NON-COMPETITION AND NON-RECRUITMENT AGREEMENT
This Agreement is made as of the 15th day of April, 1998 by and between
Iomega Corporation, a Delaware corporation (hereinafter referred to collectively
with its subsidiaries as the "Company"), and Xxx X. Xxxxxxx ("Xxxxxxx").
For good and valuable consideration, including without limitation, the
mutual covenants and agreements of the parties pursuant to that certain
Severance Agreement and General Release dated of even date herewith (the
"Severance Agreement") and the payments made or to be made by the Company to
Xxxxxxx pursuant to the Severance Agreement and this Agreement, Xxxxxxx and the
Company agree as follows:
1. Non-Competition and Non-Recruitment. Until the earlier of (i) April 14,
2003 and (ii) the date upon which Xxxxxxx pays in full all amounts owed to the
Company pursuant to the Secured Promissory Note of even date herewith (the
"Secured Promissory Note"), Xxxxxxx will not directly or indirectly, anywhere in
the world:
(a) Engage in any business or enterprise (whether as owner, partner,
officer, director, employee, consultant, investor, lender or otherwise, except
as the holder of not more than 1% of the outstanding stock of a publicly-held
company) that (i) develops, (ii) manufactures and sells, and/or (iii) sells as a
significant part of its business, any removable media storage product that
competes with any of the Specified Company Products (which term shall have the
meaning previously agreed to by the parties); or
(b) Either alone or in association with others (i) solicit any employee of
the Company to leave the employ of the Company or (ii) hire, or permit any
organization directly or indirectly controlled by Xxxxxxx to hire, any person
who is at the time employed by the Company or who was employed by the Company at
any time during the term of Xxxxxxx' employment with the Company or at any time
during the term of this Agreement; provided, that clause (ii) shall not apply to
any individual whose employment with the Company has been terminated for a
period of twelve months or longer.
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2. Payments. As additional consideration for the covenants of Xxxxxxx set
forth in Section 1, the Company shall make the payments set forth on Schedule I
hereto; provided, however, that the Company's obligation to make such payments
shall terminate in the event Employee breaches his obligations under this
Agreement and; provided, further, that the Company shall not be obligated to
make any such payments after the date upon which Xxxxxxx pays in full all
amounts owed to the Company pursuant to the Secured Promissory Note and;
provided, further, that in the event Xxxxxxx prepays in full all amounts owed
under the Secured Promissory Note on any date other than April 15, then the
Company shall make a pro-rata payment to Xxxxxxx equal to the interest accrued
under the Secured Promissory Note for the period from the preceding April 15
until the date of such prepayment.
3. Miscellaneous.
(a) Acknowledgment. The Company and Xxxxxxx acknowledge that this Agreement
is being entered into in connection with the Severance Agreement, pursuant to
which Xxxxxxx will receive significant benefits, and that the execution of this
Agreement is a condition and inducement to the Company entering into the
Severance Agreement.
(b) Interpretation. If any restriction set forth in Section 1 is found by
any court of competent jurisdiction to be unenforceable because it extends for
too long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable.
(c) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(d) Waiver of Rights. No delay or omission by the Company in exercising any
right under this Agreement will operate as a waiver of that or any other right.
A waiver or consent given by the Company on any one occasion is effective only
in that instance and will not be construed as a bar to or waiver of any right on
any other occasion.
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(e) Equitable Remedies. The restrictions contained in this Agreement are
necessary for the protection of the business and goodwill of the Company and are
considered by Xxxxxxx to be reasonable for such purpose. Xxxxxxx agrees that any
breach of this Agreement is likely to cause the Company substantial and
irrevocable damage and therefore, in the event of any such breach, Xxxxxxx
agrees that the Company, in addition to such other remedies which may be
available, shall be entitled to specific performance and other injunctive
relief.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah. Any action, suit, or other legal
proceeding which is commenced to resolve any matter arising under or relating to
any provision of this Agreement shall be commenced only in a court of the State
of Utah (or, if appropriate, a federal court located within the State of Utah),
and the Company and Xxxxxxx each consents to the jurisdiction of such a court.
XXXXXXX ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND
UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.
IOMEGA CORPORATION
Date: April 15, 1998 By: /s/ Xxxxx X. Xxxx
Chairman of the Board
EMPLOYEE:
Date: April 15, 1998 /s/ Xxx X. Xxxxxxx
Xxx X. Xxxxxxx
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SCHEDULE I
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Date Payment Amount
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April 14, 1999 An amount equal to the interest payable
by Xxxxxxx on April 15, 1999 under the
Secured Promissory Note, but in no event
more than $285,000
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April 14, 2000 An amount equal to the interest payable
by Xxxxxxx on April 15, 2000 under the
Secured Promissory Note, but in no event
more than $228,000
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April 14, 2001 An amount equal to the interest payable
by Xxxxxxx on April 15, 2001 under the
Secured Promissory Note, but in no event
more than $171,000
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April 14, 2002 An amount equal to the interest payable
by Xxxxxxx on April 15, 2002 under the
Secured Promissory Note, but in no event
more than $114,000
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April 14, 2003 An amount equal to the interest payable
by Xxxxxxx on April 15, 2003 under the
Secured Promissory Note, but in no event
more than $57,000
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