{"id":38485,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-relating-to-noncompetition-and-other-covenants.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-relating-to-noncompetition-and-other-covenants","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/agreement-relating-to-noncompetition-and-other-covenants.html","title":{"rendered":"Agreement Relating to Noncompetition and Other Covenants &#8211; Goldman Sachs Group Inc."},"content":{"rendered":"<pre>                                                                 Draft 4\/14\/99\n\n\n                                                                 \n                              AGREEMENT RELATING TO\n                       NONCOMPETITION AND OTHER COVENANTS\n\n\n               AGREEMENT, dated as of May _____, 1999 (this 'Agreement'), by and\nbetween The Goldman Sachs Group, Inc., a Delaware corporation ('GS Inc.'), on\nits behalf and on behalf of its subsidiaries and affiliates (collectively with\nGS Inc., and its and their predecessors and successors, the 'Firm'), and the\nindividual whose name appears at the end of this Agreement (the 'Executive').\n\n               WHEREAS, prior to the completion of the transactions contemplated\nby the Plan of Incorporation (the 'Plan') of The Goldman Sachs Group, L.P.\n('Group'), Executive was a Schedule II Limited Partner of Group; and\n\n               WHEREAS, as a Schedule II Limited Partner, Executive was subject\nto certain requirements relating to competition, confidentiality, solicitation\nand cooperation pursuant to the Memorandum of Agreement of Group; and\n\n               WHEREAS, in connection with Executive's participation in the\nPlan, Executive has agreed to enter into an agreement with GS Inc., on its\nbehalf and on behalf of its subsidiaries and affiliates, in respect of certain\nobligations, inter alia, to keep information concerning the Firm confidential,\nnot to engage in competitive activities, not to solicit the Firm's clients or\nemployees and to cooperate with the Firm in maintaining certain relationships\nfollowing the termination of Executive's employment.\n\n               NOW, THEREFORE, in consideration of the premises contained herein\nand for other good and valuable consideration, the receipt and adequacy of which\nare hereby acknowledged, Executive and the Firm agree as follows:\n\n               1. Confidential Information. In the course of involvement in the\nFirm's activities or otherwise, Executive has obtained or may obtain\nconfidential information concerning the Firm's businesses, strategies,\noperations, financial affairs, organizational and personnel matters (including\ninformation regarding any aspect of the Executive's tenure as a partner or an\nemployee of the Firm or of the termination of such partnership or employment),\npolicies, procedures and other non-public matters, or concerning those of third\nparties. Such information ('Confidential Information') may have been or be\nprovided in written or electronic form or orally. In consideration of, and as a\ncondition to, continued access to Confidential Information, and without\nprejudice to or limitation on any other confidentiality obligations imposed by\nagreement or by law, Executive hereby undertakes to use and protect Confidential\nInformation in accordance with any restrictions placed on its use or disclosure.\nWithout limiting the foregoing, except as authorized by the Firm or as required\nby law, Executive may not disclose or allow disclosure of any Confidential\nInformation, or of any information derived therefrom, in whatever form, to any\nperson unless such person is a director, officer, partner, employee,\nattorney or agent of the Firm and, in Executive's reasonable good faith\njudgment, has a need to know the Confidential Information or information derived\ntherefrom in furtherance of the business of the Firm. The foregoing obligations\nwill survive, and remain binding and enforceable notwithstanding, any\ntermination of Executive's employment and any settlement of the financial rights\nand obligations arising from Executive's employment. Without limiting the\nforegoing, the existence of, and any information concerning, any dispute between\nExecutive and the Firm shall constitute Confidential Information except that\nExecutive may disclose information concerning such dispute to the arbitrator or\ncourt that is considering such dispute, or to Executive's legal counsel\n(provided that such counsel agrees not to disclose any such information other\nthan as necessary to the prosecution or defense of the dispute).