NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made as of June 29,
2004, by Xxxxxx X. Xxxxxxxx (the "Stockholder"), Inet Technologies, Inc., a
Delaware corporation (the "Company"), and Tektronix, Inc., an Oregon corporation
("Parent").
RECITALS
Whereas, the Company is being acquired by Parent pursuant to the terms
of an Agreement and Plan of Merger, dated as of the date hereof, by and among
Parent, the Company, Impala Merger Corp., a Delaware corporation, and Impala
Acquisition Co. LLC, a Delaware limited liability company (the "Merger
Agreement");
Whereas, the Stockholder is a stockholder of the Company, and has served
as the Chairman of the Board of the Company and thereby possesses extensive
knowledge and experience concerning the Company and its business and operations,
including without limitation Confidential Information as herein defined;
Whereas, the Stockholder acknowledges that, following the completion of
the transactions contemplated by the Merger Agreement, the Company and Parent
could suffer irreparable harm if the Stockholder were to disclose confidential
or trade secret information relating to the Company to third parties, and it is
therefore reasonable to protect the Company and Parent against such actions and
activities by the Stockholder;
Whereas, the Stockholder will benefit from the transactions contemplated
by the Merger Agreement; and
Whereas, for these reasons, a condition to the completion of the
transactions contemplated by the Merger Agreement is the execution and delivery
of this Agreement by and among the Company, the Stockholder and Parent.
Now, therefore, pursuant to the Merger Agreement and in consideration of
the Recitals and for other good and valuable consideration described herein, the
receipt and sufficiency of which are hereby acknowledged, it is hereby agreed
that:
1 DEFINITIONS
When used in this Agreement, capitalized terms which are not otherwise
defined shall have the meaning ascribed to them in the Merger Agreement, and the
following terms shall have the meanings ascribed thereto:
1.1 Business. "Business" shall mean developing, marketing and
selling communication products for current and next generation tier-one mobile
and fixed-line carriers and communications equipment manufacturers that monitor,
manage and diagnose overall health of voice and data networks, which is the
primary businesses of the Company.
1.2 Competitive Product. "Competitive Product" shall mean a product
or service, developed, marketed, distributed or provided by a Competitor, which
is the same as or is directly
competitive with a product or service constituting a part of the Business and
with respect to which the Stockholder has acquired Confidential Information by
reason of the Stockholder's position and duties with the Company.
1.3 Competitor. "Competitor" shall mean any Person engaged in, or
preparing to engage in, the development, marketing, distribution or provision of
any Competitive Product, including any customer of the Company which begins to
perform for itself services previously provided by the Company.
1.4 Confidential Information. "Confidential Information" shall mean
all confidential and trade secret information of the Company, including without
limitation information such as customer and prospect lists and information,
design and manufacturing processes, financial information, computer programs,
designs and other software products, software code, routines and subroutines,
flow charts, user and technical manuals, marketing and promotional materials,
data processing and computer programming techniques and know-how, research and
development plans, marketing and distribution plans, strategies and channels,
development costs, product pricing and payment terms, suppliers, purchasing
methods and other information not generally available to the public.
"Confidential Information" may be oral or written. Confidential Information
shall not include any such information which (1) is in the public domain or (2)
hereafter through an act or failure to act of Parent or the Company (other than
by breach of a duty of confidentiality by the Stockholder created by this
Agreement) becomes information in the public domain or (3) is available from a
third party source with no duty of confidentiality to Parent or the Company.
2 CONFIDENTIALITY; RELATIONSHIP WITH OTHERS
2.1 Confidentiality Obligation of Stockholder. The Stockholder
acknowledges that in connection with his duties and responsibilities with the
Company, the Stockholder has obtained Confidential Information which may have
been originated by the Stockholder or which otherwise may have come into the
Stockholder's possession or knowledge. For a period of 5 years after the Closing
Date, the Stockholder agrees to hold all such Confidential Information in strict
confidence and not to use any Confidential Information and not to divulge or
disclose any Confidential Information to any Person except (i) upon the written
request or instruction of the Company or (ii) in the event the Stockholder
becomes legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigation, demand, order or similar process) to disclose any
of the contents of the Confidential Information, Parent and the Company agree
that the Stockholder may do so without liability, but the Stockholder agrees (x)
to promptly notify Parent prior to any such disclosure and (y) to cooperate with
Parent and the Company, at their sole cost and expense, in any attempt either of
them may make to obtain a protective order or other appropriate assurance that
confidential treatment will be afforded the Confidential Information. This
Section 2.1 is intended to protect Confidential Information constituting a part
of the Business, and is not intended to limit the Stockholder's right to seek
and obtain employment in competition with the Company, which is covered by
Section 3.1.
