Exhibit 10.11
NONCOMPETITION AND NONDISCLOSURE AGREEMENT
This Noncompetition and Nondisclosure Agreement (the "Agreement"), dated as
August 1, 1995, by and between Xxxx Xxxxxx (the "Executive") and The Cornerstone
Investments Group, Inc. (the "Company"), is executed in connection with a
certain Executive Agreement by and between the Executive and the Company dated
of even date herewith (the "Executive Agreement"). Unless otherwise indicated,
all references to "Company" hereinafter shall be deemed to include The
Cornerstone Investments Group, Inc.
The parties hereto, in consideration of the premises and covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby agree as follows:
1. During the period of the Executive's engagement by the Company, and as
provided in Section 8 hereof, the Executive agrees that the Executive will not,
directly or indirectly, alone or as a partner, officer, director, employee or
stockholder of any company or business organization, engage in any business
activity in which the Company is then engaged, which is directly competitive
with and detrimental to the business of the Company (it being understood and
agreed that a catalog with substantially different merchandise or target
audience from any catalog then operated by the Company is not directly
competitive), except for those current directorships, special advisory roles and
activities set forth on Exhibit I hereof. For purposes of this Agreement, the
Executive shall not be deemed to be a stockholder of any company or business
organization if (a) the Executive beneficially owns (i) privately-held
securities, (ii). securities listed on a national securities exchange or (iii)
securities sold in the over-the-counter market, provided. that in each. (i),
(ii) and (iii), such securities do not exceed in the aggregate five percent
(5%) of the issued and outstanding capital stock of such companies or business
organizations or (b) during the term of his engagement by the Company, he has
obtained prior approval thereof from a majority of the Board of Directors of the
Company.
2. The Executive understands that his relationship with the Company and
its officers and employees is one of trust and confidence and that during the
period of his engagement by the Company, the Executive may acquire knowledge of,
or access to, information which relates to the business, operations or plans of
the Company which is proprietary, confidential or not known generally to
executives in the catalog business (hereinafter "Confidential Information").
Confidential Information may include, but is not limited to, budget costs,
prices, customer lists, vendor lists and information about products, designs,
marketing plans, customers and the Company's financial affairs. The Executive
will not reveal or otherwise disclose to any person, association, company or
other entity any Confidential Information of the Company so far as it has come
or may come to his knowledge, except as may be required in the ordinary course
of performing his duties as an employee of the Company or except as may be in
the public domain through no fault of his, and the Executive will keep secret
all matters entrusted to him and shall not use
or attempt to use any such Confidential Information in any manner which may
injure or cause loss or may be reasonably expected to injure or cause loss to
the Company.
The Executive agrees that the Executive shall not, after the termination of
his engagement with the Company, use or permit to be used, any notes, memoranda,
records, files, computer programs, data or other materials containing
Confidential Information, it being agreed that any of the foregoing shall be and
remain the sole and exclusive property of the Company and that immediately upon
the termination of his engagement with the Company the Executive shall deliver
all of the foregoing, and all copies thereof, to the Company, at its main
office.
3. The Executive will not at any time during his engagement and for the
two (2) year period following the termination of his engagement with the Company
hire, solicit or encourage any employee (other than Executive's personal
secretary) of the Company (or any employee of Performance Associates, Inc. or
other "employee leasing company" whose employees perform services for the
Frontgate Cinmar Business) to terminate his or her employment in order to work
for a business or enterprise which competes or intends to compete with the
Company.
4. The Executive further represents that his performance of all of the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to maintain in confidence proprietary information acquired
by him in confidence or in trust prior to his engagement by the Company. The
Executive has not entered into, and the Executive agrees that the Executive will
not enter into, any agreement, either written or oral, in conflict herewith.
5. The Executive agrees that any breach of this Agreement by him will
cause immediate and irreparable damage to the Company, which cannot be fully and
adequately compensated in money damages, and that in the event of such breach
the Company shall have, in addition to any and all remedies at law, the right to
an injunction, specific performance or other equitable relief to prevent the
violation, threatened violation or continued violation of any provision;
hereunder.
6. Any waiver by the Company of a breach of any portion of this Agreement
shall not operate or be construed as a waiver of any subsequent breach hereof.
