EXHIBIT 10.18
CONSULTING AGREEMENT
This Agreement made and entered into this first day of April 1999 by
and between ASHA Corporation, a corporation duly organized and existing under
and pursuant to the laws of the State of Delaware (hereinafter referred to as
"ASHA/McLaren or the "Company") and Xxxx X. XxXxxxxxx, an individual residing in
the city of Santa Ynez, State of California (hereinafter referred to as
"XxXxxxxxx").
WHEREAS, ASHA/McLaren is engaged in the development, marketing and sale
of Intellectual Properties as well as in Contractual Engineering and Engine
Development via its subsidiary McLaren Engines, Inc., and is desirous of
entering the automotive after market, and has employed XxXxxxxxx since February
1, 1995 first as President and Chief Operating Officer and since January, 1998
as Chairman, President and Chief Executive Officer;
WHEREAS, both ASHA/McLaren and XxXxxxxxx have agreed that XxXxxxxxx
shall resign from his position and employment with ASHA/McLaren and in so doing
vacate the offices of Chairman, President and Chief Executive Officer of
ASHA/McLaren;
WHEREAS, XxXxxxxxx, in order to facilitate a smooth and orderly
transition of ASHA/McLaren's senior management agrees to retention by
ASHA/McLaren as a consultant to the new Chairman and the new President and Chief
Operating Officer of ASHA/McLaren; and
WHEREAS, both ASHA/McLaren and XxXxxxxxx wish to formalize this
relationship, in contractual form, it is hereby agreed that ASHA/McLaren will
retain XxXxxxxxx and XxXxxxxxx will accept retention by ASHA/McLaren as a
consultant pursuant to the terms hereof,
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Resignation. XxXxxxxxx hereby acknowledges and agrees that he
voluntarily and irrevocably resigns from his positions and employment
with ASHA/McLaren effective April 21, 1999. Provided however; XxXxxxxxx
shall remain a member of ASHA/McLaren's Board of Directors through
September 30, 1999.
2. Consulting.
(a) At the reasonable request of the Chief Executive Officer, Chief
Operating Officer or Board of Directors of ASHA/McLaren; XxXxxxxxx
agrees to provide consulting services to ASHA/McLaren during the
period commencing on April 21, 1999 and ending on April 20, 2000
("Consulting Term"). Such consulting services shall include advice
on transitional issues, financial matters, customer and public
relations, and other mutually agreeable projects. After April 21,
1999, XxXxxxxxx shall no longer be an employee of ASHA/McLaren
and the consulting services shall be rendered as an independent
contractor. XxXxxxxxx shall endeavor to render his
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services to ASHA/McLaren at a time and in a manner reasonably
convenient to ASHA/McLaren and XxXxxxxxx. XxXxxxxxx shall be
entitled to reasonable vacation and leisure time during which he
shall have no obligation to provide any consulting services.
XxXxxxxxx shall have no liability or obligation for any consulting
services he performs or any action or omission on the part of
ASHA/McLaren or any of its subsidiaries based thereon.
Within ten (10) days after the conclusion of each month during the
Consulting Term, XxXxxxxxx agrees to submit a report to the Chief
Executive Officer and Chief Operating Officer detailing the
consulting services provided for the previous month. This report
shall include an outline of specific actions recommended and
planned during the next ninety (90) days.
3. Compensation. The compensation for consulting services rendered
pursuant to this Agreement and the consideration for the releases and
non-competition covenants contained in this Agreement shall consist of
the following:
(a) ASHA/McLaren shall pay to XxXxxxxxx the annual amount of $147,000
payable in twenty-six (26) equal and consecutive installments of
$5,653.85 each on the Friday of every second week of the month
during the term of this Agreement beginning April 30, 1999 and
ending April 14, 2000.
(b) Upon the effective date of this Agreement, XxXxxxxxx shall be
granted an option to purchase 50,000 shares of ASHA/McLaren common
stock at a price equal to the closing price of ASHA common stock
on the date of grant. 25,000 of such shares of ASHA common stock
will vest upon the effective date of this Agreement. The remaining
25, 000 shares will vest upon a motion made and approved by the
Board of Directors of ASHA/McLaren at the conclusion of the
Consulting Term that XxXxxxxxx has fulfilled all of his
obligations pursuant to this Agreement. The expiration date of
such options shall be in accordance with the terms of the Notice
of Grant for such options.
