SHALL NOT BE EXTINGUISHED OR RELEASED THEREBY.
(e)
Treatment of Stock Options in Event of Termination.
In the event
of termination of employment for causes 6(a), 6(b), or 6(c) above, stock options
granted the employee per 4(a) on the Effective Date of the Agreement will vest
immediately in an amount pro-rated to the number of calendar days of employment
subsequent to the Effective Date relative to the number of days of the Initial
Term and be exercisable 12 months subsequent to such vesting.
5
7.
NONSOLICITATION AND NONDISCLOSURE COVENANTS.
(A)
RATIONALE FOR RESTRICTIONS.
EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE'S
SERVICES HEREUNDER ARE OF A SPECIAL, UNIQUE, AND EXTRAORDINARY CHARACTER, AND
EMPLOYEE'S POSITION WITH THE COMPANY PLACES EMPLOYEE IN A POSITION OF CONFIDENCE
AND TRUST WITH CUSTOMERS, SUPPLIERS, AND OTHER PERSONS AND ENTITIES WITH WHOM
THE COMPANY AND ITS RELATED ENTITIES HAVE A BUSINESS RELATIONSHIP.
THE
EMPLOYEE FURTHER ACKNOWLEDGES THAT THE RENDERING OF SERVICES UNDER THIS
AGREEMENT WILL LIKELY REQUIRE THE DISCLOSURE TO EMPLOYEE OF CONFIDENTIAL
INFORMATION (AS DEFINED BELOW) INCLUDING TRADE SECRETS OF THE COMPANY RELATING
TO THE COMPANY AND/OR RELATED ENTITIES.
AS A CONSEQUENCE, THE EMPLOYEE AGREES
THAT IT IS REASONABLE AND NECESSARY FOR THE PROTECTION OF THE GOODWILL AND
LEGITIMATE BUSINESS INTERESTS OF THE COMPANY AND RELATED ENTITIES THAT THE
EMPLOYEE MAKE THE COVENANTS CONTAINED IN THIS SECTION 7, THAT SUCH COVENANTS ARE
A MATERIAL INDUCEMENT FOR THE COMPANY TO EMPLOY THE EMPLOYEE AND TO ENTER INTO
THIS AGREEMENT, AND THAT THE COVENANTS ARE GIVEN AS AN INTEGRAL PART OF AND
INCIDENT TO THIS AGREEMENT.
(B)
NONSOLICITATION COVENANTS.
AS USED HEREIN, THE TERM "RESTRICTIVE
PERIOD" MEANS THE TIME PERIOD COMMENCING ON THE EFFECTIVE DATE OF THIS AGREEMENT
AND ENDING ON THE SECOND (2ND) ANNIVERSARY OF THE DATE ON WHICH THE EMPLOYEE'S
EMPLOYMENT BY THE COMPANY (OR ANY RELATED ENTITY) EXPIRES OR IS TERMINATED FOR
ANY REASON, INCLUDING BOTH A TERMINATION BY THE COMPANY FOR CAUSE AND NOT FOR
CAUSE.
IN ADDITION, THE TERM "COVERED BUSINESS" MEANS ANY BUSINESS WHICH IS THE
SAME AS, OR SIMILAR TO, ANY BUSINESS CONDUCTED BY THE COMPANY OR ANY OF THE
RELATED ENTITIES AT ANY TIME DURING THE RESTRICTIVE PERIOD.
THE EMPLOYEE AGREES
THAT THE EMPLOYEE WILL NOT ENGAGE IN ANY OF THE FOLLOWING ACTS ANYWHERE IN THE
WORLD DURING THE RESTRICTIVE PERIOD:
(I)
DIRECTLY OR INDIRECTLY ASSIST, PROMOTE OR ENCOURAGE ANY EXISTING
OR POTENTIAL EMPLOYEES, CUSTOMERS, CLIENTS, OR VENDORS OF THE COMPANY OR ANY
RELATED ENTITY, AS WELL AS ANY OTHER PARTIES WHICH HAVE A BUSINESS RELATIONSHIP
WITH THE COMPANY OR A RELATED ENTITY, TO TERMINATE, DISCONTINUE, OR REDUCE THE
EXTENT OF THEIR RELATIONSHIP WITH THE COMPANY OR A RELATED ENTITY;
(II)
DIRECTLY OR INDIRECTLY SOLICIT BUSINESS OF THE SAME OR SIMILAR
TYPE AS A COVERED BUSINESS, FROM ANY PERSON OR ENTITY KNOWN BY THE EMPLOYEE TO
BE A CUSTOMER OR CLIENT OF THE COMPANY, WHETHER OR NOT THE EMPLOYEE HAD CONTACT
WITH SUCH PERSON OR ENTITY DURING THE EMPLOYEE'S EMPLOYMENT WITH THE COMPANY;
(III)
DISPARAGE THE COMPANY, ANY RELATED ENTITIES, AND/OR ANY