CONSULTING AGREEMENT
Exhibit 10.22
This
Consulting Agreement (the “Agreement”) is made and entered into as of the 6th day of
November, 2009 between TranSwitch Corporation, a Delaware corporation (the
“Company”), and Xx. Xxxxxxx Xxx (“Consultant”).
WHEREAS,
the Company and Consultant have entered into a Separation Agreement and Release
(the “Letter Agreement”) pursuant to which the Consultant’s employment with the
Company will terminate on December 1, 2009; and
WHEREAS,
the Company wishes to retain the Consultant as a consultant to the Company and
the Consultant desires to serve as a consultant to the Company on the terms and
conditions set forth herein;
NOW,
THEREFORE, in consideration of the mutual covenants and promises contained
herein, the parties hereto each intending to be legally bound, agree as
follows:
1. Term.
(a) This
Agreement shall commence on December 2, 2009 and shall be for a term of two (2)
years expiring on December 1, 2011, subject to earlier termination as provided
for in Sections 1(b) and 4 (the “Term”).
(b) Notwithstanding
Section 1(a) above, unless a Change of Control (as defined below) has occurred
on or prior to December 2, 2010, the Company may elect to terminate this
Agreement without payment (other than for unpaid consulting payments accrued to
the date of termination) or penalty at any time after December 2, 2010 if the
Board of Directors of the Company (the “Board”) determines in its reasonable
judgment that Consultant has not performed in a satisfactory manner the duties
and responsibilities assigned to him hereunder. If, before a Change
of Control occurs, the Company terminates this Agreement for any other reason
(other than death or disability (as described in Section 4(d) below)), or if the
Consultant terminates this Agreement due to a breach of this Agreement by the
Company or a successor to the Company (by merger or otherwise), then the Company
(or successor) will pay to the Consultant an amount in cash equal to the amount
that would otherwise have become payable to the Consultant through the remainder
of the Term if this Agreement had not been terminated. If a Change of Control of
the Company occurs on or prior to November 9, 2010, the Company (or its
successor) may elect to terminate this Agreement; provided, that, it shall be
required to pay to Consultant an amount in cash equal to the amount otherwise
due and payable to him under Section 3 hereof through the remainder of the
Term. Any such cash payment described in either of the preceding two
sentences shall be made in a lump sum on the date the termination of this
Agreement becomes effective. “Change of Control” shall have the
meaning set forth in the Indemnification Agreement, dated April 3, 2009 between
the Company and Consultant.
(c) Notwithstanding
anything to the contrary herein, if the “Letter Agreement” is revoked in
accordance with the terms thereof in Section 10(a), this Agreement shall be
deemed to be void ab initio.
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(d) This
Agreement shall not be effective unless and until the Letter Agreement is
executed and delivered by the parties thereto.
2. Duties and
Responsibilities.
(a) Consultant
shall perform such duties and accept such responsibilities as are appropriate
considering his stature and prior position as may be reasonably assigned to him
from time to time by the Board and the then Chief Executive Officer (the “CEO”)
of the Company. If so requested by the Board or CEO, Consultant shall
serve on one or more boards of subsidiaries or affiliates of the
Company. Consultant shall be an independent contractor and nothing
contained herein shall be construed as to constitute an employment relationship
between Consultant and the Company. The Consultant will not be
required to work more than 20% of the average level of services performed by the
Consultant during the 36-month period preceding the termination of his
employment with the Company (as determined pursuant to Section
1.409A-1(h)(1)(ii) of the U.S. Treasury Regulations). Such consulting
services will be provided upon reasonable notice to the Consultant and at the
Consultant’s reasonable convenience, taking into account, among other things,
his other commitments, activities and location or place of
residence.
(b) For
two (2) years following the date of this Agreement, the Company shall furnish
Consultant with an office in a suitable facility of the Company, in reasonable
proximity to the Company, together with a laptop, and access to such computer,
telephone and telecopy facilities, and such administrative or secretarial
support, as Consultant reasonably may request. The Company shall
continue to provide such office and services until December 1, 2011,
notwithstanding any termination of the Term of this Agreement.
(c) During
the Term, Consultant may engage in other business activities, subject to the
terms of this Agreement and the Letter Agreement.
(d) Consultant
represents and warrants that he is not subject or party to any other agreement,
covenant, understanding or restriction that would prohibit him from executing
this Agreement and performing fully his duties and responsibilities hereunder,
or which would in any manner, directly or indirectly, limit or affect the duties
and responsibilities which may now or in the future be assigned to him by the
Company.
(e) Consultant
agrees that at all times he will strictly adhere to and perform all his duties
in accordance with applicable laws, rules and regulations, and in accordance
with applicable policies and procedures of the Company that are in effect from
time to time.
3. Compensation; Expense
Reimbursement; Indemnification.
(a) For
the services to be rendered hereunder, Consultant will be paid at an annual rate
of $200,000, payable on a bi-weekly basis. Consultant will not
participate in any of the benefit plans of the Company.
(b) Consultant
shall be reimbursed for the reasonable business expenses incurred on the
Company’s behalf in connection with the performance of his services hereunder
upon presentation of an itemized account and written proof of such expenses, in
accordance with the policies established by the Company.
