EXHIBIT 10.31
NON-COMPETITION AGREEMENT
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NON-COMPETITION AGREEMENT dated as of August 1, 1994, by and among Iron Age
Holdings Corporation, a Delaware corporation ("Holdings"), Falcon Shoe Mfg. Co.,
a Maine corporation (the "Company") and a wholly-owned subsidiary of Holdings
and Xxxxxxxx X. Xxxxxxxx. Holdings, the Company and Xx. Xxxxxxxx are referred
to collectively as the "Parties."
WHEREAS, Holdings acquired all of the common stock of the Company held by
Xx. Xxxxxxxx pursuant to the terms of the Stock Purchase Agreement dated August
1, 1994 (the "Stock Purchase Agreement") among Holdings, Xx. Xxxxxxxx, Xxxxxxxx
X. Xxxxxxxx and the Falcon Shoe Mfg. Co. Employee Stock Ownership Plan Trust
created under the Falcon Shoe Mfg. Co. Employee Stock Ownership Plan dated
November 13, 1989 between the Company and Xx. Xxxxxxxx, as Trustee;
WHEREAS, Xx. Xxxxxxxx has entered into an Employment Agreement with the
Company dated August 1, 1994 (the "Employment Agreement") in connection with the
transactions relating to the Stock Purchase Agreement;
WHEREAS, the Parties desire to enter into a non-competition agreement for
the period of time set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained and other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Term and Termination. This Agreement shall be effective from and as
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of the date hereof and shall remain in effect during each Non-Competition Period
(as defined below).
2. Non-Competition Period.
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2.1. Defined. As used herein the term "Non-Competiton Period" shall
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mean each of:
2.1.1 the period during which Xx. Xxxxxxxx is employed by the
Company under the Employment Agreement (as the same may be extended or
modified from time to time);
2.1.2 the periods, if any, following the termination of the
period referred to in Section 2.1.1 above during which the Company is
required to provide benefits to Xx. Xxxxxxxx pursuant to Section 6(e)
of the Employment
Agreement or to make payments to Xx. Xxxxxxxx pursuant to Section 6(h)
of the Employment Agreement; and
2.1.3 each period, if any, during which the Company shall have
elected to extend Xx. Xxxxxxxx'x obligations under this Agreement
pursuant to Section 2.3 of this Agreement.
2.2. Consideration. In consideration for the execution of this
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Agreement, the Buyer agrees to pay to Xx. Xxxxxxxx the sum of One Hundred
Thousand Dollars ($100,000.00) in cash payable by certified check or wire
transfer upon such execution.
2.3. Elective Non-Competition Periods. Upon the later of either (i)
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the termination for any reason of the Employment Agreement, or (ii) upon
the expiration of the periods, if any, under which Xx. Xxxxxxxx receives
benefits from the Company as specified in Section 2.1.2 of this Agreement,
the Company shall have the option, upon written notice given to Xx.
Xxxxxxxx within ten (10) days of such termination or expiration, to invoke
the application of this Agreement for a period of one (1) year from the
giving of such notice. In addition, the Company shall have the option to
renew such one-year period upon written notice given to Xx. Xxxxxxxx not
later than one hundred eighty (180) days prior to the expiration of such
one-year period, for one, and only one, additional period of one-year from
expiration of such initial one-year period. During each such one-year
period, the Company shall pay Xx. Xxxxxxxx an aggregate amount of Seventy-
Five Thousand Dollars ($75,000.00), payable in monthly installments in
arrears on the first business day of each calendar month.
2.4. Set-Off. In the event Xx. Xxxxxxxx receives cash compensation
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with respect to any such one-year period (excluding any payment received
under this Agreement) in excess of $75,000, the Company shall be entitled
to set-off against any cash compensation to be provided to Xx. Xxxxxxxx
under Section 2.3 above by an amount equal to one-third of the total of (i)
any cash compensation received by Xx. Xxxxxxxx with respect to each one-
year period (excluding any payments received under this Agreement) minus
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(ii) $75,000 subject to a maximum set-off of $50,000 per one-year period.
Xx. Xxxxxxxx shall inform the Company of any such amounts of cash
compensation and shall refund to the Company any amounts which the Company
has paid which exceed the amounts due from the Company after application of
the set-off provided for in this paragraph. Notwithstanding the foregoing
and any other provision of this Agreement, Xx. Xxxxxxxx shall be under no
obligation to seek or accept any employment during the term of this
Agreement for any reason.
3. Consulting Agreement. At any time and from the time at or after the
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termination of Xx. Xxxxxxxx'x employment with the Company, Xx. Xxxxxxxx will
negotiate in good faith with respect to the provision by Xx. Xxxxxxxx of such
consulting services as the Company may request. Such consulting services shall
be provided on such terms and
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conditions, and in exchange for such per diem fees and reimbursement of
expenses, as the Company and the Employee may agree.
