EXHIBIT 10.2
NON-COMPETE AGREEMENT
DATE: August 6, 1999
PARTIES: Xxxxxx Tool & Machining, Inc.,
a Minnesota corporation ("Company")
Xxxxxxx X. Xxxxxx ("Xxxxxx")
RECITALS
X. Xxxxxx has considerable knowledge and experience relating to the
business of the Company as a result of his employment by the Company and
ownership of capital stock of the Company, all of the stock of which has been
acquired by WSI Industries, Inc. ("WSI") as of the date hereof.
B. The Company and Xxxxxx acknowledge that the Company would be
irreparably harmed in the event Xxxxxx competed with the Company during the
term of this Agreement.
C. The Company and Xxxxxx desire to set forth in this Agreement their
understandings and agreements.
AGREEMENTS
1. The term of this Agreement shall begin on the date hereof and
continue until August 1, 2004.
2. During the term of this Agreement, Xxxxxx shall not, directly or
indirectly, alone or as an officer, director, stockholder, partner, associate,
employee, agent, principal, salesman, consultant, creditor, owner,
representative, or in any other capacity, (i) take any action in or participate
with or become interested or associated with any person, firm, partnership,
corporation or other entity whatsoever which intends to engage, or is engaged,
anywhere in the world, in the business of custom precision contract machining
and related businesses in competition with the Company; or (ii) employ, solicit
or in any way retain any employee of the Company, other than family members for
a business which does not otherwise violate this Agreement. In consideration of
Xxxxxx'x agreements under this Section 2, the Company shall pay Xxxxxx a total
of $1,000,000 payable $50,000 per quarter on the first day of each November,
February, May and August, beginning November 1, 1999, until paid in full.
3. If, at the time of enforcement of Section 2, a court shall hold
that the duration, scope or area restriction stated herein is unreasonable,
under circumstances then existing, the
parties agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the state of duration, scope or area.
4. In the event of the breach of Xxxxxx of any of the provisions of
Section 2, the Company, in addition and supplementary to any other rights and
remedies existing in its favor, may apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce or prevent any violation of the provisions hereof.
5. The Company and WSI shall have the right to offset any amounts due
hereunder for any and all liabilities, obligations or claims the Company or WSI
may have against Xxxxxx as provided in Section 5.5 of the Stock Purchase
Agreement dated this date between Xxxxxx and WSI.
6. This Agreement may not be changed orally. No modification,
termination or attempted waiver of any of the provisions of this Agreement shall
be valid unless in writing signed by the party against whom the same is sought
to be enforced.
7. The validity, enforceability, construction and interpretation of
this Agreement shall be governed by the laws of the State of Minnesota.
8. This Agreement shall be binding upon and inure to the benefit of
the Company, its successors and assigns. The rights and obligations of Xxxxxx
hereunder are personal and may not be assigned or transferred except as may be
agreed to in writing by the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement the date and
year first above written.
XXXXXX TOOL & MACHINING, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Its: President
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/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
