CONSULTING AGREEMENT
by and between
INTELIDATA TECHNOLOGIES CORPORATION
and
Robert J. Schock
Effective as of May 7, 1997
CONSULTING AGREEMENT
--------------------
CONSULTING AGREEMENT (this "Agreement"), by and between InteliData
Technologies Corporation, a Delaware corporation (the "Company"), and Robert J.
Schock (the "Consultant").
W I T N E S S E T H:
The Company desires to engage the Consultant to render consulting
services to it and the Consultant is willing to provide such consulting services
to the Company, on the terms and conditions herein provided.
In order to effect the foregoing, the parties hereto wish to enter into
a consulting agreement on the terms and conditions set forth below. Accordingly,
in consideration of the premises and the respective covenants and agreements of
the parties herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Engagement. The Company hereby agrees to engage the Consultant to
provide consulting services to the Company pursuant to the terms and conditions
of this Agreement and the Consultant hereby agrees to provide such services to
the Company.
2. Term.
(a) The term of this Agreement shall commence on May 7, 1997
(the "Effective Date"). Simultaneously with the commencement of the term of this
Agreement the Employment Agreement (the "Employment Agreement"), dated as of
July 1, 1996, between the Company's predecessor, Colonial Data Technologies
Corp. and the Consultant shall terminate. Unless sooner terminated pursuant to
paragraph (b) of this Section 2, this Agreement shall remain in full force and
effect for the period commencing on the Effective Date and ending on June 30,
2000 (the "Termination Date").
(b) This Agreement shall terminate prior to the Termination
Date upon the occurrence of any of the following events:
(i) if, as a result of the Consultant's
incapacity due to physical or mental illness, the Consultant shall have been
unable to perform his duties hereunder for the entire period of six (6)
consecutive months (herein defined as "Disability") and the Company shall have
given written notice to the Consultant of the termination of this Agreement for
Disability;
(ii) the death of Consultant;
(iii) upon written notice of termination by the
non-defaulting party following the material breach of this Agreement by the
other party and the failure to cure such
breach within thirty days after notice from the non-defaulting party
specifying the nature of the breach; or
(iv) the written agreement of the Company and
Consultant to terminate this Agreement.
(c) Upon the termination of this Agreement pursuant to this
Section 2, neither the Company nor the Consultant shall have any liability or
obligation to the other hereunder, except for (i) the obligation of the Company
to pay the Consultant any due and payable consulting fee pursuant to Section 6
for his consulting services rendered to the Company prior to the termination of
this Agreement, (ii) the obligation of the Company to reimburse expenses
incurred by the Consultant pursuant to Section 7 and (iii) the restrictive
covenant obligations of the Consultant pursuant to Section 8, all of which shall
survive such termination.
3. Consulting Services. The Consultant shall provide such consulting
services to the Company as may be reasonably requested by it during regular
business hours at the Company's offices in New Milford, Connecticut or such
other location as the parties may agree, including, without limitation, the
following:
(i) assistance with litigation relating to the
Company's consumer telecommunications equipment business;
(ii) services relating to Worldwide Telecom
Partners, Inc.;
(iii) services relating to business relationships
with telephone operating companies; and
(iv) consumer telecommunications product
management.
4. Nature of Relationship. The Consultant shall perform his consulting
services hereunder in the capacity of an independent contractor and not as an
employee or agent of the Company. Any provision to the contrary in this
Agreement notwithstanding, the Consultant shall have no power or authority to
execute or otherwise enter into any agreement on behalf of, or in any way to
bind, the Company. The Company shall pay no amounts on account of the Consultant
for purposes of Social Security, unemployment insurance or federal or state
withholding taxes.
5. Benefits. During the term of this Agreement, the Company shall
provide Consultant with continued participation (or equivalent benefits if such
participation is not permitted) in the Company's disability and health insurance
plans (including dependent coverage) and shall continue the life insurance
provided to the Consultant as of the Effective Date. The Company shall not
provide any other contributions or benefits for the Consultant which might be
expected in the context of an employer-employee relationship.
6. Compensation. The Company shall pay the Consultant an initial fee of
$750,000 upon the execution of this Agreement and an annual fee equal to
Twenty-Five Thousand Dollars
($25,000) which annual fee shall be payable in equal monthly installments on the
first business day of each month during the term of this Agreement.
7. Expenses. During the term of this Agreement, the Company shall
reimburse Consultant for all expenses incurred in performing the consulting
services to be provided hereunder including expenses relating to or for travel,
telephone, mail and similar items. The Company shall reimburse the Consultant
for expenses within thirty (30) days following the Company's receipt from the
Consultant of reasonable supporting documentation of such expenses.
8. Restrictive Covenants.
(a) Reasonable Covenants. It is expressly understood by and
between the Company and the Consultant that the covenants contained in this
Section 8 are an essential element of this Agreement and that but for the
agreement by the Consultant to comply with these covenants and thereby not to
diminish the value of the organization and goodwill of the Company or any
subsidiary of the Company, including relations with their employees, clients,
customers and accounts, the Company would not enter into this Agreement.