4. Confidentiality and Non-Competition Covenants. Xx. Xxxxxxxx
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acknowledges tha tthe success of Holdings, the Company and its subsidiaries
depends upon the continued preservation of the confidentiality of certain
information possessed by Xx. Xxxxxxxx and the agreement by Xx. Xxxxxxxx not to
engage directly or indirectly in businesses competitive with the business of
Holdings, the Company and its subsidiaries, that the preservation of the
confidentiality of such information by Xx. Xxxxxxxx and the agreement not to
compete of Xx. Xxxxxxxx are essential premises of the bargain between Xx.
Xxxxxxxx and each of Holdings and the Buyer pursuant to the Stock Purchase
Agreement, and that Holdings and the Buyer would be unwilling to enter into the
Stock Purchase Agreement in the absence of this Non-Competition Agreement.
Accordingly, Xx. Xxxxxxxx hereby agrees with Holdings and the Company as
follows:
4.1. Confidentiality Covenant. During the Non-Competition Period,
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Xx. Xxxxxxxx will not, and will cause his affiliates (other than Holdings,
the Company and their respective subsidiaries) not to, directly or
indirectly, without the prior written consent of Holdings and the Company,
disclose or use, in any way harmful to Holdings, the Company or any of
their respective subsidiaries, or otherwise contrary to the interests of
Holdings, the Company or any of their respective subsidiaries, any
confidential or proprietary information involving or relating to Holdings,
the Company or any of their respective subsidiaries; provided, however,
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that the information subject to the foregoing provisions of this sentence
shall be deemed not to include any information known generally in the
industry (other than as a result of disclosure in violation hereof by Xx.
Xxxxxxxx or any such affiliate thereof); and provided, further, that the
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provisions of this Section 4.1 shall not prohibit any retention of records
or disclosure required by law or made in connection with the enforcement of
any right or remedy relating to the Stock Purchase Agreement or the
transactions contemplated thereby.
4.2. Non-Competition Covenant. During the Non-Competition Period,
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Xx. Xxxxxxxx will not, and will cause his affiliates (other than Holdings,
the Company and their respective subsidiaries) not to, directly or
indirectly, or by or through any other person, whether as an officer,
director, shareholder, guarantor, partner, joint venturer, consultant,
agent or otherwise, (i) engage in any business which is the same as or
similar to or which otherwise competes with the business of Holdings, the
Company or any of their respective subsidiaries in any geographic area
specified in Schedule A hereto, or (ii) hire or attempt to hire any
employee or agent of Holdings, the Company or any of their respective
affiliates, assist in such hiring by any person, encourage any such
employee or agent to terminate his relationship with Holdings, the Company
or any of their respective affiliates, or solicit or encourage any
customer, supplier, vendor or distributor of the Company or any of their
respective affiliates to terminate its relationship with them, or to
conduct with any person any business or
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activity which competes with the business or which such customer, supplier,
vendor or distributor conducts with Holdings, the Company or any of their
respective affiliates; provided, however, that the ownership or acquisition
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by Xx. Xxxxxxxx or any such affiliate thereof of an aggregate of (for Xx.
Xxxxxxxx and each such affiliate, collectively) less than five percent (5%)
of the outstanding stock of any publicly traded company shall not,
considered alone, constitute a violation of this Section 4.2.
4.3. Enforcement. Xx. Xxxxxxxx acknowledges and agrees that, because
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the legal remedies of Holdings and the Company may be inadequate in the
event of a breach of, or other failure to perform, any of the convenants
and obligations set forth in this Section 4, Holdings or the Company may,
in addition to obtaining any other remedy or relief available to it
(including without limitation consequential and other damages at law),
obtain specific enforcement of this Section 4 and other equitable remedies,
without the necessity of posting any bond. In the event a good faith
dispute arises between Xx. Xxxxxxxx, on the one hand, and the Company or
Holdings, on the other hand, regarding any amounts allegedly owed by Xx.
Xxxxxxxx to either the Company or Holdings, the Company or Holdings shall
be entitled to withhold payments to Xx. Xxxxxxxx hereunder, provided,
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however, the Company or Holdings shall place such withheld amounts in
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escrow pending resolution of such dispute. The exercise by either the
Company or Holdings of such right to withhold payments shall not relieve
Xx. Xxxxxxxx of his obligations hereunder.
5. Miscellaneous.
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5.1. No Third-Party Beneficiaries. This Agreement shall not confer
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any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
5.2. Entire Agreement. This Agreement constitutes the entire
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agreement among the Parties with respect to its subject matter and
supersedes any prior or contemporaneous understandings, agreements, or
representations by or among the Parties, written or oral, to the extent
they have related in any way to the subject matter hereof.
