Exhibit 10.40


 


CONFIDENTIALITY, NON-COMPETITION
AND INTELLECTUAL PROPERTY AGREEMENT (this “Non-Competition Agreement”), dated as of November     , 2006 (the “Effective Date”), by and between GPS
CCMP ACQUISITION CORP. (together with its
successors, assigns and affiliates, the “Company”) and                                 
(“Executive”).


 


WHEREAS, the Company or
one of its subsidiaries employs the Executive, and in connection with such
employment, the Executive has and will receive specific confidential information
relating to the business of the Company, which confidential information is
necessary to enable Executive to perform Executive’s duties.  Executive will play a significant role in the
development and management of the businesses of the Company and has and will be
entrusted with the Company’s confidential information relating to the Company,
the Company’s customers, suppliers, subcontractors, employees and others.


 


WHEREAS,  it is a
condition to the execution of the Restricted Stock Agreement, dated as of the
date hereof, by and between Executive and the Company, that Executive execute
and deliver this Non-Competition Agreement simultaneously with the execution
and delivery of that agreement.


 


NOW, THEREFORE, it is
mutually agreed as follows:


 


SECTION 1.         Confidentiality.


 


Confidential Information.  In addition to all duties of loyalty imposed
on Executive by law, during the term of Executive’s employment with the Company
or any of its subsidiaries, and for 18 moths following the termination of such
employment for any reason, Executive shall maintain Confidential Information in
confidence and secrecy and shall not disclose Confidential Information or use
it for the benefit of any person or organization (including Executive) other
than the Company without the prior written consent of an authorized officer of
the Company (except for disclosures to persons acting on the Company’s behalf
with a need to know such information), under any circumstances where any
Confidential Information so disclosed or used is reasonably likely to be used
anywhere on behalf of any Competitive Business.


 


(b)           Trade
Secrets.  During his or her employment
with the Company or any of its subsidiaries, Executive shall preserve and
protect Trade Secrets of the Company from unauthorized use or disclosure; and
after termination of such employment, Executive shall not use or disclose any
Trade Secret of the Company for so long as that Trade Secret remains a Trade
Secret.


 


(c)           Procedures. 
In the event that Executive is requested or required (by deposition,
interrogatories, requests for information or documents in legal proceedings,
subpoenas, civil demand or similar process) to disclose any Confidential
Information or Trade Secrets, Executive will give the Company prompt written
notice of such request or requirement so that the Company may seek an
appropriate protective order or other remedy and/or waive compliance with the
provisions of this Non-Competition Agreement, and Executive will cooperate with
the Company’s efforts to obtain such protective order.  In the event that such protective order or
other remedy is not obtained or the Company waives compliance with the relevant
provisions of this Non-Competition Agreement, Executive is permitted to furnish
that Confidential Information or Trade Secrets which is legally required to be
disclosed and will use 


 

















 


[his] [her] reasonable
efforts to obtain assurances that confidential treatment will be accorded to
such information.


 


As used in this Non-Competition Agreement, all
capitalized terms used without definition shall have the meanings ascribed to
them in the Employment Agreement.  In
addition, the following terms have the meanings set forth below:


 


“Competitive Business”
means any corporation, partnership, association, or other person or entity,
including but not limited to Executive, (i) which competes directly, or is
planning to compete directly, with the Company with respect to the design,
development, manufacture, remanufacture, assembly, marketing, sales, or service
of standby power products, or any other business of the Company, that was
within Executive’s management, operational, marketing, purchasing or sales
responsibility, including the responsibility of personnel reporting directly to
Executive, or about which Executive received any Confidential Information or
Trade Secrets at any time within eighteen (18) months prior to termination of
Executive’s employment with the Company or any of its subsidiaries, and (ii) which
engages or plans to engage in such competition in any state of the United
States in which the Company sold or distributed, or actively attempted to sell
or to distribute, such products within eighteen (18) months prior to
termination of Executive’s employment with the Company or any of its
subsidiaries.


