May 9, 2008 Loren K. Carroll RE: Letter Agreement on Non-Competition Dear Loren:
EXHIBIT 10.1
May 9, 2008
Xxxxx X. Xxxxxxx
RE: Letter Agreement on Non-Competition
Dear Xxxxx:
I am writing to you to set out decisions we have reached regarding the need to replace the
non-competition restriction set out in paragraph 14 of the Employment Agreement between you and
Xxxxx International, Inc. (“Xxxxx”) that was effective April 30, 2006 (the “Employment Agreement”).
We have agreed that, now that you are no longer a Xxxxx Employee, a one-year period of
non-competition is insufficient to protect Xxxxx’x interests, including its trade secrets and other
confidential information, given current market conditions. Thus, this letter (this “Agreement”)
sets out the following agreements that shall supersede paragraph 14 of the Employment Agreement:
1. Non-Competition Payment: In consideration for your agreement to the terms of the
Protective Covenants set forth herein, you will receive the sum of $1,887,197.00 (the
“Non-Competition Payment”). Xxxxx will pay the Non-Competition Payment in two equal installments
with the first payable on December 15, 2008, and the second payable on December 15, 2009. The
Non-Competition Payment is separate from any severance or other separation benefits to which you
may otherwise be entitled under any other agreement with, or plan or program maintained by, Xxxxx
and will not be considered compensation under any compensation or benefit plan maintained,
sponsored, or provided by Xxxxx. You will not perform any services for Xxxxx in return for the
Non-Competition Payment as it is solely paid to you as consideration for agreeing to the
non-competition covenant set out below. Xxxxx will issue you an IRS Form 1099 for each payment and
any taxes which may become due as a result of any payment or transaction contemplated by this
Agreement are your sole responsibility, and you agree to hold Xxxxx harmless on account thereof.
2. Protective Covenants: You agree that Xxxxx has given you access to Confidential
Information related to Xxxxx’x business. You agree that a simple agreement not to disclose or use
such Confidential Information is inadequate, standing alone, to protect Xxxxx’x legitimate business
interests because some activities by a former executive, like you, will by their very nature,
compromise Xxxxx’x Confidential Information. You also recognize and agree that, to the extent your
position with Xxxxx has involved contact with customers or employees of Xxxxx, your duties have
included developing goodwill for Xxxxx’x benefit with these persons and businesses and not for
purposes of personal gain independent from Xxxxx. You, therefore, agree that the following
covenants are reasonable and necessary agreements for the protection of the business interests
covered in the fully enforceable, ancillary agreements under which you were employed by Xxxxx. You
recognize that violations of covenants such as these, whether intentional or not, are frequently
undetectable by Xxxxx until it is too late and will cause irreparable injury to Xxxxx. To prevent
this kind of irreparable harm, you agree that for a period of two (2) years following the first
date set out above (the “Non-Competition Period”), you will abide by the following “Protective
Covenants”:
(a) You will not provide services to a Competitor in any role or position (as an employee,
consultant, or otherwise) that would involve Conflicting Business Activities;
(b) You will not (in person or through material assistance to others) knowingly participate in
soliciting or communicating with the customers of Xxxxx that you had business-related contact with
or were provided Confidential Information about in the last two years of your employment with Xxxxx
for the purpose of pursuing a Competing Line of Business; and
(c) You will not (in person or through assistance to others) knowingly participate in soliciting or
communicating with any Xxxxx Employee that you worked with or were provided Confidential
Information about in the last two years of your employment with Xxxxx for the purpose of persuading
or helping any Xxxxx Employee to end or reduce his or her employment relationship with Xxxxx.
For purposes of this Agreement, “Competitor” means a person, entity, or separately operated
business unit of an entity, that engages in a Competing Line of Business. “Competing Line of
Business” means a business that involves a product or service offered by anyone other than Xxxxx
that would replace or compete with any product or service offered or to be offered by Xxxxx that
you had material involvement with while employed by Xxxxx unless Xxxxx is no longer engaged in or
planning to engage in that line of business at the relevant time of enforcement. “Conflicting
Business Activities” means business-related activities and/or job duties in the United States, and
any other country where you did business on behalf of Xxxxx, that are the same as or similar to the
job duties and/or business-related activities you participated in or were provided Confidential
Information about in the last two years of your employment with Xxxxx, or the supervision of such
duties and/or activities. “Xxxxx Employee” means an individual employed by or, for purposes of
this Agreement only, retained as a consultant to Xxxxx.
For purposes of this Agreement, the term “Confidential Information” includes any single piece of
information or compilations of information, in any form, tangible or intangible, related to Xxxxx’x
business that Xxxxx has not made public or authorized public disclosure of and that is not
generally known to the public or to other persons who might obtain value or competitive advantage
from its disclosure or use. Confidential Information includes trade secrets, but an item of
Confidential Information need not qualify as a trade secret to be protected by this Agreement.
