EXHIBIT 10.28
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT is being executed and delivered as of May
13, 2002 by and between Xxxxx Xxxxxxxxx (the "Employee") and IXYS
Corporation, a Delaware corporation ("Parent"). Certain capitalized terms used
in this Noncompetition Agreement are defined in Section 19.
RECITALS
A. As an employee and optionholder of Clare, Inc., a Massachusetts
corporation (the "Company"), the Employee has obtained extensive and valuable
knowledge and confidential information concerning the business of the Company
and its subsidiaries (the Company and its subsidiaries are hereinafter referred
to as the "Acquired Corporations").
B. Parent, the Company and Teacup Acquisition Corp., a Massachusetts
corporation and a wholly owned subsidiary of Parent ("Merger Sub") entered into
an Agreement and Plan of Merger dated as of April 22, 2002 (the "Merger
Agreement") which provides (subject to the conditions set forth therein) for the
merger of Merger Sub with and into the Company.
C. In order to induce Parent and Merger Sub to enter into the Merger
Agreement, the Employee had previously agreed to enter into this
Noncompetition Agreement following the execution of the Merger Agreement but
prior to the Closing Date, as such term is defined in the Merger Agreement.
AGREEMENT
The parties hereto, intending to be legally bound, do hereby agree as follows:
1. RESTRICTION ON COMPETITION; PAYMENT. Parent shall pay the Employee
$275,000 immediately following the Closing (as defined in the Merger Agreement)
by wire transfer of immediately available funds to an account designated by the
Employee prior to the Closing Date (as defined in the Merger Agreement).
During the Noncompetition Period, the Employee shall not, and shall not
permit any of his Affiliates to:
(a) engage directly or indirectly in Competition in any Restricted
Territory; or
(b) directly or indirectly be or become an officer, director,
Employee, owner, co-owner, Affiliate, partner, promoter, employee,
agent, representative, designer, consultant, advisor, manager, licensor,
sublicensor, licensee or sublicensee of, for or to, or otherwise be or
become associated with or acquire or hold (of record, beneficially or
otherwise) any direct or indirect interest in, any Person that engages
directly or indirectly in Competition in any Restricted Territory;
provided, however, that the Employee may, without violating this Section 1,
own, as a passive investment, shares of capital stock of a publicly-held
corporation that engages in Competition if (i) such shares are actively traded
on an established national securities market in the United States, (ii) the
number of shares of such corporation's capital stock that are owned beneficially
(directly or indirectly) by the Employee and the number of shares of such
corporation's capital
stock that are owned beneficially (directly or indirectly) by the Employee's
Affiliates collectively represent less than one percent of the total number of
shares of such corporation's capital stock outstanding, and (iii) neither the
Employee nor any Affiliate of the Employee is otherwise associated
directly or indirectly with such corporation or with any Affiliate of such
corporation.
2. NO HIRING OR SOLICITATION OF EMPLOYEES. The Employee agrees that,
during the Noncompetition Period, the Employee shall not, and shall not
permit any of his Affiliates to: (a) hire any Specified Employee (as defined
below), or (b) directly or indirectly, personally or through others, encourage,
induce, attempt to induce, solicit or attempt to solicit (on the Employee's
own behalf or on behalf of any other Person) any Specified Employee or any other
employee to leave his or her employment with Parent, any of the Acquired
Corporations or any of Parent's other subsidiaries. For purposes of this Section
2, "Specified Employee" shall mean any individual who (i) is or was an employee
of any of the Acquired Corporations on the date of this Noncompetition Agreement
or during the 180-day period ending on the date of this Noncompetition
Agreement, and (ii) remains or becomes an employee of Parent, any of the
Acquired Corporations, Merger Sub or any of Parent's other subsidiaries on the
date of this Noncompetition Agreement or at any time during the Noncompetition
Period.