 


“Confidential Information” shall mean information related
to the Company’s business, not generally known in the trade or industry, which
Executive learns or creates during the period of Executive’s employment with
the Company or any of its subsidiaries, which may include but is not limited to
product specifications, manufacturing procedures, methods, equipment,
compositions, technology, formulas, know-how, research and development
programs, sales methods, customer lists, customer usages and requirements,
computer programs and other confidential technical or business information and
data.  Confidential Information shall not
include any information that (A) is or becomes generally available to the
public other than as a result of a disclosure by Executive in violation of this
Non-Competition Agreement or (B) becomes available to Executive on a
non-confidential basis from a source other than the Company or its affiliates
which is not prohibited from disclosing such information to Executive by a
legal, contractual or fiduciary obligation to the Company or any other person.


 


“Trade Secret(s)”
means information, including a formula, pattern, compilation, program, device,
method, technique or process, that derives independent economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and that is the subject of efforts to maintain its
secrecy that are reasonable under the circumstances.


 


(d)           Executive further agrees to take all reasonable measures
to prevent unauthorized persons or entities from obtaining or using
Confidential Information.  Promptly upon
termination of [his] [her] employment with the Company and its subsidiaries,
Executive agrees to deliver to the Company all property and materials within
Executive’s possession or control which belong to the Company or which contain
Confidential Information.


 


SECTION 2.         Non-Competition;
Non-Solicitation.


 


(a)           Noncompetition. 
During the term of Executive’s employment with the Company or any of its
subsidiaries and for eighteen (18) months following the termination of such
employment for any reason, Executive shall not, directly or indirectly,
participate in, consult 


 


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with, be employed by, or
assist with the organization, planning, ownership, financing, management,
operation or control of any Competitive Business in any capacity in which, in
the absence of this Agreement, Confidential Information, Trade Secrets or
Goodwill of the Company would reasonably be considered useful.


 


“Goodwill”
means any tendency of customers, distributors, representatives, employees, or
federal, state, local or foreign governmental entities to continue or renew any
valuable business relationship with the Company or any Competitive Business
with which Executive may be associated, based in whole or in part on past
successful relationships with the Company or the lawful efforts of the Company
to foster such relationships, and in which Executive, or any personnel
reporting directly to Executive, actively participated at any time within
eighteen (18) months prior to termination of Executive’s employment with the
Company or any of its subsidiaries.


 


(b)           Nonsolicitation.  
During the term of Executive’s employment with the Company or any of its
subsidiaries and for eighteen (18) months following the termination of such
employment for any reason, Executive shall not, directly or indirectly, on
behalf of any Competitive Business, either by himself or by providing
substantial assistance to others, solicit to terminate employment with the
Company or any of its subsidiaries, or to accept or begin employment with or
service to any Competitive Business, any employee of the Company whom Executive
supervised or about whom Executive gained Confidential Information at any time
during the last eighteen (18) months of Executive’s employment with the Company
or any of its subsidiaries.


 


SECTION 3.         No Right to Continued
Employment.  Nothing in
this Non-Competition Agreement shall confer upon Executive any right to
continue in the employ of the Company or shall interfere with or restrict in
any way the rights of the Company, which are hereby reserved, to discharge
Executive at any time for any reason whatsoever, with or without cause.


 


SECTION 4.         No Conflicting Agreements.  Executive warrants that Executive is not
bound by the terms of a confidentiality agreement, non-competition or other
agreement with a third party that would conflict with Executive’s obligations
hereunder.


 


SECTION 5.         Remedies.


 


(a)           In the event of breach or threatened breach by Executive
of any provision hereof, the Company shall be entitled to seek temporary or
preliminary injunctive relief or other equitable relief to which either of them
may be entitled, without the posting of any bond or other security.


 


(b)           The period of time during which the restrictions set forth
in Section 2(a) hereof will be in effect will be extended by the
length of time during which Executive is in breach of the terms of those
provisions as finally determined by an arbitrator or any court of competent
jurisdiction.


 


SECTION 6.         Successors and Assigns.  This Non-Competition Agreement shall be
binding upon Executive and Executive’s heirs, assigns and representatives and
inure to the benefit of the Company and its successors and assigns, including
without limitation any entity to which 


 


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substantially
all of the assets or the business of either of the Company are sold or
transferred.  The obligations of
Executive are personal to Executive and shall not be assigned by Executive.