7. Each provision herein shall be treated as a separate and independent
clause, and the unenforceability of any one clause shall in no way impair the
enforceability of any of the clauses herein. Moreover, if one or more of the
provisions contained in this Agreement shall for any reason be held to be
excessively broad as to scope, activity or subject so as to be unenforceable at
law, such provision or provisions shall be construed by the appropriate judicial
body by limiting and reducing it or them, so as to be enforceable to the extent
compatible with the applicable law as it shall then appear.
8. Subject to the provisions of this Section 8 and Section 9 hereof, the
restrictions contained in Sections 1 and 3 above shall terminate upon the stated
expiration date of the term of the Executive Agreement set forth in Section 2
thereof, provided that
2
there has not occurred an uncured material default by Executive under such
restrictions or the Executive Agreement. In addition, the restrictions contained
in Sections 1 and 3 above shall immediately terminate if the Company fails to
pay any Base Salary or any amounts payable under Section 4(c)(ii) of the
Executive Agreement or otherwise materially breaches the Executive Agreement, or
the Company shall fail to pay any amounts due, and such failure or breach
continues for seven (7) days after written notice from Executive referring to
his intent to terminate such restrictions. In the event that (1) Executive shall
voluntarily resign (other than for reasons of incapacity) from his employment
duties undertaken pursuant to the Executive Agreement prior to the stated
expiration date of the Executive Agreement set forth in Section 2 thereof, or
(2) Executive's employment with the Company is terminated for Cause (as defined
in the Executive Agreement) pursuant to Section 4(c)(i)(A), Section 4(c)(i)(B),
or Section 4(c)(i)(C of said Executive Agreement, and provided there has not
occurred an uncured material default by the Company under the Executive
Agreement, the restrictions contained in Sections 1 and 3 above shall survive
such termination of the Executive's engagement with the Company for a period of
eighteen (18) months. In the event that Executive's employment with the Company
is terminated pursuant to Section 4(b) of the Executive Agreement, and provided
there has not occurred an uncured material default by the Company under the
Executive Agreement, the restrictions contained in Sections 1 and 3 above shall
survive such termination of the Executive's engagement with the Company for a
period of twelve (12) months. Except as provided in this Section 8 and Section 9
hereof, the Executive's obligations under this Agreement shall survive the
termination of the Executive's engagement with the Company, regardless of the
manner of such termination, and shall be binding upon the Executive's heirs,
executors and administrators.
In the event that Executive's engagement with the Company is terminated
without Cause (i) pursuant to Section 5(c)(ii)(A) of the Executive Agreement,
and provided there has not occurred an uncured material default by the Company
under the Executive Agreement, the restrictions contained in Sections 1 and 3
hereof shall survive such termination of the Executive's engagement with the
Company for eighteen (18) months, or (ii) pursuant to Section 5(c)(ii)(B) of
the Executive Agreement, and provided there has not occurred an uncured default
by the Company under the Executive Agreement, the restrictions contained in
Sections 1 and 3 hereof shall survive such termination of the Executive's
engagement with the Company for the later to occur of (A) September 10, 1997, or
(B) eighteen (18) months from the date of such termination.
9. Provided that the Company is not in material default under the terms
of the Executive Agreement, the Company may, at its option, extend the term of
this Agreement for one additional period of twelve (12) months by providing
Executive ninety (90) days advance written notice of its intention to so extend.
In the event this Agreement is so extended, the Company shall pay to Executive
an amount equal to the aggregate compensation, benefits and bonuses actually
received by the Executive during the preceding calendar year. Such amount shall
be paid on a monthly basis, except for any bonuses, which shall be paid at the
customary date of payment of all executive bonuses (less applicable withholding
and other such items), on the first day of each month during such extended
period.
3
10. The Executive understands that his obligations under this Agreement
will extend to any other organization which succeeds to the business of the
Company by reason of any sale, merger or similar action. For purposes of this
paragraph 10, the term "business of the Company" shall be deemed to be that
business in which the Company was engaged prior to any such sale, merger or
similar action.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
THE CORNERSTONE INVESTMENTS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx /s/ Xxxx Xxxxxx
--------------------------------- -------------------------
Executive Officer/Managing Director Xxxx Xxxxxx
4
EXHIBIT 1
Xxxx Xxxxxx
Noncompetition and Nondisclosure Agreement
dated as of August 1, 1995
Directorship, Special Advisory Roles and Activities: None
5
