Exhibit 10.14
Consulting Agreement
This Consulting Agreement is entered into as of this 6th day of
December, 1996 by and between EMCORE Corporation, a New Jersey corporation
having its chief executive offices at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx
Xxxxxx 00000 ("Emcore"), and Xxxxxx X. Xxxxxxxxx, residing at 00 Xxxxx Xxxxxx
Xxx, Xxxxxx, Xxx Xxxxxx 00000 ("Xx. Xxxxxxxxx").
WHEREAS, Xx. Xxxxxxxxx has served honorably as the Chief Executive
Officer of Emcore from its formation until December 4, 1996, on which date he
retired as its Chief Executive Officer, its Chairman of the Board of Directors
and as a member of its Board of Directors;
WHEREAS, Emcore desires to maintain a continuing relationship with
Xx. Xxxxxxxxx and obtain the benefit of his consulting services on a regular
basis, and Xx. Xxxxxxxxx is willing to provide such services; and
WHEREAS, Emcore and Xx. Xxxxxxxxx both desire to provide for
appropriate retirement arrangements.
NOW, THEREFORE, in consideration of the foregoing, and of the
agreements hereinafter set forth, the parties hereto agree as follows:
CONSULTING PROVISIONS: 1. Consulting. Xx. Xxxxxxxxx agrees to provide
consulting services to Emcore in the area of compound semiconductor materials
and devices for eight, eight hour workdays per month (approximately 2 days a
week less vacation time) for a term of two years commencing January 1, 1997
and ending December 31, 1998 (the "Term"). Xx. Xxxxxxxxx agrees that he will
consult with no other person or entity during the Term in the subject area of
compound semiconductor materials and devices without the prior written consent
of Emcore, which consent shall not be unreasonably withheld. Xx. Xxxxxxxxx
shall be responsible to, and shall from time to time report to, the Chairman
of the Board of Directors of Emcore and will consult with such personnel and
take direction for such consulting assignments from either the Chairman of the
Board of Directors or such other senior executive personnel as the Chairman
shall from time to time designate. Xx. Xxxxxxxxx agrees to review regularly
the status of research and product development projects to which he has been
assigned, discuss such projects with the Emcore's scientific and technical
personnel and provide regular comments on and suggestions for improvement of
these projects. Xx. Xxxxxxxxx and the senior executive personnel of Emcore
shall consult from time-to-time about other assignments which Xx. Xxxxxxxxx
may undertake, including the attendance at conferences, appearances at trade
shows and discussion of scientific problems with customers (but no sales
visits), provided that no such additional services shall be undertaken without
the specific and voluntary agreement of both parties. Emcore agrees to
reimburse Xx. Xxxxxxxxx for all reasonable expenses incurred in connection
with the performance of such additional assignments.
2. Renewal. This Agreement will automatically renew for one
successive two-year term if neither party gives notice to the other more than
sixty (60) days prior to the end of the Term (i.e., November 2, 1998) of his
or its intention not to renew at the end of the Term. In the event of such
renewal the Term shall be extended until December 31, 2000.
3. Consulting Fee. Xx. Xxxxxxxxx shall receive a monthly fee of
$20,833.33 (an annual rate of $250,000.00) payable for each month of the Term
on the first day of that month. To secure the payment of the consulting fee,
Emcore agrees to deposit, no later than December 24, 1996, $500,000 in an
interest-bearing account, said interest being for the benefit of Emcore, with
the law firm of Xxxxxx, Xxxxx and Xxxxxx as escrow agent. Emcore shall have
the option of having the monthly consulting fee paid from the escrow or paying
such sums directly. If sums are paid directly, then upon the written request
of Emcore and upon written notice given to Xx. Xxxxxxxxx and without objection
by Xx. Xxxxxxxxx within ten days, the escrow agent shall release to Emcore
that portion of the consulting fee so paid by Emcore. Interest on the account
shall be paid quarterly to Emcore without the requirement of notice. Emcore
agrees that this is a Security agreement and all amounts in the escrow are
pledged as security for payment of the consulting fee. In the event of
default hereunder Xx. Xxxxxxxxx shall have all of the rights and remedies of a
secured party under the Uniform Commercial Code with respect to the balance of
such escrow. Emcore and Xx. Xxxxxxxxx shall enter into such further security
documents as Xx. Xxxxxxxxx shall reasonably request to perfect Xx. Xxxxxxxxx'x
security interest in the escrow fund.