\n\n               2. Noncompetition. (a) In view of Executive's importance to the\nFirm, Executive hereby agrees that the Firm would likely suffer significant harm\nfrom Executive's competing with the Firm during Executive's Employment Period\n(as defined in the employment agreement between Executive and GS Inc., dated the\ndate hereof (the 'Employment Agreement')) and for some period of time thereafter\nor, if Executive has separated from the Firm on or prior to the date of\nconsummation of the initial public offering of the common stock of GS Inc. (the\n'IPO Date'), for some time after the IPO Date. Accordingly, Executive hereby\nagrees that Executive will not, without the written consent of GS Inc., during\nthe Employment Period, if any, and for twelve months following the Date of\nTermination:\n\n               (1) form, or acquire a 5% or greater equity ownership, voting or\n        profit participation interest in, any Competitive Enterprise; or\n\n               (2) associate (including, but not limited to, association as an\n        officer, employee, partner, director, consultant, agent or advisor) with\n        any Competitive Enterprise and in connection with such association\n        engage in, or directly or indirectly manage or supervise personnel\n        engaged in, any activity\n\n                       (i) which is similar or substantially related to any\n               activity in which Executive was engaged, in whole or in part, at\n               the Firm,\n\n                       (ii) for which Executive had direct or indirect \n               managerial or supervisory responsibility at the Firm, or\n\n                       (iii) which calls for the application of the same or\n               similar specialized knowledge or skills as those utilized by\n               Executive in Executive's activities with the Firm,\n\n\n                                      -2-\n        at any time during the one-year period immediately prior to the Date of\n        Termination (or, in the case of an action taken during the Employment\n        Period, during the one-year period immediately prior to such action),\n        and, in any such case, irrespective of the purpose of the activity or\n        whether the activity is or was in furtherance of advisory, agency,\n        proprietary or fiduciary business of either the Firm or the Competitive\n        Enterprise.\n\n        (By way of example only, this provision precludes an 'advisory'\n        investment banker from joining a leveraged-buyout firm or a research\n        analyst from becoming a proprietary trader or joining a hedge fund, in\n        each case without the written consent of GS Inc.)\n\n               (b) For purposes of this Agreement, a 'Competitive Enterprise' is\na business enterprise that (1) engages in any activity, or (2) owns or controls\na significant interest in any entity that engages in any activity, that, in\neither case, competes anywhere with any activity in which the Firm is engaged.\nThe activities covered by the previous sentence include, without limitation,\nfinancial services such as investment banking, public or private finance,\nlending, financial advisory services, private investing (for anyone other than\nExecutive and members of Executive's family), merchant banking, asset or hedge\nfund management, insurance or reinsurance underwriting or brokerage, property\nmanagement, or securities, futures, commodities, energy, derivatives or currency\nbrokerage, sales, lending, custody, clearance, settlement or trading.\n\n               (c) For purposes of this Agreement, 'Date of Termination' means\nExecutive's Date of Termination (as defined in the Employment Agreement) or, if\nthe Executive is not a party to an Employment Agreement, the IPO Date.\n\n               3. Nonsolicitation of Clients. (a) Executive hereby agrees that\nduring the Employment Period, if any, and for eighteen months following the Date\nof Termination, Executive will not, in any manner, directly or indirectly, (1)\nSolicit a Client to transact business with a Competitive Enterprise or to reduce\nor refrain from doing any business with the Firm, or (2) interfere with or\ndamage (or attempt to interfere with or damage) any relationship between the\nFirm and a Client.\n\n               (b) For purposes of this Agreement, the term 'Solicit' means any\ndirect or indirect communication of any kind whatsoever, regardless of by whom\ninitiated, inviting, advising, encouraging or requesting any person or entity,\nin any manner, to take or refrain from taking any action.\n\n               (c) For purposes of this Agreement, the term 'Client' means any\nclient or prospective client of the Firm to whom Executive provided services, or\nfor whom\n\n\n                                      -3-\nExecutive transacted business, or whose identity became known to Executive in\nconnection with Executive's relationship with or employment by the Firm.\n\n               4. Nonsolicitation of Employees. Executive hereby agrees that\nduring the Employment Period, if any, and for eighteen months following the Date\nof Termination, Executive will not, in any manner, directly or indirectly,\nSolicit any person who is an employee of the Firm to resign from the Firm or to\napply for or accept employment with any Competitive Enterprise.