Exhibit 10.2
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
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This CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (referred to herein
as this "Agreement") is made and entered by and between __________ ("Employee")
and The Middleby Corporation (the "Company") as of this ___ day of ______, 2005
(the "Agreement Date").
R E C I T A L S:
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WHEREAS, the Company and Employee acknowledge that they have a
confidential relationship and that, in the course of employment by the Company,
Employee will acquire, develop, be provided with and become privy to valuable
confidential, restricted, and proprietary information pertaining to the Company
and its business; and
WHEREAS, pursuant to the terms of The Middleby Corporation 1998 Stock
Option Plan (the "Plan") and Employee's Non-Qualified Stock Option Agreement
dated as of ___________________ (the "Option Agreement"), Employee has been
granted a non-qualified option (the "Option") to purchase the number of shares
specified in the Option Agreement conditioned upon entering into this
Agreement.
NOW, THEREFORE, in consideration of Employee's Option, the benefits to
be gained by the performance thereof, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Confidentiality.
(a) Employee will hold all "Confidential Information" (as defined
below) in strictest confidence at all times during and after Employee's
employment, and will not use or disclose such Confidential Information on
Employee's own behalf, or on the behalf of any third parties, to any business,
individual, partner, firm, corporation, or other entity, at any time, other
than as required in performance of Employee's duties on behalf of the Company
or unless first authorized in writing by an executive officer of the Company.
In the event that Employee is required by law to disclose any Confidential
Information, Employee will give the Company prompt written notice prior to such
disclosure and provide the Company with reasonable assistance in obtaining an
order to protect the Confidential Information from public disclosure.
(b) For purposes of this Agreement, "Confidential Information" shall
mean any confidential or proprietary information about the Company and/or any
person, firm, company, or other organization that directly, or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the Company (each, an "Affiliate," and together,
"Affiliates"), and their joint or respective products, services or clients,
which is developed by or for the Company or its Affiliate or which is owned or
used in the course of business by the Company or its Affiliates, including, but
in no way limited to: (i) information relating to research, development, patent
and copyright development and licensing thereof, trade secrets, inventions,
formulas, designs, drawings, specifications and engineering, laboratory
analysis, production processes, or equipment; (ii) information related to the
specific or unique marketing techniques, price lists, pricing policies, sales,
services, costs, business methods, formulas, product specifications or business
planning of the Company or its Affiliates; (iii) information relating to the
names of customers of the Company or its Affiliates and their representatives,
customer services, or the type, quantity and specifications of products
purchased by or from customers which came into Employee's knowledge,
possession, or control in connection with his or her employment; and (iv)
information relating to the specific or unique computer programs, software,
techniques or equipment of the Company or its Affiliates. The term
"Confidential Information" does not include information, materials or devices
which are generally known to the public (other than as a result of an improper
or unauthorized disclosure by Employee in violation of the terms hereof) or
information, materials or devices that are not in any manner competitively
sensitive to the Company or any of its Affiliates.
2. Non-Competition.
(a) During the "Restricted Period" (as defined below), Employee will
not engage in "Competitive Activities" (as defined below) within the "Covered
Area" (as defined below) unless first authorized in writing by an executive
officer of the Company.
(b) For purposes of this Agreement:
(i) "Restricted Period" means the period during which
Employee is employed with the Company or its Affiliates and, in the event that
Employee voluntarily terminates employment prior to the fifth anniversary of
the Agreement Date, a one (1) year period following such termination.
Notwithstanding the foregoing, the lapse or expiration of the Restricted Period
shall not extinguish or effect any obligations or restrictions that may
otherwise be applicable to Employee, including, but not limited to, with
respect to Confidential Information as provided under this Agreement.
(ii) "Competitive Activities" means rendering the same
services or substantially the same services, or being involved in the same
capacity or substantially the same capacity as Employee was, for the Company or
any of its Affiliates, whether as an officer, director, employee, consultant,
agent, owner or shareholder (excluding ownership of less than five percent (5%)
of the stock of a publicly traded company), in the manufacture, development,
promotion, distribution or sale of any cooking or warming products or services
which are the same as or competitive with any products or services of any of
the businesses of the Company or its Affiliates in which Employee has
participated in any material respect during Employee's last twelve (12) months
of employment (including any products or services known to Employee to be in
development or which Employee knew the Company or its Affiliates had plans to
sell within the succeeding twelve (12) months) (the "Covered Products").
(iii) "Covered Area" means any state, county, city, town,
province or comparable unit of local government where the Covered Products are
now or hereafter manufactured, marketed, distributed or sold by the Company or
any of its Affiliates. Employee expressly acknowledges that as of the Agreement
Date the products of the Company and its Affiliates are manufactured, marketed,
distributed and sold in Canada, China, India, Korea, Mexico, the Philippines,
Spain, Taiwan, the United Kingdom and the United States.
