EXHIBIT 10.i
NONCOMPETITION AGREEMENT
This NONCOMPETITION AGREEMENT (the "Agreement") made and entered into
effective as of March 28, 2000, is by and between TECH-SYM CORPORATION, a Nevada
corporation (the "Company", which shall include any successor), and XXXX X. XXXX
("Employee").
RECITALS
WHEREAS, Employee is employed by the Company in a confidential
relationship wherein Employee, in the course of his employment with the Company,
will be provided with confidential business information as to the Company and
its subsidiaries, including, without limitation, trade secrets utilized by the
Company and its subsidiaries, and future plans with respect thereto, all of
which have been and will be established and maintained at great expense to the
Company;
THEREFORE, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
AGREEMENT
1. DEFINED TERMS. The definitions of capitalized terms used in this
Agreement are provided in ATTACHMENT "A" hereto.
2. NON-COMPETITION PERIOD.
(a) Employee acknowledges that during his employment with the
Company, the Company shall furnish Employee with, and provide Employee
access to, Confidential Information (as defined below). Employee
understands and acknowledges that the Company's willingness to provide
Employee with such Confidential Information is based in material part on
Employee's entering into this Agreement and that Employee's breach of the
provisions of this Agreement could materially damage the Company. Subject
to the further provisions of this Agreement, Employee agrees that, during
the Restricted Period, Employee will not:
(i) engage in activities or render services that are in direct
competition with the business activities of the Company or its
subsidiaries, as the same are conducted at the time of his Qualified
Termination. Such restriction shall apply to all geographic areas
where the Company and its subsidiaries, at such time, are conducting
such business or have plans, which Employee is aware of, to conduct
such business in the next year;
(ii) call upon any person who is, at that time, an employee of
the Company or a subsidiary for the purpose or with the intent of
enticing such employee away from or out of the employ of the Company
or a subsidiary; or
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(iii) call upon any person or entity which is, at that time,
or which has been, within one year prior to that time, a customer of
the Company or a subsidiary for the purpose of selling products or
services in direct competition with the Company or a subsidiary.
Notwithstanding the above, the foregoing covenant shall not be
deemed to prohibit Employee from (1) acquiring as an investment not more
than 5% of the equity interests of a company engaged in competition with
the Company or a subsidiary or (2) performing services for any competitor
of the Company or a subsidiary, provided that the services performed by
Employee do not directly compete with the business of, or are not directly
related to, a product or service of the competitor that directly competes
with a product or service of the Company or a subsidiary.
(b) Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenant, and because of
the immediate and irreparable damage that could be caused to the Company
for which it would have no other adequate remedy, Employee agrees that
foregoing covenant may be enforced by the Company, in the event of breach
by him, by injunctions, restraining orders and orders of specific
performance issued by a court of competent jurisdiction.
(c) It is agreed by the parties that the foregoing covenants impose
a reasonable restraint on Employee in light of the activities and business
of the Company on the date of the execution of this Agreement and the
current plans of the Company.
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3. CONFIDENTIALITY.
(a) Employee acknowledges and agrees that all Confidential
Information of the Company is confidential and a valuable, special and
unique asset of the Company that gives the Company an advantage over its
actual and potential, current and future competitors. Employee further
acknowledges and agrees that Employee owes the Company a fiduciary duty to
preserve and protect all Confidential Information from unauthorized
disclosure or unauthorized use, that certain Confidential Information
constitutes "trade secrets" under applicable laws and, that unauthorized
disclosure or unauthorized use of the Confidential Information would
irreparably injure the Company.
(b) Both during Employee's employment, and after the termination of
Employee's employment with the Company for any reason, Employee shall hold
all Confidential Information in strict confidence, and shall not use any
Confidential Information except for the benefit of the Company, in
accordance with the duties assigned to Employee. Employee shall not, at
any time (either during or after the term of Employee's employment),
disclose any Confidential Information to any person or entity (except
other employees of the Company who have a need to know the information in
connection with the performance of their employment duties), or copy,
reproduce, modify, transmit, including electronic transmission, decompile
or reverse engineer any Confidential Information. Employee shall take
reasonable precautions to protect the physical security of all documents
and other material containing Confidential Information (regardless of the
medium on which the Confidential Information is stored). This Agreement
applies to all Confidential Information, whether now known or later to
become known to Employee.
