Non-Competition Agreement
EXHIBIT 10.2
This Non-Competition Agreement (the “Agreement”), effective as of November 1, 2007
(the “Effective Date”), is made by and between Xxxxxx Xxxxxxxx (the “Executive”)
and Opnext, Inc., a Delaware corporation, and any of its subsidiaries and affiliates as may employ
Executive from time to time (collectively, and together with any successor thereto, the
“Company”).
RECITALS
| A. | The Executive is an employee of the Company and, in his position with the Company, has acquired and developed valuable and confidential expertise, knowledge, experience and relationships. | ||
| B. | The Company has (1) granted certain options and restricted stock to the Executive pursuant to the Opnext, Inc. Amended and Restated 2001 Long-Term Stock Incentive Plan and (2) entered into an Employment Agreement with the Executive, dated as of November 1, 2007, that provides that the Executive will receive certain compensation and benefits during his period of employment and that the Executive may receive severance payments from the Company in the event of certain terminations of the Executive’s employment with the Company, in each case in part in exchange for the terms and conditions set forth in this Agreement, which are designed to protect the Company’s business interests, proprietary relationships with its customers, and trade secret and proprietary information. | ||
| C. | The parties recognize and acknowledge that if the Executive were to compete with certain businesses of the Company, the Company could suffer significant financial loss. | ||
| D. | The Company and the Executive desire to enter into this Agreement, effective as of the Effective Date. |
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements set forth below the parties hereto agree as follows:
Section 1. Effective Date. The Agreement shall become effective on the Effective
Date.
Section 2. Non-Competition; Non-Solicitation. The Executive agrees to the following
obligations that he acknowledges to be reasonably designed to protect the Company’s legitimate
business interests without unnecessarily or unreasonably restricting his post-employment
opportunities.
(a) The Executive shall not, at any time during the Executive’s employment with the Company or
during the one year period immediately following the date of the Executive’s
termination of employment with the Company (the “Restricted Period”), directly or
indirectly engage in, have any equity interest in, or manage or operate any person, firm,
corporation, partnership, business or entity (whether as director, officer, employee, agent,
representative, partner, security holder, consultant or otherwise) that engages in (either directly
or through any subsidiary or affiliate thereof) any business or activity which competes with any of
the businesses of the Company or any entity owned by the Company in North America, Europe, Asia, or
anywhere else in the world that the Company does business. Notwithstanding the foregoing, the
Executive shall be permitted to acquire a passive stock or equity interest in such a business
provided the stock or other equity interest acquired is not more than one percent (1%) of the
outstanding interest in such business.
(b) During the Restricted Period, the Executive will not directly or indirectly, either for
himself or on behalf of any other entity, recruit or otherwise solicit or induce any employee,
customer, distributor, contractor, national builder or supplier of the Company to terminate its
employment or arrangement with the Company, otherwise change its relationship with the Company, or
establish any relationship with the Executive or any of his affiliates for any business purpose
competitive with the business of the Company. In addition, during the Restricted Period, the
Executive shall not, either for himself or on behalf of any other entity, hire or cause to be hired
any person who was employed by the Company at any time during the one year period immediately prior
to the date of the Executive’s termination or who thereafter becomes employed by the Company.
(c) In the event that this Section 2 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too great a period of time or over
too great a geographical area or by reason of its being too extensive in any other respect, it will
be interpreted to extend only over the maximum period of time for which it may be enforceable, over
the maximum geographical area as to which it may be enforceable, or to the maximum extent in all
other respects as to which it may be enforceable, all as determined by such court in such action.
(d) As used in this Section 2, the term “Company” shall include the Company, any
parent, related entity, or direct or indirect subsidiary of the Company.
(e) The provisions contained in Section 2(a) and Section 2(b) may be altered
and/or waived with the prior written consent of the Company’s Board of Directors (the
“Board”) or the compensation committee of the Board.
