Exhibit 10 (B) (9)
CONSULTING AGREEMENT
--------------------
This Consulting Agreement (this "Agreement"), dated as of the 30th day of
October, 1997, is by and between Chemfab Corporation, a Delaware Corporation
with its principal place of business at 000 Xxxxxx Xxxxxxx Xxxxxxx, Xxxxxxxxx,
Xxx Xxxxxxxxx, xx behalf of itself and each of its subsidiaries (hereinafter,
individually and collectively, the "Company"), and Dr. Xxxxxxxx Xxxxxx, an
individual residing at 000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000
(hereinafter, "Consultant").
WHEREAS, the Company desires to extend and broaden its technologies,
business operations and commercial activities to improve and expand its existing
products; develop new applications and markets for its existing technologies;
and develop or acquire materials, products, processes, applications and
capabilities that are materially different from, but synergistic with, those
currently produced, sold, practiced, and used by the Company (such initiatives
collectively herein the "Growth Initiatives").
WHEREAS, the Company recognizes that such Growth Initiatives will likely
best be achieved over time from various sources that are both internal and
external to the Company, through, for example, one or more Diversifying
Arrangements (as defined in Section 1.1 below);
WHEREAS, the Company further recognizes that the Growth Initiatives will
involve substantial attention to strategic planning in all aspects of the
Company's business;
WHEREAS, Consultant is highly qualified to assist the Company in evaluating
strategic considerations and developing strategic plans (herein "Strategic
Planning") due to his experience, knowledge and contacts in the field of
materials science and in the plastics industry;
WHEREAS, Consultant has been providing Strategic Planning advice to the
Company since approximately the beginning of September 1997, and the Company
desires formaly to engage the services of Consultant to assist it in Strategic
Planning; and
WHEREAS, Consultant desires to provide said services to the Company as an
independent contractor to the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
undertakings hereinafter set forth, the parties hereto agree as follows:
Section 1. Definitions. For the purposes of this Agreement, the
following words and expressions shall have the following meanings:
Section 1.1 "Diversifying Arrangement" shall mean any Strategic Alliance
that materially diversifies or extends the Company's technologies, business
operations and/or commercial activities to include materials, products,
processes, applications and/or capabilities that are materially different from,
but synergistic with, those that are produced, sold, practiced, and used by the
Company as of the date hereof.
Section 1.2 "Strategic Alliance" shall mean transactions such as, but
not limited to, business acquisitions, joint ventures and other strategic
alliances, licenses, joint development arrangements, joint marketing
arrangements or similar arrangements.
Section 2. Consulting Relationship.
-----------------------
Section 2.1 Freedom to Contract. Consultant represents that he is free
to enter into this Agreement, that he has not made and will not make any
agreements in conflict with this Agreement, and will not disclose to the
Company, or use for the Company's benefit, any trade secrets or confidential
information now or hereafter in Consultant's possession which is the property of
any other party.
Section 2.2 Independent Contractor. This Agreement shall be construed
as an independent contractor's agreement for all purposes. Consultant shall be
independent and not an employee of the Company or of any affiliate of the
Company, and subject to the provisions of Section 3, Consultant shall control
the location and timing of the performance of his services hereunder.
Consultant and the Company are not partners or joint ventures with each other
with respect to the matters subject to this Agreement and nothing herein shall
be construed so as to make them such partners or joint ventures or to impose any
obligation or liability as such on them.
Section 3. Services Provided.
-----------------
Section 3.1 Consulting Services. In accordance with the provisions of
this Agreement, Consultant shall provide consulting services upon request of the
Company at mutually convenient time or times (at an expected average monthly
time commitment of approximately 20 hours), specifically by providing
suggestions, direction, evaluation and assistance to the Company in Strategic
Planning. These consulting services shall be separate from and in addition to
Consultant's duties as a Director of the Company, whether as Chairman of the
Board, as a Board committee member, or otherwise. Consultant shall provide
these consulting services to the Company primarily through telephonic and other
communications (and, when convenient for both parties, meetings with the
Executive Vice President or the Chief Executive Officer of the Company, and such
other Officers as designated by either of them). Consultant hereby accepts such
engagement upon the terms and conditions set forth herein.
Section 3.2 Secretarial Support. The Company shall provide secretarial
and administrative support to Consultant on a limited, as-needed basis,
particularly during such times as Consultant is performing services at the
Company's offices, but only to the extent that such support is reasonably
available from existing resources within the Company.
Section 4. Compensation, Expenses and Taxes.
--------------------------------
Section 4.1 Consultant Fee and Expenses. The Company shall pay
Consultant $10,000 per fiscal quarter for each quarter during which Consultant
provides consulting services hereunder, payable in arrears, commencing with the
fiscal quarter ending December 28, 1997. For the term of this Agreement, the
Company shall reimburse Consultant for documented, reasonable out-of-pocket
expenses incurred in the performance of consulting services hereunder, provided
that Consultant's requests for reimbursement (together with reasonable
supporting documentation) are submitted to the Company within forty-five (45)
days after the date on which such expenses were incurred.
Section 4.2 Grant of Options.