(c) XxXxxxxxx SHALL be compensated for his reasonable expenses
incurred in connection with consulting activities under this
Agreement.
(d) All options currently held by XxXxxxxxx shall remain valid until
the stated expiration date of the options.
(e) the full or complete payment of compensation described in this
Agreement shall be considered as fulfilling all of the Company's
compensation obligations to XxXxxxxxx, including salary, bonuses,
unpaid vacation and stock options.
4. Other Compensation and Benefits. During the Consulting Term, XxXxxxxxx
shall be entitled to participate in and receive the same benefits under
ASHA/McLaren's group life, health, dental and medical/hospital in
effect from time to time.
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XxXxxxxxx shall be supplied with a 1999 Jeep Grand Cherokee presently
in use as a test vehicle for his own personal use during the Consulting
Term. At the termination of the Consulting Term, he may purchase the
vehicle at this option for a price equal to 50% of the then wholesale
Blue Book value of the vehicle. XxXxxxxxx shall also have available for
his personal use the Apple computer that he currently uses and shall be
allowed to purchase this computer at its fair market value at the
termination of the Consulting Term.
5. Non-Competition. XxXxxxxxx agrees that during and for a period of one
year after the expiration of the Consulting Term (the "Non-Compete
Period"), XxXxxxxxx shall not, directly or indirectly, without the
prior written consent of ASHA/McLaren:
(a) solicit, entice, persuade or induce any employee, consultant, agent
or independent contractor of ASHA/McLaren or of any of its
subsidiaries or affiliates to terminate his or her employment with
ASHA/McLaren or such subsidiary or affiliate, to become employed by
any person, firm or corporation other than ASHA/McLaren or such
subsidiary or affiliate or approach any such employee, consultant,
agent or independent contractor for any of the foregoing purposes,
or authorize or assist in the taking of any such actions by any
third party (for purposes of this Section 5(a), the terms
"employee," "consultant," "agent" and "independent contractor"
shall include any persons with such status at any time during the
six (6) months preceding any solicitation in question); or
(b) directly or indirectly engage, participate, or make any financial
investment in, or become employed by or render consulting, advisory
or other services to or for any person, firm, corporation or other
business enterprise, wherever located, which is engaged, directly
or indirectly, in competition with ASHA/McLaren's business or the
businesses of its subsidiaries or affiliates as conducted or any
business proposed to be conducted at the time of the expiration or
termination of the Consulting Term; provided, however, that nothing
in this Section 5(b) shall be construed to preclude XxXxxxxxx from
making any investments in the securities of any business
enterprise.
6. Termination of Employment Agreement. XxXxxxxxx and ASHA/McLaren hereby
agree that the Employment Agreement between XxXxxxxxx and the Company
dated February 1, 1997 has terminated and is rendered null and void and
that ASHA/McLaren shall not have any obligation or liability
thereunder.
7. General Release.
(a) In exchange for the full and complete execution of payments
described herein, XxXxxxxxx and his heirs, executors,
administrators and assigns hereby forever release and discharge
ASHA/McLaren and its shareholders, subsidiaries, related entities
and affiliates, their respective predecessors, successors,
assigns, and past, present or future officers, partners,
directors, shareholders, employees, agents,
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trustees, from any and all claims, demands, liens, agreements,
covenants, actions, suits, causes of action, obligations,
controversies, costs, expenses, damages, judgments, orders, and
liabilities of whatever kind or nature, in law or in equity, by
statute or otherwise, whether now known or unknown, vested or
contingent, which exist or have existed prior to the date of this
General Release ("Claims").
(b) Without limiting the generality of the foregoing, Claims with
respect to XxXxxxxxx shall include any claims and liabilities
relating to or arising out of XxXxxxxxx'x employment or
termination of employment by ASHA/McLaren and any and all claims
of employment under the United States Constitution, Title VII of
the Civil Rights Act of 1964, as amended, the Americans with
Disabilities Act of 1990, as amended, the Age Discrimination in
Employment Act of 1967, as amended ("ADEA"), and any other local,
state or federal law, order, regulation, or ordinance relating to
employment or otherwise.
(c) The parties acknowledge that this Agreement, when duly and
completely executed, is intended to constitute a full and final
settlement, mutual release and bar to all employment related
claims of any kind, known or unknown which the parties may have
against each other. The Parties acknowledge that they are 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."