\n\n               5. Transfer of Client Relationships. (a) During the Coverage\nPeriod, Executive hereby agrees to take all actions and do all such things as\nmay be reasonably requested by the Firm from time to time to maintain for the\nFirm the business, goodwill, and business relationships with any of the Firm's\nClients with whom Executive worked during the term of Executive's employment.\n\n               (b) For purposes of this Agreement, the term 'Coverage Period'\nmeans, (1) if Executive is a party to an Employment Agreement, the 90-day period\nbeginning on the date on which notice of Executive's termination of employment\nis delivered to or by the Firm, or in the case of termination for Cause or on\naccount of Extended Absence (each as defined in the Employment Agreement), the\n90-day period beginning on the Date of Termination or (2) if Executive is not a\nparty to an Employment Agreement, the 90-day period beginning on the IPO Date.\n\n               6. Prior Notice Required. Executive hereby agrees that prior to\naccepting employment with any other person or entity during the Employment\nPeriod, if any, or during the eighteen months following the Date of Termination,\nExecutive will provide such prospective employer with written notice of the\nprovisions of this Agreement, with a copy of such notice delivered\nsimultaneously to the General Counsel of GS Inc.\n\n               7. Covenants Generally. (a) Executive's covenants as set forth in\nthe preceding paragraphs of this Agreement are from time to time referred to\nherein as the 'Covenants.' If any of the Covenants is finally held to be\ninvalid, illegal or unenforceable (whether in whole or in part), such Covenant\nshall be deemed modified to the extent, but only to the extent, of such\ninvalidity, illegality or unenforceability and the remaining such Covenants\nshall not be affected thereby; provided, however, that if any of such Covenants\nis finally held to be invalid, illegal or unenforceable because it exceeds the\nmaximum scope determined to be acceptable to permit such provision to be\nenforceable, such Covenant will be deemed to be modified to the minimum extent\nnecessary to modify such scope in order to make such provision enforceable\nhereunder.\n\n               (b) Executive understands that the provisions of the Covenants\nmay limit Executive's ability to earn a livelihood in a business similar to the\nbusiness of the Firm.\n\n\n                                      -4-\n               (c) Executive acknowledges that a violation on Executive's part\nof any of the Covenants would cause irreparable damage to the Firm. Accordingly,\nExecutive agrees that the Firm will be entitled to injunctive relief for any\nactual or threatened violation of any of the Covenants in addition to any other\nremedies it may have.\n\n               8. Damages. (a) Executive acknowledges that Executive's\ncompliance with the Covenants is an important factor to the continued success of\nthe Firm's operations and its future prospects. Executive and GS Inc. agree that\nif at any time prior to the fifth anniversary of the date of this Agreement,\nExecutive were to breach any of the Covenants set forth in Sections 2, 3 and 4\nhereof, the damages to the Firm would be material, but that the amount of such\ndamages would be uncertain and not readily ascertainable. Accordingly, Executive\nand GS Inc. agree that, if, prior to the fifth anniversary of the date of this\nAgreement, Executive breaches any of such Covenants, as determined by the Board\nof Directors of GS Inc. (the 'Board') in its good faith judgment, GS Inc. will\nbe entitled to receive immediately following such determination and written\ndemand therefor, and Executive will make, a cash payment as and for liquidated\ndamages (the 'Liquidated Damages') as follows:\n\n               (1) if, on April 12, 1999, Executive was a member of the Board\n        and\/or a management committee (as defined below) of the Firm (and\n        whether or not such membership continues), the Liquidated Damages shall\n        be $15,000,000; and\n\n               (2) if, on April 12, 1999, Executive was not a member of either\n        the Board or a management committee of the Firm (and whether or not\n        Executive later has any such membership), the Liquidated Damages shall\n        be $10,000,000.\n\nA 'management committee' means each of the Management Committee and the\nPartnership Committee. The payment of any amount as liquidated damages will not\nbe construed as a release or waiver by the Firm of the right to prevent the\ncontinuation of any such violation of such Covenants in equity or otherwise. In\naddition, Executive and GS Inc. agree that it would be too speculative to\nattempt to determine any amount of liquidated damages that would be applicable\nfollowing the fifth anniversary of the date of this Agreement, and that any\ndamages payable as a result of any breach following such date shall be\ndetermined without regard to this Section 8.