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Exhibit 10.9
CONSULTING AGREEMENT
THIS AGREEMENT, dated as of October 1, 1996, between SOVEREIGN SPECIALTY
CHEMICALS, L.P., a Delaware limited partnership (the "Company") and XXXX X.
XXXXXXXX (the "Consultant").
1. Consulting. The Company hereby engages the Consultant to serve as
an advisor and consultant to the Company, and the Consultant hereby accepts such
engagement, on the terms and conditions of this Agreement.
2. Term of Engagement. The term of Consultant's engagement hereunder
shall commence as of the date first written above, and shall continue thereafter
until one month written notice is received from either the Consultant or the
Company to the other terminating this Agreement. In addition to any other
remedies the Company may have, the Company may terminate this Agreement
immediately in the event of the breach of any of the provisions of this
Agreement by Consultant.
3. Duties. The Consultant shall during the term of this Agreement,
be available to the Company and its Subsidiaries on a mutually agreeable basis
to provide information and consultation to the Company and its Subsidiaries in
the areas of flexible packaging and paper converting. Travel to customers and
potential customers will also be requested of the Consultant. The Consultant
will assist the Company's sales and technical service personnel as appropriate
and as the Consultant and the Company's Chairman deem necessary. In addition,
Consultant may be asked to consult with the Company in other areas and to engage
in other assignments as mutually agreed upon with the Company. The Consultant
shall discharge such consulting functions to the best of his ability. The
Consultant shall report to and receive instructions and directions from the
Company's Chairman. Consultant shall provide information as set forth above to
the Chairman of the Company or such other person as the Chairman may designate.
Information provided to the Company pursuant to the terms of this Agreement will
not be used by Consultant, or any company or entity which he owns or controls,
directly or indirectly, or provided to any company or other person or
organization without, in each case, the prior written consent of the Company.
The restriction in the foregoing sentence shall not apply to information which
is or subsequently becomes part of the public domain.
4. Compensation. For providing consulting services hereunder and the
Consultant's undertakings pursuant to paragraphs 6 and 7 hereof, the Company
shall pay the Consultant $1,000 per Working Day. For purposes of this Agreement,
a "Working Day" shall be deemed to mean the performance by the Consultant on
such day of at least eight (8) hours of consulting services for the Company. The
Consultant shall submit a statement defining his employment and the daily
services performed on a monthly basis in a form reasonably satisfactory to the
Chairman.
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5. Expenses. The Company will reimburse the Consultant for all
reasonable expenses incurred by Consultant in rendering services hereunder upon
submission to the Company of an accounting and substantiation for such expenses
and related receipts.
6. Trade Secret Information. Consultant acknowledges that the
information, observations and data obtained by him while engaged by the Company
concerning the business or affairs of the Company or any of its Subsidiaries (or
any of their predecessors) which the Company or any such Subsidiary considers to
be confidential and which is proprietary to the Company or any such Subsidiary
("Trade Secret Information") are the property of the Company or any such
Subsidiary. Therefore, Consultant agrees that he shall not disclose to any
unauthorized Person (except (i) to any entity which shall succeed to the
business of the Company or any such Subsidiary, (ii) as may be required in the
regular course of business of the Company or any such Subsidiary or (iii) as
required by law) or use for his own purposes any Trade Secret Information
without the prior written consent of the Company, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public or Persons knowledgeable in the Company's industry other than as a
result of Consultant's acts or omissions which constitute a breach hereof.
Consultant shall deliver to the Company at the termination of the Agreement, or
at any other time the Company may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents and data
(and copies thereof) relating to the Trade Secret Information, Work Product (as
defined below) or the business of the Company or any such Subsidiary which he
may then possess or have under his control.
7. Inventions and Patents Consultant acknowledges that all
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) which (i) relate to the Company's or any of its Subsidiaries' (or
any of their predecessors) actual or anticipated business, research and
development or existing or future products or services or (ii) result from any
work performed by Consultant for the Company and its Subsidiaries (or any of
their predecessors) and which are conceived, development or made by Consultant
while engaged by the Company ("Work Product") belong to the Company or such
Subsidiaries.
