NONCOMPETITION AND CONFIDENTIALITY AGREEMENT
This Noncompetition And Confidentiality Agreement ("Agreement") is entered
into as of this 21st day of December, 1999 by and between Xxxxxx X. Xxxxxx
("Shareholder") and PSC Inc. ("Buyer").
RECITALS
A. Pursuant to those certain Asset Purchase Agreements, dated even
date herewith ("Purchase Agreements"), Buyer is acquiring through
subsidiaries certain assets of GEO Labs, Inc., and GAP Technologies, Inc.
(the "Companies");
B. Shareholder owns all of the outstanding capital of Companies;
C. Shareholder will receive substantial benefit under the terms of the
Purchase Agreements;
D. Buyer has required as a condition to executing the Purchase
Agreements that Shareholder enter into this Agreement;
E. Companies are engaged in the development of technology and
inventions, the legal ownership of patents and patent applications with
respect to technology and inventions, and the development, design,
manufacture and marketing of miniature bar code laser scanners and other
technologies, products and services for the automatic identification and
keyless data entry industry, including without limitation products,
services, applications systems and technologies relating to bar coded data,
magnetic stripe encoded data, radio frequency communications of bar coded
or related data, optical character recognition, machine vision as applied
to the recognition of bar coded data and electronic interchange of bar
coded and related data and any other business in which the Companies are
actually engaged or as to which they are doing research and development on
the date hereof or have done so on any date in the past (the "Business");
and
F. Following the transactions contemplated by the Purchase Agreements,
Buyer will continue to operate the Business, which is highly competitive,
and Buyer desires that it be protected from the use or disclosure of
Companies' confidential information by Shareholder and from direct or
indirect competition from Shareholder for a reasonable period of time and
within a reasonable geographic area.
NOW, THEREFORE, Shareholder and Buyer hereby agree as follows:
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1. Confidential Information.
1.1 Defined. Confidential Information of the Companies shall, for
purposes of this Agreement, include but not be limited to information and
matters not readily available to the public which are:
(a) of a technical nature, such as, but not limited to, methods,
know-how, formulae, compositions, drawings, blueprints, compounds,
processes, discoveries, prototypes, machines, inventions, computer
programs, and similar items;
(b) of a business nature, such as, but not limited to,
information about sales or lists of customers, vendors, competitors,
prices, costs, purchasing, profits, markets, product strengths and
weaknesses, business processes, business and marketing plans and
activities, financial information, and employee personnel records and
information; or
(c) pertaining to future developments, such as, but not limited
to, research and development, or future marketing or merchandising
plans or ideas.
Confidential Information shall also include information of the
Companies' customers and vendors which was learned by Shareholder as a
consequence of his employment with or ownership of or control over the
Companies.
1.2 Nondisclosure. Shareholder shall maintain all Confidential
Information in strict confidence and secrecy, and shall not at any time,
directly or indirectly, except in connection with performing services under
his Employment Agreement with Buyer or as explicitly requested by Buyer,
(i) use for any purpose, (ii) disclose to any person, or (iii) keep or make
copies of documents, tapes, discs, programs or other information storage
media containing or reflecting, any Confidential Information. Shareholder
shall, upon request of Buyer, immediately return to Buyer any documents,
tapes, discs, or other information storage media containing or reflecting
any Confidential Information (whether prepared by Shareholder or not).
Nothing in this Agreement modifies or reduces Shareholder's obligation to
comply with applicable laws relating to trade secrets, confidential
information or unfair competition.
2. Restrictive Covenants.
2.1 Covenant Not to Compete. Shareholder covenants and agrees that he
will not directly or indirectly for a period of four (4) years from the
date hereof: (i) directly or indirectly engage in or assist another to
engage in work or activity connected with the development, manufacture or
sale of products or services which compete with the existing or prior
products or services of the Companies or any parent or subsidiary of the
Companies; (ii) persuade or attempt to persuade any employee or consultant
of the Companies not to take employment with Buyer or to leave the employ
of Buyer or to stop providing services to Buyer; (iii) solicit or assist in
soliciting any client of the Companies with respect to any products or
services of the type offered or previously offered by the Companies; or
(iv) provide or assist in providing any products or services to any clients
of the Companies (including any party to whom the Companies have made a
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sales proposal within eighteen (18) months prior to the date hereof) of the
type offered by the Companies. The geographic scope of the covenant not to
compete shall extend to the entire world. Recognizing the specialized
nature of the Business and the scope of the competition that Buyer will
face after the Closing, Shareholder hereby acknowledges that the duration
and geographic scope of this covenant not to compete is reasonable.
