachusetts.
5.8 Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
a binding contract as of the date first written above.
XXXXXXX XXXXXXXXX, INC.
/s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
Title: Chief Executive Officer
DATAWARE TECHNOLOGIES, INC.
/s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: President
Agreed with respect to
Sections 1.2 and 1.4
Xxxxxxx Xxxxxxxxx
/s/ Xxxxxxx Xxxxxxxxx
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SCHEDULE 1.4
Current Business Commitments of Xxxxxxxxx
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Director, CEO and Treasurer of Xxxxxxx Xxxxxxxxx, Inc.
Director of:
1) Gold Wire Technology Corp.
2) Eprise Corporation
3) LSEnterprises Ltd.
4) Agranat Systems, Inc.
Advisory Board Member of:
1) Netmarquee Online Services, Inc.
2) Cytel Software, Inc.
Consultant to:
1) Global Telephone Corp.
2) Global Telemedix Inc.
3) Performance Motion Devices, Inc.
4) Dataware Technologies, Inc.
Treasurer of:
1) Kappelerhof Trading USA, Inc.
Agent for:
1) Iteco Inc.
2) Stockholders and noteholders of Sigma Design, Inc.
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EXHIBIT A
Approximate time investment at Company:
Current Future
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20% 40% Deal structure and planning
5% 20% Investor relations/BOD
55% 20% Financial reporting
15% 15% Management team focus
5% 5% Supervise admin., h/r, misc.
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100% 100% TOTAL
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EXHIBIT B
Non-Disclosure Agreement
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