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(c) Upon the termination of Employee's employment with the Company
for any reason, and upon written request of the Company at any other time,
Employee shall promptly surrender and deliver to the Company all documents
and other written material in his possession of any nature containing or
pertaining to any Confidential Information and shall not retain any such
document or other material. Within five business days of any such written
request, Employee shall certify to the Company in writing that all such
materials have been returned.
4. NONCOMPETE PAYMENT. Upon a Qualified Termination, Employee shall
be paid $273,625 by the Company in a lump sum in cash within five days following
the date of such Qualified Termination. Notwithstanding anything in this
Agreement to the contrary, Employee's termination shall not alter or impair any
of Employee's rights or benefits, if any, under any (i) employee benefit plan of
the Company or (ii) incentive or deferred compensation plan, including, without
limitation, any stock option plan, of the Company.
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5. LITIGATION AND OTHER COOPERATION. During the Restricted Period,
Employee shall reasonably cooperate with the Company in the defense or
prosecution of any claims or actions now in existence or which may be brought in
the future against or on behalf of the Company which relate to events or
occurrences that transpired while Employee was employed by the Company;
provided, however, that such cooperation in Employee's good faith opinion shall
not materially and adversely affect Employee or expose Employee to an increased
probability of civil or criminal litigation or materially interfere, in
Employee's good faith opinion, with Employee's personal and business activities.
During the Restricted Period, to the extent that it does not materially
interfere, in Employee's good faith opinion, with Employee's personal and
business activities, Employee also shall cooperate with the Company in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while Employee was employed by the Company. The
Company shall provide Employee with Consulting Compensation on an hourly basis
for requested litigation and regulatory cooperation that occurs after his
termination of employment, and pay in advance upon request by Employee all costs
and expenses incurred in connection with his performance under this Paragraph,
including, but not limited to, reasonably attorneys' fees and costs.
6. NO MITIGATION OR OFFSET. Employee shall not be required to mitigate the
amount of any Company payment provided for in this Agreement by seeking other
employment or otherwise. The amount of any payment required to be paid to
Employee by the Company pursuant to this Agreement shall not be reduced by any
amounts that are owed to the Company by Employee, or by any setoff,
counterclaim, recoupment, defense or other claim, right or action.
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7. COMPLETE AGREEMENT. This Agreement supersedes, and replaces in full,
all representations, understandings and agreements (oral or written) between
Employee and the Company or any of its officers, directors or representatives
existing as of the Effective Date and covering the same subject matter as this
Agreement. This written Agreement is the final, complete and exclusive statement
and expression of the agreement between the Company and Employee and of all the
terms of this Agreement, and it cannot be varied, contradicted or supplemented
by evidence of any prior or contemporaneous oral or written agreements. This
written Agreement may not be modified after the Effective Date except by a
further writing signed by a duly authorized officer of the Company and Employee,
and no term of this Agreement may be waived except by writing signed by the
party waiving the benefit of such term. Without limiting the generality of the
foregoing, either party's failure to insist on strict compliance with this
Agreement shall not be deemed a waiver thereof.
8. NOTICE. Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:
To the Company: Tech-Sym Corporation
00000 Xxxxxxxxxx Xx., Xxxxx 000
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
To Employee: Xxxx X. Xxxx
Notice shall be deemed given and effective on the earlier of five days after the
deposit in the U.S. mail of a writing addressed as above and sent first class
mail, certified or registered, or when actually received. Either party may
change the address for notice by notifying the other party of such change in
accordance with this paragraph 7.
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9. SEVERABILITY; HEADINGS. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. The
paragraph headings herein are for reference purposes only and are not intended
in any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.
10. LEGAL FEES AND EXPENSES. The Company shall pay all legal fees and
expenses incurred by Employee in disputing in good faith any issue hereunder or
seeking in good faith to obtain or enforce any benefit or right provided by this
Agreement. Such payments shall be made within five days after delivery of
Employee's written requests for payment accompanied with such evidence of fees
and expenses as the Company may reasonably require.
