PROPRIETARY INFORMATION, INVENTIONS AND NON-COMPETE AGREEMENT
THIS
PROPRIETARY INFORMATION, INVENTIONS AND NON-COMPETE AGREEMENT (this
“Agreement”),
dated as of the
9th day of May, 2006, between Xxxx Foods Company, a Delaware corporation (“the
Company”), having its principal place of business at 0000 XxXxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000, and Xxxx Xxxxxxxx (“Employee”).
WHEREAS, the Company has offered Employee employment as Executive Vice President and Chief
Financial Officer of the Company; a position which will result in Employee acquiring substantial
knowledge of the operations and practices of the business of the Company;
WHEREAS, the Company desires to prevent any competitive business from securing or utilizing
the services of Employee, to the extent and for the period of Employee’s employment and for a
reasonable period thereafter; and
WHEREAS, as a condition to the employment of Employee, the Company has required that Employee
enter into this Agreement.
NOW, THEREFORE, it is agreed as follows:
1.
Acknowledgments. Employee acknowledges that (i) the Company is
engaged in a continuous program of research, development, and production respecting its
business throughout the United States and Canada (the foregoing, together with any other
businesses in which the Company engages, from the date hereof to the date of the termination
of
Employee’s employment with the Company, is hereinafter referred to as the “Company
Business”); (ii) Employee’s services to the Company will be unique and have significant value
to
the Company, and Employee may make new contributions and inventions of value to the
Company; (iii) Employee’s work for the Company allows Employee access to trade secrets of, and
confidential information concerning, Company; (iv) the Company Business is national and
international in scope; (v) the Company would not have agreed to employ Employee but
for the agreements and covenants contained in this Agreement; and (vi) the agreements and
covenants contained in this Agreement are necessary and essential to protect the business,
goodwill, and customer relationships that the Company has expended significant resources to
develop.
2.
Ownership of Works. The Company shall own all rights, including all trade
secrets and copyrights, in and to all discoveries, developments, designs, improvements,
inventions, formulas, processes, techniques, know-how and data, whether patentable under
patent or registerable under copyright or similar statutes or reduced to practice and all
documentation thereof created by Employee, during the time Employee is employed by the
Company, whether created during or outside normal business hours or on the Company
premises or at some other location and that: (i) directly relate to or are derived from the
Company Business; and (ii) result from or are derived from any task or work assigned to
Employee or work performed by Employee for the Company (collectively,
“Works”). To the
1
extent that any Works do not qualify as works made for hire under U.S. copyright law, this
Agreement shall constitute an irrevocable assignment by Employee to the Company of the ownership
of, and rights of copyright in, Works. Employee agrees to give the Company or its designees all
assistance reasonably required to protect such rights.
3.
Inventions. If Employee individually or jointly makes, conceives of, or
reduces to practice any invention, technique, recipe, process, improvement, modification,
development, documentation, data, design, idea, discovery, trademark, trade secret, formula,
process, or other know-how, whether patentable or not, in the course of performing services
for
the Company, that directly relates to the Company Business
(collectively, “Inventions”),
Employee will and hereby does assign to the Company Employee’s entire right, title and
interest in and to such Inventions. Employee agrees that all Inventions shall be the sole
property of the Company and its assigns, and the Company and its assigns shall be the sole
owner of all patents, copyrights, and other rights in connection therewith. Employee will
disclose any such Inventions (to the extent Employee knows such inventions are “Inventions” as
defined herein) to an officer of the Company and will, upon request, promptly sign a specific
assignment of title to the Company and do anything else reasonably necessary without
additional compensation to enable the Company to secure patent, trade secret, or any other
proprietary rights in the United States or foreign countries. Employee agrees to execute any
documents deemed necessary or advisable by the Company to effect the terms of this
paragraph. Employee agrees that after termination of employment with the Company
Employee shall not use any Inventions, except in furtherance of the Company Business and
except to the extent such Inventions are in the public domain through no fault of Employee.
4.