3. CONFIDENTIALITY. The Employee agrees that he or she shall hold all
Confidential Information in strict confidence and shall not at any time (whether
during or after the Noncompetition Period): (a) reveal, report, publish,
disclose or transfer any Confidential Information to any Person (other than
Parent or the Acquired Corporations); (b) use any Confidential Information for
any purpose; or (c) use any Confidential Information for the benefit of any
Person (other than Parent or the Acquired Corporations).
4. REPRESENTATIONS AND WARRANTIES. The Employee represents and
warrants, to and for the benefit of the Indemnitees, that: (a) he or she has
full power and capacity to execute and deliver, and to perform all of his
obligations under, this Noncompetition Agreement; and (b) neither the execution
and delivery of this Noncompetition Agreement nor the performance of this
Noncompetition Agreement will result directly or indirectly in a violation or
breach of (i) any agreement or obligation by which the Employee or any of his
Affiliates is or may be bound, or (ii) any law, rule or regulation. The
Employee's representations and warranties shall survive the expiration of the
Noncompetition Period for an unlimited period of time.
5. SPECIFIC PERFORMANCE. The Employee agrees that, in the event of any
breach or threatened breach by the Employee of any covenant or obligation
contained in this Noncompetition Agreement, each of Parent, the Company and the
other Indemnitees shall be entitled (in addition to any other remedy that may be
available to it, including monetary damages) to seek and obtain (a) a decree or
order of specific performance to enforce the observance and performance of such
covenant or obligation, and (b) an injunction restraining such breach or
threatened breach. The Employee further agrees that no Indemnitee shall be
required to obtain, furnish or post any bond or similar instrument in connection
with or as a condition to obtaining any remedy referred to in this Section 5,
and the Employee irrevocably waives any right he or she may have to require
any Indemnitee to obtain, furnish or post any such bond or similar instrument.
6. INDEMNIFICATION. Without in any way limiting any of the rights or
remedies otherwise available to any of the Indemnitees, the Employee shall
indemnify and hold harmless each Indemnitee against and from any loss, damage,
injury, harm, detriment, lost opportunity, liability, exposure, claim, demand,
settlement, judgment, award, fine, penalty, tax, fee (including attorneys'
fees), charge or expense (whether or not relating to any third-party claim) that
is directly or indirectly suffered or incurred at any time (whether during or
after the Noncompetition Period) by such Indemnitee, or to which such Indemnitee
otherwise becomes subject at any time (whether during or after the
Noncompetition Period), and that arises directly or indirectly out of or by
virtue of, or relates directly or indirectly to, (a) any inaccuracy in or breach
of any representation or warranty contained in this Noncompetition Agreement, or
(b) any failure on the part of the Employee to observe, perform or abide by,
or any other breach of, any restriction, covenant, obligation or other provision
contained in this Noncompetition Agreement.
7. NON-EXCLUSIVITY. The rights and remedies of Parent, the Company and the
other Indemnitees under this Noncompetition Agreement are not exclusive of or
limited by any other rights or remedies which they may have, whether at law, in
equity, by contract or otherwise, all of which shall be cumulative (and not
alternative). Without limiting the generality of the foregoing, the rights and
remedies of Parent, the Company and the other Indemnitees under this
Noncompetition Agreement, and the obligations and liabilities of the Employee
under this Noncompetition Agreement, are in addition to their respective rights,
remedies, obligations and liabilities under the law of unfair competition, under
laws relating to misappropriation of trade secrets, under other laws and common
law requirements and under all applicable rules and regulations. Nothing in this
Noncompetition Agreement shall limit any of the Employee's obligations, or
the rights or remedies of Parent, the Company or any of the other Indemnitees,
under the Merger Agreement; and nothing in the Merger Agreement shall limit any
of the Employee's obligations, or any of the rights or remedies of Parent,
the Company, or any of the other Indemnitees, under this Noncompetition
Agreement. No breach on the part of Parent, the Company or any other party of
any covenant or obligation contained in the Merger Agreement or any other
agreement shall limit or otherwise affect any right or remedy of Parent, the
Company or any of the other Indemnitees under this Noncompetition Agreement.