11. GOVERNING LAW. This Agreement shall in all respects be construed
according to the laws of the State of Texas without regard to its conflicts of
law provisions. The parties hereto consent to the nonexclusive jurisdiction of
the state and federal courts sitting in Xxxxxx County, Texas.
12. INTEREST. The Company shall pay to Employee interest at the maximum
rate allowed by law on any payment not paid when due.
13. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective Date.
TECH-SYM CORPORATION
By:/S/J. XXXXXXX XXXX
Name: J. Xxxxxxx Xxxx
Title: Chairman of the Board and President
EMPLOYEE
By: /s/Xxxx X. Xxxx
Xxxx X. Xxxx
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Attachment A
DEFINITIONS
BENEFICIAL OWNER shall have the meaning set forth in Rule 13d-3 under the
Exchange Act.
BOARD shall mean the Board of Directors of the Company.
BONUS PLAN shall mean the Company's Incentive Bonus Plan as the same may be
modified from time to time, but substantially in the form in effect on the
Effective Date.
CAUSE for termination by the Company of Employee's employment shall mean (a) the
willful and continued failure by Employee to substantially perform the
Employee's duties with the Company (other than any such failure resulting from
or anticipated to result from Employee's death or incapacity due to physical or
mental illness) which continues unabated for another thirty days after a written
demand for substantial performance is delivered to Employee by the Board, which
demand specifically identifies the manner in which the Board believes Employee
has not substantially performed Employee's duties, or (b) the willful engaging
by the Employee in gross misconduct which is demonstrably and materially
monetarily injurious to the Company and its subsidiaries taken as a whole. For
the purpose of this definition, (x) no act, or failure to act, on Employee's
part shall be deemed "willful" unless done, or omitted to be done, by Employee
not in good faith and without reasonable belief that Employee's act, or failure
to act, was in the interest of the Company and (y) in the event of a dispute
concerning the application of this provision, no claim by the Company that Cause
exists shall be given effect unless the Company establishes to the Compensation
Committee of the Board by clear and convincing evidence that Cause exists.
Notwithstanding the foregoing, Employee's Employment shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
Employee a certified copy of a resolution adopted pursuant to the recommendation
of the Compensation Committee, by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the Board
which was called and held for the purpose of considering such termination (after
reasonable notice to the Employee and an opportunity for Employee, together with
Employee's counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, Employee was guilty of conduct set forth in clause
(a) or (b) of the definition of Cause herein, and specifying the particulars
thereof in detail.
A CHANGE IN CONTROL shall be deemed to have occurred if the event set forth in
any one of the following paragraphs shall have occurred:
(A) any person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities;
(B) during any period of two consecutive years commencing with the annual
meeting of stockholders on May 11, 1999, individuals who at the beginning of
such period constitute the Board cease for any reason to constitute at least
two-thirds of the directors constituting the Board;
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(C) there is consummated a merger or consolidation of the Company or any
direct or indirect subsidiary of the Company with any other company other than
(a) merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 80% of the combined voting power of the securities
of the Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (b) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no Person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities; or
(D) the stockholders of the Company approve a plan of a complete or
substantially complete liquidation or dissolution of the Company; or
(E) there is consummated one or more agreement(s) for the sale or
disposition by the Company of a significant portion of the Company's assets. For
the purposes of this paragraph, the phrase "the sale or disposition by the
Company of a significant portion of the Company's assets" shall mean a
transaction or series of transactions involving the sale or disposition of
assets of the Company or any subsidiaries (including the stock of any
subsidiaries) in which the value of the assets or stock being sold or otherwise
disposed of (as measured by the consideration being paid or received therefor)
constitutes more than 60% of the fair market value of the Company as determined
by the aggregate market value of the Company's outstanding equity securities on
the date of the transaction or, in the event of a series of transactions, on the
date of the last transaction constituting a significant portion of the Company's
assets.
