Document:

Exhibit 10.1

 

[FORM]

 

CONFIDENTIALITY, NON-COMPETITION, AND NON-SOLICITATION AGREEMENT

 

This CONFIDENTIALITY, NON-COMPETITION, AND NON-SOLICITATION AGREEMENT (this “Agreement”), dated as of [      ] (this “Effective Date”), is made by and among Eagle Rock Energy G&P, LLC (“G&P”) and the employee who signs below (the “Employee”).

 

RECITALS

 

WHEREAS, G&P is the general partner of Eagle Rock Energy GP, LP (“GP”), which is the general partner of Eagle Rock Energy Partners, L.P. (the “Partnership” and collectively with G&P, GP, and its and their direct and indirect subsidiaries as and where applicable, the “Company”) which is a growth-oriented limited partnership engaged, through direct and indirect subsidiaries, in: (i) the business of gathering, compressing, treating, processing, transporting, marketing and trading natural gas; fractionating, transporting and marketing natural gas liquids; and crude oil logistics and marketing (together with the business of acquiring such assets and/or businesses, the “Midstream Business”); and (ii) the business of developing and producing hydrocarbons in oil and natural gas properties, including without limitation the lease, acquisition, exploration, production, gathering, or marketing of hydrocarbons (and rights or interests therein) and related products and the exploration potential of geographical areas on which hydrocarbon exploration prospects are located (together with the business of acquiring such assets and or businesses, the “Upstream Business” and together with the Midstream Business, the “Business”).

 

WHEREAS, G&P plans to employ Employee in a position of trust inside G&P and in connection with G&P’s service to GP and the Partnership, including to provide services to the Business.

 

WHEREAS, Employee acknowledges that, in the course of his/her employment by G&P and performance of services on behalf of the Company, he/she will become privy to various opportunities relating to the Business, economic and trade secrets, confidential information, and relationships of the Company.

 

WHEREAS, in connection with his/her hiring by and employment with G&P, Employee may have the opportunity to receive awards of restricted common units (the “Restricted Units”) of the Partnership pursuant to the Amended and Restated Eagle Rock Energy Partners Long-Term Incentive Plan (as it may be amended or restated from time to time, the “Plan”).

 

WHEREAS, the Restricted Units are designed to, among other things, provide the Employee with financial and other incentives to (1) protect the confidential information of the Company, (2) maintain, enhance, and grow the goodwill of the Company with its employees, service providers, clients, and customers, and (3) grow and protect the value of the Business.

 

WHEREAS, it is a condition to the employment of Employee by the Company and Employee’s receipt of any Restricted Units pursuant to the Plan that Employee agree to certain confidentiality and non-competition protections for the Company and its

 

1

 

confidential information, goodwill, and other legitimate business interests, on the terms and conditions in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises below and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree to the following terms:

 

TERMS

 

1.             Business Opportunities and Intellectual Property; Personal Investments;  Confidentiality; Covenant not to Compete.

 

(a)           Employee shall promptly disclose to the Company all Business Opportunities and Intellectual Property (as defined below).

 

(b)           Employee hereby assigns and agrees to assign to the Company, its successors, assigns, or designees, all of Employee’s right, title, license, and interest in and to all Business Opportunities and Intellectual Property, free and clear of all encumbrances, including without limitation, security interest(s), licenses, liens, or other restrictions other than as expressly provided for in this Agreement, and further acknowledges and agrees that all Business Opportunities and Intellectual Property constitute the exclusive property of the Company.  If Employee cannot assign all or any portion of his right, title, license or interest in or to such Intellectual Property, Employee shall and hereby does grant to the Company an exclusive, perpetual, world-wide, fully-paid, royalty-free, non-revocable license in and to such Intellectual Property.

 

(c)           For purposes hereof, “Business Opportunities” shall mean all business ideas, prospects, proposals, and other opportunities pertaining to any aspect of the Business that are:

 

(i)            developed by Employee during the period that Employee is employed by the Company (the “Employment Term”); and

 

(ii)           originated by any third parties and brought to the attention of Employee, during the Employment Term, except to the extent that (A) such opportunities are not applicable, directly or indirectly, to any of the Company’s properties or assets or the Business, and (B) third parties possess valid and enforceable rights to such opportunities;

 

together with information relating thereto, including, without limitation, the “Company’s Business Records” (as defined below).

 

(d)           For purposes hereof “Intellectual Property” shall mean all ideas, inventions, discoveries, processes, designs, methods, substances, articles, computer programs, and improvements (including, without limitation, enhancements to, or further interpretation or processing of, information that was in the possession of Employee prior to the Effective Date), whether or not patentable or registrable under copyright or similar laws, which do not fall within the definition of Business Opportunities, and which are discovered, conceived, invented, created, or developed by Employee, alone or with others if such discovery, conception, invention,

 

2

 

creation, or development occurs or occurred (i) during the Employment Term, or (ii)  with the use of any of the Company’s time, materials, assets, or facilities.

