ENGAGED IN THE MANUFACTURE AND/OR SALE OF PRODUCTS COMPETITIVE WITH ANY MATERIAL
PRODUCT OR PRODUCT LINES OF THE COMPANY; PROVIDED, HOWEVER, THAT THE EXECUTIVE
SHALL NOT BE DEEMED TO HAVE BREACHED THIS UNDERTAKING IF HIS SOLE RELATION WITH
SUCH ENTITY CONSISTS OF HIS HOLDING, DIRECTLY OR INDIRECTLY, AN EQUITY INTEREST
IN SUCH ENTITY NOT GREATER THAN TWO PERCENT (2%) OF SUCH ENTITY'S OUTSTANDING
EQUITY INTEREST, AND THE CLASS OF EQUITY IN WHICH THE EXECUTIVE HOLDS AN
INTEREST IS LISTED AND TRADED ON A BROADLY RECOGNIZED NATIONAL OR REGIONAL
SECURITIES EXCHANGE. FOR PURPOSES HEREOF, THE TERM "MATERIAL PRODUCT OR PRODUCT
LINE OF THE COMPANY" SHALL MEAN ANY PRODUCT OR PRODUCT LINE OF THE COMPANY, THE
AGGREGATE GROSS SALES OF WHICH DURING ANY CALENDAR YEAR DURING THE FIVE (5) YEAR
PERIOD PRECEDING THE EXECUTIVE'S UNDERTAKING SUCH ASSOCIATION WITH SUCH A
COMPETITOR WERE AT LEAST $10 MILLION.
(B)
ACKNOWLEDGEMENT OF AND PAYMENT FOR NONCOMPETE. THE EXECUTIVE
ACKNOWLEDGES THAT:
(I)
THE SERVICES TO BE PERFORMED BY HIM UNDER THIS AGREEMENT ARE OF A
SPECIAL, UNIQUE, UNUSUAL, EXTRAORDINARY, AND INTELLECTUAL CHARACTER;
12
(II)
THE BUSINESS OF THE COMPANY IS WORLDWIDE IN SCOPE AND ITS
PRODUCTS ARE MARKETED THROUGHOUT THE WORLD;
(III)
THE COMPANY COMPETES WITH OTHER BUSINESSES THAT ARE OR COULD BE
LOCATED IN ANY PART OF THE WORLD; AND
(IV)
THE PROVISIONS OF THIS SECTION 9 ARE REASONABLE AND NECESSARY TO
PROTECT THE COMPANY'S BUSINESS.
AS SUCH, EXECUTIVE ACKNOWLEDGES AND AGREES THAT FIVE PERCENT (5%) OF EVERY
PAYMENT MADE TO HIM ON EACH PAYROLL PERIOD OF HIS BASE SALARY FROM THE COMPANY
ACTUALLY REPRESENTS CONSIDERATION FOR AGREEING TO THE NONCOMPETE PROVISIONS OF
THIS SECTION 9.
(C)
BLUE PENCILING. IF ANY COVENANT IN THIS SECTION 9 IS HELD TO BE
UNREASONABLE, ARBITRARY, OR AGAINST PUBLIC POLICY, SUCH COVENANT WILL BE
CONSIDERED TO BE DIVISIBLE WITH RESPECT TO SCOPE, TIME, AND GEOGRAPHIC AREA, AND
SUCH LESSER SCOPE, TIME, OR GEOGRAPHIC AREA, OR ALL OF THEM, AS A COURT OF
COMPETENT JURISDICTION MAY DETERMINE TO BE REASONABLE, NOT ARBITRARY, AND NOT
AGAINST PUBLIC POLICY, WILL BE EFFECTIVE, BINDING, AND ENFORCEABLE AGAINST THE
EXECUTIVE.
(D)
AUTOMATIC EXTENSION FOR VIOLATION. THE PERIOD OF TIME APPLICABLE
TO ANY COVENANT IN THIS SECTION 9 WILL BE EXTENDED BY THE DURATION OF ANY
VIOLATION BY THE EXECUTIVE OF SUCH COVENANT.
(E)
AGREEMENT TO IDENTIFY SUBSEQUENT EMPLOYER. THE EXECUTIVE WILL,
WHILE THE COVENANTS UNDER THIS SECTION 9 ARE IN EFFECT, GIVE NOTICE TO THE
COMPANY, WITHIN TEN (10) DAYS AFTER ACCEPTING ANY OTHER EMPLOYMENT, OF THE
IDENTITY OF THE EXECUTIVE'S EMPLOYER. THE COMPANY MAY NOTIFY SUCH EMPLOYER THAT
THE EXECUTIVE IS BOUND BY THIS AGREEMENT AND, AT THE COMPANY'S ELECTION, FURNISH
SUCH EMPLOYER WITH A COPY OF THIS AGREEMENT OR RELEVANT PORTIONS THEREOF.
(F)
PENALTY FOR VIOLATION. IN THE EVENT IT IS DETERMINED THAT THE
EXECUTIVE HAS VIOLATED THE PROVISIONS OF THIS SECTION 9, THE EXECUTIVE, WITHOUT
ANY FURTHER ACTION BY THE COMPANY OR EXECUTIVE, SHALL FORFEIT, AS OF THE FIRST
DAY OF ANY SUCH VIOLATION ANY AMOUNT OWED TO EXECUTIVE UNDER