NONDISCLOSURE AND NON-COMPETE AGREEMENT
Exhibit 10(a) (7)
This Agreement is entered into as of the 17th day of December, 2007, by and between Universal
Forest Products, Inc., and its affiliates and subsidiaries, 0000 Xxxx Xxxxxxxx XX, Xxxxx Xxxxxx, XX
00000 (herein “UFP”), and Xxxxxxx X. Xxxxxx, an individual, of 0000 Xxxxx Xxxxx XX, Xxxxx Xxxxxx,
XX 00000 (herein “Xxxxxx”).
RECITALS
| X. | Xxxxxx intends to retire as an officer of UFP as of July 21, 2009. UFP wishes to restrict
his services from being provided to any competitors of UFP. |
The Parties agree as follows:
SECTION 1. DISCLOSURE OF INFORMATION.
Xxxxxx acknowledges that UFP’s trade secrets, private or secret processes as they exist from
time to time, and information concerning customers and their identity, products, developments,
manufacturing techniques, new product plans, equipment, inventions, discoveries, patent
applications, ideas, designs, engineering drawings, sketches, renderings, other drawings,
manufacturing and test data, computer programs, progress reports, materials, costs, specifications,
processes, methods, research, procurement and sales activities and procedures, promotion and
pricing techniques, and credit and financial data concerning customers of UFP, as well as
information relating to the management, operation, or planning of UFP, herein the (“Proprietary
Information”) are valuable, special, and unique assets of UFP, access to and knowledge of which may
be essential to the performance of Xxxxxx’x duties under this Agreement. In light of the highly
competitive nature of the industries in which UFP conducts businesses, Xxxxxx agrees that all
Proprietary Information obtained by Xxxxxx as a result of its relationship with UFP shall be
considered confidential. In recognition of this fact, Xxxxxx agrees that except as may be
necessary for UFP’s benefit, in Xxxxxx’x reasonable judgment, Xxxxxx will not, during and after the
Non-Compete Period, disclose any of such Proprietary Information to any person or entity for any
reason or purpose whatsoever without the written consent of UFP, and Xxxxxx will not make use of
any Proprietary Information for Xxxxxx’x own purposes or for the benefit of any other person or
entity (except UFP) under any circumstances.
SECTION 2. NON-COMPETITION AGREEMENT.
In order to further protect the confidentiality of the Proprietary Information and in
recognition of the highly competitive nature of the industries in which UFP conducts its
businesses, and for the consideration set forth herein, Xxxxxx further agrees that during
and for the period commencing on July 21, 2009 and ending on July 21, 2012 (the “Non-Compete
Period”):
2.1 Xxxxxx will not directly or indirectly engage in any Business Activities (hereinafter
defined), other than on behalf of UFP, whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less than 1% of the outstanding
capital stock of a publicly-traded corporation), advisor, agent, or other participant, in any
geographic area in which the products or services of UFP have been distributed or provided during
the period of Xxxxxx’x consulting relationship with UFP. For purposes of this Agreement, the term
“Business Activities” shall mean the design, development, manufacture, sale, marketing, or
servicing of UFP’s products, together with all other activities engaged in by UFP or any of its
subsidiaries at any time during Xxxxxx’x relationship with UFP, and activities in any way related
to activities with respect to which Xxxxxx renders consulting services under this Agreement.
2.2 Xxxxxx will not directly or indirectly engage in any of the Business Activities (other
than on behalf of UFP) by supplying products or providing services to any customer with whom UFP
has done any business during the consulting relationship with UFP, whether such engagement is as an
officer, director, proprietor, employee, partner, investor (other than as a holder of less than one
percent (1%) of the outstanding capital stock of a publicly traded corporation), advisor, agent, or
other participant.
2.3 Assistance to Others. Xxxxxx will not directly or indirectly assist others in
engaging in any of the Business Activities in any manner prohibited to Xxxxxx under this Agreement.
2.4 UFP’s Employees. Xxxxxx will not directly or indirectly induce employees of UFP
to engage in any activity hereby prohibited to Xxxxxx or to terminate their employment with UFP.
2.5 Non-Compete Payments. In exchange for Xxxxxx’x agreements and obligations under
this Section 2, Xxxxxx will receive a payment of Forty One Thousand Six Hundred Sixty Six Dollars
($41,666.00) per month for the term of the Non-Compete Period, subject to earlier termination upon
the death or Disability of Xxxxxx. Disability shall mean a physical or mental injury or illness
that totally and permanently renders Xxxxxx unable to perform all of the functions called for under
this Agreement.