2.2 Relationship with Others. The parties agree that, during the
Stockholder's relationship with the Company, the Stockholder has had unique and
extensive exposure to and personal contact with customers and employees of the
Business, and such contact has enabled
2
the Stockholder to establish a unique relationship with these customers and
employees that, unless restricted, could enable the Stockholder to compete
unfairly with the Company and cause the Company irreparable injury. The parties
further agree that the profitability and goodwill of the Company depend on
continued amicable relations with its customers and prospective customers, and
employees, and the Stockholder will not, during the 5 year period after the
Closing Date, cause, induce, attempt to induce, request, solicit, attempt to
solicit or advise (a) any supplier of the Company, or any customers, prospective
customers, distributors, resellers or independent contractors of the Company to
curtail, harm, cancel or terminate their patronage of the Business, or
relationships with the Company; or (b) any employee of the Company to terminate
the employee's employment as such in order to become an employee, consultant or
independent contractor to or for any Competitor or to or for any person or
entity with which the Stockholder is associated in any way; provided, that the
foregoing restriction in clause (b) shall not apply to responses to general
advertisements, public notices or similar public postings made by or for the
Stockholder, or to solicitations by a placement agency, in each case as to which
the Stockholder had not targeted the hiring of any such employee. Nothing in
this Section 2.2 shall prevent the employment of the Stockholder by a customer
or supplier of the Company unless such employment violates Section 3.1 or
constitutes a specific violation of this Section 2.2.
3 NONCOMPETITION
3.1 Scope of Noncompete. The Stockholder agrees that for a period of
5 years after the completion of the transactions contemplated by the Merger
Agreement, the Stockholder will not:
(a) Render services, either directly or indirectly, to any
Competitor in connection with the development, marketing, promotion,
distribution, sale, or licensing of any Competitive Products; or
(b) Engage, either directly or indirectly, either on behalf
of the Stockholder or as a representative, agent, consultant, employee,
officer, director, trustee, stockholder or partner, joint venturer or
investor, in the development, marketing, promotion, distribution, sale,
or licensing of any Competitive Product.
3.2 Exceptions to Scope of Noncompete.
(a) Nothing in Section 3.1 shall prohibit the Stockholder
from (i) owning a limited partnership interest in BlueStream Ventures
L.P. or (ii) owning or acquiring securities of any corporation or other
business enterprise that may be engaged in activities described in
Section 3.1, provided that, in the case of clause (ii), (x) such
securities are held by the Stockholder for investment purposes only and
represent less than 5% of the total voting power and of the total equity
interests of such corporation or business enterprise and (y) such
securities are listed on a national securities exchange or are regularly
quoted in the over-the-counter market by one or more members of the
National Association of Securities Dealers.
(b) It shall not be deemed a violation of Section 3.1 if the
Stockholder is employed by, or renders services to, a business entity
which is diversified and made up of
3
separate divisions in which, as to parts of its business, it is not a
Competitor so long as the Stockholder will not be expected, required or
permitted to, and in fact does not, render services directly or
indirectly to a division or a part of such business entity which
division or part is a Competitor.
4 MISCELLANEOUS
4.1 Common Law of Torts or Trade Secrets. The parties agree that
nothing in this Agreement shall be construed to limit or negate the common law
of torts or trade secrets where it provides the Company with broader protection
than that provided herein.
4.2 Remedies.
(a) In addition to other remedies provided by law or equity,
in the event of a breach by Stockholder of any of the covenants
contained herein the Company shall be entitled to have a court of
competent jurisdiction enter an injunction against Stockholder
prohibiting any further breach of the covenants contained herein.
(b) The parties agree that it is impossible to measure in
money the damages that may accrue to a party hereto by reason of a
failure to perform any of the obligations hereunder. Therefore, in the
event of any controversy concerning the rights or obligations under this
Agreement, such rights or obligations shall be enforceable in a court of
equity by a decree of specific performance. Such remedy, however, shall
be cumulative and nonexclusive and shall be in addition to any other
remedy which the parties may have.
4.3 Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original but all of
which shall together constitute one and the same agreement.
