1
EXHIBIT 10.27
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT ("Agreement") is made and
entered into on and as of the 22nd day of January 1998 ("Effective Date"), by
and between FORE Systems, Inc., a Delaware corporation (the "Company"), and Onat
Menzilcioglu, an individual (the "Employee").
WITNESSETH
WHEREAS, the Employee is a co-founder of the Company and has
served since 1994 as its President; and
WHEREAS the Employee and the Company are parties to a
Non-Competition Agreement dated December 21, 1992, which terminated in
accordance with its terms on December 21, 1997; and
WHEREAS, the Employee and the Board of Directors of the
Company (the "Board") have mutually determined that it is in the best interests
of the Company and all of its stockholders for the Employee to retire from his
position as President of the Company, resign his employment with the Company and
enter into a new non-competition covenant, all in accordance with the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants contained herein, the Company and the Employee, each intending
to be legally bound hereby, agree as follows:
1. Resignation of Employment. Employee acknowledges that he
will retire from his position as President and resign from employment with the
Company, effective as of the Effective Date, after which date he will perform no
further duties, functions or services for the Company, except in relation to his
duties as a member of the Board.
2. Covenant Not to Compete.
(a) For the purposes of this Section 2, the "Company" shall
be deemed to include any entity directly or indirectly controlling, controlled
by or under common control with FORE Systems, Inc. Through the period beginning
on the Effective Date and ending on July 22, 1999 (the "Non-Competition
Period"), Employee shall not:
(i) directly or indirectly induce or attempt to
influence any employee of the Company to terminate his or her
employment with the Company;
(ii) contact, directly or indirectly, any person or
entity (a "Person") who is or was a customer of the Company or
otherwise has or had a business
2
relationship with the Company for purposes of competing, or aiding any
Person to compete, directly or indirectly, with the Company in any
business engaged in the development, manufacturing, marketing and
selling of the following computer networking equipment: ATM switches,
ATM adapters, ATM video devices, Ethernet or hybrid Ethernet/ATM
switches and ATM access and concentrator devices (a "Directly
Competitive Business") during the Non-Competition Period; or
(iii) engage in, directly or indirectly, whether as a
principal, partner, director, officer, agent, employee, consultant or
in any other capacity, or have any direct or indirect ownership
interest in any Person anywhere in the world which is engaged, either
directly or indirectly, in any Directly Competitive Business; provided,
however, that this Section 2 shall not preclude the Employee from
owning, as a passive investor, up to ten percent (10%) in any Person
which is engaged in a Directly Competitive Business.
(b) The Employee expressly acknowledges that the covenants
contained in this Section 2 are of vital importance to the Company and that such
covenants are a material inducement to the Company to enter into this Agreement
and to pay to the Employee the compensation and other benefits set forth in
Section 3 hereof. Any breach of this Section 2 by the Employee will cause the
Company to suffer irreparable injury. In the event of any such breach by the
Employee of this Section 2, the Company will be entitled, in addition to any
other remedies available to it at law or equity, to injunctive relief,
including, without limitation, a temporary restraining order, without any
necessity of first proving any harm.
3. Payments.
(a) In consideration for the Employee entering into the
Covenant Not to Compete set forth in Section 2 of this Agreement, the Company
will continue Employee's salary payments, at an annual rate of $ 270,000,
throughout the Non-Competition Period, payable in periodic installments in
accordance with the Company's regular payroll practices in effect from time to
time; and
(b) Throughout the Non-Competition Period, the Employee
will receive those benefits afforded generally to employees of the Company.
4. Confidentiality and Invention Assignment. The Company's
standard form of employee confidentiality and invention assignment agreement for
employees, which has been executed by the Employee, will remain in full force
and effect throughout the Non-Competition Period and thereafter in accordance
with its terms.
5. Miscellaneous.
(a) Waiver. Any failure or delay on the part of either
party to exercise any right, remedy, power or privilege under this Agreement
will not operate as a waiver thereof, nor will any single or partial exercise of
any right, remedy, power or privilege preclude any other
-2-
3
or further exercise of the same or of any other right, remedy, power or
privilege, nor will any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of that right, remedy, power
or privilege with respect to any other occurrence.
(b) Notices. All notices, requests, demands and other
communications required or permitted under this Agreement must be in writing and
will be deemed to have been duly given, made and received only when delivered
(personally, by facsimile transmission or by courier service such as Federal
Express, or by other messenger) or when deposited in the mail, postage prepaid,
return receipt requested, addressed as set forth below:
(i) if to the Employee:
Onat Menzilcioglu
00000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
(ii) if to the Company:
FORE Systems, Inc.
0000 XXXX Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Corporate Counsel
In addition, notice by mail must be by air mail if posted
outside of the continental United States.
Any party may alter the address to which communications or
copies are to be sent by giving notice of any change of address to the other
party in conformity with the provisions of this paragraph for the giving of
notice.
(c) Binding Nature of Agreement; Assignment. This
Agreement shall be binding upon and inure to the benefit of the Company and its
successors and assigns and shall be binding upon the Employee. The Company may
assign this Agreement at any time to any successor in interest to the entire
business or assets of the Company, and any such assignee may re-assign this
Agreement to any such entity, provided that such assignee shall be bound by the
provisions of this Agreement applicable to the Company. The Employee may not
assign this Agreement.
(d) Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which will be deemed to be an
original and all of which will together constitute one and the same instrument.
(e) Provisions Separable. The provisions of this Agreement
are independent of and separable from each other, and no provision will be
affected or rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may
-3-
4
be invalid or unenforceable in whole or in part. It is the parties' intention
that this Agreement, including Section 2, shall be enforced in accordance with
its terms, and in the event that any of the covenants set forth in Section 2 are
determined to be overly broad in geographical scope or otherwise, such covenants
shall be enforced to the maximum extent permitted by applicable law.
(f) Entire Agreement. This Agreement, together with the
other agreements and instruments referenced herein, contain the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersede all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
with respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of such terms. This Agreement may not be modified or amended other than by
an agreement in writing signed by both parties.
(g) Section Headings. The section headings in this
Agreement are for convenience only; they form no part of this Agreement and will
not affect its interpretation.
(h) Gender, etc. Words used herein, regardless of the
number and gender specifically used, will be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context indicates is appropriate.
(i) Jurisdiction and Governing Law. This Agreement shall be
construed and interpreted in accordance with, and governed by, the laws of the
Commonwealth of Pennsylvania, excluding any conflicts of laws rules which would
require the laws of any other jurisdiction to apply. Any dispute under this
Agreement shall be litigated in the state or federal courts located in
Pittsburgh, Pennsylvania.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered as of the date first above written.
FORE SYSTEMS, INC.
By: /S/ XXXXXX X. XXXX
----------------------------------------
Xxxxxx X. Xxxx
President and Chief Executive Officer
/s/ ONAT MENZILCIOGLU
----------------------------------------
Onat Menzilcioglu
-4-