 

2.             Non-Competition Obligations During Employment Term.

 

(a)           Except as set forth in subsection (b) hereof, Employee agrees that during the Employment Term:

 

(i)            Employee will not, other than through the Company, engage or participate in any manner, whether directly or indirectly through any family member or as an employee, employer, consultant, agent, principal, partner, more than one percent equity-holder, officer, director, licensor, lender, lessor, or in any other individual or representative capacity, in any business or activity which is engaged in any aspect of the Business; provided that, this Section 2 shall not preclude Employee from making personal investments in securities of companies engaged in the Business which are registered on a national stock exchange or on The NASDAQ Stock Market, if the aggregate amount owned by Employee and all family members and affiliates does not exceed 2% of such company’s outstanding securities; and

 

(ii)           all investments made by Employee (whether in Employee’s own name or in the name of any family members or made by any Controlled Affiliates, as defined below), which relate to any aspect of the Business shall be made solely through the Company; and Employee will not (directly or indirectly through any family members), and will not permit any Controlled Affiliate to: (A) invest or otherwise participate alongside the Company in any Business Opportunities, or (B) invest or otherwise participate in any business or activity relating to a Business Opportunity, regardless of whether the Company ultimately participates in such business or activity.

 

For purposes hereof, “Controlled Affiliates” are entities in which Employee and Employee’s family members collectively own, directly or indirectly, a majority of the equity or voting interests.

 

(b)           Employee represents that neither Employee nor his/her Controlled Affiliates or his/her immediate family members (i.e., his/her spouse and children) own any investments or interests which relate to any aspect of the Business, other than any Restricted Units granted to Employee pursuant to the Plan and those interests that are described in the Disclosure Schedule attached as Exhibit A hereto (the “Excluded Interests”).  Employee shall supplement the Disclosure Schedule if he/she receives any gifts or inherits any interests that require disclosure, and he/she shall not be required to reject disclosed gifts or inherited interests received in good faith as a condition of continuing employment.  It is agreed that the provisions of this Section 2 shall not prohibit Employee from maintaining Employee’s current direct or indirect ownership interests in the Excluded Interests; provided, that Employee agrees that he/she will not, directly or indirectly, make any investment or expenditure to increase the interest of Employee or of his/her Controlled Affiliates or immediate family members, in any of such Excluded Interests beyond that to which Employee is entitled as of the Effective Date.

 

3

 

3.             Confidentiality Obligations.

 

(a)           Employee hereby acknowledges that all trade secrets, Intellectual Property, and confidential or proprietary information of the Company (collectively referred to herein as “Confidential Information”) constitute valuable, special, and unique assets of the Business and the Company, and that access to and knowledge of such Confidential Information is essential to the performance of Employee’s duties.  Employee agrees that during the Employment Term and following the date of termination of Employee’s employment (the “Termination Date”), regardless of the reason for such termination, Employee shall hold the Confidential Information in strict confidence and shall not publish, disseminate, or otherwise disclose, directly or indirectly, to any person other than the Company and its officers, directors, and employees, any Confidential Information or use any Confidential Information for Employee’s own personal benefit or for the benefit of anyone other than the Company.  The Company agrees to provide previously undisclosed Confidential Information to Employee in exchange for Employee’s agreement to keep such Confidential Information, and any Confidential Information to which Employee has already become privy, in strict confidence as provided in this Agreement.

 

(b)           For purposes of this Section 3, it is agreed that Confidential Information includes, without limitation, any information heretofore or hereafter acquired, developed or used by the Company relating to Business Opportunities or Intellectual Property, or any other aspect of the Business that is not generally available to the public, whether oral or in written form and whether or not included in the Company’s Business Records, but shall exclude any information which (A) is or has become part of common knowledge or understanding in the oil and gas industry or otherwise in the public domain (other than from disclosure by Employee in violation of this Agreement), (B) was rightfully in the possession of Employee, as shown by Employee’s records and disclosed by Employee on Exhibit A, prior to the Effective Date and which is not directly applicable to the Business of the Company or any of its properties or assets, (C) is lawfully acquired by Employee after the Termination Date from any third party not bound by an obligation of confidence to the Company; or (D) is independently developed by or for Employee after the Termination Date without using the Confidential Information of the Company; provided, however, that Employee shall provide to the Company copies of all information described in clause (B) to the extent reasonably requested by the Company (and which is not otherwise subject to a pre-existing confidentiality agreement); provided further, however, that this Section 3 shall not be applicable to the extent Employee is required to testify in a judicial or regulatory proceeding pursuant to the order of a judge or administrative law judge but in such event Employee shall first request that such Confidential Information be preserved and shall give prompt notice to the Company of such order to testify for the purpose of giving the Company a reasonable opportunity to take appropriate steps to preserve the confidentiality of such Confidential Information.

