Exhibit 10.9
NONCOMPETITION AND NONDISCLOSURE AGREEMENT
This Noncompetition and Nondisclosure Agreement (the "Agreement"), dated as
of August 1, 1995, by and between Xxxxxx X. Xxxxxxx (the "Executive") and The
Cornerstone Investments Group, Inc. (the "Company"), is executed in connection
with a certain Executive Agreement by and between the Executive and the Company
dated of even date herewith (the "Executive Agreement").
The parties hereto, in consideration of the premises and covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby agree as follows:
1. During the period of the Executive's employment by the Company, and as
provided in Section 8 hereof, the Executive agrees that the Executive will not,
directly or indirectly, alone or as a partner, officer, director, employee or
stockholder of any company or business organization, engage in any business
activity in which the Company is then engaged, which is directly competitive
with and detrimental to the business of the Company (it being understood and
agreed that a catalog with substantially different merchandise or target
audience from any catalog then operated by the Company is not directly
competitive), except for those current directorships, special advisory roles and
activities as set forth on Exhibit A to the Employment Agreement. For purposes
of this Agreement, the Executive shall not be deemed to be a stockholder of any
other company or business or organization if (a) the Executive beneficially owns
(i) privately-held securities, (ii) securities listed on a national securities
exchange or (iii) securities sold in the over-the-counter market, provided that
in each of (i), (ii) and (iii) such securities do not exceed in the aggregate
five percent (5%) of the issued and outstanding capital stock of such companies
or business organizations, or (b) during the term of his employment by the
Company, he has obtained prior approval thereof from a majority of the Board of
Directors.
2. The Executive understands that his relationship with the Company and its
officers and employees is one of trust and confidence and that during the period
of his employment by the Company, the Executive may acquire knowledge of, or
access to, information which relates to the business, operations or plans of the
Company which is proprietary, confidential or not known generally to executives
in the catalog business (hereinafter "Confidential Information"). Confidential
Information may include, but is not limited to, budget costs, prices, vendor
lists and information about products, designs, marketing plans, customers and
the Company's financial affairs. The Executive will not reveal or otherwise
disclose to any person, association, company or other entity any Confidential
Information of the Company so far as it has come or may come to his knowledge,
except as may be required in the ordinary course of performing his duties as an
employee of the Company or except as may be in the public domain through no
fault of his, and the Executive will keep secret all matters entrusted to him
and shall not use or attempt to use any such Confidential Information in any
manner which may injure or cause loss or may be reasonably expected to injure or
cause loss to the Company.
The Executive agrees that the Executive shall not, after the termination of
his employment with the Company, use or permit to be used, any notes, memoranda,
records, files, computer programs, data or other materials containing
Confidential Information, it being agreed that any of the foregoing shall be and
remain the sole and exclusive property of the Company and that immediately upon
the termination of his employment with the Company the Executive shall deliver
all of the foregoing, and all copies thereof, to the Company, at its main
office.
3. The Executive will not at any time during his engagement and for the
period of two (2) years after the termination of the Executive's employment
hire, solicit or encourage any employee (other than Employee's personal
secretary) of the Company, (or any employee of Performance Associates, Inc. or
other "employee leasing company" whose employees perform services for the
Frontgate Cinmar Business) to terminate his or her employment in order to work
for a business or enterprise which competes or intends to compete with the
Company.
4. The Executive further represents that his performance of all of the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to maintain in confidence proprietary information acquired
by him in confidence or in trust prior to his employment by the Company. The
Executive has not entered into, and the Executive agrees that the Executive will
not enter into, any agreement, either written or oral, in conflict herewith.
5. The Executive agrees that any breach of this Agreement by him will cause
immediate and irreparable damage to the Company, which cannot be fully and
adequately compensated in money damages, and that in the event of such breach
the Company shall have, in addition to any and all remedies at law, the right to
an injunction, specific performance or other equitable relief to prevent the
violation, threatened violation or continued violation of any provision
hereunder.
6. Any waiver by the Company of a breach of any portion of this Agreement
shall not operate or be construed as a waiver of any subsequent breach hereof.
