EXHIBIT 10.8
Confidentiality, Non-Competition
and Non-Solicitation Agreement
THIS CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION AGREEMENT (this
"Agreement") is made as of July 1, 1997 by and among Xxxxxxxx X. Xxxxxxxx, Xx.
and Xxxx Xxxxxxx Xxxxxxxx (together "Sellers"), and Xxxxxxxx Manufacturing
Company, Inc., a Texas corporation ("DMC").
WHEREAS, DMC, Sellers, Enterprise Partners III, L.P., a Delaware limited
partnership ("EPIII"), Enterprise Partners III Associates, L.P., a Delaware
limited partnership ("EPIIIA"), Enterprise Partners IV, L.P., a Delaware limited
partnership ("EPIV"), Enterprise Partners IV Associates, L.P., a Delaware
limited partnership ("EPIVA," together with EPIII, EPIIIA and EPIV, the "EP
Funds"), Enterprise Management Partners Corporation, a California corporation
("EMPC"), Enterprise Partners Texas Company, L.L.C., a Texas limited liability
company and wholly-owned subsidiary of EMPC ("EP Texas," together with EMPC and
EP Funds, the "Buyers"), and Spectrum Polymers, Ltd. ("Spectrum" and, together
with DMC, the "Company") are parties to a Recapitalization Agreement dated July
1, 1997 (the "Recapitalization Agreement"), pursuant to which the Company is
being recapitalized;
WHEREAS, Sellers' management contributions to the Company have been
uniquely valuable and involve proprietary information that would be
competitively unfair to make available to any competitor of the Company in the
United States or in any other country in which the Company is currently doing or
proposing to do business.
WHEREAS, in order to induce Enterprise to enter into the Recapitalization
Agreement and consummate the transactions contemplated thereunder, and for the
cash consideration being paid hereunder, Sellers have agreed to maintain certain
information as confidential, not to compete with the Company and not to solicit
employees of the Company without first obtaining the consent of DMC, all in
accordance with the terms set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms used herein but not otherwise defined
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shall have the meanings set forth in the Recapitalization Agreement.
2. Consideration. As consideration for entering into this Agreement, DMC
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hereby pays to the Sellers $10,000 by wire transfer of immediately available
funds to such account or accounts designated in writing by Sellers.
3. Confidentiality. For a period of three years from and after the
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Closing Date, Sellers shall not disclose to any person, or use or otherwise
exploit for his or her own benefit or for the benefit of anyone other than the
Company, any Confidential Information (as
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defined below). Sellers shall have no obligation to keep confidential any
Confidential Information if and to the extent disclosure thereof is specifically
required by law, judicial or governmental order or other legal process;
provided, however, that in the event such disclosure is required, Sellers shall,
to the extent reasonably practicable, provide DMC with reasonably prompt notice
of such requirement, prior to making any disclosure, so that DMC may seek an
appropriate protective order or waive compliance with this provision with
respect to such disclosure. For purposes of this Agreement, "Confidential
Information" shall mean any confidential information with respect to the conduct
or details of the businesses of the Company including, without limitation,
methods of operation, customer lists, products (existing and proposed), prices,
fees, costs, plans, designs, technology, inventions, trade secrets, know-how,
software, marketing methods, policies, personnel, suppliers, competitors,
markets or other specialized information or proprietary matters of the Company.
The term "Confidential Information" does not include, and there shall be no
obligation hereunder with respect to, information that (a) is generally
available to the public on the date of this Agreement or (b) becomes generally
available to the public other than as a result of a disclosure by either Seller
in violation of this Agreement.
4. Non-Competition.
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(a) Subject to the other provisions of this Section 4, for a period
of five years from and after the Closing Date (the "Noncompetition Term"),
without the prior written consent of DMC, Sellers shall neither (i) knowingly
participate as a stockholder, proprietor, partner, trustee, consultant,
employee, director, officer, lender, or investor in an entity which directly
competes (whether as a manufacturer, distributor or seller) in the United States
or in any other country in which the Company is currently doing business with
the businesses currently conducted or currently proposed to be conducted and the
products currently manufactured or currently proposed to be manufactured by the
Company (each a "Competing Entity") nor (ii) knowingly fund (including by loan,
investment, forbearance, gift or otherwise) any person, including any current or
future employee of the Company or any relative of Sellers, in a Competing
Entity.
(b) Nothing contained herein shall limit the right of either Seller
to hold and make investments in securities of any corporation or limited
partnership that is registered on a national securities exchange or admitted to
trading privileges thereon or actively traded in a generally recognize over-the-
counter market, provided such Seller's equity interest therein does not exceed
5% of the total outstanding shares or interests in such corporation or
partnership.
(c) If, during any period within the Noncompetition Term, either
Seller is not in compliance with the terms of this Section 4, the Company shall
be entitled to, among other remedies, compliance by such Seller with the terms
of this Section 4 for an additional period equal to the period of such
noncompliance. For purposes of this Agreement, the term "Noncompetition Term"
shall also include such additional period.