Confidential Information includes both information belonging to Xxxxx and confidential information
belonging to third parties, such as customers, prospective customers, suppliers, and vendors, to
which you had access by virtue of your role with Xxxxx. Further, Xxxxx’x controlled disclosure of
Confidential Information to customers and other third party business associates for legitimate
business purposes does not remove such information from protected status as Confidential
Information under this Agreement. Confidential Information that is intentionally made available to
the general public by Xxxxx or with Xxxxx’x express authorization will not be considered
Confidential Information under this Agreement.
You acknowledge that you have received Confidential Information and/or developed business goodwill
with customers through, or in the course of, past association with Xxxxx. The nature and scope of
restrictions necessary to protect the parties’ interests related to these past events is
unresolved. In exchange for the payments and other good and valuable consideration provided to you
through this Agreement, you agree to fully settle and resolve any and all disputes you have with
Xxxxx regarding the exact nature of the restrictions on your future conduct that are reasonable and
necessary to protect Xxxxx’x Confidential Information or other legitimate business interests. You
agree that this Agreement benefits both Xxxxx and you because, among other things, it provides
finality and predictability for both Xxxxx and you regarding enforceable boundaries on future
conduct. Accordingly, you agree that this Agreement and the restrictions in it should be enforced
under the common law rules favoring the enforcement of settlement agreements. For these reasons,
you agree that you will not xxx or pursue a legal action to set aside or avoid application of the
Protective Covenants. You also understand and agree that should you xxx or pursue a legal action
to set aside or avoid the application of the Protective Covenants, you must repay the entire amount
of Non-Competition Payment to Xxxxx within ten (10) business days of initiating such an action. If
you accept a position with a Competitor within the Non-Competition Period, you agree that you will
promptly give written notice to Xxxxx’x General Counsel and will provide Xxxxx with the information
it needs about your new position to determine whether such position would likely lead to a
violation of this Agreement.
You also understand and agree that if you violate this Agreement (and particularly the Protective
Covenants), Xxxxx will be entitled to (a) injunctive relief by temporary restraining order,
temporary injunction, and/or permanent injunction, (b) recovery of the attorney’s fees and costs
incurred by Xxxxx in obtaining such relief where allowed by law, (c) damages, and (d) any other
legal and equitable relief to which it may be entitled. Injunctive relief will not exclude other
remedies that might apply. Further, if you a violate a restriction in the Protective Covenants,
the time period for that restriction will be extended by one day for each day you are found to have
violated it, up to a maximum extension equal to the original length of time prescribed for the
restriction.
3. Entire Agreement: You agree that this Agreement sets forth the entire agreement between
you and Xxxxx concerning the subject matter addressed herein. You further agree that you have not
relied on any representations or statements not set forth in this Agreement with regard to the
subject matter, basis or effect of this Agreement. This Agreement may be amended only in writing,
signed by you and Xxxxx’x Senior Vice President, Human Resources. Nothing in this Agreement is
intended to or creates a contract of employment for a specific term and your employment with Xxxxx
terminated before you entered this Agreement.
4. Severability and Reformation: If any provision contained in this Agreement is
determined to be void, illegal or unenforceable, in whole or in part, then the other provisions
contained herein will remain in full force and effect as if the provision so determined had not
been contained herein. If the restrictions provided in this Agreement are deemed unenforceable as
written, the parties expressly authorize the adjudicating authority to revise, delete, or add to
such restrictions to the extent necessary to enforce the intent of the parties and to provide
Xxxxx’x goodwill, confidential information, and other business interests with effective protection.
5. Governing Law and Venue: This Agreement is made and entered into, and is to be governed
by and construed in accordance with, the laws of the State of Texas without regard to its laws on
conflicts of law. However, the rule of construction against the drafter shall not be employed.
The parties agree that the exclusive venue for any dispute arising under or relating to this
Agreement shall be the State of Texas. You stipulate and consent to a Texas court’s personal
jurisdiction over you, and waive any right to objection to such jurisdiction.
Xxxxx, please sign and date below to evidence your agreement with the terms set forth herein and
return the executed original me within five (5) days. If you do not do so, this letter agreement
will become null and void.
| Sincerely, | ||||
| /s/ Xxxxxxx X. Xxxxxxxx
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| Senior Vice President, | ||||
| Human Resources |
I, Xxxxx X. Xxxxxxx, have read, understand, and fully agree to the terms and conditions set forth
above and, by my signature below, hereby voluntarily accept and agree to those terms and
conditions.
/s/ Xxxxx X. Xxxxxxx
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May 9, 2008
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