4. Automotive Allowance. Emcore shall provide Xx. Xxxxxxxxx an
automobile allowance of $750 per month through the Term of this Agreement
which shall be paid on the first of the month.
5. Forgiveness of Advances. Emcore has advanced to Xx. Xxxxxxxxx
$58,000 and $57,300. Emcore acknowledges that, as previously agreed, the
$58,000 advance has been forgiven as of the date of Xx. Xxxxxxxxx'x
retirement. Emcore agrees to forgive the $57,300 advance on January 1, 1997,
as additional compensation for Xx. Xxxxxxxxx'x consulting activities.
6. Notes and Warrants Issued May 1, 1996. On May 1, 1996, Emcore
completed an offering to shareholders of Subordinated Notes and Warrants.
Employees who were also shareholders were permitted to participate in the
offering on the basis of delivery of their personal notes in lieu of cash as
an employee benefit. Pursuant to this offering, Xx. Xxxxxxxxx purchased in
the aggregate $566,432 principal amount of Emcore's Subordinated Notes and
received Warrants to purchase 472,027 shares of Emcore Common Stock,
exercisable at $1.20 per share, and paid for these securities with Xx.
Xxxxxxxxx'x personal Note in the amount of $566,432. Xx. Xxxxxxxxx agrees to
place said Subordinated Notes and said Warrants in escrow with the escrow
agent until January 6, 1998. On such date such securities shall be released
to Xx. Xxxxxxxxx unless this Agreement has been terminated for reasons other
than the death or disability of Xx. Xxxxxxxxx or a material breach of this
Agreement by Emcore. In such event the parties agree that the May 1, 1996
transaction shall be reversed and Xx. Xxxxxxxxx, through the escrow agent,
shall re-deliver to Emcore said Subordinated Notes and said Warrants and said
personal Note of Xx. Xxxxxxxxx shall be automatically canceled. Should any
party dispute that such securities should be released or should be cancelled,
such party shall give written or facsimile notice to the escrow agent no
later than January 5, 1998 and the escrow agent shall advise the other party
then shall hold such securities pending the written agreement of the parties
or an order of court. Should such Warrants be called while in escrow, the
escrow agent shall take instructions from Xx. Xxxxxxxxx in responding to the
call and Xx. Xxxxxxxxx may direct that the Notes be delivered in payment,
provided that if such warrants are exercised the shares of common stock
deliverable upon exercise shall be delivered into escrow. Should Xx. Xxxxxxxxx
desire to exercise the warrants during the escrow period, then the escrow
agent shall exercise the warrants at Xx. Xxxxxxxxx'x written direction and
using as payment such funds as Xx. Xxxxxxxxx shall provide or the Subordinated
Notes at Xx. Xxxxxxxxx'x direction.
7. Public Statements Concerning Emcore or its Tech nology. Xx.
Xxxxxxxxx agrees that during the Term of this Agreement that he will submit
all public statements and literary works relating to Emcore or the subject
area of this Consulting Agreement to Emcore for its review prior to
publication or release to third parties to better assure the good name of
Emcore and better protect its confidential information. Emcore will submit to
Xx. Xxxxxxxxx all public statements or literary works referring to Xx.
Xxxxxxxxx prior to publication to better assure his good name.
8. Termination. This Consulting Agreement shall terminate if Xx.
Xxxxxxxxx shall die or, within the meaning of the disability policy identified
below, if Xx. Xxxxxxxxx shall become disabled. This Consulting Agreement may
be terminated by Emcore only for material breach of its provisions and after
30 days written notice to Xx. Xxxxxxxxx identifying the breach and providing a
reasonable opportunity (if at all possible) to cure. Upon termination all of
Emcore's obligations under this Agreement to make payments shall cease and the
Term shall come to an end.
