EXHIBIT 10.34
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is made as of the date set
forth below by and between Silicon Graphics, Inc. (the "Company") and
Xxx Xxxxxx, ("Consultant").
RECITALS
Consultant has been employed by the Company since 1988 and has most
recently served in the capacity of Vice President, Finance and
Treasurer. Consultant wishes to resign in order to pursue other personal
interests. The Company wishes to have Consultant remain available to
contribute to certain projects and activities of the Company. Accordingly,
the Company and Consultant have agreed that Consultant will change his
relationship with the Company from that of an employee to that of a
consultant on the terms set forth in this Agreement.
AGREEMENT
In consideration of the mutual promises made herein, the Company and
Consultant hereby agree as follows:
1. SEPARATION AGREEMENT. Consultant and Company have entered into a
letter agreement dated contemporaneously herewith (the "Separation
Agreement") governing the terms of Consultant's resignation as an officer
and employee of Company effective as of the close of business on
December 29, 1995 (the "Effective Separation Date").
2. CONSULTING RELATIONSHIP.
(a) Commencing immediately after the Effective Separation Date and
continuing through September 3, 1996 (the "Consulting Period"), Consultant
shall serve as an independent consultant to the Company.
(b) During the Consulting Period, Consultant shall (i) assist the
Chief Financial Officer of the Company during the transition period until
Consultant's successor begins work at the Company; (ii) handle special
projects with respect to treasury matters identified by the Chief Financial
Officer of the Company; and (iii) provide such other reasonable services as
are agreed to by Consultant and the Company. Consultant will be
available during the Consulting Period for such reasonable hours on an
as needed basis as are mutually agreed upon by the parties. It is
expected that such consulting services may be full-time during certain
times during the Consulting Period.
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Consultant shall at all times be an independent contractor to the Company,
and nothing in this Agreement shall in any way be construed to constitute
Consultant as an agent, employee or representative of the Company.
(c) Consultant may terminate the consulting relationship at any
time before the end of the Consulting Period, for any or no reason, upon
written notice to the Company. The consulting relationship shall also
terminate automatically if Consultant becomes employed in a full time
capacity during the Consulting Period. Upon any termination, the Company
shall have no obligation to pay Monthly Consulting Period Fees or other
benefits hereunder accruing thereafter.
3. COMPENSATION.
(a) In consideration for Consultant's agreement to provide
consulting services during the Consulting Period as provided herein and
his faithful adherence to the terms and conditions of this Agreement, the
Company shall pay Consultant a Monthly Consulting Fee equal to one-twelfth of
the annual base salary that Consultant was earning as of the Effective
Separation Date. Such compensation shall be paid in monthly installments
(prorated in the case of December 1995, and adjusted if necessary if
Consultant has otherwise received salary payments from the Company in
respect of any portion of the Consulting Period) within ten business days
after receipt of Consultant's monthly invoice, but no earlier than the tenth
business day of each month.
(b) The attached Stock Option Personnel Summary sets forth the
details concerning all outstanding options to purchase Common Stock of
the Company held by Consultant. It is understood and agreed that
during the Consulting Period, such options shall remain outstanding and
continue vesting at their normal rate.
(c) CONSULTANT IS ADVISED THAT AS A RESULT OF THE CONVERSION OF
HIS STATUS FROM EMPLOYEE TO CONSULTANT, ANY ISOS (INCENTIVE STOCK OPTIONS)
WILL BECOME NON-STATUTORY OPTIONS (NSOS), TO THE EXTENT THEY ARE NOT
EXERCISED WITHIN NINETY (90) DAYS AFTER THE DATE CONSULTANT CEASES TO BE AN
EMPLOYEE. If Consultant's consulting relationship terminates for any
reason, then all vesting shall immediately stop, and Consultant's or his
estate's ability to exercise such options shall be governed by the terms
of each of the respective option agreements therefor.
(d) The Company agrees that the computer, car phone and
facsimile machine located in Consultant's residence shall become the property
of Consultant upon the execution of this Agreement, but any ongoing fees,
expenses, etc., related to such equipment are the sole responsibility of
Consultant.
(e) During the Consulting Period, the Company shall provide to
Consultant medical, dental and vision continuation benefits through COBRA
and the Company shall pay the COBRA premiums only during the Consulting
Period or until the earlier termination of the Consulting Period as
specified herein.
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(f) The Company will directly pay or reimburse Consultant, upon
receipt of the appropriate verification, for (i) out-of-pocket expenses
incurred in connection with services performed by Consultant, to the
extent provided for in the Company's expense reimbursement guidelines, and
(ii) 1995 individual annual tax preparation services, to the extent
provided for in the Company's Executive Perquisite guidelines.
(g) Other than the provisions set forth herein, Consultant has
no expectation of, and shall make no other claims for payment or any other
compensation or benefits from SGI.
4. CONFIDENTIAL INFORMATION. Consultant shall continue to
maintain the confidentiality of all confidential and proprietary information
of the Company pursuant to, and shall continue to comply with all
terms and conditions of, the Proprietary Information and Invention
Agreement between Consultant and the Company (the "Confidentiality
Agreement"). Such obligations shall survive any termination of Consultant's
consulting relationship.
5. TAX CONSEQUENCES. Consultant acknowledges that he is obligated to
report as income all compensation received by Consultant pursuant to this
Agreement, and Consultant acknowledges his obligation to pay all federal,
state or local income, self-employment or other taxes relating to such
compensation or any amounts realized upon exercise of Consultant's options,
and any penalties or assessments thereon. Except as referred to in section
3(c), the Company gives no opinions and makes no representations with
respect to the potential or actual tax consequences or liabilities, if any,
associated with the payment of any amounts to Consultant under the terms
of this Agreement or the continued vesting of Consultant's options.