(b) Noncompetition. During the term of this Agreement and for
two (2) years after the Termination Date, the Consultant shall not: (i) actively
engage, anywhere within the geographical areas in which the Company, and/or any
of its subsidiaries have conducted their business operations or provided
services as of the date hereof or at any time prior to the Termination Date,
directly or indirectly, in any business conducted by the Company or any of its
subsidiaries; (ii) divert to any competitor of the Company or any of its
subsidiaries, any customer of the Company or any of its subsidiaries; or (iii)
solicit or encourage any officer, employee or consultant of the Company or any
of its subsidiaries to leave the employ of or the engagement by the Company or
any of its subsidiaries for employment or engagement by or with any competitor
of the Company or any of its subsidiaries.
If, at any time, the provisions of this Section 8(b)
shall be determined to be invalid or unenforceable by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 8(b) shall
be considered severable and shall become and shall be immediately amended solely
with respect to such area, duration and scope of activity as shall be determined
to be reasonable and enforceable by the court or other body having jurisdiction
over the matter and the Consultant agrees that this Section 8(b) as so amended
shall be valid and binding as though any invalid or unenforceable provision had
not been included herein. Except as provided in this Section 8 and in Section 3,
nothing in this Agreement shall prevent or restrict the Consultant from engaging
in any business or industry in any capacity.
(c) Nondisclosure of Confidential Information. The Consultant
shall keep confidential any information regarding this Agreement, or any other
information regarding the Company or its subsidiaries which is not available to
the general public, and/or not generally known outside the Company, to which he
has or shall have had access at any time during the course of his engagement
with the Company. Notwithstanding the foregoing provisions of this
Section 8, the Consultant may discuss this Agreement with the members of his
immediate family and with his personal legal and tax advisors.
(d) Public Support and Assistance. The Consultant agrees that
during the term of this Agreement and following any termination of his
consulting engagement with the Company hereunder, he shall endorse strategies of
the Company and/or its subsidiaries, and shall not disclose or cause to be
disclosed any negative, adverse or derogatory comments or information of a
substantial nature about the Company or its management, or about any product or
service provided by the Company, or about the Company's prospects for the future
(including any such comments or information with respect to subsidiaries of the
Company). The Company and/or any of its subsidiaries may seek the assistance,
cooperation or testimony of the Consultant following any such termination in
connection with any investigation, litigation or proceeding arising out of
matters within the knowledge of the Consultant and related to his position as a
consultant to the Company, and in any such instance, the Consultant shall
provide such assistance, cooperation or testimony and the Company shall pay the
Consultant's reasonable costs and expenses in connection therewith.
(e) Specific Performance. Without intending to limit the
remedies available to the Company, the Consultant agrees that damages at law
would be an insufficient remedy to the Company in the event that the Consultant
violates any of the provisions of this Section 8, and that the Company may apply
for and, upon the requisite showing, have injunctive relief in any court of
competent jurisdiction to restrain the breach or threatened breach of or
otherwise to specifically enforce any of the covenants contained in this Section
8.
9. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for herein shall be in writing and shall be deemed
to have been duly given when delivered or (unless otherwise specified) mailed by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Consultant:
14 Poggy Bay Lane
Mystic, Connecticut 06355
If to the Company:
InteliData Technologies Corporation
13100 Worldgate Drive
Suite 600
Herndon, VA 20170
Attention: President
or to such other address as any party may have furnished to the other in writing
in accordance herewith except that notices of change of address shall be
effective only upon receipt.
10. Severability. If any provision of this Agreement (or part thereof)
shall be held to be invalid or unenforceable under applicable law, the
invalidity or unenforceability thereof shall not affect the validity or
enforceability of the remaining provisions hereof and each such other provision
(or the remainder of such provision) shall, to the full extent consistent with
applicable law, continue in full force and effect.
11. Books and Records. The Consultant hereby agrees that all books and
records relating in any manner to the business of the Company, and all other
files, books and records and other materials owned by the Company or used by it
in connection with the conduct of its business, whether prepared by the
Consultant or otherwise coming into the Consultant's possession, shall be the
exclusive property of the Company regardless of which party prepared the
original material, books or records. All such books, records and other materials
shall be returned immediately to the Company upon the termination of the
Consultant's services hereunder.
12. Non-Assignability. Neither the Consultant nor the Company shall
have any right to assign this Agreement or any of his or its rights or
obligations hereunder without the prior written consent of the other party,
except that (i) this Agreement shall inure to the benefit of and be binding
automatically on any successors and assigns of all or substantially all of the
business and/or assets of the Company (whether direct or indirect, by purchase,
merger, consolidation or otherwise) and (ii) the Consultant's right to receive
payments or benefits hereunder may be transferred by will or the laws of descent
and distribution.
13. Arbitration. All controversies, claims or disputes arising out of
or relating to this Agreement, shall be settled by arbitration under the rules
of the American Arbitration Association then in effect in the State of
Connecticut, as the sole and exclusive remedy of either party, and judgment upon
such award rendered by the arbitrator(s) may be entered in any court of
competent jurisdiction.
14. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of Connecticut
without regard to its conflicts of law principles.
15. Amendments. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Consultant and such officer of the Company as may be
specifically designated for such purpose by the Board. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
17. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date set forth in Section 2(a) hereof.
ATTEST: INTELIDATA TECHNOLOGIES CORPORATION
/s/ John C. Backus, Jr.
- ------------------------------ By ----------------------------------------
Name: John C. Backus, Jr.
Title: President & Chief Operating Officer
ATTEST: CONSULTANT
/s/ Robert J. Schock
- ------------------------------ ----------------------------------------
Robert J. Schock