5.3. Successors and Assigns. This Agreement shall be binding upon
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and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without
the prior written approval of the other parties hereto; provided, however,
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that Holdings or the Company may (i) assign any or all of its rights and
interests hereunder to one or more of its subsidiaries; or (ii) designate
one or more of its subsidiaries to perform its obligations hereunder (in
any or all of which cases each of Holdings and the Company nonetheless
shall remain responsible for the performance of all of its obligations
hereunder).
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5.4. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
5.5. Headings. The section headings contained in this Agreement are
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inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
5.6. Notices. All notices, requests, demands, claims, and other
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communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and
then five business days after) it is sent by registered or certified mail,
return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below:
If to Xx. Xxxxxxxx:
Xxxxxxxx X. Xxxxxxxx
X.X. Xxx 000
Xxxxxx, Xxxxx 00000
Copy to:
Xxxxx & Xxxxxxxx
000 Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxx, Esq.
If to Holdings or the Company:
Iron Age Holdings Corporation
Xxxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx and Xxxxx X. XxXxxxxxx
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Copy to:
Xxxxxx Capital Corporation
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Xxxxxx X. Xxxxx
and
X. Xxxxxxx Xxxxxxxxx, Esq.
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail,
or electronic mail), but no such notice, request, demand, claim, or
other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party
may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.
5.7. Governing Law. This Agreement shall be governed by and
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construed in accordance with the domestic laws of Maine without giving
effect to any choice or conflict of law provision or rule (whether of Maine
or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than Maine; provided, however, any dispute relating
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to provisions of Section 5.11 shall be governed by the United States
Arbitration Act as then in force.
5.8. Amendments and Waivers. No amendment, waiver or other
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modification of any provision of this Agreement shall be valid unless the
same shall be in writing and signed by all of the Parties hereto. No
waiver by any Party of any default or breach of covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default or breach of covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
5.9. Invalid Provisions. Any term or provision of this Agreement
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that is invalid or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and
provisions hereof, which shall remain in full force and effect, and each
such invalid or unenforceable provision shall be
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construed by limiting it so as to be valid and enforceable to the maximum
extent permitted by law.
5.10. Incorporation of Schedules. The Schedules identified in this
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Agreement are incorporated herein by reference and made a part hereof.
5.11. Arbitration.
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5.11.1 Generally. Except solely as set forth in Section 5.11
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hereof, each dispute, difference, controversy or claim arising in
connection with or related or incidental to, or question occurring
under, this Agreement or the subject matter hereof shall be finally
settled under the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA") by an arbitral tribunal composed
of three arbitrators, at least one of whom shall be an attorney
experienced in corporate transactions, appointed by agreement of the
Parties in accordance with said Rules. In the event the Parties fail
to agree upon a panel of aribtrators from the first list of potential
arbitrators proposed by the AAA, the AAA will submit a second list in
accordance with said Rules. In the event the Parties shall have
failed to agree upon a full panel of arbitrators from said second
list, any remaining arbitrators to be selected shall be appointed by
the AAA in accordance with said Rules. If, at the time of the
arbitration, the Parties agree in writing to submit the dispute to a
single arbitrator, said single arbitrator shall be appointed by
agreement of the parties in accordance with the foregoing procedure,
or, failing such agreement, by the AAA in accordance with said Rules.
The foregoing arbitration proceedings may be commenced by any Party by
notice to all other Parties.
5.11.2 Place of Arbitration. The place of arbitration shall be
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Suffolk County, Massachusetts.
5.11.3 Recourse to Courts. The Parties hereby exclude any right
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of appeal to any court on the merits of the dispute. The provisions
of this Section 5.11 may be enforced in any court having jurisdiction
over the award or any of the Parties or any of their respective assets
and judgment on the award (including without limitation equitable
remedies) granted in any arbitration hereunder may be entered in any
such court. Nothing contained in this Section 5.11 shall prevent any
party from seeking interim measures of protection in the form of pre-
award attachment of assets or preliminary or temporary equitable
relief.
5.11.4 Reliance. Each of the Parties hereto acknowledges that
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such Party has been informed by each other Party that the provisions
of Section 5.11 constitute a material inducement upon which such Party
is relying
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and will rely in entering into this Agreement and the transactions
contemplated hereby.
5.12. Further Assurances. In case at any time after the date hereof
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any further action is necessary or desirable to carry out the purposes of
this Agreement, each of the Parties will take such further action
(including the execution and delivery of such further instruments and
documents) as any other Party reasonably may request, all at the sole cost
and expense of the requesting Party.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
IRON AGE HOLDINGS CORP.
By: /s/ Xxxxxx X. Xxxxxx
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Title: President
FALCON SHOE MFG. CO.
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Title: President
/s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxxxxx X. Xxxxxxxx
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SCHEDULE A
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The United States of America, including without limitation its territories
and possessions, Canada and Mexico.
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