Exhibit 10.1
ACCO BRANDS CORPORATION
AMENDED AND RESTATED 2005 INCENTIVE PLAN
2010 – 2012 CASH-BASED AWARD AGREEMENT
THIS AGREEMENT is made, entered into and effective this , 2010 (the“Grant Date”) by and between ACCO Brands Corporation, a Delaware corporation (collectively with all Subsidiaries, the“Company”) and (“Grantee”).
WHEREAS, Grantee is a Key Employee of the Company and in compensation for Grantee’s services and Grantee’s agreement to certain employment and post-employment covenants, the Board deems it advisable to grant to Grantee a Cash-Based Award payable in cash, pursuant to the Amended and Restated ACCO Brands Corporation 2005 Incentive Plan (“Plan”), which may be earned and vested by Grantee upon Grantee’s continuous service and the satisfaction of performance objectives as set forth herein.
NOW THEREFORE, subject to the terms and conditions set forth herein:
1.Plan Governs; Capitalized Terms. This Agreement is made pursuant to the Plan, and the terms of the Plan are incorporated into this Agreement, except as otherwise specifically stated herein. Capitalized terms used in this Agreement that are not defined in this Agreement shall have the meanings as used or defined in the Plan. References in this Agreement to any specific Plan provision shall not be construed as limiting the applicability of any other Plan provision.
2.Award. The Company hereby grants to Grantee on the Grant Date an Award payable in cash at Target, or such lesser or greater cash amount, as may be earned upon the attainment of applicable performance objectives set forth inSchedule I attached hereto and made a part hereof, during the 2010, 2011 and 2012 fiscal years (each fiscal year a“Performance Period”) as follows:
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Performance Period | | Amount of Award That May Be Earned At Target |
2010 | | $ |
2011 | | $ |
2012 | | $ |
This Award shall be earned and vested in accordance withSection 3 and shall be payable to Grantee in accordance withSection 4. Until the Award is paid (if payable), Grantee shall have the status of a general unsecured creditor of the Company. THIS AWARD IS CONDITIONED ON GRANTEE SIGNING THIS AGREEMENT AND
RETURNING IT TO THE COMPANY BY , 2010 AND IS SUBJECT TO ALL TERMS, CONDITIONS AND PROVISIONS OF THE PLAN AND THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CERTAIN COVENANTS SET FORTH ONATTACHMENT A HERETO THAT APPLY DURING, AND FOLLOWING A TERMINATION OF, GRANTEE’S EMPLOYMENT FOR ANY REASON. FOR PURPOSES OFATTACHMENT A, GRANTEE’S SECTION 4.1 RESTRICTION SHALL BE FOR MONTHS AND GRANTEE’S SECTION 4.2 RESTRICTION SHALL BE FOR MONTHS, EXCEPT AS GRANTEE AND THE CHIEF EXECUTIVE OFFICER (AND SHOULD THE CHIEF EXECUTIVE OFFICER BE THE GRANTEE, THE COMPENSATION COMMITTEE OF THE BOARD) MAY OTHERWISE AGREE IN WRITING.
3.Vesting.
(a)Generally. The Performance Periods set forth inSchedule I shall commence on January 1 and end on December 31 of the 2010, 2011 and 2012 fiscal years, respectively. Subject to acceleration of the vesting of the Award pursuant toSection 3(b) or3(f), or the forfeiture and termination of the Award pursuant toSections 3(e) or4(c), the Award shall be wholly or partially earned and vested and become nonforfeitable for a Performance Period to the extent of the attainment of the performance objectives for such Performance Period set forth inSchedule I, provided that Grantee has been continuously employed by the Company through December 31, 2012 (except as provided inSection 3(c),3(d) and3(f)(ii)).
(b)Death; Disability. Upon the death of Grantee while employed by the Company, or Grantee’s separation from service from the Company and all members of the Company controlled group (within the meaning of Treasury Regulation Sections 1.409A-1(g) and (h)) (“Separation from Service”) due to his Disability, in either such case before December 31, 2012, an amount of the Award shall become earned and vested equal to the sum of:
(i) the amount of the Award, if any, that has been earned, based on the attainment of the applicable performance objectives set forth inSchedule I, during such of the 2010 and 2011 Performance Periods as have been completed on or prior to the date of Grantee’s death or Separation from Service; plus
(ii) an amount of the Award as would have become earned and vested, based on the deemed attainment of a target-level of performance set forth inSchedule I, for such of the incomplete Performance Period in which such death or Separation from Service occurs and any Performance Periods that had not yet commenced by the date of the Grantee’s death or Separation from Service.