4.4 Section Headings. The section headings herein are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
4.5 Assignability. This Agreement is personal in nature and neither
party may assign its rights or obligations hereunder without the prior written
consent of the other party.
4.6 Governing Law; Forum. This Agreement shall be construed and
governed under the laws of the state of Delaware, without regard to the
principles of conflict of laws. Each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any federal court located in the
state of Delaware or of any state court located in the state of Delaware (the
"Delaware Courts") in the event any dispute arises out of this Agreement or the
transactions contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any Delaware Court and (c) agrees that it will not bring any action
relating to this Agreement or the transactions contemplated by this Agreement in
any court other than a Delaware Court.
4.7 Severability. The invalidity or unenforceability of any
provision hereof shall not affect or impair any other provisions.
4
4.8 Amendment. No amendment of this Agreement shall be effective
unless in writing and signed by Stockholder, Parent and the Company.
4.9 Entire Agreement. This Agreement, together with the Merger
Agreement and the other documents and materials referred to herein or therein,
constitute the entire understanding of the parties with respect to the subject
matter hereof. There are no restrictions, promises, warranties, covenants or
undertakings other than those expressly set forth herein and therein. This
Agreement supersedes all prior negotiations, agreements and undertakings between
the parties with respect to the subject matter hereof. This Agreement is not an
agreement of employment, and is not intended to be superseded by any current or
subsequent employment agreement between the Stockholder and the Company or
Parent.
4.10 Effectiveness. This Agreement and the provisions hereof shall
only become effective upon the closing of the transactions contemplated by the
Merger Agreement. If the Merger Agreement is terminated for any reason, this
Agreement shall be void and of no further force and effect.
[Signature page follows]
5
In witness whereof, the parties hereto have executed this Noncompetition
Agreement as of the date first written above.
INET TECHNOLOGIES, INC.
By: /S/ XXXX X. XXXXXXXX
--------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, General Counsel
and Secretary
STOCKHOLDER
/S/ XXXXXX X. XXXXXXXX
----------------------
Name: Xxxxxx X. Xxxxxxxx
TEKTRONIX, INC.
By: /S/ XXXXX X. XXXXXX
-------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President, General Counsel
and Secretary
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made as of June 29,
2004, by Xxxx X. Xxxxxxx (the "Stockholder"), Inet Technologies, Inc., a
Delaware corporation (the "Company"), and Tektronix, Inc., an Oregon corporation
("Parent").
RECITALS
Whereas, the Company is being acquired by Parent pursuant to the terms
of an Agreement and Plan of Merger, dated as of the date hereof, by and among
Parent, the Company, Impala Merger Corp., a Delaware corporation, and Impala
Acquisition Co. LLC, a Delaware limited liability company (the "Merger
Agreement");
Whereas, the Stockholder is a stockholder of the Company, and has served
as the President and Chief Executive Officer of the Company and thereby
possesses extensive knowledge and experience concerning the Company and its
business and operations, including without limitation Confidential Information
as herein defined;
Whereas, the Stockholder acknowledges that, following the completion of
the transactions contemplated by the Merger Agreement, the Company and Parent
could suffer irreparable harm if the Stockholder were to disclose confidential
or trade secret information relating to the Company to third parties, and it is
therefore reasonable to protect the Company and Parent against such actions and
activities by the Stockholder;
Whereas, the Stockholder will benefit from the transactions contemplated
by the Merger Agreement; and
Whereas, for these reasons, a condition to the completion of the
transactions contemplated by the Merger Agreement is the execution and delivery
of this Agreement by and among the Company, the Stockholder and Parent.
Now, therefore, pursuant to the Merger Agreement and in consideration of
the Recitals and for other good and valuable consideration described herein, the
receipt and sufficiency of which are hereby acknowledged, it is hereby agreed
that:
5 DEFINITIONS
When used in this Agreement, capitalized terms which are not otherwise
defined shall have the meaning ascribed to them in the Merger Agreement, and the
following terms shall have the meanings ascribed thereto:
5.1 Business. "Business" shall mean developing, marketing and
selling communication products for current and next generation tier-one mobile
and fixed-line carriers and communications equipment manufacturers that monitor,
manage and diagnose overall health of voice and data networks, which is the
primary businesses of the Company.