Non-Disclosure. Employee recognizes that the Company competes in a
highly competitive field and that the Company possesses and will continue to possess
information of commercial value that relates to the Company Business, including but not
limited to trade secrets, technical and scientific information, financial business
information,
processes, recipes, formulas, data, know-how, improvements, inventions, product concepts,
discoveries, developments, designs, inventions, techniques, marketing plans,
strategies,
forecasts, new products, blueprints, specifications, programs, ideas, customer lists, vendor
lists,
pricing and other structures, marketing and business strategies, budgets, projections,
licenses,
costs, financial data, and plans, proposals and information about the Company’s employees
and/or consultants (collectively, “Proprietary Information”). Notwithstanding the foregoing,
Proprietary Information shall not include information that is publicly available when
received,
or thereafter becomes publicly available through no fault of Employee or is otherwise
disclosed by the Company to another party without obligation of confidentiality. Employee
agrees that the Proprietary Information constitutes a unique and valuable asset which is
essential to the Company’s business success, and that any release of Proprietary Information
would be harmful to the Company and/or its customers. To protect the Company’s Proprietary
Information, Employee agrees that at all times, including during and after the term of
Employee’s
employment, Employee will not disclose to any person, firm, company, or corporation or use for
Employee’s own benefit or for the benefit of any third party (except in furtherance of
Company Business or affairs of the Company) any and all Proprietary Information that Employee
may have acquired in the course of or as an incident to Employee’s employment with the
Company. Employee further agrees to take all reasonable precautions to protect against the
2
intentional, negligent, or inadvertent disclosure by Employee of the Company’s Proprietary
Information to any other person or business entity, except in furtherance of the Company Business.
5.
Non-Competition. Employee understands and agrees that during Employee’s employment
with the Company, Employee will be provided access to specialized information related to Company
Business and trade secrets, as well as the Company’s customers and their confidential information.
Employee further agrees that if this information were used in competition against the Company, the
Company would experience serious harm and the competitor would have a unique advantage against the
Company. Employee hereby covenants and agrees that (A) at no time during Employee’s employment
with the Company and (B) at no time until the two years from the date of Employee’s termination
(the “Non-Compete Period”), will Employee (i) develop, own, manage, operate, or otherwise engage
in, participate in, represent in any way or be connected with, as officer, director, partner,
owner, employee, agent, independent contractor, consultant, proprietor, stockholder or otherwise,
any Competing Business in any geographic territory (within or outside the United States) in which
the Company does business; or (ii) act in any way, directly or indirectly, on behalf of any
Competing Business, with the purpose or effect of soliciting, diverting or taking away any
business, customer, client, supplier, or good will of the Company.
The foregoing provisions shall not restrict Employee from (i) owning up to a 2% interest in a
publicly traded company which is or engages in a Competing Business or (ii) acting as an officer,
employee, agent, independent contractor or consultant to any company or business which engages in
multiple lines of business, one or more of which may be a Competing Business, if Employee has no
direct or indirect involvement, oversight or responsibility with respect to the unit, division,
group or other area of operations which cause such company or business to be a Competing Business.
A “Competing Business” shall mean a company or business which is engaged, or intends to engage in,
the manufacture, distribution, sale or marketing of any products which compete directly with the
Company’s products or the Company Business.
Employee acknowledges that this covenant has a unique, substantial, and immeasurable value to the
Company.
Notwithstanding the foregoing, the restrictions of this Section 5 shall terminate immediately if
your employment with the Company is involuntarily terminated by the Company without “Cause.”
“Cause” shall mean: (a) conviction of Employee of any crime deemed by the Company to make
continued employment untenable; (b) any act of gross negligence or willful misconduct in the
conduct of your employment; (c) any act of dishonesty on the part of Employee whether relating to
the Company or any of its subsidiaries, its affiliates, employees, agents or otherwise; (d)
failure by Employee to comply with the Xxxx Foods Code of Ethics, or any conduct of Employee which
brings the Company or any of its affiliates into disrepute, in each case as determined by the
Board of Directors.
3
6.
Non-Solicitation. Employee hereby covenants and agrees that at no time
during Employee’s employment with the Company and during the Non-Compete Period, will
Employee (i) recruit, hire, assist or solicit, directly or indirectly, any of the Company’s
employees to leave the employ of the Company or (ii) solicit any customer or prospective
customer of the Company for the purpose of (1) inducing or otherwise intending to cause
such customer or prospective customer to alter or end its business relationship with the
Company or (2) interfering with the Company’s business relationship with such customer or
prospective customer. For the purposes of this Agreement, “customer” shall mean any
company that was a customer of the Company at any time during the term of Employee’s
employment with the Company, and “prospective customer” shall mean any company that, to
Employee’s knowledge, was actively solicited by the Company at any time during the term of
Employee’s employment with the Company.
7.