Grantee shall forfeit any amount of the Award not becoming earned and vested underSection 3(b)(i) and3(b)(ii) upon Grantee’s death or Separation from Service.
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(c)Retirement. Upon Grantee’s Separation from Service due to his Retirement before December 31, 2012, an amount of the Award shall become earned and vested equal to the sum of:
(i) the amount of the Award, if any, that has been earned, based on the attainment of the applicable performance objectives set forth inSchedule I, during such of the 2010 and 2011 Performance Periods as have been completed on or prior to the date of Grantee’s Separation from Service; plus
(ii) an amount of the Award, if any, equal to the product of (A) the fraction the numerator of which is the number of days Grantee was continuously employed from the first day of the Performance Period during which such Separation from Service occurs to the date of Separation from Service and the denominator of which is 365 (or 366 if occurring during the 2012 Performance Period) (“Pro Rata Portion”) multiplied by (B) the amount of the Award that would have become earned for the Performance Period in which such Separation from Service occurs, in accordance with the attainment of the performance objectives set forth inSchedule I, had Grantee remained continuously employed to the last day of such Performance Period.
Grantee shall forfeit any amount of the Award not becoming earned and vested underSection 3(c)(i) and3(c)(ii) upon Grantee’s Separation from Service, including for any Performance Period commencing after Grantee’s Separation from Service.
(d)Involuntary Termination. Upon Grantee’s involuntary Separation from Service by the Company without Cause after June 30, 2012 and before December 31, 2012 (an“Involuntary Termination”), an amount of the Award shall become earned and vested equal to the sum of:
(i) the amount of the Award, if any, that has been earned, based on the attainment of the applicable performance objectives set forth inSchedule I, during each of the 2010 and 2011 Performance Periods; plus
(ii) an amount of the Award, if any, equal to the product of (A) the Pro Rata Portion multiplied by (B) the amount of the Award that would have become earned for the 2012 Performance Period, in accordance with the attainment of the performance objectives set forth inSchedule I, had Grantee remained continuously employed to December 31, 2012.
Grantee shall forfeit any amount of the Award not becoming earned and vested underSection 3(d)(i) and3(d)(ii) upon Grantee’s Separation from Service.
(e)Other Terminations. Upon a termination of Grantee’s employment for any reason prior to December 31, 2012, other than due to Grantee’s death or his Separation from Service due to Disability, Retirement or an Involuntary Termination, or due to a Divestiture (defined below), all of the Award shall be immediately forfeited. Any amount of the Award forfeited under thisSection 3 shall be cancelled and shall terminate.
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(f)Change in Control; Divestiture.
(i) Upon the occurrence of a Change in Control while Grantee is employed by the Company and on or before December 31, 2012, an amount of the Award shall become earned and vested equal to the sum of:
(1) the amount of the Award, if any, that has been earned, based on the attainment of the applicable performance objectives set forth inSchedule I, during such of the 2010 and 2011 Performance Periods as have been completed on or prior to the date of the Change in Control; plus
(2) the amount of the Award that could have become earned, based on the deemed attainment of a maximum-level of performance set forth inSchedule I, for the Performance Period in which such Change in Control occurs and any Performance Periods that had not yet commenced by the date of the Change in Control.
Upon the Change in Control, Grantee shall forfeit any amount of the Award not becoming earned and vested underSection 3(f)(i)(1) and3(f)(i)(2).