5.2 Competitive Product. "Competitive Product" shall mean a product
or service, developed, marketed, distributed or provided by a Competitor, which
is the same as or is directly
7
competitive with a product or service constituting a part of the Business and
with respect to which the Stockholder has acquired Confidential Information by
reason of the Stockholder's position and duties with the Company.
5.3 Competitor. "Competitor" shall mean any Person engaged in, or
preparing to engage in, the development, marketing, distribution or provision of
any Competitive Product, including any customer of the Company which begins to
perform for itself services previously provided by the Company.
5.4 Confidential Information. "Confidential Information" shall mean
all confidential and trade secret information of the Company, including without
limitation information such as customer and prospect lists and information,
design and manufacturing processes, financial information, computer programs,
designs and other software products, software code, routines and subroutines,
flow charts, user and technical manuals, marketing and promotional materials,
data processing and computer programming techniques and know-how, research and
development plans, marketing and distribution plans, strategies and channels,
development costs, product pricing and payment terms, suppliers, purchasing
methods and other information not generally available to the public.
"Confidential Information" may be oral or written. Confidential Information
shall not include any such information which (1) is in the public domain or (2)
hereafter through an act or failure to act of Parent or the Company (other than
by breach of a duty of confidentiality by the Stockholder created by this
Agreement) becomes information in the public domain or (3) is available from a
third party source with no duty of confidentiality to Parent or the Company.
6 CONFIDENTIALITY; RELATIONSHIP WITH OTHERS
6.1 Confidentiality Obligation of Stockholder. The Stockholder
acknowledges that in connection with his duties and responsibilities with the
Company, the Stockholder has obtained Confidential Information which may have
been originated by the Stockholder or which otherwise may have come into the
Stockholder's possession or knowledge. For a period of 5 years after the Closing
Date, the Stockholder agrees to hold all such Confidential Information in strict
confidence and not to use any Confidential Information and not to divulge or
disclose any Confidential Information to any Person except (i) upon the written
request or instruction of the Company or (ii) in the event the Stockholder
becomes legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigation, demand, order or similar process) to disclose any
of the contents of the Confidential Information, Parent and the Company agree
that the Stockholder may do so without liability, but the Stockholder agrees (x)
to promptly notify Parent prior to any such disclosure and (y) to cooperate with
Parent and the Company, at their sole cost and expense, in any attempt either of
them may make to obtain a protective order or other appropriate assurance that
confidential treatment will be afforded the Confidential Information. This
Section 2.1 is intended to protect Confidential Information constituting a part
of the Business, and is not intended to limit the Stockholder's right to seek
and obtain employment in competition with the Company, which is covered by
Section 3.1.
6.2 Relationship with Others. The parties agree that, during the
Stockholder's relationship with the Company, the Stockholder has had unique and
extensive exposure to and personal contact with customers and employees of the
Business, and such contact has enabled
8
the Stockholder to establish a unique relationship with these customers and
employees that, unless restricted, could enable the Stockholder to compete
unfairly with the Company and cause the Company irreparable injury. The parties
further agree that the profitability and goodwill of the Company depend on
continued amicable relations with its customers and prospective customers, and
employees, and the Stockholder will not, during the 5 year period after the
Closing Date, cause, induce, attempt to induce, request, solicit, attempt to
solicit or advise (a) any supplier of the Company, or any customers, prospective
customers, distributors, resellers or independent contractors of the Company to
curtail, harm, cancel or terminate their patronage of the Business, or
relationships with the Company; or (b) any employee of the Company to terminate
the employee's employment as such in order to become an employee, consultant or
independent contractor to or for any Competitor or to or for any person or
entity with which the Stockholder is associated in any way; provided, that the
foregoing restriction in clause (b) shall not apply to responses to general
advertisements, public notices or similar public postings made by or for the
Stockholder, or to solicitations by a placement agency, in each case as to which
the Stockholder had not targeted the hiring of any such employee. Nothing in
this Section 2.2 shall prevent the employment of the Stockholder by a customer
or supplier of the Company unless such employment violates Section 3.1 or
constitutes a specific violation of this Section 2.2.
7 NONCOMPETITION
7.1 Scope of Noncompete. The Stockholder agrees that for a period of
5 years after the completion of the transactions contemplated by the Merger
Agreement, the Stockholder will not:
(a) Render services, either directly or indirectly, to any
Competitor in connection with the development, marketing, promotion,
distribution, sale, or licensing of any Competitive Products; or
(b) Engage, either directly or indirectly, either on behalf
of the Stockholder or as a representative, agent, consultant, employee,
officer, director, trustee, stockholder or partner, joint venturer or
investor, in the development, marketing, promotion, distribution, sale,
or licensing of any Competitive Product.
