Exhibit 10.30
NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT (this "Agreement"), dated as of July 29, 1999, by
and between Xxxxxx Xxxxx, an individual (the "Executive"), and Xxxx
Incorporated, a Delaware corporation (the "Company").
RECITALS
WHEREAS, the parties hereto recognize and agree that the non-competition
covenants in this Agreement are necessary, among other things, to protect the
value of the business engaged in by the Company and Special Devices,
Incorporated, a Delaware corporation and the sole stockholder of the Company
("SDI").
NOW, THEREFORE, in consideration of the foregoing recital, the terms and
provisions herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. COVENANT NOT TO COMPETE.
(a) In consideration of, among other things, the payments set forth in
Section 2 of this Agreement, for the period commencing on the date hereof and
extending until November 30, 2001, the Executive will not, voluntarily or
involuntarily, for any reason whatsoever, directly or indirectly, individually
or on behalf of persons not now parties to this Agreement, or as a partner,
stockholder, director, officer, principal, agent, or in any other capacity or
relationship, for his own account or for the benefit of any other person, firm,
corporation, partnership, association or other entity:
(i) compete in the Business (as defined below) with the Company or SDI
or any of their successors or assigns, within the United States of America
or the European Community (the "Territory");
(ii) engage in the business of owning or managing any company that
engages in the Business or any other operation that sells products that
compete with the products produced by the Business within the Territory;
PROVIDED, HOWEVER, that the ownership of less than 2% of the outstanding
shares of any class of capital stock of a publicly-held corporation shall
not be deemed to be a violation of this Section 1(a);
(iii) solicit for employment or hire any of the officers or directors
or other persons currently employed by the Company or SDI or those persons
that are in the future employed by the Company or SDI or any of their
successors or assigns.
(b) For the purposes of this Section 1, the term "Business" shall mean each
type of business conducted by the Company or SDI as of the date hereof.
(c) During the term of this Agreement, the Executive will not, directly or
indirectly, approach or seek Business from any Customer (as defined below),
refer Business from any Customer to any enterprise or business or be paid
commissions based on Business-
related sales received from any Customer by any enterprise or business. For
purposes of this Section 1, the term "Customer" means any person, firm,
corporation, partnership, association or other entity to which the Company or
SDI or any of their successors or assigns, provided goods or services during the
36-month period prior to the time at which any determination shall be made that
any such person, firm, corporation, partnership, association or other entity is
a Customer.
(d) The Executive acknowledges that the restrictions imposed by this
Agreement are fully understood by him and are fair and reasonable.
(e) The Executive expressly agrees that the character, duration and
geographical scope of the provisions set forth in this Agreement are reasonable
in light of the circumstances as they exist on the date hereof. Should a
decision, however, be made at a later date by a court of competent jurisdiction
that the character, duration or geographical scope of such provisions is
unreasonable, then it is the intention and the agreement of the parties hereto
that this Agreement shall be construed by the court in such a manner as to
impose only those restrictions on the Executive's conduct that are reasonable in
light of the circumstances and as are necessary to assure the Company and SDI
the benefits of this Agreement. If, in any judicial proceeding, a court shall
refuse to enforce all of the separate covenants deemed included herein because
taken together they are more extensive than necessary to assure to the Company
or SDI the intended benefits of this Agreement, it is expressly understood and
agreed by the parties hereto that the provisions of this Agreement that, if
eliminated, would permit the remaining separate provisions to be enforced in
such proceeding, shall be deemed eliminated, for the purposes of such
proceeding, from this Agreement.
(f) Notwithstanding the restrictions set forth in this Section 1, Executive
may from time to time perform consulting services for various entities owned or
controlled by X.X. Xxxxxx Equity Investors I, L.P. on terms mutually agreeable
to both parties.
2. CONSIDERATION.
(a) In consideration of the Executive's promises in Section 1 hereof, the
Company shall pay an aggregate of $890,000 to the Executive, of which $570,000
will be payable on November 30, 1999, $185,000 will be payable on November 30,
2000 and $135,000 will be payable on November 30, 2001 (each such installment to
be paid without accrual of interest).
(b) Whenever any payments are to be made to the Executive under this
Agreement the Company, in its discretion, may require the Executive to remit to
the Company, or may withhold from such payment, all or any part of the amount
determined in the Company's discretion to be sufficient to satisfy federal,
state and local withholding tax obligations which the Company or its counsel
determine may arise from any payment to the Executive pursuant to this
Agreement.