----------------
(a) As of October 30, 1997, the Company hereby grants Consultant,
subject to Sections 4.2(b) and 4.3 below, a non-qualified option (the "Option")
to purchase twenty thousand (20,000) shares of the Company's Common Stock, to
vest in accordance with the following schedule:
Date Number of Shares
-------------- -----------------
October 30, 1997 5,000 (25%)
October 30, 1998 5,000 (25%)
October 30, 1999 5,000 (25%)
October 30, 2000 5,000 (25%)
(b) The Option granted however is subject to the terms and conditions
of (I) the Company's Second Amended and Restated 1991 Stock Option Plan, as
amended (the "Plan"), (ii) the separate Nonstatutory Stock Option Agreement
(Director Consultant form) dated as of October 30, 1997 between the Company and
the Consultant; and (iii) the other terms and conditions herein. No Option
granted hereunder shall vest after the effective date hereof unless Consultant
(x) continues to serve as of the pertinent vesting date set forth in Section
4.2(a) above (herein, a "Vesting Date"), both as a consultant to the Company and
as Chairman of the Board, and (y) in his capacity as Consultant, a director of
the Company, or otherwise, is eligible on the date of vesting of such Option to
exercise non-qualified stock options under the Plan in effect on such date. The
number of shares for which Options are granted pursuant to this Section 4.2, and
the number of shares for which any Option is exercisable, shall be automatically
adjusted, as appropriate, to account for any stock dividends, stock splits or
contractions, reclassifications, or similar changes in the Company's Common
Stock.
Section 4.3 Terms of the Option. Any Option shall (i) be granted
pursuant to the Plan as a non-qualified option, (ii) have an exercise price
equal to $21.125 and (iii) vest pursuant to Section 4.2(a) above.
Section 4.4 Responsibility for Taxes. All compensation (including the
grant of Options) to be paid to Consultant hereunder shall be paid without
deduction or withholding of any federal, state, local or foreign taxes, and
Consultant shall be solely responsible for and pay all federal, state, local and
foreign taxes due with respect thereto and all other deductions required by law.
Consultant agrees to indemnify the Company and hold it harmless from and against
any liability, cost or expense (including, without limitation, court costs and
attorney's fees) resulting from Consultant's breach of his obligations under
this Section 4.4. The Company shall have the right to set off against any
payments owing to Consultant any amounts owed to the Company by Consultant as a
result of any breach of Consultant's obligations under this Section 4.4.
Section 5. Term.
-----
Section 5.1 General. This Agreement shall take effect as of the date
first above written, and shall remain in effect for so long as Consultant
continue to serve both as a Consultant to the Company and as a director, or
until earlier terminated under the provisions of this Section 5. This Agreement
may be renewed or extended by mutual written agreement of the parties.
Section5.2 Survival of Certain Provisions. The provisions of the
following sections shall survive the termination of this Agreement: 5 and 7.
Furthermore, termination of this Agreement shall not affect any other
obligations of either party that have accrued prior to or as of the date of
termination.
Section5.3 Termination. The Company shall have the right upon thirty
(30) days' notice to terminate this Agreement without cause (as defined below),
and immediately upon notice to terminate this Agreement with cause (as defined
below), with no compensation to accrue or to be owing in respect of any period
after the effective date of such termination and no liability of any kind to
accrue on account of such termination. For the purposes of this Section 5.3,
the term "cause" shall mean a breach of this Agreement by Consultant.
Section6. Confidentiality and Assignment of Inventions. Simultaneously
with the execution of this Agreement, the parties hereto shall enter into an
Independent Contractor Confidentiality and Assignment of Inventions Agreement,
substantially in the form of Exhibit A hereto (the "Confidentiality Agreement").
Such Confidentiality Agreement shall survive any termination of this Agreement.
Section7. Provisions of General Application.
---------------------------------
Section7.1 Governing Law. This Agreement and the rights and
obligations of the parties hereunder shall be construed, interpreted and
determined in accordance with the laws of the State of New Hampshire.
Section7.2 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original and all of which, taken
together, shall constitute one and the same instrument. In making proof of this
Agreement it shall not be necessary to produce or account for more than one such
counterpart.
Section7.3 Entire Agreement. This Agreement, including the
Confidentiality Agreement, represents the entire understanding and agreement
between the parties as to the subject matter hereof. No prior, concurrent or
subsequent agreement, whether written or oral, shall be construed to change,
amend, alter, repeal or invalidate this Agreement, unless this Agreement is
specifically identified in and made subject to such other written agreement.
Section7.4 Amendment. This Agreement may be amended only by a written
instrument executed in one or more counterparts by the parties hereto.
Section7.5 Waiver. No consent to or waiver of any breach or default in
the performance of any obligation hereunder shall be deemed or construed to be a
consent to or waiver of any other breach or default in the performance of any of
the same or any other obligation hereunder. Failure on the part of either party
to complain of any act or failure to act of the other party or to declare the
other party in default, irrespective of the duration of such failure, shall not
constitute a waiver of rights hereunder and no waiver hereunder shall be
effective unless it is in writing, executed by the party waiving the breach or
default hereunder.
Section7.6 Headings. The headings of sections and subsections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement or to affect the meaning of any of its
provisions.
Section7.7 Severability. If any provision of this Agreement shall, in
whole or in part, prove to be invalid for any reason, such invalidity shall
affect only the portion of such provision which shall be invalid, and in all
other respects this Agreement shall stand as if such invalid provision, or the
invalid portion thereof, had not been a part hereof.
Section7.8 Notices and Other Communications. All notices and other
communications required hereunder shall be effective if in writing and if
delivered by hand or set via U.S. mail or telecopier (a) if to Consultant, at
his residence address first set forth above, and (b) if to the Company, at its
principal business address first set forth above, or to such other persons or
addresses as the parties hereto may specify by a written notice to the other
from time to time.
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its
duly authorized officer, and by Consultant, as of the date first above written.
CHEMFAB CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------------
Xxxx X. Xxxxxxxx
Executive Vice President and
Chief Operating Officer
CONSULTANT
By: /s/ Dr. Xxxxxxxx Xxxxxx
----------------------------------------
Dr. Xxxxxxxx Xxxxxx, Individually