Remedies. Employee acknowledges, understands, and agrees that the
restrictions contained in Paragraphs 2, 3, 4, 5, and 6 of this Agreement are reasonable, fair,
and
equitable in scope, terms, geographic area and duration, are necessary to protect the
legitimate
business interests and good will of the Company, and are a material inducement to the
Company to employ Employee and to enter into this Agreement, and that any breach or
threatened breach of such restrictions would cause the Company substantial and irreparable
harm for which there is no adequate remedy at law. Therefore, Employee agrees that in the
event of any such breach, any unvested stock options, restricted stock awards or other equity
grants shall be immediately canceled and all of Employee’s rights thereunder shall be
immediately terminated. In addition, if the Company deems such action warranted by the
particular circumstances, the Company shall be entitled to equitable relief including, but not
limited to, temporary, preliminary, and permanent injunctive relief, including the issuance of a
temporary restraining order, in order to secure the specific performance of this Agreement
without the necessity of posting bond or security, which Employee expressly waives. Employee
agrees that the rights of the Company to obtain injunctive relief shall not be considered a
waiver of the Company’s rights to seek any other remedies it may have at law or in equity.
The restrictions set forth herein shall be construed as a series of separate and severable
covenants. Employee agrees that if in any proceeding, the tribunal refuses to enforce fully any
covenants contained herein because such covenants cover too extensive a geographic area or too
long a period of time or for any other reason whatsoever, any such covenant shall be considered
divisible both as to duration and geographic area so that each month of a specified period shall
be deemed a separate period of time and each county in each particular state (or such other
geographic subdivision as the tribunal determines is reasonable) a separate geographic area,
resulting in an intended requirement that the longest lesser period of time or the largest lesser
geographic area found by such tribunal to be a reasonable restriction shall remain an effective
restrictive covenant specifically enforceable against Employee. Further, the covenants contained
in Xxxxxxxxxx 0, 0, 0, 0, xxx 0 xxxxx xx construed as agreements independent of any other
provision of this Agreement, and the existence of any claim or cause of action of Employee against
the Company or any of its employees, agents, shareholders, directors, or officers, whether
predicated on this Agreement or otherwise, shall not constitute a defense to enforcement by the
Company of any of these covenants.
4
8.
Return of Records. Upon termination of employment, Employee agrees to
return to the Company all documents (whether electronic or written), notes, drawings, data,
records, materials and other property of whatever nature received from or created for the
Company, and any and all copies thereof including, but not limited to, those documents,
records, and materials containing or relating to Proprietary Information. Employee agrees that
all such documents that are currently in Employee’s possession or control or which may come
into Employee’s possession or control in the future shall be the property of the Company.
9.
Miscellaneous.
(a) Severability. Nothing in this Agreement shall be construed so as
to require the commission of any act contrary to law and wherever there is any conflict
between any provision of this Agreement and any law, statute, ordinance, order or regulation,
the latter shall prevail, but in the event of any conflict, any provision of this Agreement
shall be
curtailed and limited only to the extent necessary to bring it within applicable legal
requirements.
If any provision of this Agreement should be held invalid or unenforceable, the remaining
provisions shall be unaffected by the holding.
(b) Complete
Agreement. This Agreement contains the entire agreement
and understanding between the parties relating to the subject matter hereof, and supersedes
any prior understandings, agreements, or representations by or between the parties, written or
oral, relating to the subject matter hereof. It may not be modified, except in a written
document executed by both parties to this Agreement.
(c) Other
Agreements. Employee represents and warrants that Employee
is not a party to or bound by the provisions of any other agreement which would prevent or
impair Employee’s ability to render services to the Company and that Employee’s entering into
this
Agreement. The parties hereto each represent and warrant to the other party that the
performance
of any obligations hereunder by such party will not violate the provisions of, or cause such
party
to be in default under, any other agreement or contract to which such party is a party or by
which
such party is bound.
(d) Paragraph Headings. The paragraph headings used in this
Agreement are included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.
(e) Governing
Law. This Agreement shall be governed by and this
Agreement and any disputes or controversies related hereto shall be construed in accordance
with the laws of the State of Texas, excluding any choice of law provisions that would apply
the laws of any other jurisdiction.
(f) Waiver. No delay on the part of either party in exercising any
right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part
of either party of any right, power, or privilege hereunder, preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege hereunder.
5
(g) Assignment. This Agreement and Employee’s rights and obligations hereunder
may not be assigned by Employee. The Company may, without Employee’s consent, assign its rights,
together with its obligations, under this Agreement.
(h) Period
of Employment. As used herein, the period of employment includes any time
in which Employee is retained by the Company as an employee, director, or consultant.
(i) Counterparts. This Agreement may be entered into in two or more counterparts,
each of which shall be deemed an original, and together shall be deemed to be one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed and delivered this Proprietary Information,
Inventions and Non-Compete Agreement as of the date first set forth above.
| EMPLOYEE | XXXX FOODS COMPANY | |||||
/s/
XXXX X. XXXXXXXX XX.
|
By: | /s/ Xxxxxxxx Xxxxxxx | ||||
XXXX
X. XXXXXXXX XX.
|
EVP & General Counsel | |||||
6