 


SECTION 7.         Severability.  It is expressly agreed that if any
restrictions set forth in this Non-Competition Agreement are found by any court
having jurisdiction to be unreasonable because they are too broad in any
respect, then and in each such case, the remaining provisions herein contained
shall, to the greatest extent permitted under applicable law, nevertheless,
remain effective, and this Non-Competition Agreement, or any portion hereof,
shall, to the extent permitted by applicable law, be considered to be amended,
so as to be considered reasonable and enforceable by such court, and the court
shall specifically have the right to restrict the time period or the business
or geographical scope of such restrictions to any portion of the time period,
business or geographic areas to the extent the court deems such restriction to
be necessary to cause the covenants to be enforceable and, in such event, the
covenants shall be enforced to the extent so permitted and the remaining
provisions shall be unaffected thereby. 
In such event, the parties hereto agree to execute all documents
necessary to evidence such amendment so as to eliminate or modify any such
unreasonable provision in order to carry out the intent of this Non-Competition
Agreement insofar as possible and to render this Non-Competition Agreement
enforceable in all respects as so modified. 
The covenants contained in this Section 7 shall be construed to
extend to separate jurisdictions or sub-jurisdictions of the United States in
which the Company, during the term of Executive’s employment, have been or are
engaged in business, and to the extent that any such covenant shall be illegal and/or
unenforceable with respect to any jurisdiction, said covenant shall not be
affected thereby with respect to each other jurisdiction, such covenants with
respect to each jurisdiction being construed as severable and independent.  The restrictive covenant provisions of this
Non-Competition Agreement shall govern to the extent there is any conflict
between their terms and the terms of any other agreement or understanding with
the Company.


 


SECTION 8.         Notices.  Any notice required or permitted to be given
under this Non-Competition Agreement shall be in writing and be deemed given
when delivered by hand or received by registered or certified mail, postage
prepaid, or by nationally reorganized overnight courier service addressed to
the party to receive such notice at the following address or any other address
substituted therefor by notice pursuant to these provisions:


 


If
to the Executive, to [him] [her] at [his] [her] most recent address in the
Company’s records.


 


If to the Company:


 


Generac Power Systems, Inc.

P.O. Box 295

Waukesha, WI  53187

Attention:  Chief Executive Officer


 


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with a
copy to:


 


GPS
CCMP Acquisition Corp.

c/o CCMP Capital Advisors, LLC

245 Park Avenue, 16th floor 

New York, New York  10167

Attn:  Stephen Murray


 


SECTION 9.         Amendment.  No provision of this Non-Competition
Agreement may be modified, amended, waived or discharged in any manner except
by a written instrument executed by the Company and Executive.


 


SECTION 10.       Entire Agreement.  This Non-Competition Agreement constitute the
entire agreement of the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings of the parties
hereto, oral or written, with respect to the subject matter hereof, however, if
any portion of this Non-Competition Agreement is determined to be unenforceable
by a court of law, then solely the appropriate conflicting provisions of any
other agreement binding upon Executive shall control.


 


SECTION 11.       Waiver, etc.  The failure of the Company to enforce at any
time any of the provisions of this Non-Competition Agreement shall not be
deemed or construed to be a waiver of any such provision, nor in any way affect
the validity of this Non-Competition Agreement or any provision hereof or the
right of the Company to enforce thereafter each and every provision of this
Non-Competition Agreement.  No waiver of
any breach of any of the provisions of this Non-Competition Agreement by the
Company shall be effective unless set forth in a written instrument executed by
the Company, and no waiver of any such breach shall be construed or deemed to
be a waiver of any other or subsequent breach.


 


SECTION 12.       Applicable Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Non-Competition
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Wisconsin without giving effect to any choice of law or conflict
of law rules or provisions (whether of the State of Wisconsin or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Wisconsin.


 


SECTION 13.       Enforcement.  If any party shall institute legal action to
enforce or interpret the terms and conditions of this Non-Competition Agreement
or to collect any monies hereunder, venue for any such action shall be the
State Wisconsin.  Each party irrevocably
consents to the jurisdiction of the courts located in the State of Wisconsin
for all suits or actions arising out of this Non-Competition Agreement.  Each party hereto waives to the fullest
extent possible, the defense of an inconvenient forum, and each agrees that a
final judgment in any action shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.


 


[Signature Page Follows]


 


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IN WITNESS WHEREOF, the parties
have caused this Non-Competition Agreement to be executed as of the day written
above.


 


	
   

  	
  GPS CCMP ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: Mark McFadden

  
	
   

  	
  Title: Vice President and
  Assistant Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: