PROPRIETARY INFORMATION, INVENTIONS AND NON-COMPETE AGREEMENT
Exhibit 10.4
PROPRIETARY INFORMATION, INVENTIONS
AND NON-COMPETE AGREEMENT
THIS PROPRIETARY INFORMATION, INVENTIONS AND NON-COMPETE AGREEMENT (this “Agreement”), dated
as of the _7th___day of September, 2005, between Xxxx Foods Company, a Delaware corporation,
having its principal place of business at 0000 XxXxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx XX 00000, and
Xxxx Xxxxxx (“Employee”).
WHEREAS, the Xxxx Foods Company, or one or more of its affiliates or subsidiaries (the
“Company”) has offered Employee employment as President of Xxxx Foods Dairy Group; a position which
will result in Employee acquiring substantial knowledge of the operations and practices of the
business of Company;
WHEREAS, the Company desires to prevent any competitive business from securing or utilizing
the services of Employee, to the extent and for the period of Employee’s employment and for a
reasonable period thereafter; and
WHEREAS, as a condition to the employment of Employee, the Company has required that Employee
enter into this Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Acknowledgments. Employee acknowledges that (i) Company is engaged in a continuous
program of research, development, and production respecting its business throughout the United
States (the foregoing, together with any other businesses in which Company engages, from the date
hereof to the date of the termination of Employee’s employment with Company, is hereinafter
referred to as the “Company Business”); (ii) Employee’s work for Company allows Employee access to
trade secrets of, and confidential information concerning, Company; (iii) the Company Business is
national and international in scope; (iv) Company would not have agreed to employ Employee but for
the agreements and covenants contained in this Agreement; and (v) the agreements and covenants
contained in this Agreement are necessary and essential to protect the business, goodwill, and
customer relationships that Company has expended significant resources to develop.
2. Inventions. If Employee individually or jointly makes, conceives of, or reduces to
practice any invention, technique, recipe, process, improvement, modification, development,
documentation, data, design, idea, discovery, trademark, trade secret, formula, process, or other
know-how, whether patentable or not, in the course of performing services for Company, that
directly relates to the Company Business (collectively, “Inventions”), Employee will and hereby
does assign to Company Employee’s entire right, title and interest in and to such Inventions.
Employee agrees that all Inventions shall be the sole property of Company and its assigns, and
Company and its assigns shall be the sole owner of all patents, copyrights, and other rights in
connection therewith. Employee will disclose any such Inventions (to the extent Employee knows such
inventions are “Inventions” as defined herein) to an officer of Company and will, upon request,
promptly sign a specific assignment of title to Company and do anything else reasonably necessary
without additional compensation to enable Company to secure patent, trade secret, or any other
proprietary rights in the United States or foreign countries. Employee agrees to execute any
documents deemed necessary or advisable by Company to effect the terms of this paragraph. Employee
agrees that after
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termination of employment with Company Employee shall not use any Inventions, except in
furtherance of the Company Business and except to the extent such Inventions are in the public
domain through no fault of Employee.
3. Non-Disclosure. Employee recognizes that Company competes in a highly competitive
field and that Company possesses and will continue to possess information of commercial value that
relates to the Company Business, including but not limited to trade secrets, technical and
scientific information, financial business information, processes, recipes, formulas, data,
know-how, improvements, inventions, product concepts, discoveries, developments, designs,
inventions, techniques, marketing plans, strategies, forecasts, new products, blueprints,
specifications, programs, ideas, customer lists, vendor lists, pricing and other structures,
marketing and business strategies, budgets, projections, licenses, costs, financial data, and
plans, proposals and information about Company’s employees and/or consultants (collectively,
“Proprietary Information”). Notwithstanding the foregoing, Proprietary Information shall not
include information that is publicly available when received, or thereafter becomes publicly
available through no fault of Employee or is otherwise disclosed by the Company to another party
without obligation of confidentiality. Employee agrees that the Proprietary Information constitutes
a unique and valuable asset which is essential to Company’s business success, and that any release
of Proprietary Information would be harmful to Company and/or its customers. To protect Company’s
Proprietary Information, Employee agrees that at all times, including during and after the term of
Employee’s employment, Employee will not disclose to any person, firm, company, or corporation or
use for Employee’s own benefit or for the benefit of any third party (except in furtherance of
Company Business or affairs of Company) any and all Proprietary Information that Employee may have
acquired in the course of or as an incident to Employee’s employment with Company. Employee
further agrees to take all reasonable precautions to protect against the intentional, negligent, or
inadvertent disclosure by Employee of Company’s Proprietary Information to any other person or
business entity, except in furtherance of the Company Business.
4. Non-Competition. Employee understands and agrees that during Employee’s employment
with Company, Employee will be provided access to specialized information related to Company
Business and trade secrets, as well as Company’s customers and their confidential information.
Employee further agrees that if this information were used in competition against Company, Company
would experience serious harm and the competitor would have a unique advantage against Company.
Employee hereby covenants and agrees that (A) at no time during Employee’s employment with Company
and (B) at no time until the two years from the date of Employee’s termination (the “Non-Compete
Period”), will Employee (i) develop, own, manage, operate, or otherwise engage in, participate in,
represent in any way or be connected with, as officer, director, partner, owner, employee, agent,
independent contractor, consultant, proprietor, stockholder (except for the ownership of a less
than five percent equity interest in a publicly traded company), or otherwise, any company or
business engaged primarily, or as a substantial part of its business, in the manufacture,
distribution, sale or marketing of any Relevant Products in any geographic territory (within or
outside the United States) in which Company does business; or (ii) act in any way, directly or
indirectly, with the purpose or effect of soliciting, diverting or taking away any business,
customer, client, supplier, or good will of Company. Employee acknowledges that this covenant has a
unique, substantial, and immeasurable value to Company.
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As used herein, “Relevant Products” means (i) milk and milk based beverages, (ii) creams and
creamers, (iii) ice cream and ice cream novelties, (iv) ice cream mix, and (v) cultured dairy
products.
Notwithstanding the foregoing, the restrictions of this Section 4 shall terminate immediately if
Employee’s employment with the Company is involuntarily terminated by the Company without “Cause.”
“Cause” shall mean: (a) conviction of Employee of any crime deemed by the Company to make continued
employment untenable; (b) any act of gross negligence or willful misconduct in connection with your
employment with the Company; (c) any act of dishonesty on the part of Employee whether relating to
the Company or any of its affiliates, employees, agents or representatives; (d) failure by Employee
to comply with the Xxxx Foods Code of Ethics, or any similar conduct of Employee which brings the
Company or any of its affiliates into disrepute. In each case, any termination for cause will not
be effective unless the Board of Directors of the Company has provided you with (i) written notice
of the Board’s intention to terminate you for cause, and (ii) an opportunity for you to appear
before the Board to discuss any such termination. No act or omission shall constitute the basis of
a termination for cause if such act or omission is taken or omitted at the request of the Board or
another senior officer of the Company, or is based upon the advice of counsel to the Company.
5. Non-Solicitation. Employee hereby covenants and agrees that at no time during
Employee’s employment with the Company and during the Non-Compete Period, will Employee (i)
recruit, hire, assist or solicit, directly or indirectly, any of Company’s employees to leave the
employ of Company or (ii) solicit any customer or prospective customer of Company for the purpose
of (1) inducing or otherwise intending to cause such customer or prospective customer to alter or
end its business relationship with Company or (2) interfering with Company’s business relationship
with such customer or prospective customer or (3) causing such customer or prospective customer to
purchase products and/or services competitive with those of Company. For the purposes of this
Agreement, “customer” shall mean any company that was a customer of Company at any time during the
term of Employee’s employment with Company, and “prospective customer” shall mean any company that,
to Employee’s knowledge, was actively solicited by Company at any time during the term of
Employee’s employment with Company.
6. Remedies. Employee acknowledges, understands, and agrees that the restrictions
contained in Paragraphs 2, 3, 4 and 5 of this Agreement are reasonable, fair, and equitable in
scope, terms, geographic area and duration, are necessary to protect the legitimate business
interests and good will of Company, and are a material inducement to Company to employ Employee and
to enter into this Agreement, and that any breach or threatened breach of such restrictions would
cause Company substantial and irreparable harm for which there is no adequate remedy at law.
Therefore, Employee agrees that in the event of any such breach or threatened breach, any unvested
stock options, restricted stock awards or other equity grants shall be immediately canceled and all
of Employee’s rights thereunder shall be immediately terminated. In addition, if Company deems
such action warranted by the particular circumstances, Company shall be entitled to equitable
relief including, but not limited to, temporary, preliminary, and permanent injunctive relief,
including the issuance of a temporary restraining order, in order to secure the specific
performance of this Agreement without the necessity of posting bond or security, which Employee
expressly waives. Employee agrees that
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the rights of Company to obtain injunctive relief shall not be considered a waiver of
Company’s rights to seek any other remedies it may have at law or in equity.