2.2 Relief for Violations. If the geographic or time restriction
contained in this Section shall be determined by a court of law to be
unreasonable, the court may amend this Section to provide a reasonable
geographic or time restriction which shall then be binding upon the Buyer
and the Shareholder. Shareholder acknowledges that the broad geographic
scope of this covenant is required because the Business is international in
scope.
3. Consideration. Buyer shall pay to Shareholder as consideration hereunder
an amount equal to $250,000, payable in two equal installments of $125,000 each
on the third and fourth anniversaries of the date hereof. If Shareholder
breaches any of his obligations herein, Buyer shall have the right, in addition
to other remedies available to it, to withhold any further payment hereunder,
and to terminate his employment and the further payment of any compensation or
benefits to him pursuant to his Employment Agreement with Buyer of even date.
Shareholder agrees that any breach or threatened breach by him of any of the
above provisions cannot be remedied solely by the recovery of damages and Buyer
shall be entitled to an injunction against such breach or threatened breach
without the requirement of posting bond. Nothing herein, however, shall be
construed as prohibiting Buyer from pursuing, in conjunction with an injunction
or otherwise, any other remedies available at law or in equity for any such
breach or threatened breach, including the recovery of damages. The failure of
Buyer to initiate any action upon a breach of this Agreement shall not
constitute a waiver of that or any other breach hereof.
4. Other Provisions.
4.1 Recitals. Shareholder acknowledges and agrees that the recitals
set forth at the beginning of this Agreement are true and correct and
constitute a part of this Agreement.
4.2 Waivers. No failure on the part of Buyer to object to or complain
of any breach or default by Shareholder or to take any other action with
respect thereto, irrespective of how long such failure may continue, shall
constitute or be deemed a waiver of that or of any other breach or default.
No waiver by Buyer of any breach or default on the part of Shareholder
shall be effective unless set forth in writing and executed by Buyer, and
any such waiver shall operate only as a waiver of the particular breach or
default specified in such written waiver and shall not be effective as a
waiver of any other subsequent breach or default on the part of
Shareholder.
4.3 Assignment. Shareholder shall not assign any portion of this
Agreement without the prior written consent of Buyer. Any attempted
assignment without such prior written consent shall be null and void and
without legal effect. This Agreement shall be binding upon and inure to the
benefit of Buyer and Shareholder and their respective successors, heirs,
legal representatives and assigns permitted hereunder.
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4.4 Notices. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered;
or (b) sent to the parties at their respective addresses indicated herein
by private mail courier service. The respective addresses to be used for
all such notices, demands or requests are as follows:
(a) If to Buyer, to:
PSC Inc.
000 Xxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxxxx X. XxXxxxxx
General Counsel
(with a copy to):
Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
or to such other person or address as Buyer shall furnish to Shareholder in
writing.
(b) If to Shareholder, to:
Xxxxxx X. Xxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx, XX 00000
(with a copy to):
Xxxx Xxxxx Xxxx & XxXxxx LLP
2500 One Liberty Place
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx
or to such other person or address as Shareholder shall furnish to Buyer in
writing.
If personally delivered, such communication shall be deemed delivered
upon actual receipt; if sent by courier pursuant to this Section, such
communication shall be deemed delivered upon receipt. Any party to this
Agreement may change its address for the purposes of this Agreement by
giving notice thereof in accordance with this Section.
4.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the state of New York without regard to the
conflict of laws provisions thereof.
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4.6 Severability. In the event a court of competent jurisdiction
determines that the provisions of this Agreement, including the restrictive
covenants, are excessively broad as to duration, geographical scope or
activity, or are otherwise unenforceable, it is expressly agreed that the
invalidity of such provisions shall not affect the enforceability of the
remaining provisions, which will remain in full force and effect, and any
such over broad provisions will be deemed, without further action on the
part of any person, to be modified, amended and/or limited, but only to the
extent necessary to render the same valid and enforceable in such
jurisdiction.
IN WITNESS WHEREOF, Shareholder and Buyer have executed and delivered
this Agreement on the date first written above.
PSC INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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/s/ Xxxxxx X. Xxxxxx
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Shareholder
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