8. SEVERABILITY. If any provision of this Noncompetition Agreement or any
part of any such provision is held under any circumstances to be invalid or
unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable to the
fullest possible extent, (b) the invalidity or unenforceability of such
provision or part thereof under such circumstances and in such jurisdiction
shall not affect the validity or enforceability of such provision or part
thereof under any other circumstances or in any other jurisdiction, and (c) the
invalidity or unenforceability of such provision or part thereof shall not
affect the validity or enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Noncompetition
Agreement. Each provision of this Noncompetition Agreement is separable from
every other provision of this Noncompetition Agreement, and each part of each
provision of this Noncompetition Agreement is separable from every other part of
such provision.
9. GOVERNING LAW; VENUE.
(a) This Noncompetition Agreement shall be construed in accordance
with, and governed in all respects by, the laws of the State of Delaware
(without giving effect to principles of conflicts of laws).
(b) Any legal action or other legal proceeding relating to this
Noncompetition Agreement or the enforcement of any provision of this
Noncompetition Agreement may be brought or otherwise commenced in any state or
federal court located in Santa Xxxxx County, California. The Employee:
(i) expressly and irrevocably consents and submits to the
jurisdiction of each state and federal court located in Santa Xxxxx
County, California (and each appellate court located in the State of
California), in connection with any such legal proceeding;
(ii) agrees that service of any process, summons, notice or
document by U.S. mail addressed to him or her at the address set forth on
the signature page of this Noncompetition Agreement shall constitute
effective service of such process, summons, notice or document for
purposes of any such legal proceeding;
(iii) agrees that each state and federal court located in
Santa Xxxxx County, California shall be deemed to be a convenient forum;
and
(iv) agrees not to assert (by way of motion, as a defense or
otherwise), in any such legal proceeding commenced in any state or federal
court located in Santa Xxxxx County, California any claim that the
Employee is not subject personally to the jurisdiction of such court,
that such legal proceeding has been brought in an inconvenient forum, that
the venue of such proceeding is improper or that this Noncompetition
Agreement or the subject matter of this Noncompetition Agreement may not
be enforced in or by such court.
Nothing contained in this Section 9 shall be deemed to limit or otherwise affect
the right of any Indemnitee to commence any legal proceeding or otherwise
proceed against the Employee in any other forum or jurisdiction.
(c) THE EMPLOYEE IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS NONCOMPETITION AGREEMENT
OR THE ENFORCEMENT OF ANY PROVISION OF THIS NONCOMPETITION AGREEMENT.
10. WAIVER. No failure on the part of Parent, the Company or any other
Indemnitee to exercise any power, right, privilege or remedy under this
Noncompetition Agreement, and no delay on the part of Parent, the Company or any
other Indemnitee in exercising any power, right, privilege or remedy under this
Noncompetition Agreement, shall operate as a waiver of such power, right,
privilege or remedy; and no single or partial exercise of any such power, right,
privilege or remedy shall preclude any other or further exercise thereof or of
any other power, right, privilege or remedy. No Indemnitee shall be deemed to
have waived any claim of such
Indemnitee arising out of this Noncompetition Agreement, or any power, right,
privilege or remedy of such Indemnitee under this Noncompetition Agreement,
unless the waiver of such claim, power, right, privilege or remedy is expressly
set forth in a written instrument duly executed and delivered on behalf of such
Indemnitee; and any such waiver shall not be applicable or have any effect
except in the specific instance in which it is given.
11. SUCCESSORS AND ASSIGNS. Each of Parent, the Company and the other
Indemnitees may freely assign any or all of its rights under this Noncompetition
Agreement, at any time, in whole or in part, to any Person without obtaining the
consent or approval of the Employee or of any other Person. This
Noncompetition Agreement shall be binding upon the Employee and his heirs,
executors, estate, personal representatives, successors and assigns, and shall
inure to the benefit of Parent, the Company, Merger Sub and the other
Indemnitees.