(ii) Upon the occurrence of a transaction, before December 31, 2012, by which the Subsidiary that is Grantee’s principal employer ceases to be a Subsidiary of the Company and Grantee’s employment with the Company and all other Subsidiaries ceases (“Divestiture”), an amount of the Award shall become earned and vested equal to the sum of:
(1) the amount of the Award, if any, that has been earned, based on the attainment of the applicable performance objectives set forth inSchedule I, during such of the 2010 and 2011 Performance Periods as have been completed on or prior to the date of such Divestiture; plus
(2) for the incomplete Performance Period in which such Divestiture occurs, the amount of the Award equal to the product of (A) the fraction the numerator of which is the number of days Grantee was continuously employed from the first day of such Performance Period to the Divestiture Date and the denominator of which is 365 (or 366 if occurring during the 2012 Performance Period) multiplied by (B) the amount of the Award that would have become earned and vested, based on the deemed attainment of a target-level of performance set forth inSchedule I, for such Performance Period.
Upon such Divestiture, Grantee shall forfeit any amount of the Award not becoming earned and vested underSection 3(f)(ii)(1) and3(f)(ii)(2).
(g)Payment on Vesting. To the extent earned and vested, the Award shall be paid to Grantee as provided inSection 4 hereof.
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4.Payment of Award.
(a)Payment. Subject toSections 4(c) and7(h)(ii), the Company (or its successor) shall pay to Grantee a cash lump sum equal to the amount of the Award then earned and vested pursuant toSection 3 upon the attainment (or deemed attainment upon Grantee’s death, Separation from Service due to Disability, the occurrence of a Change in Control, or the occurrence of a Divestiture) of the performance objectives set forth inSchedule I:
(i) As soon as may be practicable after December 31, 2012, but not later than March 15th, 2013, in any case other as provided inSection 4(a)(ii) or4(a)(iii);
(ii) As soon as may be practicable after December 31 of the Performance Period in which Grantee’s Retirement occurs (or Grantee’s Separation from Service is due to Disability at time when Grantee was eligible for Retirement) but not later than March 15 following such December 31; and
(iii) Within 60 days following the occurrence of Grantee’s death, Separation from Service due to Disability (except whenSection 4(a)(ii) applies), a Change in Control or a Divestiture.
Provided, in the event that the occurrence of a Change in Control is not a change in the ownership or effective control of the Company or of a substantial portion of the assets of the Company within the meaning of Treasury Regulation Section 1.409A-3(i)(5), or a Divestiture is not a Separation from Service of Grantee, such issuance of shares shall be postponed until the earliest to occur of (1) such a change in the ownership or effective control of the Company or of a substantial portion of the assets of the Company, (2) Grantee’s Separation from Service (subject toSection 7(h)(ii)) or (3) the date for payment underSection 4(a)(i).
If, on the date of payment to Grantee under thisSection 4, Grantee’s principal office is located in a country other than the United States of America and Grantee is paid base salary in a currency other than the U.S. Dollar, payment to Grantee shall be made in the same currency in which Grantee is paid base salary applying the currency exchange rate for such currency to the U.S. Dollar as determined by the Committee in its sole discretion at the time such payment is made.
(b)Withholding Taxes. At the time of payment of the Award to Grantee, or any earlier such time in which income or employment taxes may become due and payable, the Company shall satisfy the minimum statutory Federal, state and local withholding tax obligation (including the FICA and Medicare tax obligation) required by law with respect to the payment (or other taxable event) by withholding from the Award the amount of such required withholding.
(c)Forfeiture Upon Breach of Covenant. The provisions ofSection 3 to the contrary notwithstanding, any unpaid amount of the Award shall be immediately forfeited and cancelled in the event of Grantee’s breach of any covenant set forthSECTION 3,4.1 or4.2 ofAttachment A in addition to any other remedy set forth atSECTION 7 ofAttachment A.
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5.No Transfer or Assignment of Award. Except as otherwise provided in this Agreement, the Award and the rights and privileges conferred thereby shall not be sold, pledged or otherwise transferred (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment, levy or similar process until the Award is paid to Grantee or his designated representative.
6.Grantee Covenants. In consideration of this Award, Grantee agrees to the covenants, Company remedies for a breach thereof, and other provisions set forth inAttachment A, attached hereto, incorporated into, and being a part of this Agreement.
7.Miscellaneous Provisions.
(a)No Retention Rights. Nothing in this Agreement shall confer upon Grantee any right to continue in the employment or service of the Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or of Grantee, which rights are hereby expressly reserved by each, to terminate his employment or service at any time and for any reason, with or without cause.