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(c) The
Company shall indemnify Consultant from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever (“Losses”) which may at any
time be imposed on, incurred by or asserted against Consultant in any way
relating to or arising out of this Agreement, or any action taken by Consultant
in the performance of his duties hereunder; provided that, the
Company shall not be liable for the payment of any portion of such Losses
resulting solely from Consultant’s gross negligence or willful
misconduct This Section 3(c) shall survive the Term of this
Agreement.
4. Other Termination
Events.
(a) This
Agreement may be terminated by the Company or its successor pursuant to Section
1(b), to the extent and subject to the terms and conditions contained in such
Section.
(b) Consultant
may terminate this Agreement for any or no reason upon at least 30 days prior
written notice to the Company, in which case, the Consultant will be entitled to
any previously earned and unpaid consulting fees through the date of termination
and, except as otherwise provided in Section 1(b) above, no additional
payments.
(c) If
Consultant is unable to perform the essential functions of his duties and
responsibilities to the full extent required hereunder, either with or without
reasonable accommodation, by reason of physical or psychiatric illness, injury
or incapacity for a period of 180 consecutive days, the Company may terminate
this Agreement and shall have no further liability or obligation to Consultant
hereunder, except for any unpaid consulting payments accrued to the date of
termination.
(d) If
Consultant dies, this Agreement shall terminate and thereafter the Company shall
not have any further liability or obligation to Consultant, his executors,
administrators, heirs, assigns or any other person claiming under or through
him, except for unpaid consulting payments accrued to the date of his
death.
5. Miscellaneous.
(a) The
provisions of Section 3(c) of this Agreement shall survive the termination of
this Agreement.
(b) The
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns. This Agreement
calls for the provision of personal services and, accordingly, shall not be
assignable by Consultant.
(c) It
is mutually understood and agreed that this Agreement constitutes the entire
understanding between Consultant and the Company relating to the subject matter
of this Agreement and supersedes any and all prior agreements or understandings
between Consultant and the Company arising out of or relating to the subject
matter hereof; provided, that, nothing contained herein shall be construed to
amend or modify the Letter Agreement or the Assignment of Inventions Covenants
Against Disclosure, Solicitation, Competition, Violation of the US EEA and
Misuse of Intellectual Property”, dated June 10, 2004, between the Company and
the Consultant.
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(d) The
laws of the state of Connecticut shall govern the validity of this Agreement,
the construction of its terms and the interpretation of the rights and duties of
the parties hereto. For purposes of any actions or proceedings
related to this Agreement, the parties agree to submit to the exclusive
jurisdiction of the state and federal courts of the State of
Connecticut.
(f) Any
dispute, controversy or claim between the parties arising out of the
interpretation or enforcement of this Agreement or the rights of any party
hereunder shall be submitted for resolution to the American Arbitration
Association pursuant to the then existing Employment Arbitration
Rules.
(g) This
Agreement may not be changed or modified except by a writing signed by both
Consultant and an authorized representative of the Company. The
failure of a party to insist upon strict adherence to any term of this Agreement
on any occasion shall not be considered a waiver thereof or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. The failure of a party hereto to
enforce, or the delay by a party hereto to enforce, any of its rights under this
Agreement shall not be construed as a waiver of any such party’s rights
hereunder.
(h) Section
headings contained in this Agreement have been inserted for convenience of
reference only, are not to be considered a part of this Agreement and shall not
affect the interpretation of any provision hereof.
(i) It
is the intent of the parties that the provisions of this Agreement be enforced
to the fullest extent permitted by law. In case any provision of this
Agreement shall be declared by an arbitrator or a court of competent
jurisdiction to be invalid, illegal or unenforceable as written, the parties
agree that the court shall modify and reform such provision to permit
enforcement to the greatest extent permitted by law. In addition, if
any provision of this Agreement shall be declared invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions of this Agreement shall in no way be affected or impaired
thereby.
(j) Any
notices under this Agreement shall be in writing and shall be given by personal
delivery, facsimile, by certified or registered letter, return receipt
requested, or a nationally-recognized overnight delivery service, and shall be
deemed given when personally delivered, upon actual receipt of the facsimile or
certified or registered letter, or on the business day next following delivery
to a nationally-recognized overnight delivery service at the addresses set forth
below in this Agreement or to such other address or addresses as either party
shall have specified in writing to the other party hereto.
If to the
Company:
TranSwitch
Corporation
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Xxxxxxxxxx Xxxxx
Xxxxxxx,
XX 00000
Attention: Chief
Executive Officer
If to
Consultant,
To him at
such address as he shall have provided to the Company.
(k) This
Agreement may be executed in counterparts.
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IN
WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed
this Agreement on the date first above written.
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TRANSWITCH
CORPORATION
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By:
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/s/ Xxxxxx X. Xxxx
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Xxxxxx
X. Xxxx
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Chief
Financial Officer
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Witness:
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/s/
Xxxxxx X. Xxxxxxxxxx
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/s/ Xx. Xxxxxxx Xxx
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Xx.
Xxxxxxx Xxx
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