The parties expressly waive and relinquish any and all rights and
benefits which they may have under Civil Code section 1542 to the
fullest extent permissible under the law. The Parties acknowledge
that they are aware that they, or their attorneys, may hereafter
discover claims or facts in addition to or different from those
which are known or believed to exist with respect to the subject
matter of this Agreement, but that it is the Parties' intention to
fully, finally and forever settle and release all claims known or
unknown, suspected or unsuspected which the Parties may have
against each other with respect to the subject matter of this
Agreement.
8. Cooperation Regarding Litigation. XxXxxxxxx agrees to continue to
cooperate with ASHA/MCLaren and its counsel with respect to pending or
future litigation involving ASHA/McLaren. Such cooperation includes
meeting with counsel for purposes of preparation for deposition and
testimony at trial, if necessary in the opinion of ASHA/McLaren
counsel. XxXxxxxxx agrees he will not meet or have discussions with
counsel for adverse parties without providing ASHA/McLaren's counsel an
opportunity to be present during such meeting or discussion.
ASHA/McLaren agrees to reimburse XxXxxxxxx at a reasonable rate for the
time spent by XxXxxxxxx in litigation matters at the request of
ASHA/McLaren after the expiration of the Consulting Term.
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9. No Admission of Liability. ASHA/McLaren and XxXxxxxxx understand and
agree that this General Release is not intended to be and shall not be
deemed, construed, or treated in any respect as an admission of
liability by any person or entity for any purpose.
10. Confidentiality. Neither party will divulge or discuss any aspects of
this Agreement with third parties, except as may be required by law or
by such party's legal or financial advisors. All hard copy and computer
stored proprietary information owned by ASHA/McLaren will be documented
and returned and recorded with the Chief Financial Officer of
ASHA/McLaren. Any action by XxXxxxxxx, intentional or unintentional,
that breaches the confidentiality of ASHA/McLaren's strategy, plans,
intellectual assets or any other confidential information or trade
secrets of ASHA/McLaren shall constitute a material breach of this
Agreement and the Company's obligation to pay any remaining
consideration under this Agreement shall cease, and the Company shall
be entitled to pursue additional remedies.
11. XxXxxxxxx and ASHA/McLaren acknowledge that it is their mutual intent
that the Age Discrimination in Employment Act waiver contained in
Section 7 above fully comply with the Older Workers Benefit Protection
Act. Accordingly, this Agreement requires and XxXxxxxxx acknowledges
and agrees that:
(a) he has carefully read this General Release in its entirety and has
had an opportunity to consider fully the terms of this General
Release for at least twenty-one (21) days;
(b) that he has been advised and encouraged to consult with counsel of
his choice regarding the terms and conditions of this General
Release;
(c) that he has had answered to his satisfaction any questions he had
asked with regard to the meaning and significance of any of the
terms and conditions of this General Release;
(d) that he fully understands the significance of all the terms and
conditions of the General Release;
(e) that after executing this General Release, he has a period of
seven (7) days during which he may revoke this General Release by
delivering a written revocation to ASHA/McLaren; and
(f) that he is signing this General Release voluntarily and of his own
free will and assents to all the terms and conditions therein.
12. Arbitration. Any controversy or claim arising out of or relating to
this agreement, or a breach thereof, shall be settled by arbitration in
Santa Barbara, California before a panel of Arbitrators selected as
follows: Within ten (10) days of demand by either party for
arbitration, each party will select one arbitrator and those two will
select a third arbitrator, and those three shall constitute the panel.
The arbitrator's decision will be by a majority vote. The arbitration
shall not be appealable de novo by either party.
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13. Entire Agreement. The foregoing constitutes the entire agreement
between the parties and no modification of any of the provisions hereof
shall be binding upon either XxXxxxxxx or ASHA unless in writing and
signed by the party against whom such modification is sought to be
enforced.
14. Interpretation. This agreement has been submitted to the scrutiny of
all parties hereto and of counsel. This Agreement shall be controlled
by the laws of the State of California.
15. Severability. If any provision of this Agreement is declared void or
unenforceable by any competent judicial or administrative authority,
then any such provision shall be severed and all remaining provisions
of this Agreement shall remain in full force and effect.
16. Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors, but will not be otherwise assignable without
the written consent of the other party, which consent will not be
unreasonably withheld.
XXXX X.XXXXXXXXX ASHA CORPORATION
/s/ Xxxx X. XxXxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Director
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WITNESS
Print Name: Xxxxxxxx X. Xxxxxxxxx
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Signature: /s/ Xxxxxxxx X. Xxxxxxxxx
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