9. Confidentiality Agreement.
A. Records and Disclosure. During the Term, Xx. Xxxxxxxxx
shall maintain on a current basis complete and accurate records of all
research or technical development work on which Xx. Xxxxxxxxx consults
hereunder, whether or not his involvement was during normal Emcore working
hours or on Emcore premises. Such records shall be the property of Emcore.
Xx. Xxxxxxxxx shall disclose forthwith to Emcore any discovery, invention or
literary work of any type that is used or usable by Emcore, and that is or was
conceived or created by him during the Term and relating to the subject area
of this Consulting Agreement or during the period of his prior employment by
Emcore, whether or not patentable or copyrightable, whether affirmative or
negative in nature, and whether made solely or jointly with others, unless
such discovery, invention, or literary is conceived or created after December
4, 1996 in connection with a consulting agreement with another entity and such
consulting is not in violation of this Agreement (collectively,
"Developments").
B. Assignment. Xx. Xxxxxxxxx hereby assigns, and agrees to
assign, to Emcore all of Xx. Xxxxxxxxx'x right, title and interest in all
Developments, whether or not presently in exist- ence, and in all domestic and
foreign intellectual property rights therein. Upon the filing by Emcore of
any U.S. patent application naming Xx. Xxxxxxxxx as an inventor or
co-inventor, Emcore shall pay to Xx. Xxxxxxxxx the sum of five hundred dollars
($500).
C. Cooperation. At Emcore's request and expense, during and
after the Term Xx. Xxxxxxxxx shall (i) execute and deliver to Emcore or its
designee all documents that Emcore, in its sole discretion, deems proper and
necessary in connection with the preparation, assignment, filing or
prosecution of any domestic or foreign patent or copyright application for any
Development; (ii) give and make any truthful oath to obtain, perfect, and
enforce any patent or copyright relating to any Development; and (iii) assist
in any other lawful way to obtain, perfect and enforce any patent or copyright
or application for any Development.
D. Confidentiality. During the Term and thereafter, Xx.
Xxxxxxxxx shall not use or disclose to any person, except as may be necessary
in performing Xx. Xxxxxxxxx'x duties to Emcore, any confidential information
of or concerning Emcore, its actual or anticipated business, research or
development, its technology or the implementation or exploitation thereof,
including without limitation information pertaining to customers, accounts,
vendors, prices, costs, materials, processes, material results, materials
technology, device results, system designs, system specifications, materials
of construction, trade secrets, and equipment designs.
E. Covenant. During the Term, Xx. Xxxxxxxxx shall not become
involved directly or indirectly, as a shareholder, director, officer,
employee, agent or otherwise (except as the owner of less than one percent
(1%) of the shares of a company whose annual gross revenues exceed one hundred
million dollars), in any business activity which the Board of Directors of
Emcore determines to be competitive with Emcore. For a period of two (2)
years after the Term, Xx. Xxxxxxxxx shall not: (1) Be employed by or become a
principal of any domestic or foreign business competing with Emcore in the
United States; (2) Accept employment with any customer of Emcore or any
supplier of goods or services to Emcore without prior consultation with
Emcore; (3) Solicit any employee of Emcore to leave such employee's position
with Emcore; or (4) Solicit business from any customer of Emcore without the
prior written consent of Emcore which written consent will not be unreasonably
refused.
F. Remedy. Breach by Xx. Xxxxxxxxx of Subsection D
("Confidentiality") or E ("Covenant") would injure Emcore in a manner not
adequately compensable by money damages. In the event of such an active or
threatened breach, Emcore shall be entitled to an injunction, including a
preliminary injunction and temporary restraining order, without posting a
bond.
RETIREMENT PROVISIONS
10. Retirement. Xx. Xxxxxxxxx retired from his positions as an
employee, as an officer and as a member of the Board of Directors of Emcore on
December 4, 1996.
11. Stock Options. Xx. Xxxxxxxxx holds incentive stock options
granted by Emcore under its 1995 Incentive Stock Option Plan to purchase
150,000 shares of Emcore's common stock, of which 90,000 shares are presently
vested. The Board of Directors of Emcore has, by Resolution, extended the
period for the exercise of these vested options for ninety (90) days from
December 4, 1996 until March 4, 1997. Emcore acknowledges that Xx. Xxxxxxxxx
may exercise the 90,000 options up to, and including, that date. Xx.
