EXHIBIT 10.2
FORM OF DIRECTOR
NON-COMPETE/NON-DISCLOSURE AGREEMENT
THIS
NON-COMPETE/NON-DISCLOSURE AGREEMENT (this “Agreement”), is made this _____ day
of __________, ______, by and between Torotel, Inc., a Missouri corporation
(the “Company”) and _______________________ (the “Director”), an individual
residing at
_____________________________.
WHEREAS, the
parties hereto recognize and agree that the services of the Director are
special and unique, that s/he has knowledge of and access to the Company’s trade
secrets, business plans and most sensitive confidential matters, and that s/he
has special fiduciary duties to the Company as an officer and/or director;
WHEREAS, for the
foregoing reasons, covenants on the part of the Director not to compete with the
Company, have any conflicts of interest, or to disclose confidential and
proprietary information of the Company during his/her service as a director and
for a reasonable period after the termination or expiration of his/her service
as a director is essential to protect the business of the Company;
NOW, THEREFORE, it
is hereby agreed by the Company and the Director as follows:
1. NON-COMPETE.
During the period of time that the Director serves as a director of the
Company and for a period of two (2) years after the termination or cessation of
such employment and/or service as a director, for any reason (both periods of
time, taken together, being referred to hereinafter as the “Restricted Period”),
the Director shall not, anywhere in the United States, directly or indirectly,
whether individually or as an officer, director, employee, consultant, partner,
stockholder (other than as the holder of not more than one percent (1%) of a
publicly held corporation), individual proprietor, joint venturer, investor, lender,
consultant or in any other capacity whatsoever, develop, design, produce,
market, sell or render (or assist any other person in developing, designing,
producing, marketing, selling or rendering) products or services competitive
with those developed, designed, produced, marketed, sold or rendered by the
Company at any time during the Restricted Period.
2. NON-SOLICITATION. During the Restricted Period, the Director
shall not, directly or indirectly, whether individually or as an officer,
director, employee, consultant, partner, stockholder, individual proprietor,
joint venturer, investor, lender, consultant or any other capacity
whatsoever: (a) solicit, divert or take
away, or attempt to solicit, divert or take away, the business or patronage of
any clients, customers or accounts, or prospective clients, customers or
accounts, of the Company; or (b) hire, retain (including as a consultant) or
encourage to leave the employment of the Company any employee of the Company,
or hire or retain (including as a consultant) any former employee of the
Company who has left the employment of the Company within one (1) year prior to
such hiring or retention.
3. NON-DISCLOSURE. The Director agrees, at all times during the
Restricted Period and thereafter to hold in strictest confidence, and not to
use, except for the benefit of the Company, or to disclose to any person, firm,
corporation or other entity, without written authorization from the Company,
any trade secrets, confidential knowledge, data or other proprietary
information of the Company. By way of
illustration
and not limitation, such shall include information
relating to products, processes, know-how, designs, formulas, methods,
developmental or experimental work, improvements, discoveries, plans for research,
new products, marketing and selling, business plans, budgets and unpublished
financial statements, licenses, prices and costs, suppliers and customers of
the Company.
4. ACKNOWLEDGEMENT. The Director agrees
and acknowledges that his non-competition, non-solicitation and non-disclosure
obligations hereunder are essential to the protection of the Company’s business
as a consequence of the Director’s position with the Company and are reasonable
for such purpose.
5. EQUITABLE REMEDIES. The parties hereto
hereby agree that breaches of covenants and obligations undertaken in this
Agreement are likely to cause the Company substantial and irrevocable damage,
which would be difficult, if not impossible, to prove precisely; therefore, it
is agreed that this Agreement shall be enforceable by specific performance or
other injunctive relief. If any of the
restrictions contained herein are deemed to be unenforceable by reason of the
extent, duration or geographical scope or other provisions hereof, then the
parties hereto contemplate and agree that a court shall reduce such extent,
duration, geographical scope or other provision hereof and enforce the terms
hereof in reduced form for all purposes in the manner contemplated hereby.
6. MISCELLANEOUS. The Director acknowledges
that this Agreement does not constitute a contract of employment and does not
imply that the Company will continue his service as a director for any period
of time. This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. The rights and obligations of the Company
shall inure to the benefit of, and shall be binding upon, its successors and
assigns. The Director acknowledges that
the services to be rendered by him are unique and personal and cannot and shall
not be assigned. This Agreement and the
performance hereof shall be construed and governed in accordance with the laws
of the State of Missouri.
IN WITNESS
WHEREOF, and intending to be legally bound hereby, the parties have caused this
Non-Compete/Non-Disclosure Agreement to be duly executed as an instrument under
seal as of the date and year first written above.
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Name:
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Address:
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TOROTEL, INC.
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Name:
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Address:
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