8. Non-Compete, Non-Solicitation.
a. In further consideration of the compensation to be paid to
Consultant hereunder and his exposure to or involvement in the Trade
Secret Information. Consultant acknowledges that in the course of
his engagement by the Company, he shall become familiar with trade
secrets and other Trade Secret Information concerning the Company
and its Subsidiaries and that his services have been and shall be of
special, unique and extraordinary value to the Company and its
Subsidiaries. Therefore, Consultant agrees that, during the
Noncompete Period, he shall not directly or indirectly own any
interest in, manage, control, participate in, consult with, render
services for, or in any manner engage in any business competing with
the businesses of the Company and its Subsidiaries for which
Consultant has been directly engaged,
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as such businesses exist or are in process on the date of the
termination of Consultant's engagement, within any countries or
geographical regions in which the Company and its Subsidiaries
engage or plan to engage in such businesses on the date of the
termination of Consultant's engagement; provided that nothing herein
shall prohibit Consultant from being a passive owner of not more
than 2% of the outstanding stock of any class of a corporation which
is publicly traded, so long as Consultant has no active
participation in the business of such corporation.
b. During the Noncompete Period, Consultant shall not directly or
indirectly through another entity (i) induce or attempt to induce
any employee of the Company or any of its Subsidiaries to leave the
employ of the Company or such Subsidiaries, or in any way interfere
with the relationship between the Company or any of its Subsidiaries
and any employee thereof, (ii) hire any person who was a management
employee of the Company or any of its Subsidiaries at any time
during the one-year period prior to the termination of the Agreement
or (iii) induce or attempt to induce any customer, supplier,
licensee, licensor, franchisee or other business relation of the
Company or any of its Subsidiaries to cease doing business with the
Company or such Subsidiaries, or in any way materially interfere
with the relationship between any such customer, supplier, licensee
or business relation and the Company or any of its Subsidiaries
(including, without limitation, making any negative statements or
communications about the Company or its Subsidiaries).
c. If, at the time of enforcement of this paragraph 8, a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree
that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or
area and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum period, scope and area
permitted by law. Consultant agrees that the restrictions contained
in this paragraph 7 are reasonable.
d. If, at the time of enforcement of this paragraph 8, the Consultant
is no longer employed by the Company and is not receiving any
severance or other pay from the Company or its Subsidiaries, then as
additional consideration for Consultant's covenant not to compete
contained herein the Company may, at its election, pay $3,000 per
month to Consultant during each month that the provisions of this
paragraph 8 remain in full force and effect.
e. In the event of any breach or threatened breach by Consultant of any
of the provisions of this paragraph 8, the Company and its
Subsidiaries, in addition and supplementary to other rights and
remedies existing in its favor, may apply to any court of competent
jurisdiction for specific performance and/or injunctive or other
relief in order to enforce or prevent any violations of the
provisions hereof (without posting a bond or other security). In
addition, in the event of an alleged breach or violation by
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Consultant of this paragraph 8, the Noncompete Period shall be
tolled until such breach or violation has been duly cured.
9. Consultant's Representations. Consultant hereby represents and
warrants to the Company that (i) the execution, delivery and performance by
Consultant of this Agreement and all other agreements contemplated hereby to
which Consultant is a party do not and shall not conflict with, breach, violate
or cause a default under any contract, agreement, instrument, order, judgment or
decree to which Consultant is a party or by which he is bound, (ii) Consultant
is not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity that remains in full
force and effect, and (iii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of
Consultant, enforceable in accordance with its terms.
10. Definitions.
"Noncompete Period" means during the term of this Agreement
and upon termination of this Agreement by Consultant or the Company for any
reason, a period of time, to be determined by the Company in its sole discretion
within 30 days after such termination, of no more than one additional year
thereafter.
"Subsidiaries" means, with respect to any person, any
corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by such person or
entity or one or more of the other Subsidiaries of such person or entity or a
combination thereof, or (ii) if a limited liability company, partnership,
association or other business entity, a majority of the partnership or other
similar ownership interest thereof is at the time owned or controlled, directly
or indirectly, by any person or entity or one or more Subsidiaries of such
person or entity or a combination thereof.
11. Non-Assignability, etc. The Consultant shall have no right to
assign or transfer any rights hereunder.
12. Binding Nature, Governing Law, Amendment and Waiver, Entire
Agreement. This Agreement shall be binding upon the Company, its successors and
assigns, and upon the Consultant and his respective heirs, legatees, executors
and administrators. This Agreement shall be construed and enforced in accordance
with the laws of Illinois. This Agreement may not be modified or amended except
by an instrument in writing signed by both the parties. Any inconsistency or
conflict between the terms of this Agreement and any purchase order, invoice or
other communication shall be solely governed by the terms of this Agreement.
This Agreement is the entire agreement between the parties hereto with regard to
the subject matter hereof and supersedes all prior discussions, arrangements or
agreements between the parties relating thereto.
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13. Independent Contractor. The relationship of Consultant to the
Company is that of an independent contractor. Consultant shall not be considered
an employee or agent of the Company, and except as specified elsewhere in this
Agreement, shall have absolutely no authority to bind, commit or otherwise
obligate the Company in any way whatsoever. Consultant is not eligible to
participate in any employee benefit or other plan of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first above written.
SOVEREIGN SPECIALTY CHEMICALS, L.P.
By: Sovereign Chemicals Corporation
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
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