Consultant assumes sole responsibility for any tax liability that results
from the payment of any compensation described herein.
6. NONSOLICITATION AGREEMENT.
During the Consulting Period, Consultant agrees that he shall not
directly or indirectly recruit or solicit any current employees of the
Company to leave the employ of the Company.
7. TERM AND TERMINATION.
(a) Consultant's consulting relationship may be terminated by the
Company at any time if Consultant (i) willfully fails to perform the
consulting services as reasonably requested by the Company, (ii) violates
any material provision of this Agreement, (iii) commits any act of moral
turpitude in connection with his performance of the consulting services, or
(iv) otherwise commits any willful, egregious or malicious act injurious to
the Company, its business or reputation. The Company shall give thirty
(30) days notice to Consultant of the termination of the Agreement
pursuant to this paragraph and shall provide Consultant with a reasonable
time within said thirty (30) day
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period in which to respond to and cure the alleged problem. Any
such termination by the Company shall be in addition to and shall not
affect any other remedies to which the Company may be entitled as a result
of the event leading to such termination.
(c) Notwithstanding the expiration and/or termination of this
Agreement, the provisions of Sections 4 (Confidentiality) and 8 (General)
by their terms, shall survive the expiration and/or termination of this
Agreement.
8. GENERAL.
(a) ENTIRE AGREEMENT. Except as set forth in the Separation
Agreement, this Agreement represents the entire agreement and
understanding between the Company and the Consultant concerning
Consultant's consulting relationship and the termination of Consultant's
employment relationship with the Company, and, except as specifically
provided herein, supersedes and replaces all prior agreements and
understandings, written and oral, concerning Consultant's relationship with
the Company and his compensation by the Company. Neither party has relied
upon any representations or statements made by the other party hereto that
are not specifically set forth in this Agreement.
(b) SETTLEMENT OF OUTSTANDING OBLIGATIONS. Consultant agrees that
this Agreement and the Separation Agreement represent settlement in full of
all outstanding obligations owed to him by the Company as a result of
his employment by the Company or his change of status, including without
limitation all obligations for current or past salary, bonus or severance
payments.
(c) NOTICES. Any notice or other communication required
hereunder shall be in writing and shall be delivered personally,
telegraphed, sent by facsimile transmission or sent by certified, registered
or express mail, postage prepaid. Any such notice shall be deemed given
when so delivered personally, telexed or sent by facsimile transmission
or, if mailed, two days after the date of deposit in the United States
mails as follows (or to such other address as to which one party may
advise the other in writing):
(i) if to the Company, to
Silicon Graphics, Inc.
0000 X. Xxxxxxxxx Xxxx.
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxx
with a copy to Legal Services; and
(ii) if to Consultant, to:
Xxx Xxxxxx
[street address omitted]
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(d) WAIVERS AND AMENDMENTS. This Agreement may be amended,
terminated or extended, or the terms hereof may be waived, only by a
written instrument signed by the parties. No delay in exercising any right
hereunder shall operate as a waiver thereof, nor shall any waiver or partial
exercise of a right preclude any other or further exercise thereof or any
other right.
(e) GOVERNING LAW. This Agreement is entered into and
governed by the laws of the State of California. In the event of any
dispute, claim, question, or disagreement arising out of or relating to this
Agreement or the breach thereof, the parties hereto agree to first use their
best efforts to settle such matters in an amicable manner. Initially, they
shall consult and negotiate with each other, in good faith and, recognizing
their mutual interests, attempt to reach a just and equitable solution
satisfactory to both parties. If they do not reach such resolution within
a period of sixty (60) days, then upon written notice by either party
to the other, any unresolved dispute, claim or differences shall be
finally settled by confidential arbitration administered by the
American Arbitration Association in accordance with the provisions of
its then applicable rules. Either party may, without inconsistency
with this Agreement, apply to any court having jurisdiction hereof and seek
injunctive relief so as to maintain the status quo until such time as the
arbitration award is rendered or the controversy is otherwise resolved. The
site of the arbitration shall be in the County of Santa Clara California.
Each party shall bear its own costs and expenses and an equal share
of the arbitrators' fees and administrative expenses of arbitration.
(f) ASSIGNMENT AND ASSUMPTION. This Agreement, and
Consultant's rights and obligations hereunder, are personal in nature
and accordingly may not be assigned by Consultant, except for an
assignment by Consultant of his rights to a corporation, trust,
partnership or other legal entity established by him for personal
financial or tax purposes. If Consultant's consulting relationship
terminates by reason of death, except for all stock option vesting
terminating, Consultant's estate's eligibility to any outstanding
consulting compensation payment provided hereunder, shall survive. This
Agreement and its rights, together with its obligations hereunder, shall be
assumed by the successors in interest of the Company in connection with
any sale, transfer or other disposition of all or substantially all of its
assets or business, whether by merger, consolidation or otherwise. Such
successor or assignee to the business or assets shall be bound by the terms
and provisions of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed in
counterparts, and each counterpart shall have the same force and effect as
an original and shall constitute an effective, binding agreement on the
part of each of the parties.
9. VOLUNTARY EXECUTION OF AGREEMENT. This Agreement is executed
voluntarily and without any duress or undue influence on the part or on
behalf of the parties hereto. The parties acknowledge that:
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(a) They have carefully read this Agreement;
(b) They have been advised and represented in the preparation,
negotiation, review and execution of this Agreement by legal counsel of
their own choice;
(c) They understand the scope, terms, consequences and effects of
this Agreement; and
(d) They are fully aware of the legal and binding effect of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
respective dates set forth below.
Dated: December 21, 1995.
/s/ Xxx Xxxxxx
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XXX XXXXXX
SILICON GRAPHICS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Senior Vice President and
Chief Financial Officer
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