12. FURTHER ASSURANCES. The Employee shall (at the Employee's sole
expense) execute and/or cause to be delivered to each Indemnitee such
instruments and other documents, and shall (at the Employee's sole expense)
take such other actions, as such Indemnitee may reasonably request at any time
(whether during or after the Noncompetition Period) for the purpose of carrying
out or evidencing any of the provisions of this Noncompetition Agreement.
13. ATTORNEYS' FEES. If any legal action or other legal proceeding
relating to this Noncompetition Agreement or the enforcement of any provision of
this Noncompetition Agreement is brought against the Employee, the prevailing
party shall be entitled to recover reasonable attorneys' fees, costs and
disbursements (in addition to any other relief to which the prevailing party may
be entitled).
14. CAPTIONS. The captions contained in this Noncompetition Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Noncompetition Agreement and shall not be referred to in connection with the
construction or interpretation of this Noncompetition Agreement.
15. CONSTRUCTION. Whenever required by the context, the singular number
shall include the plural, and vice versa; the masculine gender shall include the
feminine and neuter genders; and the neuter gender shall include the masculine
and feminine genders. Any rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be applied in the
construction or interpretation of this Noncompetition Agreement. Neither the
drafting history nor the negotiating history of this Noncompetition Agreement
shall be used or referred to in connection with the construction or
interpretation of this Noncompetition Agreement. As used in this Noncompetition
Agreement, the words "include" and "including," and variations thereof, shall
not be deemed to be terms of limitation, and shall be deemed to be followed by
the words "without limitation." Except as otherwise indicated in this
Noncompetition Agreement, all references in this Noncompetition Agreement to
"Sections" are intended to refer to Sections of this Noncompetition Agreement.
16. SURVIVAL OF OBLIGATIONS. Except as specifically provided herein, the
obligations of the Employee under this Noncompetition Agreement (including
his obligations under Sections 3, 6 and 12) shall survive the expiration of the
Noncompetition Period. The expiration of the Noncompetition Period shall not
operate to relieve the Employee of any obligation or
liability arising from any prior breach by the Employee of any provision of
this Noncompetition Agreement.
17. OBLIGATIONS ABSOLUTE. The Employee's obligations under this
Noncompetition Agreement are absolute and shall not be terminated or otherwise
limited by virtue of any breach (on the part of Parent, the Company, any other
Indemnitee or any other Person) of any provision of the Merger Agreement or any
other agreement, or by virtue of any failure to perform or other breach of any
obligation of Parent, the Company, any other Indemnitee or any other Person.
18. AMENDMENT. This Noncompetition Agreement may not be amended, modified,
altered or supplemented other than by means of a written instrument duly
executed and delivered on behalf of the Employee and Parent (or any successor
to Parent).
19. DEFINED TERMS. For purposes of this Noncompetition Agreement:
(a) "Affiliate" means, with respect to any specified Person, any
other Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such specified
Person.
(b) "Competing Product" means any: (i) product, that has been
designed, developed, manufactured, assembled, promoted, sold, supplied,
distributed, resold, installed, supported, maintained, repaired, refurbished,
licensed, sublicensed, financed, leased or subleased by or on behalf of any of
the Acquired Corporations (or any predecessor of any of the Acquired
Corporations) at any time during the Employee's employment by the Company; (ii)
product that has been designed, developed, manufactured, assembled, promoted,
sold, supplied, distributed, resold, installed, supported, maintained, repaired,
refurbished, licensed, sublicensed, financed, leased or subleased by or on
behalf of Parent, Merger Sub or any of Parent's other subsidiaries (including
any of the Acquired Corporations) at any time during the period in which the
Employee is employed by Parent, Merger Sub or any of Parent's other subsidiaries
(including any of the Acquired Corporations); or (iii) product, equipment,
device or system that is substantially the same as, incorporates, is a material
component or part of, is based upon, is functionally similar to or competes in
any material respect with any product, equipment, device or system of the type
referred to in clause "(i)" or "(ii)" of this sentence.
