Exhibit 10.9
NON-COMPETITION AGREEMENT
THIS AGREEMENT (the "Agreement"), made this 31st day of March,
1998, by and between Xxxxxxx Xxxxx, an individual presently residing at 000
Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000 ("Employee"), and Diamond Triumph Auto Glass,
Inc., a Delaware corporation ("Diamond"). As used herein, the term "Company"
shall refer, individually and/or collectively, as applicable, to Diamond and its
existing and future subsidiaries.
Green Equity Investors II, L.P. (the "Purchaser") would not
consummate the transactions contemplated by the Second Amended and Restated
Stock Purchase Agreement dated as of January 15, 1998 (the "Stock Purchase
Agreement") by and among the Purchaser, the Company, Xxxxxxx Xxxxxx, Xxxxxxx
Xxxxx and the other parties listed therein unless Employee delivers and complies
with all of the terms of this Agreement;
NOW, THEREFORE, in order to induce Employee to consummate the
transactions contemplated by the Stock Purchase Agreement, and in recognition
and acknowledgement of the Company's need to protect its goodwill and other
business interests and for other good and valuable consideration received by
Employee, the parties hereto, each intending to be legally bound, hereby
mutually covenant and agree as follows:
1. NON-COMPETITION.
For a period of five years from the date hereof (the
"Agreement Term"), Employee shall not, directly or indirectly, own,
manage, operate, join, control, participate in, invest in or otherwise
be connected or associated with, in any manner, including, without
limitation, as an officer, director, employee, distributor, independent
contractor, independent representative, partner, consultant, advisor,
agent, proprietor, trustee or investor, any Competing Business located
in any state or region (including foreign jurisdictions) where the
Company conducts business or is considering doing business; provided,
however, that ownership of 1% or less of the stock or other securities
of a corporation, the stock of which is listed on a national securities
exchange or is quoted on The Nasdaq Stock Market's National Market,
shall not constitute a breach of this Section 1, so long as Employee
does not in fact have the power to control, or direct the management
of, or is not otherwise engaged in activities with, such corporation.
For purposes hereof, the term "Competing Business" shall mean
any business or venture which is engaged, directly or indirectly, in
(i) developing, manufacturing, marketing, selling and/or distributing
(including wholesale distribution) of automobile or truck glass or
windshields or other glass products utilized in vehicles; repairing,
replacing or installing automobile or truck glass or windshields or
other glass products utilized in vehicles; or selling or installing
those kinds of automobile or truck accessories sold by the Company,
(ii) any other business engaged in or actively being developed by the
Company, or (iii) any other business which is substantially similar to
the whole or any significant part of the business conducted by the
Company.
2. NO SOLICITATION.
During the Agreement Term, Employee shall not, directly or
indirectly, including on behalf of, for the benefit of, or in
conjunction with, any other person or entity, (i) solicit, assist,
advise, influence, induce or otherwise encourage in any way, any
employee of the Company to terminate its relationship with the Company
for any reason, nor assist any person or entity in doing so, or employ,
engage or otherwise contract with any employee or former employee of
the Company in a Competing Business or any other business unless such
former employee shall not have been employed by the Company for a
period of at least one year, (ii) interfere in any manner with the
relationship between any employee and the Company or (iii) contact,
service or solicit any existing clients, customers or accounts of the
Company on behalf of a Competing Business, either as an individual on
his own account, as an investor, or as an officer, director, partner,
joint venturer, consultant, employee, agent or salesman of any other
person or entity.
3. CONFIDENTIAL INFORMATION.
(a) "Confidential Information" shall mean confidential records
and information, including, but not limited to, development, marketing,
purchasing, organizational, strategic, financial, managerial,
administrative, manufacturing, production, distribution and sales
information, distribution methods, data, specifications and processes
(including the Transferred Property as hereinafter defined) presently
owned or at any time hereafter developed by the Company or its agents
or consultants or used presently or at any time hereafter in the course
of the business of the Company, that are not otherwise part of the
public domain.