3. Business Relationship Non-Solicit/Non-Interference. During the
Restricted Period, Employee will not: (a) directly or indirectly solicit,
induce or influence (or attempt to solicit, induce or influence) any clients,
customers, vendors or suppliers of the Company or its Affiliates with which
Employee was involved as part of Employee's job responsibilities during
Employee's last twelve (12) months of employment to divert their business to
any business, individual, partner, firm, corporation, or other entity that is a
current or prospective competitor of the Company or its Affiliates (each such
person or entity, a "Competitor of the Company"), or to terminate his, her or
its relationship with the Company; (b) interfere with or damage (or attempt to
interfere with or damage) any relationship and/or agreement between any of the
Company or its Affiliates and known potential or current clients, customers,
vendors or suppliers of any of the Company or its Affiliates; or (c) otherwise
intentionally interfere with or damage the business or accounts of the Company
or its Affiliates.
4. Employee Non-Solicit. During Restricted Period, Employee will not:
(a) directly or indirectly solicit, induce or cause (or attempt to solicit,
induce or cause) another person in the employ of the Company or its Affiliates
to terminate his or her employment for the purposes of joining, associating,
consulting or becoming employed with any Competitor of the Company; or (b) make
known to any potential employer, firm, corporation, association, or other
entity the names or addresses of, or any information pertaining to, any current
or former employee of the Company or its Affiliates.
5. Return of the Company's Property and Confidential Information. Upon
request by the Company at any time, and, in any event, upon the termination of
Employee's employment, whether voluntary or involuntary, Employee will return
to the Company, and not retain copies, electronic versions, duplicates or
printouts of, all documents, materials, equipment, devices and property
belonging to the Company or its Affiliates or containing Confidential
Information, including, but not limited to, computer files, e-mails,
correspondence, notes, memoranda, reports and manuals, and copies, electronic
versions, duplicates or printouts thereof. This provision is intended to
include all documents, materials, equipment and devices made or compiled by
Employee, as well as all materials furnished to Employee by any third party. At
the Company's request, Employee will confirm in writing his or her compliance
with the requirements of this provision.
6. Acknowledgements.
(a) Employee acknowledges the importance of the restrictions and
obligations contained in this Agreement and that (i) Confidential Information
is valuable proprietary information of the Company and its Affiliates which the
Company and its Affiliates have devoted, and will continue to devote,
substantial resources to develop and to protect, (ii) the business of the
Company and its Affiliates is intensely competitive and the use or disclosure
of Confidential Information could be damaging to the business operations of the
Company and/or its Affiliates, particularly if such disclosure is by or to a
Competitor of the Company, vendor, or service provider, (iii) Employee provides
unique and extraordinary services to the Company which involve Employee's use
and access to particularly sensitive and valuable Confidential Information,
(iv) the restrictions and obligations contained in this Agreement are
reasonable and necessary to safeguard the Company's legitimate protectable
business interests, including, but not limited to, with respect to Confidential
Information and the development, at significant costs to the Company and its
Affiliates, of customer and employee relationships, (v) Employee has and will
continue to come into contact with Confidential Information and develop
relationships with customers and employees of the Company or its Affiliates
solely due to Employee's employment with the Company or its Affiliates, and
(vi) the restrictions and obligations contained in this Agreement are in
addition to, and do not limit or supercede, any preexisting obligations
Employee may have to the Company or its Affiliates concerning such matters,
including confidentiality, competition, solicitation of customers and
employees, non-interference and return of Company property.
(b) In addition, Employee recognizes and agrees that any violation or
threatened or anticipated violation of any part of this Agreement will result
in irreparable harm and continuing damage to the Company, and that the remedy
at law for any such breach or threatened or anticipated breach will be
inadequate. Accordingly, in addition to any other legal or equitable remedies
that may be available to the Company or its Affiliates, Employee acknowledges
and agrees that the Company shall be entitled to seek and obtain an injunction
or injunctions, without bond or other security, to prevent any breach or
threatened or anticipated breach of this Agreement.
7. Cancellation of Options and "Clawback" of Proceeds.
(a) In the event of a violation of the restrictions and obligations
contained in this Agreement by Employee, in addition and without prejudice to
any other remedies the Company may have, the Option shall be rescinded and
Employee (or, if applicable, his or her heirs, beneficiaries or estate) shall
promptly, at the Company's request (i) sell back to the Company all "Acquired
Shares" (as defined below) held by Employee (or, if applicable, his or her
heirs, beneficiaries or estate) for a per share price equal to the per share
exercise price paid by Employee pursuant to the Option Agreement to acquire
such shares (the "Exercise Price"), and (ii) to the extent such Acquired Shares
have previously been sold or otherwise disposed of by Employee (or, if
applicable, by his or her heirs, beneficiaries or estate), repay to the Company
the excess of (x) the aggregate Fair Market Value (as defined below) of such
Acquired Shares on the date of such sale or disposition over (y) the aggregate
Exercise Price of such Acquired Shares. For purposes of this Section 7, the
amount of the repayment described herein shall not be affected by whether
Employee (or, if applicable, his or her heirs, beneficiaries or estate)
actually received such Fair Market Value with respect to such sale or other
disposition.