(c) "Competing Service" means any: (i) service that has been
provided, performed or offered by or on behalf of any of the Acquired
Corporations (or any predecessor of any of the Acquired Corporations) at any
time during the Employee's employment by the Company including, without
limitation, services related to a Competing Product; (ii) service related to a
Competing Product that is provided, performed or offered by or on behalf of
Parent, Merger Sub or any of Parent's other subsidiaries (including any of the
Acquired Corporations) at any time during the period in which the Employee is
employed by Parent, Merger Sub or any of Parent's other subsidiaries (including
any of the Acquired Corporations); (iii) service that facilitates, supports or
otherwise relates to the design, development, manufacture, assembly, promotion,
sale, supply, distribution, resale, installation, support, maintenance, repair,
refurbishment, licensing, sublicensing, financing, leasing or subleasing of any
Competing Product; or (iv) service that is substantially the same as, is based
upon or competes in any material respect with any service referred to in clause
"(i)," "(ii)" or "(iii)" of this sentence.
(d) A Person shall be deemed to be engaged in "Competition" if: (a)
such Person or any of such Person's subsidiaries or other Affiliates is engaged
directly or indirectly in the design, development, manufacture, assembly,
promotion, sale, supply, distribution, resale, installation, support,
maintenance, repair, refurbishment, licensing, sublicensing, financing, leasing
or subleasing of any Competing Product; or (b) such Person or any of such
Person's subsidiaries or other Affiliates is engaged directly or indirectly in
providing, performing or offering any Competing Service.
(e) "Confidential Information" means any non-public information
(whether or not in written form and whether or not expressly designated as
confidential) relating directly or indirectly to Parent, any of the Acquired
Corporations, Merger Sub or any of Parent's other subsidiaries or relating
directly or indirectly to the business, operations, financial affairs,
performance, assets, technology, processes, products, contracts, customers,
licensees, sublicensees, suppliers, personnel, consultants or plans of Parent,
any of the Acquired Corporations, Merger Sub or any of Parent's other
subsidiaries (including any such information consisting of or otherwise relating
to trade secrets, know-how, technology, inventions, prototypes, designs,
drawings, sketches, processes, license or sublicense arrangements, formulae,
proposals, research and development activities, customer lists or preferences,
pricing lists, referral sources, marketing or sales techniques or plans,
operations manuals, service manuals, financial information, projections, lists
of consultants, lists of suppliers or lists of distributors); provided, however,
that "Confidential Information" shall not be deemed to include information of
any of the Acquired Corporations that was already publicly known and in the
public domain prior to the time of its initial disclosure to the Employee.
(f) "Indemnitees" shall include: (i) Parent; (ii) each of the
Acquired Corporations; (iii) Merger Sub; (iv) each Person who is or becomes an
Affiliate of Parent, Merger Sub or the Company; and (v) the successors and
assigns of each of the Persons referred to in clauses "(i)", "(ii)", "(iii)" and
"(iv)" of this sentence.
(g) "Noncompetition Period" shall mean the period commencing on the
Closing Date and ending on the third anniversary of the termination of his
employment with the Company; provided, however, that in the event of any breach
on the part of the Employee of any provision of this Noncompetition Agreement,
the Noncompetition Period shall be automatically extended by a number of days
equal to the total number of days in the period from the date on which such
breach shall have first occurred through the date as of which such breach shall
have been fully cured.
(h) "Person" means any: (i) individual; (ii) corporation, general
partnership, limited partnership, limited liability partnership, trust, company
(including any limited liability company or joint stock company) or other
organization or entity; or (iii) governmental body or authority.
(i) "Restricted Territory" means each country in the world and the
respective political subdivisions or territories thereof.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Noncompetition Agreement as of the date first above written.
Employee:
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
Address: 00 Xxxxxx Xxxx Xxxxx
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Xxxxxxx, XX 00000
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Telephone No.: (000) 000 0000
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Facsimile: (000) 000 0000
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PARENT:
By: /s/ Xxxxxx Xxxxxx
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Printed Name: Xxxxxx Xxxxxx
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Title: President and CEO
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