7.2 Exceptions to Scope of Noncompete.
(a) Nothing in Section 3.1 shall prohibit the Stockholder
from (i) owning a limited partnership interest in BlueStream Ventures
L.P. or (ii) owning or acquiring securities of any corporation or other
business enterprise that may be engaged in activities described in
Section 3.1, provided that, in the case of clause (ii), (x) such
securities are held by the Stockholder for investment purposes only and
represent less than 5% of the total voting power and of the total equity
interests of such corporation or business enterprise and (y) such
securities are listed on a national securities exchange or are regularly
quoted in the over-the-counter market by one or more members of the
National Association of Securities Dealers.
(b) It shall not be deemed a violation of Section 3.1 if the
Stockholder is employed by, or renders services to, a business entity
which is diversified and made up of
9
separate divisions in which, as to parts of its business, it is not a
Competitor so long as the Stockholder will not be expected, required or
permitted to, and in fact does not, render services directly or
indirectly to a division or a part of such business entity which
division or part is a Competitor.
8 MISCELLANEOUS
8.1 Common Law of Torts or Trade Secrets. The parties agree that
nothing in this Agreement shall be construed to limit or negate the common law
of torts or trade secrets where it provides the Company with broader protection
than that provided herein.
8.2 Remedies.
(a) In addition to other remedies provided by law or equity,
in the event of a breach by Stockholder of any of the covenants
contained herein the Company shall be entitled to have a court of
competent jurisdiction enter an injunction against Stockholder
prohibiting any further breach of the covenants contained herein.
(b) The parties agree that it is impossible to measure in
money the damages that may accrue to a party hereto by reason of a
failure to perform any of the obligations hereunder. Therefore, in the
event of any controversy concerning the rights or obligations under this
Agreement, such rights or obligations shall be enforceable in a court of
equity by a decree of specific performance. Such remedy, however, shall
be cumulative and nonexclusive and shall be in addition to any other
remedy which the parties may have.
8.3 Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original but all of
which shall together constitute one and the same agreement.
8.4 Section Headings. The section headings herein are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
8.5 Assignability. This Agreement is personal in nature and neither
party may assign its rights or obligations hereunder without the prior written
consent of the other party.
8.6 Governing Law; Forum. This Agreement shall be construed and
governed under the laws of the state of Delaware, without regard to the
principles of conflict of laws. Each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any federal court located in the
state of Delaware or of any state court located in the state of Delaware (the
"Delaware Courts") in the event any dispute arises out of this Agreement or the
transactions contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any Delaware Court and (c) agrees that it will not bring any action
relating to this Agreement or the transactions contemplated by this Agreement in
any court other than a Delaware Court.
8.7 Severability. The invalidity or unenforceability of any
provision hereof shall not affect or impair any other provisions.
10
8.8 Amendment. No amendment of this Agreement shall be effective
unless in writing and signed by Stockholder, Parent and the Company.
8.9 Entire Agreement. This Agreement, together with the Merger
Agreement and the other documents and materials referred to herein or therein,
constitute the entire understanding of the parties with respect to the subject
matter hereof. There are no restrictions, promises, warranties, covenants or
undertakings other than those expressly set forth herein and therein. This
Agreement supersedes all prior negotiations, agreements and undertakings between
the parties with respect to the subject matter hereof. This Agreement is not an
agreement of employment, and is not intended to be superseded by any current or
subsequent employment agreement between the Stockholder and the Company or
Parent.
8.10 Effectiveness. This Agreement and the provisions hereof shall
only become effective upon the closing of the transactions contemplated by the
Merger Agreement. If the Merger Agreement is terminated for any reason, this
Agreement shall be void and of no further force and effect.
[Signature page follows]
11
In witness whereof, the parties hereto have executed this Noncompetition
Agreement as of the date first written above.
INET TECHNOLOGIES, INC.
By: /S/ XXXX X. XXXXXXXX
--------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, General Counsel
and Secretary
STOCKHOLDER
/S/ XXXX X. XXXXXXX
-------------------
Name: Xxxx X. Xxxxxxx
TEKTRONIX, INC.
By: /S/ XXXXX X. XXXXXX
-------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President, General Counsel
and Secretary