Exhibit 10.6
NON-COMPETITION AGREEMENT
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THIS AGREEMENT (the "Agreement") is entered into as of July 31, 1998 by and
between _________________(the "Stockholder") and Globe Holdings, Inc., a
Massachusetts corporation formerly known as Globe Manufacturing Co. (the
"Company") (Stockholder and the Company are referred to sometimes herein as the
"Parties"). This Agreement is entered into pursuant to Section 7.01(j) of the
Agreement and Plan of Merger (the "Merger Agreement") dated as of June 23, 1998,
as amended, by and between the Company and Globe Acquisition Company, a Delaware
corporation ("MergerCo"). The Company is the surviving corporation of the
merger of MergerCo with and into the Company. Capitalized terms used but not
otherwise defined herein have the meanings given such terms in the Merger
Agreement.
Stockholder has been a stockholder and an employee, officer [and director]
of the Company, and as such, possesses special knowledge, abilities and
experience regarding the business of the Company and its Subsidiaries.
Stockholder acknowledges that he will receive a significant amount of cash and
securities in connection with the transactions contemplated by the Merger
Agreement, and enters into this Agreement to induce MergerCo to consummate the
transactions contemplated by the Merger Agreement. The execution and delivery
by Stockholder of this Agreement is a condition to the obligations of MergerCo
under the Merger Agreement. As a result, Stockholder acknowledges that MergerCo
would not consummate the transactions contemplated by the Merger Agreement if
Stockholder had not agreed to the restrictions contained herein.
In consideration of the premises and the mutual covenants and agreements
set forth herein, the Parties agree as follows:
1. Noncompetition. During the period beginning on the Closing Date
and ending on the third anniversary of the Closing Date (the "Noncompete
Period"), such Stockholder shall not engage (whether as an owner, stockholder,
operator, manager, employee, officer, director, consultant, advisor,
representative or otherwise) directly or indirectly anywhere in the United
States in any business (other than that of the Company and its Subsidiaries)
that manufactures, distributes or sells polyether or polyester spandex, latex
thread or other elastomeric fiber; provided that passive ownership of less than
2% of the outstanding stock of any publicly-traded corporation shall not, in and
of itself, be deemed to violate this Section 1.
2. Nonsolicitation. Stockholder shall not directly or indirectly
through another Person during the Noncompete Period, (i) induce or attempt to
induce any employee of the Company or any of its Subsidiaries to leave the
employ of the Company or any of its Subsidiaries, or in any way interfere with
the relationship between the Company or any of its Subsidiaries and any employee
thereof, (ii) hire any Person who was an employee of the Company or any of its
Subsidiaries within twelve months after such Person's employment with the
Company or any of its Subsidiaries was terminated for any reason or (iii) induce
or attempt to induce any customer, supplier, licensee, licensor, franchisee or
other business relation of the Company or any of its
Subsidiaries to cease doing business with the Company or any of its
Subsidiaries, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any of its
Subsidiaries.
3. Confidentiality. Stockholder shall treat and hold as confidential
any information concerning the business and affairs of the Company and its
Subsidiaries, other than information that is already generally available to the
public or becomes generally available without a breach of this Agreement (the
"Confidential Information"), refrain from using any of the Confidential
Information except in compliance with this Agreement, and deliver promptly to
the Company or destroy, at the request and option of the Company, all tangible
embodiments (and all copies) of the Confidential Information which are in his
possession or under his control. In the event that Stockholder is requested or
required (by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, Stockholder shall notify the
Company promptly of the request or requirement so that the Company may seek an
appropriate protective order or waive compliance with the provisions of this
Section 3. If, in the absence of a protective order or the receipt of a waiver
hereunder, Stockholder is, on the advice of counsel, compelled to disclose any
Confidential Information to any Governmental Entity or else stand liable for
contempt, Stockholder may disclose the Confidential Information to the
Governmental Entity; provided that Stockholder shall use his or its reasonable
best efforts to obtain, at the request of the Company, an order or other
assurance that confidential treatment shall be accorded to such portion of the
Confidential Information required to be disclosed as the Company shall
designate.
4. Remedy for Breach. Stockholder acknowledges and agrees that
in the event of a breach of any of the provisions of this Agreement, monetary
damages shall not constitute a sufficient remedy. Consequently, in the event of
any such breach, the Company and/or its successors or assigns may, in addition
to other rights and remedies existing in their favor, apply to any court of law
or equity of competent jurisdiction for specific performance and/or injunctive
or other relief in order to enforce or prevent any violations of the provisions
hereof, in each case without the requirement of posting a bond or proving actual
damages.