(b) Employee hereby sells, transfers and assigns to the
Company, or to any person or entity designated by the Company, all of
his entire right, title and interest in and to all inventions, ideas,
methods, developments, disclosures and improvements (the "Inventions"),
whether patented or unpatented, and copyrightable material, and all
trademarks, trade names, all goodwill associated therewith and all
federal and state registrations or applications thereof, made, adopted
or conceived by solely or jointly, in whole or in part (collectively,
the "Transferred Property"), prior to or during the Agreement Term
which (i) relate to methods, apparatus, designs, products, processes or
devices sold, leased, used or under construction or development by the
Company or (ii) otherwise relate to or pertain to the business,
products, services, functions or operations of the Company. Employee
shall make adequate written records of all Inventions, which records
shall be the Company's property and shall communicate promptly and
disclose to the Company, in such form as the Company requests, all
information, details and data pertaining to the aforementioned
Inventions. Whether during the Agreement Term or thereafter, Employee
shall execute and deliver to the Company such formal transfers and
assignments and such other papers and documents as may be required of
Employee to permit the Company, or any person or entity designated by
the Company, to file and prosecute patent applications (including, but
not limited to, patent applications and any other records, memoranda or
instruments deemed necessary by the Company for the prosecution of a
patent application or the acquisition of letters patent in the United
States, foreign countries or otherwise) and, as to copyrightable
material, to obtain copyrights
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thereon, and as to trademarks, to record the transfer of ownership of
any federal or state registrations or applications.
(c) All such Confidential Information is considered secret and
will be disclosed to Employee in confidence, and Employee acknowledges
that, as a consequence of his employment and position with the Company,
Employee may have access to and become acquainted with Confidential
Information. Except in the performance of his duties as an employee of
the Company, Employee shall not, during the Agreement Term and at all
times thereafter, directly or indirectly for any reason whatsoever,
disclose or use any such Confidential Information. All records, files,
drawings, documents, equipment and other tangible items, wherever
located, relating in any way to or containing Confidential Information,
which Employee has prepared, used or encountered or shall in the future
prepare, use or encounter, shall be and remain the Company's sole and
exclusive property and shall be included in the Confidential
Information. Upon termination of this Agreement, or whenever requested
by the Company, Employee shall promptly deliver to the Company any and
all of the Confidential Information and copies thereof, not previously
delivered to the Company, that may be in the possession or under the
control of Employee. The foregoing restrictions shall not apply to the
use, divulgence, disclosure or grant of access to Confidential
Information to the extent, but only to the extent, (i) expressly
permitted or required pursuant to any other written agreement between
Employee and the Company, (ii) such Confidential Information has been
publicly disclosed (not due to a breach by Employee of his obligations
hereunder, or by breach of any other person, of a fiduciary or
confidential obligation to the Company) or (iii) Employee is required
to disclose Confidential Information by or to any court of competent
jurisdiction or any governmental or quasi-governmental agency,
authority or instrumentality of competent jurisdiction, provided,
however, that Employee shall, prior to any such disclosure, immediately
notify the Company of such requirement and provided further, however,
that the Company shall have the right, at its expense, to object to
such disclosures and to seek confidential treatment of any Confidential
Information to be so disclosed on such terms as it shall determine.
4. ACKNOWLEDGEMENT; REMEDIES; SURVIVAL OF THIS AGREEMENT.
(a) Employee acknowledges that violation of any of the
covenants and provisions set forth in this Agreement would cause the
Company irreparable damage and agrees that the Company's remedies at
law for a breach or threatened breach of any of the provisions of this
Agreement would be inadequate and, in recognition of this fact, in the
event of a breach or threatened breach by Employee of any of the
provisions of this Agreement, it is agreed that, in addition to the
remedies at law or in equity, the Company shall be entitled, without
the posting of a bond, to equitable relief in the form of specific
performance, a temporary restraining order, temporary or permanent
injunction, or any other equitable remedy which may then be available
for the purposes of restraining Employee from any actual or threatened
breach of such covenants. Without limiting the generality of the
foregoing, if Employee breaches or threatens to breach Sections 1, 2,
or 3 hereof, such breach or threatened breach will entitle the Company
to enjoin Employee from disclosing any Confidential Information to any
Competing Business, to enjoin any
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Competing Business from retaining Employee or using any such
Confidential Information, to enjoin Employee from engaging in any
activities prohibited by Section 2 hereof and/or to enjoin Employee
from rendering personal services to or in connection with any Competing
Business. The rights and remedies of the parties hereto are cumulative
and shall not be exclusive, and each such party shall be entitled to
pursue all legal and equitable rights and remedies and to secure
performance of the obligations and duties of the other under this
Agreement, and the enforcement of one or more of such rights and
remedies by a party shall in no way preclude such party from pursuing,
at the same time or subsequently, any and all other rights and remedies
available to it.
(b) The provisions of this Agreement shall survive the
termination of Employee's employment with Diamond.
5. NOTICES.
Any notice, request, consent or approval required or permitted
to be given under this Agreement or pursuant to law shall be sufficient
if in writing, and if and when sent by certified or registered mail,
return receipt requested, with postage prepaid, or by a nationally
recognized overnight courier service to Employee's residence (as
reflected in the Company's records or as otherwise designated by
Employee on thirty (30) days' prior written notice to the Company) or
to the Company's principal executive office, attention: President (with
copies to the General Counsel), as the case may be. All such notices,
requests, consents and approvals shall be effective upon being
deposited in the United States mail or upon delivery to such overnight
courier service. Rejection or other refusal to accept, or the inability
to deliver because of changed address of which no notice was given as
provided herein, shall be deemed to be receipt of the notice, request,
consent or approval sent.
