Exhibit (e)(16)
NON-COMPETITION AGREEMENT
This Non-Competition Agreement (the "Agreement"), dated as of October
22, 2003, is entered into by and between Brass Eagle Inc., a Delaware
corporation (the "Company"), and [EXECUTIVE] (the "Executive"), an individual.
R E C I T A L S
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WHEREAS, the Company and the Executive are parties to that certain
Change-of-Control Agreement, dated as of [DATE] (the "Change-of-Control
Agreement");
WHEREAS, the Company has entered into an Agreement and Plan of Merger,
dated as of October 22, 2003 (the "Merger Agreement"), among the Company, K2
Inc. ("K2"), a Delaware corporation, and Xxxx Acquisition Sub, Inc., a Delaware
corporation and wholly-owned subsidiary of K2 ("Acquisition"), pursuant to which
Acquisition will merge with and into the Company and the Company will become a
wholly-owned subsidiary of K2 (the "Merger"); and
WHEREAS, the Company is engaged in the business of manufacturing,
marketing, designing and distributing products and accessories for the paintball
industry, including without limitation, paintball guns, paintball markers,
paintball masks, paintballs and CO2 gas cartridges (collectively, the
"Business");
WHEREAS, the parties acknowledge that the Executive has considerable
knowledge, business contacts and expertise relating to the Business, which
knowledge, if used in competition with the Company (as the surviving entity in
the Merger), would substantially harm the business and financial prospects of
the Company. Therefore, in order to protect the goodwill, trade secrets, and
other confidential and proprietary information related to the Business, K2 and
the Company have agreed that the Company will use its best efforts to have the
Executive execute and deliver this Agreement; and
WHEREAS, the Executive has agreed to enter into this Agreement and
thereby be bound by the material, significant and essential covenants not to
compete and the confidentiality agreements provided in this Agreement, for which
good and valuable consideration has been transferred from the Company to the
Executive in exchange for such covenants.
A G R E E M E N T
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NOW, THEREFORE, in consideration of the foregoing premises and the
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereby agree as follows:
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1. In the event that the Executive's employment with the Company is
terminated for any reason, in consideration of any payments made by Company to
the Executive pursuant to the Change-of-Control Agreement, the Executive shall
not, directly or indirectly, for that portion of a one-year period equal to the
percentage of such Executive's base salary paid pursuant to the
Change-of-Control Agreement:
(i) compete with the Company;
(ii) have any interest in, own, manage, operate, control,
promote, assist, invest or be connected with as a stockholder (other
than as a stockholder of less than three percent (3%) of the issued and
outstanding stock of a publicly held corporation), joint venturer,
officer, director, agent, lender, representative, partner, employee or
consultant, or otherwise engage or invest or participate in any
business competing with the Business, whether conducted by the Company,
any affiliate of the Company or any of their successors;
(iii) solicit or hire any existing or future employee of
Company or the Business or any of their respective successors or
encourage or aid such employees to terminate their employment with the
Company or the Business or any of their respective successors;
(iv) solicit or encourage any material customer or supplier to
terminate or adversely alter in any material respect any relationship
such person may have with Company, and of its affiliates or any of
their successors that relates to the Business; or
(v) publicly disparage, defame or criticize in a
non-constructive manner the Company or the Business or any of their
respective successors.
The parties acknowledge that the foregoing covenants are in partial
consideration for payments made by the Company to the Executive pursuant to the
Change-of-Control Agreement. The Executive agrees that in the event the
Executive is in breach of this Agreement, the Company shall have no obligation
to make any payments or provide any benefits pursuant to the Change-of-Control
Agreement and the Executive shall reimburse the Company for any payments
previously made or benefits previously provided pursuant to the
Change-of-Control Agreement.
2. The parties hereto agree that, (i) due to the unique nature of the
services and capabilities of Executive, damages would be an inadequate remedy
for the Company and its respective affiliates in the event of breach or
threatened breach of this Agreement, (ii) any such breach may allow Executive to
unfairly compete with the Company, resulting in irreparable harm to the Company
and (iii) in any such event, the Company and its affiliates shall be entitled to
appropriate equitable relief, in addition to whatever remedies they might have
at law, and may, either with or without pursuing any potential damage remedies,
immediately obtain and enforce an injunction prohibiting Executive from
violating this Agreement.
3. Without limitation, the parties agree and intend that the covenants
contained in this Agreement shall be deemed to be a series of separate covenants
and agreements, one for each and every county or political subdivision of each
applicable state of the United States. It is the
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desire and intent of the parties hereto that the provisions of this Agreement be
enforced to the fullest extent permissible under the laws and public policies of
each jurisdiction in which enforcement is sought. Accordingly, if any provision
of this Agreement or deemed to be included herein shall be adjudicated to be
invalid or unenforceable, such provision, without any action on the part of the
parties hereto, shall be deemed amended to delete or to modify (including,
without limitation, a reduction in duration, geographical area or prohibited
business activities) the portion adjudicated to be invalid or unenforceable,
such deletion or modification to apply only with respect to the operation of
such provision in the particular jurisdiction in which such adjudication is
made, and such deletion or modification to be made only to the extent necessary
to cause the provision as amended to be valid and enforceable. Executive agrees
and acknowledges that the covenants of Executive contained in this Agreement are
reasonably necessary for the protection of the Company's interests, including
the full benefit of any reputation or goodwill associated with the Business, as
the Business may exist on and after the date hereof, and are not unduly
restrictive upon Executive.
4. This Agreement may be executed by facsimile in one or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
5. This Agreement may be modified only by a written instrument duly
executed by each party hereto. No breach of any covenant, agreement, warranty or
representation shall be deemed waived unless expressly waived in writing by the
party who might assert such breach. No waiver of any right hereunder shall
operate as a waiver of any other right or of the same or a similar right on
another occasion.
6. This Agreement and the Change-of-Control Agreement contain the
entire understanding of the parties with respect to the subject matter hereof,
supersedes all prior agreements and understandings relating to the subject
matter hereof.
7. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to its conflicts or
choice of law principles.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.
EXECUTIVE
_________________________
Name:
BRASS EAGLE INC.
By:_______________________
Name:
Title:
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