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EXHIBIT 10.2
EXECUTIVE NONCOMPETITION AGREEMENT
THIS AGREEMENT (the "Agreement"), made and entered into this 11th day
of November 1999, by and between Xxxxx X. Xxxxxxx (the "Executive") and Illinois
Tool Works Inc. ("ITW") having its principal offices at 0000 Xxxx Xxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000- 5811.
WITNESSETH THAT:
WHEREAS, it is anticipated that ITW will acquire Premark International,
Inc. and its subsidiaries ("Premark") pursuant to an Agreement and Plan of
Merger dated September 9, 1999;
WHEREAS, the Executive is entrusted with knowledge of Premark's
particular business and operations methods and will be entrusted with knowledge
of ITW's business and operations after the date of the closing of the Premark
acquisition (the "Closing Date"); and
WHEREAS, the Executive recognizes and acknowledges that by reason of
Executive's employment and service to ITW and Premark, Executive has obtained
and will obtain access to certain confidential and proprietary information
relating to the business of ITW and Premark;
NOW, THEREFORE, in return for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Consideration. ITW will pay the Executive $7,160,000 within 14 days
of the Closing Date in consideration for the Executive entering into this
Agreement.
2. Noncompetition. While he is employed by ITW or Premark (hereinafter,
the "Company") after the Closing Date and for a period of 24 months after the
termination of the Executive's employment with the Company for any reason:
(a) The Executive will not be employed by, serve as a consultant
to, or otherwise assist or directly or indirectly provide
services to a Competitor (defined below) if such employment or
services would involve the likely use of or disclosure of
Confidential Information (defined below).
(b) The Executive will not solicit or attempt to solicit any party
who is then or, during the 12-month period prior to such
solicitation or attempt by the Executive was (or was solicited
to become), a customer or supplier of the Company.
Exh. 10.2-1
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(c) The Executive shall not solicit, entice, persuade or induce
any individual who is employed by the Company (or was so
employed within 180 days prior to Executive's action) to
terminate or refrain from renewing or extending such
employment or to become employed by or enter into contractual
relations with any other individual or entity other than the
Company, and the Executive shall not approach any such
employee for any such purpose or otherwise or knowingly
cooperate with the taking of any such actions by any other
individual or entity.
(d) The Executive shall not, directly or indirectly own an
interest in or finance any Competitor (other than ownership as
a passive investment of 1% or less of the outstanding stock of
any corporation listed on the New York Stock Exchange or the
American Stock Exchange or included in the NASDAQ System).
The term "Competitor" means any enterprise (including a person, firm or
business, whether or not incorporated) during any period in which it is
materially competitive in any way with any business in which the
Company was engaged during the 12-month period prior to the Executive's
termination of employment. Nothing in this paragraph shall be construed
as limiting the Executive's duty of loyalty to the Company while he is
employed by the Company.
3. Confidentiality. The Executive agrees that while he is employed by
the Company, and at all times thereafter:
(a) Except as may be required by the lawful order of a court or
agency of competent jurisdiction, except as necessary to carry
out his duties to the Company, or except to the extent that
the Executive has express authorization from the Company, the
Executive agrees to keep secret and confidential indefinitely,
all Confidential Information, and not to disclose the same,
either directly or indirectly, to any other person, firm, or
business entity, or to use it in any way.
(b) To the extent any court or agency seeks to have the Executive
disclose Confidential Information, he shall promptly inform
the Company and he shall take such reasonable steps to prevent
disclosure of Confidential Information until the Company has
been informed of such requested disclosure, and the Company
has an opportunity to respond to such court or agency. To the
extent that the Executive obtains information on behalf of the
Company that may be subject to attorney-client privilege as to
the Company's attorneys, the Executive shall take reasonable
steps to maintain the confidentiality of such information and
to preserve such privilege.
(c) Nothing in the foregoing provisions of this paragraph 2 shall
be construed so as to prevent the Executive from using, in
connection with his employment for himself or an employer
other than the Company, knowledge which was acquired by him
during the course of his employment with the Company and which
is generally known to persons of his experience in other
companies in the industry.
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For purposes of this Agreement, the term "Confidential Information"
includes, without limitation, the client and supplier lists of the
Company, their respective trade secrets, any confidential information
about (or provided by) any customer or supplier, or prospective or
former customer or supplier, of the Company, information concerning the
business or financial affairs of the Company, including books and
records, computer programs and software, cost and pricing information,
product design and development, manufacturing processes, formulas,
marketing and sales technique, commitments, procedures, plans and
prospectus, strategies or current or prospective transactions or
business and any other "inside information," (i) which has not been
disclosed publicly by the Company, (ii) which is otherwise not a matter
of public knowledge or (iii) which is a matter of public knowledge and
the Executive has reason to know that such information became a matter
of public knowledge through an unauthorized disclosure.
4. Equitable Relief.
(a) Executive acknowledges and agrees that the restrictions
contained in paragraphs 2 and 3 are reasonable and necessary
to protect and preserve legitimate interests, properties,
goodwill and business of the Company, that the Company would
not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by
the Company should Executive breach any of the provisions of
those paragraphs. Executive represents and acknowledges that
(i) Executive has been advised by the Company to consult
Executive's own legal counsel in respect of this Agreement,
(ii) Executive has had full opportunity, prior to the
execution of this Agreement, to review thoroughly this
Agreement with Executive's counsel and participated in the
negotiation thereof, and (iii) the provisions of paragraphs 2
and 3 are reasonable and these restrictions do not prevent
Executive from earning a reasonable livelihood.
(b) Executive further acknowledges and agrees that a breach of any
of the restrictions of paragraphs 2 and 3 cannot be adequately
compensated by money damages. Executive agrees that the
Company may be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual
damages, as well as provable damages and an equitable
accounting of all earnings, profits and other benefits arising
from any violation of paragraphs 2 or 3 hereof, which rights
shall be cumulative and in addition to any other rights or
remedies to which the Company may be entitled. In the event
that any of the provisions of paragraphs 2 or 3 hereof should
ever be adjudicated to exceed the time, geographic, service,
or other limitations permitted by applicable law in any
jurisdiction, it is the intention of the parties that the
provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by
applicable law, that such amendment shall apply only within
the jurisdiction of the court that made such adjudication and
that the provision otherwise be enforced to the maximum extent
permitted by law.
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(c) Executive irrevocably and unconditionally (i) agrees that any
suit, action or legal proceeding arising out of paragraphs 2
or 3 hereof, including without limitation, any action
commenced by the Company for preliminary and permanent
injunctive relief and other equitable relief, may be brought
in the United States District Court for the Northern District
of Illinois, or if such court does not have jurisdiction or
will not accept jurisdiction, in any court of general
jurisdiction in Chicago, Illinois, (ii) consents to the
non-exclusive jurisdiction of any such court in any such suit,
action or proceeding, and (iii) waives any objection which
Executive may have to laying of venue of any such suit, action
or proceeding in any such court.
5. Return of Information. Following the Executive's termination of
employment with the Company, the Executive agrees to return to the Company any
keys, credit cards, passes, documents (including documents in electronic format)
or material, or other property belonging to or relating to the business of the
Company, and to return all writings, files, records, correspondence, notebooks,
notes and other documents and things (including any copies thereof) containing
any trade secrets relating to the Company. For purposes of the preceding
sentence, the term "trade secrets" shall have the meaning ascribed to it under
the Illinois Trade Secrets Act or, if such act is repealed, the Uniform Trade
Secrets Act (on which the Illinois Trade Secrets Act is based).
6. Severability and Entire Agreement. The invalidity or enforceability
of any provision of this Agreement will not affect the validity or
enforceability of any other provision of this Agreement, and this Agreement
will be construed as if such invalid or unenforceable provision were omitted
(but only to the extent that such provision cannot be appropriately reformed or
modified). The Agreement is intended to be the entire agreement between the
parties regarding the subject matter hereof and shall supersede any prior
agreement to the contrary. However, nothing in this paragraph 6 shall limit
any obligation owed by the Executive to the Company under any applicable law.
7. Waiver. Any failure of the Company to demand rigid adherence to one
or more of this Agreement's terms, on one or more occasions, shall not be
construed as a waiver nor deprive the Company of the right to insist upon strict
compliance.
8. Applicable Law. The provision of this Agreement shall be construed
in accordance with the internal laws of the State of Illinois without
application of the conflict of laws provisions thereunder.
9. Successors. This Agreement shall be binding upon, and operate for
the benefit of, the Company and its successors and assigns.
10. Acknowledgment by Executive. The Executive acknowledges that he has
read this Agreement, understands the undertakings and restrictions it contains,
and intends to be fully bound by its terms. In situations where it is not
certain that an action to be taken by the Executive will comply with the terms
of this Agreement, the Executive may seek the consent of the Company before such
action is taken and such consent shall not be unreasonably withheld.
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IN WITNESS WHEREOF, the parties hereto have executed the Agreement as
of the date first above written.
ILLINOIS TOOL WORKS INC. Executive
By /s/ W. Xxxxx Xxxxxxx By /s/ Xxxxx X. Xxxxxxx
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W. Xxxxx Xxxxxxx
Chairman and Chief Executive Officer
Date November 11, 1999
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Exh. 10.2-5