(b) For purposes of this Agreement, "Acquired Shares" shall mean
shares of Company common stock that were acquired upon exercise of the Option
granted to Employee by the Company, and "Fair Market Value" shall mean, as of
any given date: (i) if the shares are publicly traded, the closing sale price
of a share on the date preceding such given date as reported in the Western
Edition of The Wall Street Journal or (ii) if the shares are not publicly
traded, the fair market value of a share as otherwise determined by the Company
in its sole discretion.
8. Future Engagements and Employment. Prior to providing any services
to any future employer or business entity during the Restricted Period,
Employee agrees to inform the Company of the nature of the services to be
provided and, if directed in writing by the Company, to provide a copy of this
Agreement to such employer or business entity for whom Employee is to provide
services so that the employer or business entity will be cognizant of
Employee's promises and obligations hereunder.
9. No Right to Continued Employment. This Agreement shall not confer
upon Employee any right with respect to continued employment with the Company
or its Affiliates, nor shall it alter, modify, limit or interfere with any
right or privilege of the Company or its Affiliates under any employment
contract or other agreement or arrangement heretofore or hereinafter executed
with the Employee, including the right to terminate the Employee's employment
at any time for or without cause, to change the Employee's level of
compensation, or to change the Employee's responsibilities or position.
10. Notices. Any notice necessary under this Agreement shall be
addressed to the Company in care of its Secretary at the principal executive
office of the Company and to Employee at the address appearing in the personnel
records of the Company for such Employee or to either party at such other
address as either party hereto may hereafter designate in writing to the other.
Any such notice shall be deemed effective upon receipt thereof by the
addressee.
11. Waiver. The failure of either party to this Agreement to enforce
any of its terms, provisions or covenants shall not be construed as a waiver of
the same or of the right of such party to enforce the same. Waiver by either
party hereto of any breach or default by the other party of any term or
provision of this Agreement shall not operate as a waiver of any other breach
or default.
12. Severability. In the event that any one or more of the provisions
of this Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforce ability of the remainder of the Agreement shall
not in any way be affected or impaired thereby. Moreover, if any one or more of
the provisions contained in this Agreement shall be held to be excessively
broad as to duration, scope, activity or subject, such provisions shall be
construed by limiting and reducing them so as to be enforceable to the maximum
extent allowed by applicable law.
13. Governing Law; Consent to Jurisdiction. Employee agrees and
acknowledges that: (a) other employees of the Company granted options are
subject to a form of agreement similar to this Agreement; (b) other individuals
involved with the Company, including future employees, may execute a form of
agreement similar to this Agreement; (c) the foregoing employees and
individuals live and work in various locations across the United States; and
(d) the Company has a legitimate interest in the uniform legal interpretation
and application of this Agreement. Accordingly, the interpretation, performance
and enforcement of this agreement and any disputes between Employee and the
Company arising under it shall be governed by, and construed in accordance
with, the laws of Illinois, the site of the company's principal place of
business, without regard to its conflict of law rules. The parties further
hereby irrevocably consent to the jurisdiction of the federal and state courts
located within the state of Illinois in any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement. Each party hereby irrevocably consents to the
service of any and all process in any such suit, action or proceeding by the
delivery of such process to such party at the address and manner specified for
notices under this agreement.
14. Assignment. This Agreement and all rights hereunder are personal
to Employee and may not, unless otherwise specifically permitted herein, be
assigned by Employee. Notwithstanding anything else in this Agreement to the
contrary, the Company may assign this Agreement to its successors or assigns,
including to any person, firm, company, or other organization or entity
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company's assets or business.
15. Descriptive Headings. The section headings contained herein are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
16. Entire Agreement; Option Subject to Plan. This Agreement, the
Option Agreement and the Plan contain the entire understanding and agreement of
the parties concerning the subject matter hereof, and supersede all earlier
negotiations and understandings, written or oral, between the parties with
respect thereto, except as is otherwise expressly provided herein, for example,
in Section 6(a)(vi). The Option Agreement and this Agreement are subject to the
terms and conditions of the Plan. By entering into this Agreement, Employee
agrees and acknowledges that Employee has received and read a copy of the Plan.
The terms and provisions of the Plan as it may be amended from time-to-time are
hereby incorporated herein by reference.
[Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
ACCEPTED & AGREED:
THE MIDDLEBY CORPORATION
______________________________ By:_________________________________
Employee: Its: ___________________________
Date:__________________________ Date: _____________________________