Xxxxxxxxx acknowledges that the remaining 60,000 unvested options have lapsed
pursuant to the terms of the options.
12. Medical, Disability and Life Insurance. Emcore agrees to
provide Xx. Xxxxxxxxx with participation, during the period ending on December
31, 2001, in Emcore's plan of medical benefits. Emcore agrees to assign to
Xx. Xxxxxxxxx the Disability Insurance policy under which he is presently
covered and the two life insurance policies on his life payable to his
selected beneficiary in the aggregate face amount of $1,075,000, if these
policies are by their terms assignable, and if not assignable to establish
similar policies which are assignable and so assign them. Emcore agrees to
reimburse Xx. Xxxxxxxxx, until December 31, 2001, for all premiums due on
these three policies. Emcore shall be free to continue or to cancel at its
option any key-man insurance payable to Emcore it may have on the life of Xx.
Xxxxxxxxx. In the event Emcore shall determine to cancel such insurance, it
shall give thirty (30) days notice to Xx. Xxxxxxxxx and afford Xx. Xxxxxxxxx
the opportunity to purchase such policy from Emcore upon payment to Emcore of
its cash surrender value if such insurance shall then be assignable according
to its terms.
13. Bonus, Vacation Time and Expense Reimbursement. Xx. Xxxxxxxxx
has or shall be paid within two days of the execution of this Agreement by
Emcore $103,055 in full satisfaction of all bonus and all vacation time
obligations of Emcore to Xx. Xxxxxxxxx. Xx. Xxxxxxxxx agrees to submit to
Emcore no later than January 15, 1997 all expense vouchers for expenses
incurred during the period of his employment and Emcore shall reimburse Xx.
Xxxxxxxxx for all expenses reasonably incurred.
14. Employment Agreement and Confidentiality Agreement. The
parties agree that the Employment Agreement dated January 1, 1996, which fully
replaced all prior employment agreements, has been terminated and all benefits
to which Xx. Xxxxxxxxx is entitled thereunder have been replaced by the
benefits provided hereunder. Notwithstanding such termination, Paragraph 8
thereof regarding the protection of Confidential Information of Emcore, as was
originally intended, shall remain in effect. The Employment Agreement was
supplemented by a Confidentiality Agreement dated October 14, 1996 which shall
also remain in effect.
15. 401(k) Plan. Xx. Xxxxxxxxx has made voluntary contributions
to the 401(k) plan sponsored by Emcore. Emcore acknowledges that Xx.
Xxxxxxxxx, subject to terms of the plan, may withdraw such funds and will from
time to time at Xx. Xxxxxxxxx'x request will so instruct the plan trustee.
GENERAL PROVISIONS
16. General Release. Emcore hereby generally releases Xx.
Xxxxxxxxx from all claims or causes of action it may hold against Xx.
Xxxxxxxxx as of the date of this Agreement, whether or not presently known to
Emcore (except for fraud), except as provided for herein. Xx. Xxxxxxxxx
hereby generally releases Emcore, its officers, its directors, its controlling
shareholders and its employees from all claims or causes of action which he
may hold against them as of the date of this Agreement, whether or not
presently known to Xx. Xxxxxxxxx (except for fraud), except as provided for
herein. In addition, Xx. Xxxxxxxxx and Emcore each hereby generally release
the other from any and all claims arising under the Securities Act of 1933, as
amended, or the Securities Act of 1934, as amended, or any applicable state
securities law whether such claims arise from facts and circumstances as of
the date hereof or as of any date until December 31, 1997.
17. Indemnification. Should any action be brought against Xx.
Xxxxxxxxx arising out of his acts on behalf of Emcore as a consultant,
employee, officer, director or shareholder of Emcore, Emcore agrees to
indemnify and hold harmless Xx. Xxxxxxxxx from any liability or costs
(including attorneys fees) incurred in defending such actions, provided Xx.