3. SPECIFIC PERFORMANCE.
The Company, SDI and the Executive recognize that the covenants to be
performed under this Agreement by the Executive are special, unique and of
extraordinary
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character, and that in the event of the breach by the Executive of the terms and
conditions of this Agreement, the Company or SDI will be entitled to institute
and prosecute proceedings in any court of competent jurisdiction, either at law
or in equity, to obtain damages for any breach of this Agreement, to enforce the
specific performance thereof by the Executive or to enjoin the Executive from
breaching the provisions of Section 1 or any other provision of this Agreement.
Nothing contained in this Section 3 shall be construed to prevent the Company or
SDI from seeking such other remedy in the courts, in case of any breach of this
Agreement by the Executive, as the Company or SDI may elect.
4. ASSIGNABILITY.
The rights and obligations of the Company and SDI under this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
the Company and SDI. The Executive's rights and obligations hereunder may not be
assigned or alienated and any attempt to do so by the Executive will be void.
5. NOTICES.
Any notices provided hereunder must be in writing and shall be deemed
effective upon the earlier of personal delivery (including personal delivery by
telecopy or telex) or the third day after mailing by first class mail to the
recipient at the address indicated below:
To the Company:
Xxxx, Incorporated
0000 Xxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
With copies to:
Special Devices, Incorporated
00000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
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To Executive:
Mr. Xxxxxx Xxxxx
0000 Xxxxx Xx.
Xxxxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxx Xxxxx, Xxxxxx, Xxxxx & Siepke
000 Xxxx Xxxxxxx Xx.
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Xx.
Facsimile: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending
party.
6. ARBITRATION.
(a) Any controversy, claim or dispute between the parties directly or
indirectly concerning this Agreement or the breach hereof or the subject matter
hereof, including questions concerning the scope and applicability of this
Clause (i), shall be finally settled by arbitration before one arbitrator held
in Chicago, Illinois, in accordance with the rules of commercial arbitration
then followed by the American Arbitration Association or any successor to the
functions thereof. The arbitrator shall have the right and authority to
determine how his or her decision or determination as to each issue or matter in
dispute may be implemented or enforced. Any decision or award of the arbitrator
shall be final and conclusive on the parties to this Agreement, and there shall
be no appeal therefrom other than for gross negligence or willful misconduct on
the part of the arbitrator. The prevailing party in any such dispute shall be
entitled to reimbursement of reasonable attorneys' fees and disbursements from
the non-prevailing party.
(b) The parties hereto agree that an action to compel arbitration pursuant
to this Agreement may be brought in any court and in connection therewith the
laws of the State of Illinois shall control. Application may also be made to
such court for confirmation of any decision or award of the arbitrator, for an
order of enforcement and for any other remedies that may be necessary to
effectuate such decision or award. The parties hereto hereby consent to the
jurisdiction or the arbitrator and of such court and waive any objection to the
jurisdiction of such arbitrator and court.
(c) Notwithstanding the foregoing provisions of this Clause (i), however,
nothing contained herein shall require arbitration of any issue arising under
this Agreement for which injunctive relief is successfully sought by any party
hereto.
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7. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal, substantive laws of the State of
Illinois, without giving effect to the conflict of laws rules thereof.
(b) AMENDMENT; WAIVER. No amendment or modification of this Agreement shall
be binding unless it is in writing signed by the parties hereto. The waiver by
any party to this Agreement of a breach of any provision hereof by any other
party shall not be construed as a waiver of any subsequent breach by any party.
(c) ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties with respect to the subject matter of this Agreement.
(d) BINDING EFFECT. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and, to the extent expressly provided herein,
to their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement.
(e) SEVERABILITY OF PROVISIONS. If any provision of this Agreement
otherwise is deemed to be invalid or unenforceable or is prohibited by the laws
of the state or jurisdiction where it is to be performed, this Agreement shall
be considered divisible as to such provision and such provision shall be
inoperative in such state or jurisdiction and shall not be part of the
consideration moving from either of the parties to the other. The remaining
provisions of this Agreement shall be valid and binding and of like effect as
though such provision were not included.
(f) CAPTIONS. The captions used herein are for ease of reference only and
shall not define or limit the provisions hereof.
(g) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of July 29, 1999.
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
Xxxx Incorporated
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By:
Title:
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