EXHIBIT 10.3
NON-COMPETITION AGREEMENT
Non-Competition Agreement (the "Agreement") made as of the 4th day of
January, 1999 by and between PHOENIX COLOR CORP., a Delaware corporation ( the
"Company") and Xxxxx X. Xxxxxxxx ("WLS").
RECITALS
A. WLS has been an officer, director and a principal shareholder of
Mid-City Lithographers, Inc. ("Mid-City") for a substantial period, has
been active in the management and business operations of Mid-City, and has
acquired special expertise and knowledge in connection therewith.
B. The Company is acquiring all of the issued and outstanding shares of
Mid-City, pursuant to an Acquisition Agreement dated November 30, 1998
(the "Acquisition Agreement") among the Company, WLS and other parties.
C. WLS does not desire to continue active employment with Mid-City or the
Company, and the parties desire to set forth the terms and conditions
under which WLS will henceforth refrain from engaging in any activities
competitive with the business of Mid-City and the Company.
NOW, THEREFORE, in consideration of the mutual undertakings set forth in
this Agreement and the sum of $10.00 and other valuable consideration paid and
given by each party to the other, receipt of which is hereby acknowledged, the
parties agree as follows:
1. Non-Competition. For a period of one year after the date hereof, WLS
will not directly or indirectly (whether as employee, director, owner,
stockholder, consultant, partner or otherwise) own, manage, control, participate
in, consult with or render services for any person or entity engaged in, or in
any manner undertake activities which would constitute engaging in, the business
of manufacturing, printing, assembling or otherwise supplying book covers, case
covers, dust jackets, inserts, end papers or complete books anywhere in the
United States; provided, however, that the ownership by WLS and any member of
his immediate family of less than 5% of the issued and outstanding capital stock
of any corporation which is publicly traded shall not be deemed a violation of
this Section 1, unless WLS or any member of his immediate family is an officer,
director or employee of such corporation.
2. Payment. In consideration of WLS's undertaking as set forth in the
preceding paragraph, the Company agrees to pay WLS the sum of $160,000, in the
form of twelve (12) equal consecutive monthly payments in the amount of
$13,333.33 each, commencing on January 31, 1999 and continuing on the last day
of each month thereafter, until paid in full; provided, however, that, in the
event of the failure, refusal or inability of WLS to comply with the
indemnification provisions of the Acquisition Agreement and/or the non-payment
of any bona fide Company indemnification claims from the Escrow Fund (by reason
of exhaustion of such Escrow Fund or otherwise) as defined
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and provided for in the Acquisition Agreement, the Company shall have the right
to withhold and offset, up to the amount of its claims for such indemnification,
any sums due to WLS under this Section 2, with notice of any such offset to be
given to WLS.
3. Confidentiality. In view of the fact that WLS has had access to
Confidential Information (as defined below) of Mid-City, WLS agrees to keep
secret and retain in the strictest confidence all such information, as follows:
(a) "Confidential Information" means any and all proprietary or
non-public information relating to Mid-City and its business, including, but not
limited to, customer lists and profiles, product pricing and pricing methods,
vendor lists, information on costs and markups, marketing, sales and
distribution plans and information, lists of employees and representatives,
information on compensation of personnel, operational methods, financial
statements, credit and financing plans, expansion plans and the like; provided,
however, that Confidential Information shall not include information that (i) is
independently developed by WLS without use of or reliance on any Confidential
Information; (ii) WLS lawfully obtains from any third party who has not
unlawfully obtained such information; (iii) is published or generally disclosed
to the public by Mid-City or the Company; or (iv) is otherwise in the public
domain.
(b) WLS will not, at any time directly or indirectly, use,
communicate, disclose or disseminate any Confidential Information in any manner
whatsoever, except as may be required under legal process by subpoena or other
court or administrative order.
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4. Injunctive Relief.
4.1 The parties hereby acknowledge and agree that (i) the Company
may be irreparably injured in the event of a breach by WLS of any of his
obligations under this agreement, (ii) monetary damages will not be an adequate
remedy for any such breach, and (iii) the Company will be entitled to injunctive
relief, without the necessity of posting a bond, in addition to any other remedy
which it may have in the event of any such breach.
4.2 The right of the Company to obtain injunctive relief shall be
independent of, and separately enforceable from, all other rights and remedies
of the Company available under law or in equity.
5. Limitation or Reduction of Undertaking. If any of the provisions
contained in this Agreement or any part thereof is held to be unenforceable
because of the duration of such provision or the area covered thereby, the court
making such determinations shall have the power to reduce the duration and/or
area covered by such provision to the extent required to render such provision
enforceable.
6. Miscellaneous Provisions.
6.1 This Agreement shall be deemed to be made under and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed in such state, and without reference to any conflict of law
provisions. The parties agree that any claims arising hereunder shall be brought
in court of general jurisdiction in the County and State of New York, and waive
any objection to the jurisdiction of such court.
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6.2 Any notices required or permitted under this Agreement shall be
in writing and shall be given by registered or certified mail, return receipt
requested, by personal delivery or by overnight express delivery service,
addressed to the respective parties at the address which each has designated for
such purpose.
6.3 This Agreement shall inure to the benefit of the Company and its
successors but is not assignable except with the written consent of both
parties.
6.4 This Agreement constitutes and expresses the whole agreement of
the parties in reference to its subject matter. In the event of any conflict
between the provisions of this Agreement and the Acquisition Agreement, the
provisions of the Acquisition Agreement shall take precedence. The rights and
remedies of the parties hereunder shall not be exclusive and shall supplement
and be in addition to the rights and remedies available to each of them by
contract, at law or in equity or otherwise and all such rights and remedies
(hereunder or otherwise) may be exercised singly, concurrently or successively.
This Agreement may not be amended, modified or supplemented except by a writing
signed by each of the parties hereto.
6.5 In case any one or more of the covenants, agreements, provisions
or terms contained in this Agreement shall be invalid, illegal or unenforceable
in any respect, the validity of the remaining covenants, agreements, provisions
or terms contained herein shall be in no way affected, prejudiced or disturbed
thereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
PHOENIX COLOR CORP.
By: /s/ Xxxxxx Xxxxxxxxx
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Authorized Officer
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
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