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Exhibit 10.1.8
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this "Agreement") is made effective
February 27, 1997 (the "Effective Date") by and between TELXON CORPORATION
("Telxon"), a Delaware corporation having its principal offices at 0000 Xxxx
Xxxxxx Xxxxxx, Xxxxx, Xxxx 00000, and XXXXXX X. XXXXXXXX ("RFM"), a resident of
Florida.
RECITALS:
A. RFM has served Telxon in various capacities since its founding, and
most recently as its Chairman and Chief Executive Officer.
B. During his tenure with Telxon, certain consulting services for which
Telxon had contracted with Accipiter Corporation ("Accipiter"), most recently
under a Services and Non-Competition Agreement dated as of January 18, 1993 (the
"Prior Agreement"), were performed principally by RFM.
C. The Prior Agreement expired by its terms as of March 31, 1996, and
included a covenant by RFM and Accipiter restricting them from competing with
Telxon in certain limited respects, which covenant continues in effect following
such expiration for a period of time which is subject to various
interpretations.
D. As of February 26, 1997, RFM retired from Telxon.
E. In connection with such retirement, Telxon and RFM are desirous of
redefining the extent of the competitive restriction and of extending the period
thereof.
NOW, THEREFORE, the parties agree as follows:
1. TERM. This Agreement and the provisions thereof shall be effective
as of February 26, 1997, and extend to and ending on December 31, 2000, subject
to earlier termination as provided below.
2. NON-COMPETITION RESTRICTION.
a. During the term of this Agreement, RFM shall not directly
or indirectly, acting alone or through or with others by means of
partnership, corporation, joint venture or other arrangement, own more
than five percent (5%) of the stock of any company or entity which is a
direct competitor of the businesses of Telxon as of the Effective Date.
b. During the term of this Agreement, RFM shall not directly
or
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indirectly, acting alone or through or with others by means of
partnership, corporation, joint venture or other arrangement, be an
officer, director or employee, consultant or advisor to any business
entity competitive to Telxon which by definition shall include the
commercial wireless and portable teletransaction solution business
which itself includes Pen-Based and Hand-Held portable computers
including wireless networks and systems, services, and solutions that
Telxon sells to its core markets, including, as example, Retail,
Industrial, Transportation and others; but excluding consumer markets
and home and industrial security systems. For illustrative purposes,
RFM will additionally be prohibited from any dealings with Telxon's
main direct competitors (i.e., Symbol, Intermec, Norand, Teklogix,
Electromagnetic Services, Hand-Held Products, or other companies that
have similar product profiles that compete with Telxon). To further
facilitate the intent of this Agreement, RFM shall notify Telxon in
writing of any investment or service he provides to a company that
makes peripheral products, systems or services, that may become
involved in Telxon's marketplace. Telxon shall have thirty (30) days to
respond to such notification. If, in its opinion, it determines that
such transaction is a threat to Telxon's best interests, it will inform
RFM in writing to desist. If a transaction does not seem to pose a
threat to Telxon's business or best interests, Telxon shall not
unreasonably withhold approval from RFM entering into such a
transaction. As example, RFM currently has investments with Aironet,
Metanetics and plans to enter into a joint venture with a Chinese
company that could manufacture and distribute Metanetics products in
Asia.
c. During the term of this Agreement, RFM shall not directly
or indirectly, acting alone or through or with others by means of
partnership, corporation, joint venture or other arrangement, induce
any person who is an employee, officer, customer or supplier of Telxon
to terminate or reduce their relationship with Telxon.
d. During the term of this Agreement, RFM shall not directly
or indirectly, acting alone or through or with others by means of
partnership, corporation, joint venture or other arrangement, disclose,
divulge, discuss or otherwise use, cause or suffer to be used in any
manner any trade secret or other confidential or proprietary
information of Telxon, other than in a capacity in which he is directly
acting for or on behalf of Telxon, and as expressly approved in writing
by the Chief Executive Officer of Telxon.
3. REMEDIES. RFM acknowledges and agrees that the remedy at law for any
breach of Sections 2(a), (b), (c) and (d) above will be inadequate and that
damages as a result thereof are not readily susceptible to being measured in
monetary terms. Therefore, upon any violation of such Section(s), Telxon shall
be entitled to immediate injunctive relief and to a temporary restraining order
prohibiting any threatened or future breach, notwithstanding which Telxon shall
not in any manner be limited in entitlement to other equitable or legal
remedies.
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4. CONSIDERATION. As good and sufficient agreed-upon consideration for
the covenants made by RFM in this Agreement, Telxon shall, contemporaneously
with the execution and delivery of this Agreement, advance to RFM or his
designee in immediately available funds the sum of Three Million Dollars
($3,000,000).
This Agreement shall automatically terminate if there shall at any time
occur an event which constitutes a "change in control" of Telxon which would be
required to be reported in response to Item 1(a) of a Current Report on Form 8-K
under Section 13 or 15(d) of the Exchange Act, each as in effect on the date of
the execution and delivery of this Agreement (including, without limitation, any
event as the result of which (i) any Person (for purposes hereof, defined as any
individual, corporation, partnership, group, association of other "person", as
such term is used in Section 14 (d) of the Exchange Act, other than Telxon or
any employee benefit plan sponsored by Telxon) is or becomes the beneficial
owner , directly or indirectly, of fifteen percent (15%) or more of the combined
voting power of Telxon's then outstanding securities having the right to vote
for the election of directors, or (ii) individuals who constitute the Board of
Directors of Telxon as of the date of the execution and delivery of this
Agreement (the "Continuing Directors", which term shall also include the
person(s) subsequently becoming directors of Telxon as hereinbelow provided),
and any person(s) becoming director(s) of Telxon subsequent to such date whose
election, or nomination for election by Telxon's stockholders, was approved by a
vote of at least a majority of the then Continuing Directors (either by a
specific vote or by approval of the proxy statement of Telxon in which such
person is named as a director nominee, without the objection by any member of
such approving majority of the then Continuing Directors to the nomination of
such nominee in said proxy statement), cease for any reason to constitute at
least a majority of such Board.
5. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire
agreement between the parties and supersedes any prior agreements between the
parties and their respective affiliates, with respect to the subject matter
hereof. The parties are not relying on any other representations or
understandings, express or implied, oral or written. This Agreement shall not be
modified or discharged, in whole or in part, except by an agreement in writing
signed by the parties hereto and, in the case of Telxon, approved by its Board
of Directors.
6. BINDING EFFECT. The rights and obligations of the parties under this
Agreement shall inure to the benefit of, and shall be binding upon, Telxon and
RFM and their respective successors and assigns, provided that no assignment may
be made by either party without the prior written consent of the other, which
consent shall not be unreasonably withheld.
7. CAPTIONS. The captions contained in this Agreement are for
convenience of reference only and shall not affect the meaning of any term or
provision hereof.
8. SEVERABLE PROVISIONS. The provisions of this Agreement are
severable, and
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if any one or more provisions are determined to be illegal or otherwise
unenforceable in any jurisdiction, in whole or in part, the remaining provisions
and any partially unenforceable provision shall be binding and enforceable to
the extent enforceable in such jurisdiction.
9. GOVERNING LAW AND VENUE. The validity, construction and performance
of this Agreement shall be governed by the laws of the State of Ohio without
regard to principles of conflict of laws. All actions brought by any party in
connection with this Agreement shall be brought in the courts, state or federal,
sitting in Cuyahoga or Summit Counties in the State of Ohio, and the parties
hereby consent to the jurisdiction of such courts.
IN WITNESS WHEREOF, the parties have made and delivered this Agreement
as of the Effective Date.
TELXON CORPORATION
By:/s/ Xxxxx X. Brick /s/ Xxxxxx X. Xxxxxxxx
Xxxxx X. Brick, President and Xxxxxx X. Xxxxxxxx
Chief Executive Officer
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