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SECTION 3. INTERPRETATION.
Although Xxxxxx and UFP consider the restrictions contained in Sections 1 and 2 of this
Agreement reasonable for the purpose of preserving the goodwill, proprietary rights, and going
concern value of UFP, if a final judicial determination is made by a court
having jurisdiction that the time or territory or any other restriction contained in Section 2
is an unenforceable restriction on the activities of Xxxxxx, the provisions of such restriction
shall not be rendered void but shall be deemed amended to apply as to such maximum time and
territory and to such other extent as such court may judicially determine or indicate to be
reasonable. Alternatively, if the court referred to above finds that any restriction contained in
Section 2 or any remedy provided in Section 4 of this Agreement is unenforceable, and such
restriction or remedy cannot be amended so as to make it enforceable, such finding shall not affect
the enforceability of any of the other restrictions contained in this Agreement or the availability
of any other remedy. The provisions of Sections 1 and 2 shall in no respect limit or otherwise
affect the obligations of Xxxxxx under other agreements with UFP.
SECTION 4. REMEDIES.
Xxxxxx acknowledges and agrees that UFP’s remedy at law for a breach or threatened breach of
any of the provisions of Sections 1 and 2 of this Agreement would be inadequate and, in recognition
of this fact, in the event of a breach or threatened breach by Xxxxxx of any of the provisions of
Sections 1 and 2, Xxxxxx agrees that, in addition to its remedies at law, at UFP’s option, all
rights of Xxxxxx, and obligations of UFP, under this Agreement may be terminated. UFP shall be
entitled to equitable relief in the form of specific performance, temporary restraining order,
temporary or permanent injunction, or any other equitable remedy which may then be available. UFP
shall not be required to post bond, and Xxxxxx agrees not to oppose UFP’s request for equitable
relief. Xxxxxx acknowledges that the granting of a temporary injunction, temporary restraining
order or permanent injunction merely prohibiting the use of Proprietary Information would not be an
adequate remedy upon breach or threatened breach of Sections 1 and 2, and consequently agrees upon
any such breach or threatened breach to the granting of injunctive relief prohibiting the design,
development, manufacture, marketing or sale of products and providing of services of the kind
designed, developed, manufactured, marketed, sold or provided by UFP or its subsidiaries during the
term of Xxxxxx’x relationship with UFP. Nothing contained in this Section 4 shall be construed as
prohibiting UFP from pursuing, in addition, any other remedies available to it for such breach or
threatened breach.
SECTION 5. MISCELLANEOUS PROVISIONS.
5.1 Assignment. This Agreement shall not be assignable by either party, except by UFP
to any subsidiary or affiliate of UFP (now or hereafter existing) or to any successor in interest
to UFP’s business, provided that in the case of an assignment to an affiliate or subsidiary, UFP
shall remain liable as a guarantor for payments due to Xxxxxx hereunder.
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5.2 Binding Effect. The provisions of this Agreement shall be binding upon and inure
to the benefit of the heirs, personal representatives, successors, and assigns of the parties.
5.3 Notice. Any notice or other communication required or permitted to be given under
this Agreement shall be in writing and shall be mailed by certified mail, return receipt requested,
postage prepaid, addressed to the parties at the address stated on the first page of this
Agreement. The address of a party to which notices or other communications shall be mailed may be
changed from time to time by giving written notice to the other party.
5.4 Litigation Expense. In the event of a default under this Agreement, the
defaulting party shall reimburse the non-defaulting party for all costs and expenses reasonably
incurred by the non-defaulting party in connection with the default, including without limitation
reasonable attorney’s fees. The non-defaulting party may seek reimbursement in a court of competent
jurisdiction. Additionally, in the event a suit or action is filed to enforce this Agreement or
with respect to this Agreement, the prevailing party or parties shall be reimbursed by the other
party for all costs and expenses incurred in connection with the suit or action, including without
limitation reasonable attorney’s fees at the trial level and on appeal.
5.5 Waiver. No waiver of any provision of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party
making the waiver.
5.6 Applicable Law. This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of Michigan.
5.7 Entire Agreement. This Agreement constitutes the entire Agreement between the
parties pertaining to its subject matter, and it supersedes all prior contemporaneous agreements,
representations, and understandings of the parties. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in writing by all parties.
[SIGNATURES ON FOLLOWING PAGE.]
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| UNIVERSAL FOREST PRODUCTS, INC.: | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||||
| Its: | Executive Vice President | |||||
| /s/ Xxxxxxx X. Xxxxxx | ||||||
| Xxxxxxx X. Xxxxxx | ||||||
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