(b)Inconsistency. To the extent any terms and conditions herein conflict with the terms and conditions of the Plan, the terms and conditions of the Plan shall control.
(c)Notices. Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery, upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or upon deposit with a reputable overnight courier. Notice shall be addressed to the Company at its principal executive office and to Grantee at the address that he most recently provided to the Company.
(d)Entire Agreement; Amendment; Waiver. This Agreement constitutes the entire agreement between the parties hereto with regard to the subject matter hereof. This Agreement supersedes any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof; provided, if Grantee is bound by any restrictive covenant contained in a previously-executed agreement with the Company or an Affiliate (as defined inAttachment A), such restrictions shall be read together withAttachment A of this Agreement to provide the Company and its Affiliates with the greatest amount of protection, and to impose on Grantee the greatest amount of restriction, allowed by law. No alteration or modification of this Agreement shall be valid except by a subsequent written instrument executed by the parties hereto. No provision of this Agreement may be waived except by a writing executed and delivered by the party sought to be charged. Any such written waiver shall be effective only with respect to the event or circumstance described therein and not with respect to any other event or circumstance, unless such waiver expressly provides to the contrary.
(e)Choice of Law; Venue; Jury Trial Waiver. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois, as such laws
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are applied to contracts entered into and performed in such State, without giving effect to the choice of law provisions thereof. The Company and Grantee stipulate and consent to personal jurisdiction and proper venue in the state or federal courts of Cook County, Illinois and waive each such party’s right to objection to an Illinois court’s jurisdiction and venue. Grantee and the Company hereby waive their right to jury trial on any legal dispute arising from or relating to this Agreement, and consent to the submission of all issues of fact and law arising from this Agreement to the judge of a court of competent jurisdiction as otherwise provided for above.
(f)Successors.
(i) This Agreement is personal to Grantee and, except as otherwise provided inSection 5 above, shall not be assignable by Grantee otherwise than by will or the laws of descent and distribution, without the written consent of the Company. This Agreement shall inure to the benefit of and be enforceable by Grantee’s legal representatives.
(ii) This Agreement shall inure to the benefit of and be binding upon the Company and its Affiliates and the successors thereof.
(g)Severability. If any provision of this Agreement for any reason should be found by any court of competent jurisdiction to be invalid, illegal or unenforceable, in whole or in part, such declaration shall not affect the validity, legality or enforceability of any remaining provision or portion thereof, which remaining provision or portion thereof shall remain in full force and effect as if this Agreement had been adopted with the invalid, illegal or unenforceable provision or portion thereof eliminated.
(h)Section 409A.
(i) Anything herein to the contrary notwithstanding, this Award Agreement shall be interpreted so as to comply with or satisfy an exemption from Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively, “Section 409A”). The Committee may in good faith make the minimum of modifications to this Agreement as it may deem appropriate to comply with Section 409A while to the maximum extent reasonably possible maintaining the original intent and economic benefit to Grantee and the Company of the applicable provision.
(ii) To the extent required by Section 409A(a)(2)(B)(i), payment of the Award to Grantee, who is a “specified employee” that is due upon Grantee’s Separation from Service shall be delayed and paid in a lump sum within seven (7) days (and the Company shall have sole discretion to determine the taxable year in which it is paid) after the earlier of the date that is six (6) months after the date of such Separation from Service or the date of Grantee’s death after such Separation from Service. For purposes hereof, whether Grantee is a “specified employee” shall be determined in accordance with the default provisions of Treasury Regulation Section 1.409A-1(i), with the “identification date” to be December 31 and the “effective date” to be the April 1 following the identification date (as such terms are used under such regulation).
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(i)Headings; Interpretation. The headings, captions and arrangements utilized in this Agreement shall not be construed to limit or modify the terms or meaning of this Agreement. Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, the feminine and the neuter.
(j)Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute but one and the same instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first written above.