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(d) Each of the Sellers hereby acknowledges that the geographic
boundaries, scope of prohibited activities and the time duration of the
provisions of this Section 4 are reasonable and are no broader than are
necessary to protect the legitimate business interests of the Company.
5. Non-Solicitation and Non-Interference. During the Noncompetition Term,
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neither Seller shall, directly or indirectly, (a) solicit the employment of any
current or future employee of the Company without the prior written consent of
DMC, (b) request, induce or attempt to influence any employee of the Company to
terminate his or her employment with the Company, or (c) request, induce or
attempt to influence any supplier or customer of the Company to terminate its
relationship with the Company; provided, however, that this Agreement shall not
prohibit (i) any advertisement or general solicitation that is not specifically
targeted at employees of the Company, and (ii) solicitation of the employment of
any former employee of the Company who either resigned from the Company at least
one year prior to such solicitation or was terminated by the Company at least
one year prior to such solicitation. Notwithstanding the foregoing, the persons
listed on Appendix A shall not be subject to the non-solicitation covenants set
forth in clauses (a) and (b) of this Section 5.
6. Injunctive Relief. Each Seller acknowledges that the breach of any of
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the agreements contained herein, including, without limitation, any of the
confidentiality, non-competition and non-solicitation covenants specified in
Sections 3 through 5, may give rise to irreparable injury to the Company,
inadequately compensable in money damages. Accordingly, the Company shall be
entitled to injunctive relief to prevent or cure breaches or threatened breaches
of the provisions of this Agreement and to enforce specific performance of the
terms and provisions hereof in any court of competent jurisdiction, in addition
to any other legal or equitable remedies which may be available. Sellers waive
any requirements for the posting of a bond in connection with the issuance of
such an injunction. Each Seller further acknowledges and agrees that his or her
experience and capabilities are such that he or she can obtain employment in
business activities which are of a different or noncompeting nature with his or
her activities as an employee of the Company; and that the enforcement of a
remedy hereunder by way of injunction shall not prevent such Seller from earning
a reasonable livelihood. Each Seller further acknowledges and agrees that the
covenants contained herein are necessary for the protection of the Company's
legitimate business interests and are reasonable in scope and content.
7. Miscellaneous.
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(a) Amendment and Waiver. This Agreement may be amended and any
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provision of this Agreement may be waived, provided that any such amendment or
waiver will be binding upon a party only if such amendment or waiver is set
forth in a writing executed by DMC and Sellers.
(b) Notices. All notices and other communications hereunder shall be
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in writing and shall be deemed given upon the earlier of delivery thereof if by
hand or upon receipt if sent by mail (registered or certified mail, postage
prepaid, return receipt requested)
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or on the second next business day after deposit if sent by a recognized
overnight delivery service or upon transmission if sent by telecopy or facsimile
transmission (with request of assurance of receipt in a manner customary for
communication of such type) as follows:
(i) If to the Company, to:
Xxxxxxxx Manufacturing Company, Inc.
0000 Xxxxxxx
Xxxxxxxxx, Xxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
with copies to:
O'Melveny & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: J. Xxx Xxxxxx
Facsimile No.: (000) 000-0000
(ii) If to Sellers, to:
Xxxxxxxx X. Xxxxxxxx, Xx.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxx 00000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx
Facsimile No.: (000) 000-0000
(c) Entire Agreement. This Agreement and the documents referred to
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herein contain the entire agreement between the parties and supersede any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related to the subject matter hereof in any way.
(d) Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
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(e) Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Texas without regard to the
conflicts-of-laws rules thereof.
(f) Jurisdiction and Venue. The parties hereto agree that any suit,
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action or proceeding arising out of or relating to this Agreement shall be
instituted only in a court of competent jurisdiction sitting in Tarrant County,
Texas. Each party waives any objection it may have now or hereafter to the
laying of the venue of any such suit, action or proceeding, and irrevocably
submits to the jurisdiction of any such court in any such suit, action or
proceeding.
(g) Headings. The article and section headings contained in this
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Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not affect in any way the meaning or interpretation of
this Agreement.
(h) Severability and Reformation. Whenever possible, each provision
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of this Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
Notwithstanding the foregoing, in the event a court of competent jurisdiction
should decline to enforce the provisions of Section 4 hereof, such Section 4
shall be deemed to be modified or reformed to restrict each Seller's competition
with the Company or its subsidiaries to the maximum extent, as to time,
geography and business scope, which the court shall find enforceable.
(i) Successors and Assigns. This Agreement and the rights and duties
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hereunder shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
XXXXXXXX MANUFACTURING COMPANY, INC.
By: /s/ XXXXXX X. XXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxx
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Title: Vice President
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/s/ XXXXXXXX X. XXXXXXXX, XX
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Xxxxxxxx X. Xxxxxxxx, Xx.
/s/ XXXX XXXXXXX XXXXXXXX
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Xxxx Xxxxxxx Xxxxxxxx
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Appendix A
Jahron (Xxxxxx) Xxxxxxx
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