Section 3. Nondisclosure of Proprietary Information; Non-Disparagement
(a) Except as he reasonably and in good faith determines to be required in the faithful
performance of the Executive’s duties or pursuant to Section 3(c), the Executive shall,
during his employment with the Company and after the date of his termination of employment with the
Company, maintain in confidence and shall not directly or indirectly, use, disseminate, disclose or
publish, or use for his benefit or the benefit of any person, firm, corporation or other entity any
confidential or proprietary information or trade secrets of or relating to the Company, including,
without limitation, information with respect to the Company’s operations, processes, protocols,
products, inventions, business practices, finances, principals, vendors, suppliers,
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customers, potential customers, marketing methods, costs, prices, contractual relationships,
regulatory status, compensation paid to employees or other terms of employment (“Proprietary
Information”), or deliver to any person, firm, corporation or other entity any document,
record, notebook, computer program or similar repository of or containing any such Proprietary
Information. The Executive’s obligation to maintain and not use, disseminate, disclose or publish,
or use for his benefit or the benefit of any person, firm, corporation or other entity any
Proprietary Information after the date of the Executive’s termination of employment will continue
so long as such Proprietary Information is not, or has not by legitimate means become, generally
known and in the public domain (other than by means of the Executive’s direct or indirect
disclosure of such Proprietary Information) and is continued to be maintained as Proprietary
Information by the Company. The parties hereby stipulate and agree that as between them, the
Proprietary Information identified herein is important, material and affects the successful conduct
of the businesses of the Company (and any successor or assignee of the Company).
(b) Upon termination of the Executive’s employment with the Company, the Executive will
promptly deliver to the Company all correspondence, drawings, manuals, letters, notes, notebooks,
reports, programs, plans, proposals, financial documents, or any other documents concerning the
Company’s customers, business plans, marketing strategies, products or processes.
(c) The Executive may respond to a lawful and valid subpoena or other legal process but shall
give the Company the earliest possible notice thereof, shall, as much in advance of the return date
as possible, make available to the Company and its counsel the documents and other information
sought and shall assist such counsel in resisting or otherwise responding to such process.
(d) The Executive agrees not to disparage the Company, any of its products or practices, or
any of its directors, officers, agents, representatives, stockholders or affiliates, either orally
or in writing, at any time; provided, however, that the Executive may confer in
confidence with his legal representatives and make truthful statements as required by law.
(e) As used in this Section 3, the term “Company” shall include the Company, any
parent, related entity, or direct or indirect subsidiary of the Company.
Section 4. Injunctive Relief. It is recognized and acknowledged by the Executive that
a breach of the covenants contained in Sections 2 and 3 will cause irreparable damage to
Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain,
and that the remedies at law for any such breach will be inadequate. Accordingly, the Executive
agrees that in the event of a breach of any of the covenants contained in Sections 2 and 3,
in addition to any other remedy which may be available at law or in equity, the Company will be
entitled to specific performance and injunctive relief.
Section 5. Assignment and Successors. The Company may assign its rights and
obligations under this Agreement to any entity, including any successor to all or substantially all
the assets of the Company, by merger or otherwise, and may assign or encumber this Agreement and
its rights hereunder as security for indebtedness of the Company and its affiliates. The
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Executive may not assign his rights or obligations under this Agreement to any individual or
entity. This Agreement shall be binding upon and inure to the benefit of the Company, the
Executive and their respective successors, assigns, personnel and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as applicable.
Section 6. Governing Law. This Agreement shall be governed, construed, interpreted
and enforced in accordance with the substantive laws of the state of Delaware, without reference to
the principles of conflicts of law of Delaware or any other jurisdiction, and, where applicable,
the laws of the United States.
Section 7. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
Section 8. Notices. Any notice, request, claim, demand, document and other
communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and
shall be in writing and delivered personally or sent by telex, telecopy, or certified or registered
mail, postage prepaid, as follows:
(a) If to the Company:
Opnext, Inc.
0 Xxxxxxxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxxxxx
0 Xxxxxxxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxxxxx
with a copy to:
Xxxxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxxxx
(b) If to the Executive, to the address set forth on the signature page hereto or at any other
address as any party shall have specified by notice in writing to the other party.
Section 9. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original, but all of which together will constitute one and the
same Agreement.
Section 10. Entire Agreement. The terms of this Agreement are intended by the parties
to be the final expression of their agreement with respect to the subject matter hereof and may not
be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend
that this Agreement shall constitute the complete and exclusive statement of its
terms and that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding to vary the terms of this Agreement.