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ACCO BRANDS CORPORATION |
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By: | | |
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Name: | | |
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Its: | | |
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Grantee Name |
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Grantee Signature |
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SCHEDULE I
Performance Objectives for the 2010, 2011 and 2012 Performance Periods
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| | Percentage Of Award That May Be Earned Each Performance Period | | Percentage of Award Earned at Performance Levels | | Performance Objective |
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| | | | 50% (Threshold) | | |
2010 | | 33 1/3 % | | 100% (Target) | | |
| | | | 150% (Maximum) | | |
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| | | | 50% (Threshold) | | 2011 performance objectives to be determined by the Committee by March 31, 2011 and provided to Grantee, at which time, this Schedule I shall be deemed modified accordingly. |
2011 | | 33 1/3% | | 100% (Target) | |
| | | | 150% (Maximum) | |
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| | | | 50% (Threshold) | | 2012 performance objectives to be determined by the Committee by March 30, 2012 and provided to Grantee, at which time, this Schedule I shall be deemed modified accordingly. |
2012 | | 33 1/3% | | 100% (Target) | |
| | | | 150% (Maximum) | |
Provided, the cash amount of the Award earned during each Performance Period shall be interpolated on a linear basis for the attainment of performance objectives for such Performance Period between Threshold and Target and between Target and Maximum.
ATTACHMENT A
Grantee Covenants
SECTION 1Position of Special Trust and Confidence.
1.1 The Company is placing Grantee in a special position of trust and confidence. As a result of this Agreement and Grantee’s position with the Company, Grantee will receive Confidential Information (defined below) related to his position, authorization to communicate and develop goodwill with Company customers, and/or specialized training related to the Company’s business. Grantee agrees to use these advantages of employment to further the business of the Company and not to knowingly cause harm to the business of the Company. The Company’s agreement to provide Grantee with these benefits, and the Award hereunder, gives rise to an interest in reasonable restrictions on Grantee’s competitive and post-employment conduct.
1.2 Grantee shall dedicate his full working time and efforts to the business of the Company and shall not undertake or prepare to undertake any conflicting business activities while employed with the Company. These duties supplement and do not replace or diminish the common law duties Grantee would ordinary have to the Company as the employer.
SECTION 2Consideration. In exchange for Grantee’s promises and obligations herein, the Company is granting Grantee the Award hereunder. The Company also agrees to provide Grantee with portions of its Confidential Information, authorization to communicate and develop goodwill with the Company customers, and/or specialized training related to the Company’s business. Grantee understands and agrees that the foregoing promises and benefits have material value and benefit to the Company, above and beyond any continuation of Company employment, and that Grantee would not be entitled to such consideration unless he signs and agrees to be bound by thisAttachment A. The Company agrees to provide Grantee the consideration described in this SECTION 2 only in exchange for his compliance with all the terms of thisAttachment A.
SECTION 3Confidentiality and Business Interests.
3.1 Grantee agrees to keep secret and confidential and neither use nor disclose, by any means, either during or after a termination of his employment for any reason, any Confidential Information except as provided below or required in his employment with, or authorized in writing by, the Company. Grantee agrees to keep confidential and not disclose or use, either during or after a termination of his employment for any reason, any confidential information or trade secrets of others which Grantee receives during the course of his employment with the Company for so long as and to the same extent as the Company is obligated to retain such information or trade secrets in confidence.
3.2 The obligations under this SECTION 3 shall not apply to Confidential Information to the extent that it: (a) is or becomes publicly known by means other than Grantee’s failure to perform his obligations under thisAttachment A; (b) was known to Grantee prior to disclosure to Grantee by or on behalf of the Company and Grantee; or (c) is received by Grantee in good faith from a third party (not an Affiliate) which has no obligation of
confidentiality to the Company with respect thereto. Notwithstanding anything contained herein to the contrary, Confidential Information shall not lose its protected status under thisAttachment A if it becomes generally known to the public or to other persons through improper means. The Company’s confidential exchange of Confidential Information with a third party for business purposes shall not remove it from protection under thisAttachment A.
3.3 If disclosure of Confidential Information is compelled by law, Grantee shall give the Company as much written notice as possible under the circumstances, shall refrain from use or disclosure for as long as the law allows, and shall cooperate with the Company to protect such information, including taking every reasonable step necessary to protect against unnecessary disclosure.
3.4 Grantee agrees not to disclose to the Company nor to utilize in Grantee’s work for the Company any confidential information or trade secrets of others known to Grantee and obtained prior to Grantee’s employment by the Company (including prior employers).
