THAN FIVE PERCENT (5%) OF THE SECURITIES OF A CORPORATION OR OTHER
BUSINESS ENTERPRISE SHALL NOT BE DEEMED CONTROL OF OR AN ASSOCIATION WITH SUCH
CORPORATION OR ENTERPRISE FOR PURPOSES OF THIS AGREEMENT.
4
NON-SOLICITATION OF EMPLOYEES
4.1
THE EXECUTIVE AGREES THAT FOR A PERIOD OF NINE (9) MONTHS
FOLLOWING THE TERMINATION DATE, THE EXECUTIVE SHALL NOT DIRECTLY OR INDIRECTLY,
PERSONALLY OR THROUGH OTHERS, SOLICIT OR ATTEMPT TO SOLICIT (ON HIS OWN BEHALF
OR ON BEHALF OF ANY OTHER PERSON OR ENTITY) THE EMPLOYMENT OR TERMINATION OF ANY
EMPLOYEE OR CONSULTANT OF THE WATTS SHANGHAI AND/OR ITS AFFILIATES.
THIS
PROVISION SHALL NOT APPLY TO EMPLOYEES OF WATTS SHANGHAI AND/OR ITS AFFILIATES
THAT HAVE BEEN TERMINATED FOR A PERIOD OF SIX MONTHS OR LONGER.
5
CONSIDERATION
5.1
IN CONSIDERATION OF THE EXECUTIVE'S BEING SUBJECT TO THE
RESTRICTIONS PROVIDED BY THIS AGREEMENT, THE PARENT COMPANY, FOR AND ON BEHALF
OF WATTS SHANGHAI, WILL MAKE PAYMENTS ("COMPENSATION") TO THE EXECUTIVE. THE
EXECUTIVE ACKNOWLEDGES AND AGREES THAT THE COMPENSATION IS INCLUDED IN THE TOTAL
AMOUNT OF THE SEVERANCE BENEFITS WHICH WILL BE PROVIDED BY THE PARENT COMPANY
ACCORDING TO THE LETTER AGREEMENT.
5.2
THE EXECUTIVE AGREES THAT THE COMPENSATION SET OUT UNDER THIS
ARTICLE 5 IS FAIR AND REASONABLE COMPENSATION FOR HIS RESTRICTION UNDER THIS
AGREEMENT.
THE EXECUTIVE WILL NOT SEEK OR DEMAND ANY OTHER COMPENSATION FROM
WATTS SHANGHAI AND/OR IT AFFILIATES.
SHOULD THERE BE ANY CHANGE IN THE
APPLICABLE
LAWS OR REGULATIONS SUCH THAT THE COMPENSATION WOULD NO LONGER BE SUFFICIENT TO
RENDER THE RESTRICTION UNDER THIS AGREEMENT ENFORCEABLE UNDER PRC LAW, WATTS
SHANGHAI AND/OR ITS AFFILIATES SHALL HAVE THE RIGHT TO PAY TO THE EXECUTIVE THE
AMOUNT NECESSARY TO MAKE UP FOR ANY INSUFFICIENCY IN THE COMPENSATION AND RENDER
THE EXECUTIVE'S OBLIGATION UNDER THIS AGREEMENT ENFORCEABLE.
5.3
THE EXECUTIVE AGREES THAT THE RESTRICTIONS UNDER THIS AGREEMENT
ARE REASONABLE, NO GREATER THAN WHAT IS REQUIRED TO PROTECT WATTS SHANGHAI
AND/OR ITS AFFILIATES' LEGITIMATE INTERESTS WITH RESPECT TO TRADE SECRETS,
CONFIDENTIAL INFORMATION AND CUSTOMERS, AND CUSTOMER RELATIONSHIPS, AND DO NOT
IMPAIR OR PREVENT THE EXECUTIVE FROM EARNING A LIVING.
5.4
IT IS THE INTENTION OF BOTH PARTIES TO RESTRICT THE EXECUTIVE'S
ACTIVITIES ONLY TO THE EXTENT NECESSARY FOR THE PROTECTION OF THE WATTS SHANGHAI
AND/OR ITS AFFILIATES' LEGITIMATE BUSINESS INTERESTS. TO THE EXTENT THAT THIS
RESTRICTIVE COVENANTS OF THIS AGREEMENT SHALL BE DETERMINED TO BE INVALID OR
UNENFORCEABLE IN ANY RESPECT OR TO ANY EXTENT, THE COVENANTS SHALL NOT BE
RENDERED INVALID, BUT INSTEAD SHALL BE AUTOMATICALLY AMENDED FOR SUCH LESSER
TERM OR TO SUCH LESSER EXTENT, OR IN SUCH OTHER DEGREE, AS MAY GRANT WATTS
SHANGHAI AND/OR ITS AFFILIATES THE MAXIMUM PROTECTION AND RESTRICTIONS ON YOUR
ACTIVITIES PERMITTED BY APPLICABLE LAW IN SUCH CIRCUMSTANCES. THE RESTRICTIONS
CONTAINED IN THIS AGREEMENT SHALL BE EXTENDED BY THE LENGTH OF TIME DURING WHICH
THE EXECUTIVE SHALL HAVE BEEN IN BREACH OF ANY OF SAID PROVISIONS.
6
DAMAGES
6.1
IF WATTS SHANGHAI AND/OR ITS AFFILIATES INCURS AND/OR SEEKS
REDRESS FOR ANY VIOLATION BY THE EXECUTIVE OF