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Section 11. Amendments; Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, signed by the Executive and a duly authorized
officer of Company. By an instrument in writing similarly executed, the Executive or a duly
authorized officer of the Company may waive compliance by the other party or parties with any
provision of this Agreement that such other party was or is obligated to comply with or perform;
provided, however, that such waiver shall not operate as a waiver of, or estoppel
with respect to, any other or subsequent failure. No failure to exercise and no delay in
exercising any right, remedy, or power hereunder preclude any other or further exercise of any
other right, remedy, or power provided herein or by law or in equity.
Section 12. No Inconsistent Actions. The parties hereto shall not voluntarily
undertake or fail to undertake any action or course of action inconsistent with the provisions or
essential intent of this Agreement. Furthermore, it is the intent of the parties hereto to act in
a fair and reasonable manner with respect to the interpretation and application of the provisions
of this Agreement.
Section 13. Construction. This Agreement shall be deemed drafted equally by both the
parties. Its language shall be construed as a whole and according to its fair meaning. Any
presumption or principle that the language is to be construed against any party shall not apply.
The headings in this Agreement are only for convenience and are not intended to affect construction
or interpretation. Any references to paragraphs, subparagraphs, sections or subsections are to
those parts of this Agreement, unless the context clearly indicates to the contrary. Also, unless
the context clearly indicates to the contrary, (a) the plural includes the singular and the
singular includes the plural; (b) “and” and “or” are each used both conjunctively and
disjunctively; (c) “any,” “all,” “each,” or “every” means “any and all,” and “each and every”; (d)
“includes” and “including” are each “without limitation”; (e) “herein,” “hereof,” “hereunder” and
other similar compounds of the word “here” refer to the entire Agreement and not to any particular
paragraph, subparagraph, section or subsection; and (f) all pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of
the entities or persons referred to may require.
Section 14. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted before an arbitrator in
New York, New York in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court having jurisdiction;
provided, however, that the Company shall be entitled to seek a restraining order
or injunction in any court of competent jurisdiction to prevent any continuation of any violation
of the provisions of Sections 2 or 3 of this Agreement and the Executive hereby consents
that such restraining order or injunction may be granted without requiring the Company to post a
bond. Only individuals who are (a) lawyers engaged full-time in the practice of law; and (b) on
the AAA register of arbitrators shall be selected as an arbitrator. Within 20 days of the
conclusion of the arbitration hearing, the arbitrator shall prepare written findings of fact and
conclusions of law. It is mutually agreed that the written decision of the arbitrator shall be
valid, binding, final and non-appealable; provided, however, that the parties
hereto agree that the arbitrator shall not be
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empowered to award punitive damages against any party to such arbitration. The arbitrator
shall require the non-prevailing party to pay the arbitrator’s full fees and expenses or, if in the
arbitrator’s opinion there is no prevailing party, the arbitrator’s fees and expenses will be borne
equally by the parties thereto. In the event action is brought to enforce the provisions of this
Agreement pursuant to this Section 14, the non-prevailing parties shall be required to pay
the reasonable attorney’s fees and expenses of the prevailing parties, except that if in the
opinion of the court or arbitrator deciding such action there is no prevailing party, each party
shall pay its own attorney’s fees and expenses.
Section 15. Enforcement. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the term of this Agreement,
such provision shall be fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and
the remaining provisions of this Agreement shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be
added automatically as part of this Agreement a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and enforceable.
Section 16. Executive Acknowledgement. The Executive acknowledges that he has read
and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon
any representations or promises made by the Company other than those contained in writing herein,
and has entered into this Agreement freely based on his own judgment.
[signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the Effective Date.
| COMPANY |
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| By: | /s/ Xxxxx Xxxxxxxxx | |||
| Xxxxx Xxxxxxxxx | ||||
| VP, Business Management / Secretary | ||||
| EXECUTIVE |
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| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Xxxxxx Xxxxxxxx | ||||
| 000 Xxxxxxx Xxxxxx Xxx Xxxxx, XX 00000 |
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