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EXHIBIT 10.3
NON-COMPETE, NON-SOLICITATION AND
CONFIDENTIALITY COVENANT AND AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of the 7th day of
November, 1997, by and between Xxxxxx X. Xxxxxxxxx ("Xxxxxxxxx") and Metal
Management, Inc., a Delaware corporation (the "Company").
RECITALS
WHEREAS, Xxxxxxxxx and the Company have entered into a certain Letter
Agreement dated November 7, 1997 (the "Letter Agreement"), which memorializes
the terms and conditions of Xxxxxxxxx'x separation from the Company and from
EMCO Recycling Corporation ("EMCO");
WHEREAS, as a material inducement to the Company to enter into the Letter
Agreement, Xxxxxxxxx has agreed to execute and abide by the terms of this
Agreement, as well as the terms and conditions of the Letter Agreement.
NOW, THEREFORE, in consideration of the promises, covenants and agreements
contained herein, and in consideration for the promises, covenants and
agreements contained in the Letter Agreement, the receipt and sufficiency of
which are hereby acknowledged, Xxxxxxxxx and the Company agree as follows:
1. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Xxxxxxxxx hereby
acknowledges and agrees that by reason of and/or as of a result of his
employment by the Company and/or EMCO, Xxxxxxxxx has acquired, made use of and/
or added to confidential information of a special and unique nature and value
relating to certain records, secrets, processes, documentation, software
programs, ledgers and general information, mailing lists, suppliers, customer
lists, customer profiles, prospective customer lists, accounts receivable and
payable ledgers, financial and other records of and/or with respect to the
Company and EMCO, their subsidiaries, affiliates,
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customers and other similar matters (all such information, together with that
certain information described herein, being hereinafter referred to as
"Confidential Information"). Xxxxxxxxx further acknowledges and agrees that
the Confidential Information is of great value to the Company, EMCO and/or
their subsidiaries or affiliates and that it is reasonably necessary to
protect the Confidential Information and the goodwill of the Company, EMCO and/
or their subsidiaries or affiliates. Accordingly, Xxxxxxxxx hereby agrees that:
(a) Xxxxxxxxx will not, at any time, directly or indirectly,
except as authorized by the Company for the benefit of the Company:
(i) divulge to any person, firm or corporation other than the
Company (hereinafter referred to as "Third Parties"), or use or
cause or authorize any Third Parties to use, the Confidential
Information or any other information relating to the business or
interests of the Company, EMCO and/or their subsidiaries or
affiliates which Xxxxxxxxx knows or should know is regarded as
confidential and valuable by the Company, EMCO and/or their
subsidiaries or affiliates (whether or not any of the foregoing
information is actually novel or unique or is actually known to
others), except as required by law; or
(ii) solicit, cause or authorize to be solicited, or hire,
directly or indirectly, for employment for or on behalf of himself
or any Third Parties, any persons who are, at any time within one
(1) year prior to the date of this Agreement, employees of the
Company, EMCO or their subsidiaries and affiliates.
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(b) Xxxxxxxxx shall forthwith deliver or cause to be delivered to
the Company any and all Confidential Information, including notebooks,
keys, customer lists, customer profiles, mailing lists, rolodex or other
telephone lists, data and other documents and materials belonging to the
Company, EMCO and/or their subsidiaries or affiliates which is in his
possession or under his control relating to the Company, EMCO and/or
their subsidiaries or affiliates, or the Business, regardless of the
medium upon which it is stored, and will deliver to the Company upon such
termination of employment any other property of the Company, EMCO and/or
their subsidiaries or affiliates which is in his possession or under his
control.