6. NON-WAIVER.
Neither any course of dealing nor any failure or neglect of
either party hereto in any instance to exercise any right, power or
privilege hereunder or under law shall constitute a waiver of any other
right, power or privilege or of the same right, power or privilege in
any other instance. All waivers by either party hereto must be
contained in a written instrument signed by the party to be charged
and, in the case of the Company, by its duly authorized officer.
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7. ASSIGNMENT.
This Agreement shall inure to the benefit of and be
enforceable by, and may be assigned by the Company to, any existing or
future subsidiary or affiliate of the Company, any purchaser of all or
substantially all of the Company's business or assets, any successor to
the Company or any assignee thereof (whether direct or indirect, by
purchase, merger, consolidation or otherwise). This Agreement may not
be assigned by Employee.
8. ENTIRE AGREEMENT.
This Agreement together with the Employment Agreement entered
into between Employee and the Company, the Stock Purchase Agreement,
and the agreements entered into in connection therewith contain the
entire agreement of the parties relating to the subject matter hereof
and supersede all prior agreements and understandings between them.
9. SEVERABILITY; REASONABLENESS OF AGREEMENT.
If any term, provision or covenant of this Agreement or part
thereof, or the application thereof to any person, place or
circumstance shall be held to be invalid, unenforceable or void by a
court of competent jurisdiction, the remainder of this Agreement and
such term, provision or covenant shall remain in full force and effect,
and any such invalid, unenforceable or void term, provision or covenant
shall be deemed, without further action on the part of the parties
hereto, modified, amended and limited, and the court shall have the
power to modify, amend and limit any such term, provision or covenant,
to the extent necessary to render the same and the remainder of this
Agreement valid, enforceable and lawful. In this regard, Employee
understands that the provisions of Sections 1, 2, 3, and 4 may limit
his ability to earn a livelihood in a business similar or related to
the business of the Company, but nevertheless agrees and acknowledges
that (i) the provisions of Sections 1, 2, 3 and 4 hereof are reasonable
and necessary for the protection of the Company, and do not impose a
greater restraint than is necessary to protect the goodwill or other
business interests of the Company; (ii) such provisions contain
reasonable limitations as to the time and the scope of activity to be
restrained; and (iii) the consideration provided under the Stock
Purchase Agreement is sufficient to compensate Employee for the
restrictions contained in Sections 1, 2, 3 and 4 hereof. In
consideration of the foregoing and in light of Employee's education,
skills and abilities, Employee agrees that all defenses by Employee to
the strict enforcement of such provisions are hereby waived by
Employee.
10. HEADINGS.
The headings of the sections of this Agreement are provided
for convenience only and are intended to have no effect in construing
or interpreting this Agreement.
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11. GOVERNING LAW.
This Agreement, including the validity, interpretation,
construction and performance of this Agreement, shall be governed by
and construed in accordance with the internal laws of the State of New
York, without regard to principles of conflicts of law. All actions and
proceedings relating directly or indirectly to this Agreement shall be
litigated in any state court or federal court located in New York, New
York. The parties hereto expressly consent to the jurisdiction of any
such court and to venue therein and consent to the service of process
in any such action or proceeding by certified or registered mailing of
the summons and complaint therein directed to Employee or the Company
at the address as provided in Section 5 hereof.
12. AMENDMENT.
This Agreement may be amended only by a writing which makes
express reference to this Agreement as the subject of such amendment
and which is signed by Employee and, on behalf of the Company, by its
duly authorized officer.
13. COSTS AND EXPENSES.
Each party shall pay all of its own costs and expenses,
including reasonable legal fees, in connection with the execution,
delivery, performance and compliance with this Agreement by such party.
If an action or proceeding is commenced by a party to enforce or
interpret any provision of this Agreement, the non-prevailing party
shall promptly reimburse the prevailing party for the prevailing
party's reasonable costs and expenses of such action or proceeding,
including reasonable attorneys' fees.
14. COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
all of which together shall be deemed one original.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed on its behalf by an officer thereunto duly authorized and
Employee has duly executed this Agreement, all as of the date and year first
written above.
DIAMOND TRIUMPH AUTO GLASS, INC.
By: /s/ Xxxxxxx Xxxxxx /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxxx Xxxxxxx Xxxxx
Title: Co-Chairman & Co-Chief
Executive Officer
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