The restrictions set forth herein shall be construed as a series of separate and severable
covenants. Employee agrees that if in any proceeding, the tribunal refuses to enforce fully any
covenants contained herein because such covenants cover too extensive a geographic area or too long
a period of time or for any other reason whatsoever, any such covenant shall be considered
divisible both as to duration and geographic area so that each month of a specified period shall be
deemed a separate period of time and each county in each particular state (or such other geographic
subdivision as the tribunal determines is reasonable) a separate geographic area, resulting in an
intended requirement that the longest lesser period of time or the largest lesser geographic area
found by such tribunal to be a reasonable restriction shall remain an effective restrictive
covenant specifically enforceable against Employee. Further, the covenants contained in Xxxxxxxxxx
0, 0, 0 xxx 0 xxxxx xx construed as agreements independent of any other provision of this
Agreement, and the existence of any claim or cause of action of Employee against Company or any of
its employees, agents, shareholders, directors, or officers, whether predicated on this Agreement
or otherwise, shall not constitute a defense to enforcement by Company of any of these covenants.
7. Return of Records. Upon termination of employment, Employee agrees to return to
Company all documents (whether electronic or written), notes, drawings, data, records, materials
and other property of whatever nature received from or created for Company, and any and all copies
thereof including, but not limited to, those documents, records, and materials containing or
relating to Proprietary Information. Employee agrees that all such documents that are currently in
Employee’s possession or control or which may come into Employee’s possession or control in the
future shall be the property of Company.
8. Miscellaneous.
(a) Severability. Nothing in this Agreement shall be construed so as to require the
commission of any act contrary to law and wherever there is any conflict between any provision of
this Agreement and any law, statute, ordinance, order or regulation, the latter shall prevail, but
in the event of any conflict, any provision of this Agreement shall be curtailed and limited only
to the extent necessary to bring it within applicable legal requirements. If any provision of this
Agreement should be held invalid or unenforceable, the remaining provisions shall be unaffected by
the holding.
(b) Complete Agreement. This Agreement contains the entire agreement and understanding
between the parties relating to the subject matter hereof, and supersedes any prior understandings,
agreements, or representations by or between the parties, written or oral, relating to the subject
matter hereof. It may not be modified, except in a written document executed by both parties to
this Agreement.
(c) Other Agreements. Employee represents and warrants that Employee is not a party to
or bound by the provisions of any other agreement which would prevent or impair Employee’s ability
to render services to Company and that Employee’s entering into this Agreement. The parties hereto
each represent and warrant to the other party that the performance of any obligations hereunder by
such party will not violate the provisions of, or cause such party
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to be in default under, any other agreement or contract to which such party is a party or by
which such party is bound.
(d) Paragraph Headings. The paragraph headings used in this Agreement are included
solely for convenience and shall not affect, or be used in connection with, the interpretation of
this Agreement.
(e) Governing Law. This Agreement shall be governed by and this Agreement and any
disputes or controversies related hereto shall be construed in accordance with the laws of the
State of Delaware, excluding any choice of law provisions that would apply the laws of any other
jurisdiction.
(f) Waiver. No delay on the part of either party in exercising any right, power, or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of either
party of any right, power, or privilege hereunder, preclude any other or further exercise thereof
or the exercise of any other right, power, or privilege hereunder.
(g) Assignment. This Agreement and Employee’s rights and obligations hereunder may not
be assigned by Employee. Company may, without Employee’s consent, assign its rights, together with
its obligations, under this Agreement.
(h) Period of Employment. As used herein, the period of employment includes any time
in which Employee is retained by Company as an employee, director, or consultant.
(i) Counterparts. This Agreement may be entered into in two or more counterparts, each
of which shall be deemed an original, and together shall be deemed to be one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed and delivered this Proprietary Information,
Inventions and Non-Compete Agreement as of the date first set forth above.
| XXXX FOODS COMPANY | |||
| /s/ Xxxxxxxx X. Xxxxxxx | |||
| Name:Xxxxxxxx X. Xxxxxxx | |||
| Title: EVP & General Counsel | |||
| /s/ Xxxx X. Xxxxxx | |||
| Xxxx Xxxxxx |
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