5. Survival; Duration; Modification. The Parties hereto agree that
the covenant set forth in this Agreement is reasonable with respect to its
duration, geographical area and scope. If the final judgment of a court of
competent jurisdiction declares that any term or provision of this Agreement is
invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
6. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company and its affiliates, successors and assigns
and shall be binding upon and inure to the benefit of Stockholder and his
assigns. The Company may assign or transfer its rights hereunder to any of its
affiliates or to a successor in the event of merger, consolidation or transfer
or sale of all or substantially all of the assets of the Company.
7. Modification of Waiver. No amendment, modification or waiver of
this Agreement shall be binding or effective for any purpose unless it is made
in a writing signed by the party against who enforcement of such amendment,
modification or waiver is sought. No course of dealing between the parties to
this Agreement shall be deemed to affect or to modify, amend or discharge any
provision or term of this Agreement. No delay on the part of the Company or
Stockholder in the exercise of any of their respective rights or remedies shall
operate as a waiver thereof, and no single or partial exercise by the Company or
Stockholder of any such right or remedy shall preclude other or further
exercises thereof. A waiver of right or remedy on any one occasion shall not be
construed as a bar to or waiver of any such right or remedy on any other
occasion.
8. Governing Law. THE LAW OF THE STATE OF MASSACHUSETTS SHALL GOVERN
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND
ENFORCEABILITY OF THIS AGREEMENT AND ANY EXHIBITS AND SCHEDULES ATTACHED HERETO,
AND THE PERFORMANCE OF THE OBLIGATIONS IMPOSED BY THIS AGREEMENT, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF
THE STATE OF MASSACHUSETTS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
MASSACHUSETTS.
9. Not an Employment Agreement Stockholder and the Company
acknowledge and agree that this Agreement is not intended, and will not be
construed, to grant to Stockholder any right to employment with the Company.
10. No Strict Construction. The language used in this Agreement
shall be deemed to be the language chosen by the Parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
Party.
11. Stockholder's Representations. Stockholder represents and
warrants to the Company that (i) his execution, delivery and performance of this
Agreement does not and shall not conflict with, or result in the breach of or
violation of, any other agreement, instrument, order, judgment or decree to
which he is a party or by which he is bound, and (ii) upon the execution and
delivery of this Agreement by the Company, this Agreement shall be the valid and
binding obligation of his, enforceable in accordance with its terms.
12. Notice. All notices, demands and other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to
have been given (i) when personally delivered, sent by telex, cable or telecopy
(with hard copy to follow) or sent by reputable overnight express courier
(charges prepaid), or (ii) three days following mailing by certified or
registered mail, postage prepaid and return receipt requested. Unless another
address is specified in writing, notices, demands and communications to
Stockholder and the Company shall be sent to the addresses as follows:
To Stockholder:
With a copy to: Hale and Dorr LLP
60 State Street
Boston, MA 02109-1803
Attention: John A. Burgess
Telecopy: (617) 526-5000
To Company: Globe Manufacturing Co.
456 Bedford Street
Fall River MA 02720
Attention: Vice President, Finance and
Administration
Telecopy: (508) 679-9458
With a copy to: Code Hennessy & Simmons LLC
10 South Wacker Drive
Suite 3175
Chicago, Illinois 60606
Attention: Peter M. Gotsch
Telecopy: (312) 876-3854
And with a copy to: Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Stephen L. Ritchie
Telecopy: (312) 861-2200
Either party may change its address by written notice to the other party in
accordance with this Section 12.
13. Interpretation. The captions used in this Agreement are for
convenience of reference only and do not constitute a part of this Agreement and
shall not be deemed to limit, characterize or in any way affect any provision of
this Agreement, and all provisions of this Agreement shall be enforced and
construed as if no caption had been used in this Agreement. The use of the word
"including" herein shall mean "including without limitation."
14. Counterparts; Facsimile Signature. This Agreement may be
executed in counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same instrument. This Agreement may be executed by facsimile
signature.
* * * *
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
(Corporate Seal) GLOBE MANUFACTURING CO.
ATTEST ____________________________
Name:
____________________ Title:
Secretary
[Stockholder]
____________________________