2. NON-SOLICITATION. Xxxxxxxxx agrees that for a period of five (5) years
from and after the date of this Agreement he will not, directly or indirectly,
on behalf of himself or as a partner or as an officer, director, employee,
member, manager, agent, consultant, owner or shareholder of any other entity or
person, or as a trustee, fiduciary or other representative of any other person
or entity, contact any persons or companies which are manufacturers, suppliers
or customers of the Company, EMCO or any of their subsidiaries or affiliates,
for the purpose of soliciting the manufacturers, suppliers or customers in
competition with the Company, EMCO or their subsidiaries or affiliates, nor
will he in any way, directly or indirectly, for himself, or as a partner or as
an officer, director, employee, member, manager, agent, consultant or
shareholder of any other entity or person, or as a trustee, fiduciary or other
representative of any other person or entity, solicit or divert, or cause
anyone to solicit or divert, any such manufacturers, suppliers or customers
from the Company, EMCO or their subsidiaries or affiliates. For purposes of
this Agreement, a "customer" shall mean any person or entity who has purchased
from or sold goods
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to the Company, EMCO or their subsidiaries or affiliates within the twelve-
month period immediately preceding such determination.
3. NON-COMPETITION COVENANT. As a necessary condition of this Agreement,
Xxxxxxxxx represents and acknowledges, and agrees to the restrictions, set
forth in this paragraph. Xxxxxxxxx acknowledges that the covenant set forth in
this paragraph is reasonable in scope and essential to the preservation of the
goodwill and other business interests of the Company and its Business, and that
Xxxxxxxxx'x willingness to agree to the restrictions set forth in this
paragraph were a material inducement to the Company's willingness to enter into
the Letter Agreement. Xxxxxxxxx also acknowledges that the enforcement of the
covenant set forth in this paragraph will not preclude Xxxxxxxxx from being
gainfully employed in such manner and to such extent as to provide a standard
of living for himself, the members of his family and others dependent upon him,
of at least the fashion to which he and they have become accustomed and may
expect. In addition, Xxxxxxxxx acknowledges that the Company and EMCO have
obtained an advantage over their competitors as a result of their names,
locations and reputations that is characterized, among other things, by
personal relationships and customer contacts which EMCO and the Company have
developed over time and at great expense to EMCO and the Company. Furthermore,
Xxxxxxxxx acknowledges that competition by Xxxxxxxxx would impair the operation
of the Company and EMCO beyond that which would arise from the competition of
an unrelated third party with similar skills, and that the Company has chosen
to enter into the Letter Agreement in large part based upon Xxxxxxxxx'x
agreement not to compete with the Business in any state in which the Company,
EMCO, their subsidiaries or affiliates or any other entities that the Company
has announced its intention to acquire own a scrap iron and/or metal
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yard or processing facility on the date of this Agreement (the "RESTRICTED
TERRITORY"). Xxxxxxxxx hereby acknowledges that the Company shall give valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, to
conduct the Business free of competition, direct or indirect, from Xxxxxxxxx.
Xxxxxxxxx hereby agrees that he shall not, directly or indirectly, alone or as
a partner, joint venturer, member, manager, officer, director, employee,
consultant, agent, independent contractor, stockholder or in any other capacity
of any company or business, for a period of five (5) years from and after the
date of this Agreement, engage in any business activity in the Restricted
Territory which business activity is directly or indirectly in competition with
the Business; provided however, that the beneficial ownership of less than five
percent (5%) of the shares of stock of any corporation having a class of equity
securities actively traded on a national securities exchange or over the
counter market shall not be deemed, in and of itself, to violate the
prohibitions of this Section.
4. REMEDIES. Xxxxxxxxx hereby acknowledges and agrees that the services
to be rendered by him to the Company hereunder are of a special and unique
nature and that it would be very difficult or impossible to measure the damages
resulting from a breach of this Agreement. Xxxxxxxxx hereby further
acknowledges and agrees that the restrictions herein are reasonable and
necessary for the protection of the Business and the goodwill of the Company,
EMCO and their subsidiaries and affiliates, and that a violation by Xxxxxxxxx
of any such covenants will cause irreparable damage to the Company, EMCO and/or
their subsidiaries or affiliates. Xxxxxxxxx therefore agrees that any breach
or threatened breach by him of any of the covenants or provisions of this
Agreement shall entitle the Company, in addition to any other legal remedy
available to them, to apply to any court of competent jurisdiction for a
temporary and permanent
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injunction or any other applicable decree of specific performance, without any
bond or security being required thereof, in order to enjoin such breach or
threatened breach.