3.5 Grantee shall deliver to the Company promptly upon the end of Grantee’s employment all written and other materials which constitute or contain Confidential Information or which are the property of the Company (regardless of media), and shall not remove, erase, destroy, impede the Company’s access to, or take any such written and other materials. Grantee shall preserve records on the Company customers, prospects, vendors, suppliers, and other business relationships, and shall not knowingly use these records to harm the Company’s business interests. Upon termination of Grantee’s employment, Grantee shall return all such records, and any copies (tangible and intangible) to the Company. The Company is only authorizing Grantee to access and use the Company’s computers, email, or related computer systems to pursue matters that are consistent with the Company’s business interests. Access or use of such systems to pursue personal business interests apart from the Company, to compete or to prepare to compete, or to otherwise knowingly undermine the Company’s interests (such as, by way of example, removing, erasing, impeding the Company’s access to, or destroying its records or programs) is strictly prohibited and outside the scope of Grantee’s authorized use of the Company’s systems.
SECTION 4Non-Interference Covenants.Grantee agrees that the following covenants are (a) ancillary to the other enforceable agreements contained in thisAttachment A, and (b) reasonable and necessary to protect the Company’s legitimate business interests.
4.1Restriction on Interfering with Employee Relationships.Grantee agrees that for the period of time, set forth as the“SECTION 4.1 Restriction” inSection 2 of the Agreement, following the end of his employment with the Company for any reason, Grantee shall not interfere with the Company’s business relationship with any Company employee, by soliciting or communicating with such an employee to induce or encourage him to leave the Company’s employ (regardless of who initiates the communication), by helping another person or entity evaluate a Company employee as an employment candidate, or by otherwise helping any person or entity hire an employee away from the Company.
4.2Restriction on Interfering with Customer Relationships.Grantee agrees that for the period of time, set forth as the“SECTION 4.2 Restriction” inSection 2 of the Agreement,
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following the end of his employment with the Company for any reason, Grantee shall not interfere with the Company’s business relationships with a Covered Customer, by: (a) participating in, supervising, or managing (as an employee, consultant, contractor, officer, owner, director, or otherwise) any Competing Activities for, on behalf of, or with respect to a Covered Customer; or (b) soliciting or communicating (regardless of who initiates the communication) with a Covered Customer to induce or encourage the Covered Customer to: (i) stop or reduce doing business with the Company, or (ii) to buy a Conflicting Product or Service.
4.3Notice and Survival of Restrictions.
(a) Before accepting new employment, Grantee shall advise every future employer of the restrictions in thisAttachment A. Grantee agrees that the Company may advise a future employer or prospective employer of thisAttachment A and its position on the potential application of thisAttachment A.
(b) ThisAttachment A’s post-employment obligations shall survive the termination of Grantee’s employment with the Company for any reason. If Grantee violates one of the post-employment restrictions in thisAttachment A on which there is a specific time limitation, the time period for that restriction shall be extended by one day for each day Grantee violates it, up to a maximum extension equal to the length of time prescribed for the restriction, so as to give the Company the full benefit of the bargained-for length of forbearance.
(c) It is the intention of the Parties that, if any court construes any provision or clause of thisAttachment A, or any portion thereof, to be illegal, void or unenforceable, because of the duration of such provision, the scope or the subject matter covered thereby, such court shall reduce the duration, scope, or subject matter of such provision, and, in its reduced form, such provision shall then be enforceable and shall be enforced.
(d) If Grantee becomes employed with an Affiliate without entering into a new nondisclosure, nonsolicitation, noncompetition agreement that is substantially the same as thisAttachment A, the Affiliate shall be regarded as the Company for all purposes under thisAttachment A, and shall be entitled to the same protections and enforcement rights as the Company.
4.4California Modification (California Residents Only). To the extent that Grantee is a resident of California and subject to its laws: (a) the restriction in SECTION 4.2(a) shall not apply; (b) the restriction in SECTION 4.2(b) shall be limited so that it only applies where Grantee is aided by the use or disclosure of Confidential Information; (c) the restriction in SECTION 4.1 is deemed rewritten to provide as follows: For a period of two (2) years immediately following the termination of Grantee’s employment with the Company for any reason, Grantee shall not, either directly or indirectly, solicit any of the Company’s employees, with whom Grantee worked at any time during his employment with the Company, to leave their employment with the Company or to alter their relationship with the Company to the Company’s detriment; and (d) the jury trial waiver in Section 7(e) of the Agreement shall not apply.