CONFIDENTIAL INFORMATION shall mean any information or material known to or used
by or for the Company (whether or not owned or developed by the Company and
whether or not developed by Employee) that is not generally known to other
persons in the business of the Company or its subsidiaries. Confidential
Information includes, but is not limited to, the following: all trade secrets of
the Company; all information that the Company has marked as confidential; all
nonpublic information concerning the Company's products, services, prospective
products or services, research, product designs, prices, discounts, costs,
marketing plans, marketing techniques, market studies, test data, customers,
customer lists and records, suppliers and contracts; all Company business
records and plans; all Company personnel files; all financial information of or
concerning the Company; all information relating to operating system software,
application software, software and system methodology, hardware platforms,
technical information, inventions, computer programs and listings, source codes,
object codes, copyrights and other intellectual property; all technical
specifications; any proprietary information belonging to the Company; all
computer hardware or software manuals; all training or instruction manuals; and
all data and all computer system passwords and user codes. For purposes hereof,
Confidential Information shall not include such information (i) which becomes or
is already known to the public through no fault of Employee; or (ii) the
disclosure of which (x) is required by law (including regulations and rulings)
or the order of any competent governmental authority or (y) Employee reasonably
believes is required in connection with the defense of a lawsuit against
Employee, provided that in either case, prior to disclosing any information,
Employee shall give prior written notice
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thereof to the Company and provide the Company with the opportunity to contest
such disclosure.
CONSULTING COMPENSATION shall mean the Employee's highest rate of annual taxable
compensation prior to termination of employment divided by 2,000.
EFFECTIVE DATE of this Agreement shall mean March 28, 2000.
EMPLOYEE shall mean the individual named in the first paragraph of this
Agreement.
GOOD REASON for termination by the Employee of Employee's employment shall mean
the occurrence of any of the following without Employee's express written
consent:
(A) an adverse change in Employee's positions, duties, responsibilities,
titles or offices as in effect on the Effective Date or any removal of Employee
from or any failure to re-elect or appoint Employee to any of such
responsibilities, titles, offices or positions, except in connection with the
termination of Employee's employment for Cause;
(B) a reduction in Employee's annual base salary as in effect on the
Effective Date or as the same may be increased from time to time;
(C) the failure by the Company to continue the Bonus Plan, or a failure by
the Company to continue Employee as a significant participant in the Bonus Plan
in at least the same amount as the lowest annual amount paid or payable to
Employee with respect to the three calendar years preceding the Effective Date;
(D) the failure by the Company to continue in effect any other material
employee benefit or compensation plan, program or policy in which Employee is
participating as of the Effective Date, unless the Company establishes such new
plans, programs or policies as is necessary to provide Employee with
substantially comparable benefits, the taking of any action by the Company not
required by law that would adversely affect Employee's participation in or
materially reduce Employee's benefits under any of such plans, programs or
policies, or deprive Employee of any material fringe benefit enjoyed by Employee
immediately prior to the Effective Date;
(E) the relocation of the Company's principal Employee offices to a
location outside the greater Houston area, or the Company's requiring the
Employee to relocate anywhere other than the location of the Company's principal
executive offices except for required travel on the Company's business to an
extent substantially consistent with Employee's business travel obligations as
of the Effective Date;
(F) the amendment, modification or repeal of any provision of the
Certificate of Incorporation, as amended, or the ByLaws of the Company which was
in effect as of the Effective Date, if such amendment, modification or repeal
would materially adversely effect Employee's right to indemnification by the
Company;
(G) the failure of the Company to obtain the assumption of this Agreement
by any successor;
(H) any purported termination of the Employee's employment which is not
effected pursuant to the requirements stated in the definition of "Cause;" for
purposes of
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this Agreement, no such purported termination shall be effective. The Employee's
right to terminate the Employee's employment shall not be affected by the
Employee's incapacity due to physical or mental illness.
The Employee's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any act or failure to act constituting Good
Reason hereunder.
For purposes of any determination regarding the existence of Good Reason,
any claim by the Employee that Good Reason exists shall be presumed to be
correct unless the Company establishes by clear and convincing evidence that
Good Reason does not exist.
A QUALIFIED TERMINATION shall mean a termination of Employee's employment with
the Company (a) on or following a Change in Control for any reason other than
death, or (b) prior to a Change of Control by the Company other than for Cause
or by the Employee for a Good Reason.
RESTRICTED PERIOD shall mean the two-year period following a Qualified
Termination.
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