5. ENFORCEMENT . It is the desire of the parties that the provisions of
this Agreement be enforced to the fullest extent permissible under the laws and
public policies in each jurisdiction in which enforcement might be sought.
Accordingly, if any particular portion of this Agreement shall ever be
adjudicated as invalid or unenforceable, or if the application thereof to any
party or circumstance shall be adjudicated to be prohibited by or invalidated
by such laws or public policies, such Section or Sections shall be deemed
amended to delete therefrom such portions so adjudicated, such deletions to
apply only with respect to the operation of such Section or Sections in the
particular jurisdictions so adjudicating on the parties and under the
circumstances as to which so adjudicated.
6. ATTORNEY'S FEES. The prevailing party in any action to enforce the
terms and provisions of this Agreement, or to enforce the terms and provisions
of the Letter Agreement, shall be awarded reasonable attorney's fees, costs and
expenses in connection therewith.
7. GENERAL PROVISIONS.
(a) Goodwill. The Company has invested substantial time and money in
the development of its products, services, territories, advertising and
marketing thereof, soliciting clients and creating goodwill. As a
consequence of his affiliation with EMCO and the Company, Xxxxxxxxx
acknowledges that the customers are the customers of the Company, and that
any goodwill created by Xxxxxxxxx belongs to and shall inure to the
benefit of the Company.
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(b) Notice. Any notice or demand required or permitted hereunder shall be
made in writing (i) either by actual delivery of the notice or demand into the
hands of the party thereunder entitled, or (ii) by the mailing of the notice or
demand in the United States mail, certified or registered mail, return receipt
requested, all postage prepaid and addressed to the party to whom the notice or
demand is to be given at the party's respective address set forth below, or
such other address as the parties may from time to time designate by written
notice as herein provided.
As addressed to the Company:
Metal Management, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
As addressed to the Executive
Xx. Xxxxxx X. Xxxxxxxxx
0000 Xxxx XxXxxxxxx Xxxx.
Xxxxxxx, Xxxxxxx 00000
With a copy to:
Xxxxx X. Xxxx, Esq.
Xxxxx, Xxxxxxx & Huckuli
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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The notice or demand shall be deemed to be received in case (i) on the date of
its actual receipt by the party entitled thereto and in case (ii) on the date
of its mailing.
(c) Amendment and Waiver. No amendment or modification of this
Agreement or the Letter Agreement shall be valid or binding upon the
Company unless made in writing and signed by an officer of the Company
duly authorized by the Board of Directors or upon Xxxxxxxxx unless made
in writing and signed by him. The waiver by either party hereto of the
breach of any provision of this Agreement or the Letter Agreement shall
not operate or be construed as a waiver of any subsequent breach by such
party.
(d) Entire Agreement. This Agreement and the Letter Agreement
constitutes the entire agreement between the parties with respect to the
subject matter described therein and shall supersede any and all prior
agreements or understandings between the parties hereto.
(c) Choice of Law and Venue. The validity of this Agreement and/
or the Letter Agreement, its construction, interpretation, and
enforcement, and the rights of the parties hereto, shall be determined
under, governed by, and construed in accordance with the internal laws of
the State of Illinois, without regard to conflicts of law principles. To
the maximum extent permitted by law, the parties hereto hereby agree that
all actions or proceedings arising in connection with this Agreement and/
or the Letter Agreement shall be tried and determined only in the state
courts located in the County of Xxxx, State of Illinois. To the maximum
extent permitted by law, the parties hereto expressly waive any right
they may have to assert the doctrine of forum non conveniens or to
object to venue to the extent any proceeding is brought relating or
referring to this Agreement and/or the Letter Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
METAL MANAGEMENT, INC.
By:
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Its:
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EXECUTIVE:
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XXXXXX X. XXXXXXXXX
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