SECTION 5Definitions. For purposes of the Agreement, the following terms shall have the meanings assigned to them below:
5.1“Affiliate” means the Company’s successors in interest, affiliates (as defined in Rule 12b-2 under Section 12 of the Securities and Exchange Act), subsidiaries, parents, purchasers, and assignees (collectively“Affiliates”).
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5.2“Competing Activities” are any activities or services undertaken on behalf of a Competitor that are the same or similar in function or purpose to those Grantee performed for the Company in the two (2) year period preceding the end of Grantee’s employment with the Company, or that are otherwise likely to result in the use or disclosure of Confidential Information. Competing Activities are understood to exclude: activities on behalf of an independently operated subsidiary, division, or unit of a diversified corporation or similar business that has common ownership with a competitor so long as the independently operated business unit does not involve a Conflicting Product or Service; and, a passive and non-controlling ownership interest in a competitor through ownership of less than 2% of the stock in a publicly traded company.
5.3“Confidential Information” includes but is not limited to any technical or business information, know-how or trade secrets, patentable or not, in any form, including but not limited to data; diagrams; business, marketing or sales plans; notes; drawings; models; prototypes; specifications; manuals; memoranda; reports; customer or vendor information; pricing or cost information; and computer programs, which are furnished to Grantee by the Company or which Grantee procures or prepares, alone or with others, in the course of his employment with the Company.
5.4“Conflicting Product or Service” is a product or service that is the same or similar in function or purpose to a Company product or service, such that it would replace or compete with: (a) a product or service the Company provides to its customers; or (b) a product or service that is under development or planning by the Company but not yet provided to customers and regarding which Grantee was provided Confidential Information in the course of employment. Conflicting Products or Services do not include a product or service of the Company if the Company is no longer in the business of providing such product or service to its customers at the relevant time of enforcement.
5.5 “Covered Customer” is a Company customer (natural person or entity) that Grantee had business-related contact or dealings with, or received Confidential Information about, in the two (2) year period preceding the end of Grantee’s employment with the Company. References to the end of Grantee’s employment in thisAttachment A refer to the end, whether by resignation or termination, and without regard for the reason employment ended.
5.6 “Competitor” is any person or entity engaged in the business of providing a Conflicting Product or Service.
5.7 Section references in thisAttachment A are to sections of thisAttachment A.
SECTION 6Notices. While employed by the Company, and for two (2) years thereafter, Grantee shall: (a) give the Company written notice at least thirty (30) days prior to going to work for a Competitor; (b) provide the Company with sufficient information about his new position to enable the Company to determine if Grantee’s services in the new position would
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likely lead to a violation of thisAttachment A; and (c) within thirty (30) days of any request made by the Company to do so, participate in a mediation or in-person conference to discuss and/or resolve any issues raised by Grantee’s new position. Grantee shall be responsible for all consequential damages caused by failure to give the Company notice as provided in this SECTION 6.
SECTION 7Remedies. If Grantee breaches or threatens to breach thisAttachment A, the Company may recover: (a) an order of specific performance or declaratory relief; (b) injunctive relief by temporary restraining order, temporary injunction, and/or permanent injunction; (c) damages; (d) attorney’s fees and costs incurred in obtaining relief; and (e) any other legal or equitable relief or remedy allowed by law. One Thousand Dollars ($1,000.00) is the agreed amount for the bond to be posted if an injunction is sought by the Company to enforce the restrictions in thisAttachment A on Grantee.
SECTION 8Return of Consideration. Grantee specifically recognizes and agrees that the covenants set forth in thisAttachment A are material and important terms of this Agreement, and Grantee further agrees that should all or any part or application of SECTION 4.2 be held or found invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction in an action between Grantee and the Company (despite, and after application of, any applicable rights to reformation that could add or renew enforceability), the Company shall be entitled to receive from Grantee a return of any and all monies paid to Grantee pursuant to the terms of this Agreement. The return of consideration provided for in this SECTION 8 is in addition to the remedies for breach provided for in SECTION 7.
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