EXHIBIT 10.34
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ON TECHNOLOGY CORPORATION
CONSULTING AGREEMENT
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THIS IS AN AGREEMENT made as of December 28, 2000, by and between ON
Technology Corporation, a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxxxxx (the "Consultant").
WHEREAS, the Company desires to obtain the services of the Consultant
and the Consultant desires to provide such services to the Company to facilitate
transitional needs in the event of a change of control of the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which consideration are hereby acknowledged, the parties agree as
follows:
1. Services
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During the first 12 months of the Consulting Period only, the
Consultant agrees to perform such consulting services to and for the Company as
may be reasonably requested by the President of the Company or its Board of
Directors to facilitate the transition of the Company's management from the
Consultant to his successor. The Consultant's commitment to the Company will be
part-time and shall not to exceed twenty (20) hours per week to allow the
Consultant to pursue other interests, including other part-time employment or
consulting assignments. Such consulting services shall take into account the
Consultant's expertise in managing and operating the Company and may be
performed either in person or by telephone.
2. Term
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Unless sooner terminated as provided below, the term of the
Consultant's engagement under this Agreement will be for two years from the date
the Consultant's full-time employment with the Company is terminated for any
reason other than for "cause" by (i) the Company or (ii) the Company's
successor-in-interest within twelve months after the consummation of a Change of
Control (the "Consulting Period"). For purposes of this Agreement, a Change of
Control shall mean a consolidation or merger in which the Company is not the
surviving corporation or results in a change of 50% or more of the Company's
equity securities, or the acquisition of all or substantially all of the
Company's outstanding Common Stock by a single person, entity or group of
persons or entities acting in concert, or the sale or the transfer of all or
substantially all of the assets of the Company. For purposes of this Agreement,
"cause" shall have the same meaning as is set forth in Section 9 of that certain
letter agreement regarding the Consultant's employment by and between the
Consultant and the Company dated January 31, 2000 (the "Employment Letter").
3. Extent of Services
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During the Consulting Period, the Consultant will devote his best
efforts to the performance of his duties under this Agreement. Under no
circumstances will the Consultant knowingly take any action contrary to the best
interests of the Company.
4. Compensation
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4.1 Base Consulting Fee. In consideration of the services rendered
by the Consultant under this Agreement and the other covenants set forth
hereunder, including, without limitation, Section 6 herein, the Company will pay
the Consultant compensation of $250,000 per annum, payable in accordance with
the Company's normal payroll practices (the "Base Consulting Fee").
4.2 Expenses. The Company will, upon substantiation thereof,
reimburse the Consultant for all reasonable expenses of types authorized by the
President of the Company in the ordinary course of business and incurred by the
Consultant in connection with the Company's business affairs. The Consultant
must comply with such accounting and reporting requirements as the Company may
from time to time establish in order to obtain such reimbursement.
4.3 Benefits. During the Consulting Period, the Consultant shall
be entitled to participate in the Company's life, disability, medical, dental
and other insurance programs available to key executives on the same terms as
such are available generally to other key executives of the Company.
5. Termination
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5.1 By the Company. The Company may terminate the Consultant's
consulting relationship with the Company (a) upon the expiration of the
Consulting Period in accordance with the terms of this Agreement, (b) upon the
death or disability of the Consultant, or (c) upon a determination of "cause" as
defined in the Employment Letter. A termination of this Agreement shall have no
effect on the terms of the Employment Letter, which shall remain in full force
and effect.
5.2 By the Consultant. The Consultant may terminate his
consulting relationship with the Company upon the expiration of the Consulting
Period in accordance with the terms of this Agreement.
6. Non-Disclosure; Non-Competition
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6.1 Proprietary Information.
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(a) The Consultant agrees that all information and know-how,
whether or not in writing, of a private, secret or confidential nature
concerning the Company's business or financial affairs (collectively,
"Proprietary Information") is and will be the exclusive property of the Company.
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By way of illustration, but not limitation, Proprietary Information includes
creative ideas and concepts; contemplated or planned advertising or public
relations plans, methods or techniques; slogans, copy, names, layout, formulas,
compositions, projects, developments, media or marketing plans, research data,
financial data, personnel data, computer programs, and client and supplier
lists, whether or not such information is capable of copyright, trademark or
license protection. The Consultant will not disclose any Proprietary Information
to others outside the Company or use the Proprietary Information for any
unauthorized purposes without written approval by an officer of the Company,
either during or after his employment, unless and until such Proprietary
Information has become public knowledge without the fault of the Consultant. The
Consultant acknowledges and agrees that personnel information pertaining to the
Consultant is Proprietary Information; provided however that the Consultant may
disclose his personal Base Salary. For purposes of this Section 6, Proprietary
Information shall not include information which (i) becomes generally available
to the public other than as a result of disclosure by the Consultant; (ii)
becomes available to third parties on a non-confidential basis from a source
other than the Consultant; (iii) is disclosed to third parties with the prior
permission of the Company; (iv) is disclosed to the Consultant by a third party
who is under no duty of non disclosure with respect to such information; or (v)
is made pursuant to a requirement of law or a subpoena.
(b) The Consultant agrees that all files, letters, memoranda,
reports, records, data, sketches, drawings, notebooks, program listings, or
other written, photographic, or other tangible material containing Proprietary
Information, whether created by the Consultant or others, which comes into his
custody or possession, is the exclusive property of the Company, to be used by
the Consultant only in the performance of his duties for the Company.
(c) The Consultant agrees that his obligation not to disclose or
use information, know-how and records of the types set forth in paragraphs (a)
and (b) above also extends to such types of information, know-how, records and
tangible property of customers of the Company or suppliers to the Company or
other third parties who may have disclosed or entrusted the same to the Company
or to the Consultant in the course of the Company's business.