7. Each provision herein shall be treated as a separate and independent
clause, and the unenforceability of any one clause shall in no way impair the
enforceability of any of the other clauses herein. Moreover, if one or more of
the provisions contained in this Agreement shall for any reason be held to be
excessively broad as to scope, activity or subject so as to be unenforceable at
law, such provision or provisions shall be construed by the appropriate judicial
body by limiting and reducing it or them, so as to be enforceable to the extent
compatible with the applicable law as it shall then appear.
8. Subject to the provisions of this Section 8 and Section 9 hereof, the
restrictions contained in Sections 1 and 3 above shall terminate upon the stated
expiration date of the term of the Executive Agreement set forth in Section 2
thereof, provided that there has not occurred an uncured material default by
such Executive of such restrictions or the Executive Agreement. In addition, the
restrictions contained in Sections 1 and 3 above shall immediately terminate if
the Company fails to pay any Base Salary or any
amounts payable under Section 5(c)(ii) of the Executive Agreement or otherwise
materially breaches the Executive Agreement, or the Company shall fail to pay
any amounts due, and such failure or breach continues for seven (7) days after
written notice from Executive referring to his intent to terminate such
restrictions.
In the event that (1) Executive shall voluntarily resign (other than for
reasons of incapacity) from his employment duties undertaken pursuant to the
Executive Agreement prior to the stated expiration date of the Executive
Agreement set forth in Section 2 thereof, or (2) Executive's employment with the
Company is terminated for Cause (as defined in the Executive Agreement) pursuant
to Section 5(c)(i)(A), Section 5(c)(i)(B), or Section 5(c)(i)(C) of said
Executive Agreement, and provided there has not occurred an uncured material
default by the Company under the Executive Agreement, the restrictions contained
in Sections 1 and 3 above shall survive such termination of the Executive's
engagement with the Company for a period of eighteen (18) months. In the event
that Executive's employment with the Company is terminated pursuant to Section
5(b) of the Executive Agreement, and provided there has not occurred an uncured
material default by the Company under the Executive Agreement, the restrictions
contained in Sections 1 and 3 above shall survive such termination of the
Executive's engagement with the Company for a period of twelve (12) months.
In the event that Executive's engagement with the Company is terminated
without Cause (i) pursuant to Section 5(c)(ii)(A) of the Executive Agreement,
and provided there has not occurred an uncured material default by the Company
under the Executive Agreement, the restrictions contained in Sections 1 and 3
hereof shall survive such termination of the Executive's engagement with the
Company for eighteen (18) months, or (ii) pursuant to Section 5(c)(ii)(B) of the
Executive Agreement, and provided there has not occurred an uncured default by
the Company under the Executive Agreement, the restrictions contained in
Sections 1 and 3 hereof shall survive such termination of the Executive's
engagement with the Company for the later to occur of (A) September 10, 1997, or
(B) eighteen (18) months from the date of such termination.
Except as provided in this Section 8 and Section 9 hereof, the Executive's
obligations under this Agreement shall survive the termination of the
Executive's engagement with the Company, regardless of the manner of such
termination, and shall be binding upon the Executive's heirs, executors and
administrators.
9. Provided that the Company is not in material default under the terms of
the Executive Agreement, the Company may, at its option, extend the term of this
Agreement for one additional period of twelve (12) months by providing Executive
ninety (90) days advance written notice of its intention to so extend. In the
event this Agreement is so extended, the Company shall pay to Executive an
amount equal to the aggregate compensation, benefits and bonuses actually
received by the Executive during the preceding calendar year. Such amount shall
be paid on a monthly basis, except for any bonuses, which shall be paid at the
customary date of payment of all executive bonuses (less applicable withholding
for taxes and similar such items), on the first day of each month during such
extended period.
10. The Executive understands that his obligations under this Agreement
will extend to any other organization which succeeds to the business of the
Company by reason of any sale, merger or similar action. For purposes of this
paragraph 10, the term "business of the Company" shall be deemed to be that
business in which the Company was engaged prior to any such sale, merger or
similar action.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
THE CORNERSTONE INVESTMENTS GROUP, INC.
By: /s/ Xxxxxxx X. End /s/ Xxxxxx X. Xxxxxxx
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Xxxxxxx X. End Xxxxxx X. Xxxxxxx
Executive Officer and Managing Director