\n\n               (b) Executive and GS Inc. agree that the Liquidated Damages are\nreasonable in proportion to the probable damages likely to be sustained by the\nFirm if Executive breaches at any time prior to the fifth anniversary of this\nAgreement any of the Covenants set forth in Sections 2, 3 and 4 hereof, that the\namount of actual damages to be sustained by the Firm in the event of such breach\nis incapable of precise estimation and that such cash payments are not intended\nto constitute a penalty or punitive damages for any purposes.\n\n\n                                      -5-\n               (c) Executive acknowledges and agrees that Executive's payment\nobligations under this Section 8 will be full recourse obligations and will be\nsecured pursuant to a Pledge Agreement, in substantially the form set forth as\nExhibit A hereto (the 'Pledge Agreement').\n\n               (d) Executive acknowledges and agrees that any cash payment of\nLiquidated Damages pursuant to this Section 8 shall be in addition to, and not\nin lieu of, any forfeitures of awards (required pursuant to the terms of any\nsuch awards) that may be granted to Executive in the future under one or more of\nthe Firm's compensation and benefit plans.\n\n               9. Arbitration. Subject to the provisions of Sections 10 and 11\nhereof, any dispute, controversy or claim between Executive and the Firm arising\nout of or relating to or concerning the provisions of this Agreement, the Pledge\nAgreement, any agreement between Executive and the Firm relating to or arising\nout of Executive's employment with the Firm or otherwise concerning any rights,\nobligations or other aspects of Executive's employment relationship in respect\nof the Firm ('Employment Related Matters'), shall be finally settled by\narbitration in New York City before, and in accordance with the rules then\nobtaining of, the New York Stock Exchange, Inc. (the 'NYSE') or, if the NYSE\ndeclines to arbitrate the matter, the American Arbitration Association (the\n'AAA') in accordance with the commercial arbitration rules of the AAA.\n\n               10. Injunctive Relief; Submission to Jurisdiction.\nNotwithstanding the provisions of Section 9, and in addition to its right to\nsubmit any dispute or controversy to arbitration, the Firm may bring an action\nor special proceeding in a state or federal court of competent jurisdiction\nsitting in the City of New York, whether or not an arbitration proceeding has\ntheretofore been or is ever initiated, for the purpose of temporarily,\npreliminarily, or permanently enforcing the provisions of the Covenants, the\nEmployment Agreement or the Pledge Agreement, or to enforce an arbitration\naward, and, for the purposes of this Section 10, Executive (i) expressly\nconsents to the application of Section 11 to any such action or proceeding, (ii)\nagrees that proof will not be required that monetary damages for breach of the\nprovisions of the Covenants, the Employment Agreement or the Pledge Agreement\nwould be difficult to calculate and that remedies at law would be inadequate and\n(iii) irrevocably appoints the General Counsel of GS Inc. as Executive's agent\nfor service of process in connection with any such action or proceeding, who\nshall promptly advise Executive of any such service of process.\n\n               11. Choice of Forum. (a) EXECUTIVE AND THE FIRM HEREBY\nIRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT\nLOCATED IN THE CITY OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT\nOF OR RELATING TO OR CONCERNING THIS AGREEMENT, THE EMPLOYMENT AGREEMENT, THE\nPLEDGE AGREEMENT, OR ANY EMPLOYMENT\n\n\n                                      -6-\nRELATED MATTERS THAT IS NOT OTHERWISE ARBITRATED OR RESOLVED ACCORDING TO THE\nPROVISIONS OF SECTION 9 HEREOF. This includes any suit, action or proceeding to\ncompel arbitration or to enforce an arbitration award. This also includes any\nsuit, action, or proceeding arising out of or relating to any post-employment\nEmployment Related Matters. Executive and the Firm acknowledge that the forum\ndesignated by this Section 11 has a reasonable relation to this Agreement, and\nto Executive's relationship to the Firm. Notwithstanding the foregoing, nothing\nherein shall preclude the Firm from bringing any action or proceeding in any\nother court for the purpose of enforcing the provisions of Sections 9, 10 or 11.\n\n               (b) The agreement of Executive and the Firm as to forum is\nindependent of the law that may be applied in the action, and Executive and the\nFirm agree to such forum even if the forum may under applicable law choose to\napply non-forum law. Executive and the Firm hereby waive, to the fullest extent\npermitted by applicable law, any objection which Executive or the Firm now or\nhereafter may have to personal jurisdiction or to the laying of venue of any\nsuch suit, action or proceeding in any court referred to in Section 11(a).