6.2 Developments.
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(a) The Consultant will make full and prompt disclosure to the
Company of all inventions, improvements, ideas, concepts, approaches,
discoveries, methods, developments, software, and works of authorship, whether
or not it is capable of copyright, trademark or license protection, which are
created, made, conceived or reduced to practice by the Consultant or under his
direction or jointly with others during his consulting relationship with the
Company and relates, directly or indirectly, to the performance of the
Consultant's duties for the Company, whether or not during normal working hours
or on the premises of the Company (all of which are collectively referred to in
this Agreement as "Developments").
(b) The Consultant agrees to cooperate fully with the Company,
both during and after the Consulting Period, with respect to the procurement,
maintenance and enforcement of copyrights and trademarks (both in the United
States and foreign countries) relating to Developments. The Consultant will sign
all papers, including, without limitation, copyright applications, trademark
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applications, declarations, oaths, formal assignments, assignments of priority
rights and powers of attorney, which the Company may deem necessary or desirable
in order to protect its rights and interest in any Developments.
6.3 Non-Competition.
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(a) During the term of the Consultant's consulting relationship
with the Company, the Consultant will not, without the Company's prior written
approval, directly or indirectly:
(i) as an individual proprietor, partner, stockholder,
officer, employee, consultant, director, joint venturer, investor, lender or in
any other capacity whatsoever (other than as a holder of not more than 1% of the
total outstanding stock of a publicly held company) engage in the business of
developing, manufacturing, marketing, selling or otherwise distributing any
product or service of the type developed, manufactured, marketed, sold or
otherwise distributed by the Company during the Consulting Period;
(ii) recruit, solicit, induce, attempt to induce,
participate in hiring or hire, any employee or consultant of the Company to
terminate or otherwise cease his or her relationship with the Company; or
(iii) solicit, divert or take away or attempt to divert or
to take away, the business or patronage of, or work with, provide services to or
consult for, any of the current clients, customers or accounts, or prospective
clients, customers or accounts, of the Company. For purposes of this Agreement a
current client, customer or account is any individual or entity whose business
is served by the Company during the Consulting Period, and a prospective client,
customer or account is any individual or entity whose business has been
solicited by the Company during the Consulting Period or with whom any
representative of the Company has had a meeting or submitted a proposal during
the Consulting Period with the intent of receiving business from such individual
or entity.
(b) If any restriction set forth in this Subsection 6.3 is found
by any court of competent jurisdiction to be unenforceable because it extends
for too long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the maximum
period of time, range of activities or geographic areas to which it may be
enforceable.
(c) The restrictions contained in this Subsection 6.3 are
necessary for the protection of the business and goodwill of the Company and are
considered by the Consultant to be reasonable for this purpose. The Consultant
agrees that any breach of this Subsection 6.3 will cause the Company substantial
and irrevocable damage and, therefore, in the event of any such breach, in
addition to such other remedies which may be available, the Company will have
the right to seek specific performance and injunctive relief.
6.4 Survival of Obligations. The obligations of the Consultant
under this Section 6 will survive the termination of this Agreement.
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7. No Power to Bind; Public Statements
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(a) The Consultant is not authorized by this Agreement to assume or to
create any obligation or responsibility, express or implied, on behalf of or in
the name of the Company or to bind the Company in any manner or to anything
whatsoever.
(b) The Consultant agrees that he will abide by the policies and
directions of the Board of Directors and President of the Company with respect
to all public statements concerning the Company and its industry and shall not
make any public statements which are inconsistent with or contravene express
directions of the President or Board of Directors of the Company.
8. Notices
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All notices under this Agreement must be in writing and must be
delivered by hand or mailed by certified or registered mail, postage prepaid,
return receipt requested, to the parties as follows:
If to the Company: ON Technology Corporation
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: President
with a copy to: Xxxxx Xxxxx, Esq.
Xxxxxxx, Xxxxxx & Green, P.C.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
If to the Consultant: To the address set forth below the signature
of the Consultant;
or to such other address as is specified in a notice complying with this Section
8. Any such notice is deemed given on the date delivered by hand or three days
after the date of mailing.
9. Other Agreements
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The Consultant hereby represents that he is not bound by the terms
of any agreement with any previous employer or other party to refrain from using
or disclosing any trade secret or confidential or proprietary information in the
course of his employment with the Company or to refrain from competing, directly
or indirectly, with the business of such previous employer or any other party.
The Consultant further represents that his performance of all the terms of this
Agreement and as a consulting to the Company does not and will not breach any
agreement to keep in confidence proprietary information, knowledge or data
acquired by him in confidence or in trust prior to his consulting relationship
with the Company.
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10. Miscellaneous
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10.1 Modification. This Agreement constitutes the entire Agreement
between the parties 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.
10.2 Successors and Assigns. This Agreement is binding upon and
inures to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, although the obligations
of the Consultant are personal and may be performed only by him.
10.3 Severability. The provisions of this Agreement are severable,
and invalidity of any provision does not affect the validity of any other
provision. In the event that any court of competent jurisdiction determines that
any provision of this Agreement or the application thereof is unenforceable
because of its duration or scope, the parties agree that the court in making
such determination will 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 is valid and enforceable to the full extent permitted by
law.
10.5 Governing Law. This Agreement is to be construed under and
governed by the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
ON TECHNOLOGY CORPORATION
By:
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Name:
Title:
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Xxxxxx X. Xxxxxxx
Address: 000 Xxxxxxxxxxxx Xxxxxx, Xx. 0
Xxxxxx, XX 00000
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