NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (the "Agreement") is made and entered
into as of the 31st day of December, 1997 by and between NATIONSBANK
CORPORATION, a North Carolina corporation ("NationsBank"), and XXXXXXX X. XXXXX,
XX ("Executive").
W I T N E S S E T H:
WHEREAS, as of the date hereof, Executive is retiring from NationsBank;
and
WHEREAS, during his period of employment Executive has served
NationsBank in executive capacities, including most recently as Chairman,
Corporate Risk Policy; and
WHEREAS, Executive has acquired extensive knowledge of NationsBank's
business methods, customers and employees; and
WHEREAS, the parties hereto desire to enter into this Agreement
restricting the activities of Executive in retirement in an effort to protect
NationsBank's legitimate business interests;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein shall have the meanings
set forth below:
"Affiliate" means (i) any entity directly or indirectly controlling
(including without limitation an entity for which Executive serves as an
officer, director, employee, consultant or other agent), controlled by, or under
common control with Executive, and (ii) each other entity in which Executive,
directly or indirectly, owns any controlling interest or of which Executive
serves as a general partner.
"Agreement" means this Noncompetition Agreement, including any
amendments hereto made in accordance with paragraph 7(d) hereof.
"Company" means (i) NationsBank, (ii) any corporation, partnership or
other business entity that is, directly or indirectly, controlled by or under
common control with NationsBank and (iii) their respective successors.
"Covenant Period" means the period beginning on the date of this
Agreement and ending on the date of Executive's death.
2. Consideration. In consideration for Executive's covenants and
obligations under this Agreement, NationsBank has agreed to provide Executive
with a supplemental target annual retirement benefit payable beginning January
1998 for Executive's life pursuant to a letter
agreement between Executive and NationsBank dated August 28, 1997 (the
"Supplemental Retirement Benefits").
3. Executive's Obligations in Connection with His Termination of
Employment with the Company.
(a) Nonsolicitation of Employees. During the Covenant Period,
Executive agrees not to hire, directly or indirectly, or entice or participate
in any efforts to entice to leave the Company's employ, any person who was or is
a "key employee" (as hereinafter defined) of the Company during 1997. For
purposes of this Agreement, "key employee" means an employee who has an
annualized rate of base salary equaling or exceeding fifty thousand dollars
($50,000).
(b) Noncompetition. During the Covenant Period, Executive
agrees not to engage in any manner, whether as an officer, employee, owner,
partner, stockholder, director, consultant or otherwise -- directly or
indirectly -- in any business which engages or attempts to engage, directly or
indirectly, in any business in which the Company engages within the United
States, as determined by NationsBank in its reasonable discretion; provided,
however, that Executive may (i) acquire an interest in a business entity so long
as such interest is a passive investment of Executive not exceeding five percent
(5%) of the total ownership interest in such entity or (ii) engage in any other
activities as approved in writing in advance by NationsBank.
(c) Trade Secrets and Confidential Information. Executive
hereby agrees that he will hold in a fiduciary capacity for the benefit of the
Company, and shall not directly or indirectly use or disclose any Trade Secret,
as defined hereinafter, that Executive may have acquired during the term of his
employment by the Company for so long as such information remains a Trade
Secret. The term "Trade Secret" as used in this Agreement shall mean information
including, but not limited to, technical or nontechnical data, a formula, a
pattern, a compilation, a program, a device, a method, a technique, a drawing, a
process, financial data, financial plans, product plans, or a list of actual or
potential customers or suppliers which derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and is the subject of reasonable efforts by the
Company to maintain its secrecy.
In addition to the foregoing and not in limitation thereof,
Executive agrees that during the Covenant Period he will hold in a fiduciary
capacity for the benefit of the Company and shall not directly or indirectly use
or disclose, any Confidential or Proprietary Information, as defined
hereinafter, that Executive may have acquired (whether or not developed or
compiled by Executive and whether or not Executive was authorized to have access
to such Information) during the term of, in the course of or as a result of his
employment by the Company. The term "Confidential or Proprietary Information" as
used in this Agreement means any secret, confidential or proprietary information
of the Company not otherwise included in the definition of "Trade Secret" above.
The term "Confidential and Proprietary Information" does not include information
that has become generally available to the public by the act of one who has the
right to disclose such information without violating any right of the Company.
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4. Reasonable and Necessary Restrictions. Executive acknowledges that
the restrictions, prohibitions and other provisions of this Agreement, including
without limitation the Covenant Period, are reasonable, fair and equitable in
scope, term and duration, are necessary to protect the legitimate business
interests of NationsBank, and are a material inducement to NationsBank to enter
into this Agreement and the letter agreement providing for the Supplemental
Retirement Benefits. Executive covenants that Executive will not challenge the
enforceability of this Agreement nor will Executive raise any equitable defense
to its enforcement.
5. Remedies. In the event Executive breaches any provision of this
Agreement, Executive shall forfeit and have no right to receive any of the
Supplemental Retirement Benefits due and payable from and after the date of such
breach (including without limitation any survivor benefits otherwise payable to
Executive's spouse).
6. Operations of Affiliates. Executive agrees that he will refrain from
(i) authorizing any Affiliate to perform or (ii) assisting in any manner any
Affiliate in performing any activities that would be prohibited by the terms of
this Agreement if they were performed by Executive.
7. Miscellaneous Provisions.
(a) Binding Effect. Subject to any provisions hereof
restricting assignment, all covenants and agreements in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors, assigns, heirs, and personal representatives. None of the
parties hereto may assign any of its rights under this Agreement or attempt to
have any other person or entity assume any of its obligations hereunder.
(b) Severability. If fulfillment of any provision of this
Agreement, at the time such fulfillment shall be due, shall transcend the limit
of validity prescribed by law, then the obligation to be fulfilled shall be
reduced to the limit of such validity; and if any clause or provision contained
in this Agreement operates or would operate to invalidate this Agreement, in
whole or in part, then such clause or provision only shall be held ineffective,
as though not herein contained, and the remainder of this Agreement shall remain
operative and in full force and effect.
(c) Governing Law. This Agreement, the rights and obligations
of the parties hereto, and any claims or disputes relating thereto shall be
governed by and construed in accordance with the laws of the State of North
Carolina, not including the choice-of-law rules thereof.
(d) Amendment; Waiver. Except as otherwise expressly provided
in this Agreement, no amendment, modification or discharge of this Agreement
shall be valid or binding unless set forth in writing and duly executed by each
of the parties hereto. Any waiver by any party or consent by any party to any
variation from any provision of this Agreement shall be valid only if in writing
and only in the specific instance in which it is given, and such waiver
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or consent shall not be construed as a waiver of any other provision or as a
consent with respect to any similar instance or circumstance.
(e) Headings. Paragraph and subparagraph headings contained in
this Agreement are inserted for convenience of reference only, shall not be
deemed to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.
(f) Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or entity may require.
(g) Execution in Counterparts. This Agreement may be executed
in two or more counterparts, none of which need contain the signatures of all
parties hereto and each of which shall be deemed an original.
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement, or caused this Agreement to be duly executed on its behalf, as of the
date first set forth above.
NATIONSBANK CORPORATION
By: /s/ X. X. Xxxxxx
--------------------------------
Name: X. X. Xxxxxx
------------------------
Title: Executive Vice President
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"NationsBank"
/s/ Xxxxxxx X. Xxxxx, XX [SEAL]
--------------------------------
Xxxxxxx X. Xxxxx, XX
"Executive"
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