\nExecutive and the Firm undertake not to commence any action arising out of or\nrelating to or concerning this Agreement in any forum other than a forum\ndescribed in this Section 11. Executive and the Firm agree that, to the fullest\nextent permitted by applicable law, a final and non-appealable judgment in any\nsuch suit, action or proceeding in any such court shall be conclusive and\nbinding upon Executive and the Firm.\n\n               12. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND\nCONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD\nTO PRINCIPLES OF CONFLICT OF LAWS.\n\n               13. Miscellaneous. (a) This Agreement shall not supersede any\nother agreement, written or oral, pertaining to the matters covered herein,\nexcept to the extent of any inconsistency between this Agreement and any prior\nagreement, in which case this Agreement shall prevail.\n\n               (b) Notices hereunder shall be delivered to GS Inc. at its\nprincipal executive office directed to the attention of its General Counsel, and\nto Executive at Executive's last address appearing in the Firm's employment\nrecords.\n\n               (c) This Agreement may not be amended or modified, other than by\na written agreement executed by Executive and GS Inc. or its successors, nor may\nany provision hereof be waived other than by a writing executed by Executive or\nGS Inc. or its successors; provided, that any waiver, consent, amendment or\nmodification of any of the provisions of this Agreement will not be effective\nagainst the Firm without the written consent of the Chief Executive Officer of\nGS Inc. or its successors, or such individual's\n\n\n                                      -7-\ndesignee. Executive may not, directly or indirectly (including by operation of\nlaw), assign Executive's rights or obligations hereunder without the prior\nwritten consent of the Chief Executive Officer of GS Inc. or its successors, or\nsuch individual's designee, and any such assignment by Executive in violation of\nthis Agreement shall be void. This Agreement shall be binding upon Executive's\npermitted successors and assigns. Without impairing Executive's obligations\nhereunder, GS Inc. may at any time and from time to time assign its rights and\nobligations hereunder to any of its subsidiaries or affiliates (and have such\nrights and obligations reassigned to it or to any other subsidiary or\naffiliate). This Agreement shall be binding upon and inure to the benefit of the\nFirm and its assigns.\n\n               (d) Without limiting the provisions of Section 7(a) hereof, if\nany provision of this Agreement is finally held to be invalid, illegal or\nunenforceable (whether in whole or in part), such provision shall be deemed\nmodified to the extent, but only to the extent, of such invalidity, illegality\nor unenforceability and the remaining provisions shall not be affected thereby.\n\n               (e) Except as expressly provided herein, this Agreement shall not\nconfer on any person other than the Firm and the Executive any rights or\nremedies hereunder.\n\n               (f) The captions in this Agreement are for convenience of\nreference only and shall not define or limit the provisions hereof.\n\n\n                                      -8-\n               IN WITNESS WHEREOF, Executive and the Firm hereto have caused\nthis Agreement to be executed and delivered on the date first above written.\n\n\n                                      THE GOLDMAN SACHS GROUP, INC.\n                                      (on its behalf, and on behalf of its\n                                      subsidiaries and affiliates)\n\n\n                                      By:________________________________\n\n\n\n                                      [Executive]\n\n\n                                      By:________________________________\n\n\n                                     \n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7660],"corporate_contracts_industries":[9418],"corporate_contracts_types":[9539,9549],"class_list":["post-38485","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-goldman-sachs-group-inc","corporate_contracts_industries-financial__securities","corporate_contracts_types-compensation","corporate_contracts_types-compensation__noncompetition"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38485","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38485"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38485"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38485"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38485"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}