Xxxxxxxxx shall give reasonably prompt notice to Emcore of all such actions,
shall allow Emcore, at its option, to defend such actions and shall cooperate
fully with Emcore in defense of such actions.
18. Public Offering. Emcore may undertake an initial public
offering of its shares of common stock at some time in the future. In
connection with any such initial public offering, Xx. Xxxxxxxxx agrees that he
will execute a restrictive letter as proposed by the underwriters acting in
connection with such offering and which is signed by other executive officers
and major shareholders of Emcore. However, this restrictive letter shall not
restrict the resale of the shares for a period greater than a period of six
months from the date of any initial public offering of Emcore's common stock.
Xx. Xxxxxxxxx agrees not to exercise any piggy-back rights pursuant to any
Registration Rights Agreement in connection with any such offering unless
Emcore's principal shareholder, Jesup & Xxxxxx Xxxxxxxx Partners, L.L.C., its
successors and assigns or its affiliates shall be selling shareholders in such
offering. In the event such initial public offering is completed, Emcore
agrees to assist Xx. Xxxxxxxxx in preparing and filing any report he is
required to file under the federal and state securities laws including
Schedule 13D, Schedule 13G, Form 3, Form 4 or Form 5 as may from time to time
be required to be filed by Xx. Xxxxxxxxx which may arise from his beneficial
ownership of shares of common stock of Emcore or otherwise.
19. Affiliation. Emcore acknowledges that as of December 4, 1996
Xx. Xxxxxxxxx ceased to be an affiliate of Emcore. Emcore agrees to remove
restrictive legends from Xx. Xxxxxxxxx securities at such time or from time to
time as Xx. Xxxxxxxxx shall request in writing, but not before the expiration
of six months from December 4, 1996, and not prior to the expiration of any
restrictive period under any underwriters restrictive letter provided that at
such time, as a matter of law, such restrictions may be remove in the opinion
of counsel reasonably acceptable to the Emcore. Emcore acknowledges that Xx.
Xxxxxxxxx owns 1,251,351 shares of common stock, warrants to purchase 472,027
shares of common stock and holds options to purchase 90,000 shares of common
stock.
20. Independent Contractor. Xx. Xxxxxxxxx shall be an independent
contractor, and not an employee, with respect to the consulting services.
21. Legal Fee. Emcore shall pay the reasonable legal expenses
of Xx. Xxxxxxxxx incurred in the negotiation and preparation of this
Agreement.
22. Miscellaneous. This Consulting Agreement constitutes the
entire agreement of the parties in connection with the subject matter hereof.
This Agreement shall be interpreted in accordance with the substantive laws of
the State of New Jersey. SHOULD ANY DISPUTE ARISE UNDER THIS AGREEMENT, THE
PARTIES HERETO AGREE THAT IN ANY CIVIL ACTION EACH SHALL WAIVE THE RIGHT TO
TRIAL BY JURY AND CONSENT TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL OR
STATE COURTS LOCATED IN THE STATE OF NEW JERSEY AND SHALL WAIVE ANY CLAIM OF
IMPROPER VENUE OR FORUM NON CONVENIENS WITH RESPECT THERETO. This Agreement
is a personal contract and Xx. Xxxxxxxxx'x rights and obligations herein may
not be sold, transferred or assigned, pledged, hypothecated or otherwise
alienated by Xx. Xxxxxxxxx. Notwithstanding the foregoing, Xx. Xxxxxxxxx may
transfer his rights hereunder to an entity formed by him and principally owned
by him and his family, so long as he shall remain personally responsible for
the performance of all duties hereunder. The rights and obligations of the
parties hereunder shall be binding upon and inure to the benefit of the
successors and assigns of each. This Agreement may be amended only in writing
signed by both parties to this Agreement. Notices to be given pursuant to
this Agreement shall be given to the parties' address set forth at the head of
this Agreement or at such other address as one party shall advise the other in
writing in accordance with this notice procedure.
IN WITNESS WHEREOF, Xx. Xxxxxxxxx and Emcore's duly authorized
corporate officer, have executed this Agreement as of the date set forth
above.
EMCORE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Vice President
/s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