 

(c)           Notwithstanding any other provision of this Agreement, this Agreement is not intended to interfere with Employee’s right to discuss the terms, conditions, wages, and benefits of his/her employment or engage in any other concerted activity protected by applicable law.

 

4

 

4.             Non-Competition and Non-Solicitation Obligations After Termination Date.

 

(a)           Employee acknowledges that (i) the Business is highly competitive; (ii) the Company has invested significant efforts and resources in creating its Confidential Information and building goodwill with its employees, service providers, customers, and clients, all of which give the Company a competitive advantage; (iii) due to the nature of the Business, the Company continually develops new and additional Confidential Information which has not been previously disclosed to Employee; (iv) in performing his/her services, Employee necessarily must rely on the Company’s goodwill and such previously undisclosed Confidential Information; (v) he/she is entitled under this Agreement to receive specialized training related to the Business and access previously undisclosed Confidential Information which could be used by the Company’s competitors in a manner that would irreparably harm the Company’s competitive position in the marketplace; (vi) his/her receipt of any Restricted Units is designed to, among other things, provide him/her with financial and other incentives to protect the Confidential Information of the Company and maintain, enhance, and grow its goodwill and the value of the Business; (vii) it is therefore reasonable for the Company to protect its Confidential Information, goodwill, and other legitimate business interests against unfair competition; (viii) he/she shall be responsible for, among other things, using the Company’s Confidential Information and building relationships with the Company’s employees, service providers, clients, and customers, and the continuation of such relationships and the related goodwill shall be an invaluable asset of the Company necessary to the Company’s competitive advantage; (ix) if he/she were to compete with the Company, he/she could divert certain of those relationships, and the related goodwill and business, away from the Company; (x) it would be virtually impossible for him/her to ignore all knowledge of the Company’s Confidential Information if he/she were to compete against the Company; (xi) a prohibition against his/her competing with the Company or soliciting the Company’s employees, service providers, clients, and customers during the Employment Term and for a reasonable period thereafter, and within a reasonable geographic area, is therefore appropriate for the protection of the Company’s Confidential Information, goodwill, and other legitimate business interests; and (xii) compliance with this Agreement shall not cause any hardship on him/her or prevent him/her from being able to earn a living or to operate or engage in any business not prohibited by this Agreement.

 

(b)           The purpose of the provisions of Section 2 and this Section 4 are to protect the Company from unfair loss of goodwill and business advantage and to shield Employee from pressure to use or disclose Confidential Information or to trade on the goodwill belonging to the Company. Accordingly, during the Post-Termination Non-Compete Term (as defined below), Employee will not engage or participate in any manner, whether directly or indirectly through any family member or as an employee, employer, consultant, agent, principal, partner, shareholder, officer, director, licensor, lender, lessor, or in any other individual or representative capacity, in any business or activity which is engaged in any aspect of the Business in an area that is within any of the counties or parishes, as applicable, wherein the Company conducts, or intends to conduct and has taken commercial steps toward fulfillment of that intent as known by Employee, any aspect of the Business as of the Termination Date; provided that, this Section 4 shall not preclude Employee from making personal investments in securities of oil and gas companies which are registered on a national stock exchange or on The Nasdaq Stock Market, if the aggregate amount owned by Employee and all family members and affiliates does not exceed 2% of such company’s outstanding securities.

 

(c)           For purposes hereof, the “Post Termination Non-Compete  Term” is:

 

5

 

(i)            the 12-month period following the Termination Date, if (A) Employee voluntarily resigned or otherwise terminated his/her position as an officer or employee of the Company, (B) Employee’s employment by the Company was terminated for Cause (as defined below), or (C) Employee breached any of the provisions of Sections 3, 4 or 5 hereof; or

 

(ii)           in the event that (A) Employee’s services as an officer or employee are terminated by the Company other than for Cause, and (B) Employee is not in breach of any of the provisions of Section 3, 4 or 5 hereof, the period during which the Company makes Severance Payments (as defined below) to Employee, the length of which shall be determined by the Company in its sole discretion, but in no event to be longer than 12 months following the Termination Date.

 

(d)           For purposes hereof, the term “Severance Payments” shall mean a monthly payment that is equal to the regular monthly base salary that Employee was receiving from the Company immediately before the Termination Date, and such Severance Payments shall be payable at the same times as Employee’s regular salary was paid immediately before the Termination Date and shall be subject to payroll and income tax and other withholdings, as applicable.

 

(e)           For purposes hereof, “Cause” means any determination by the Company in its reasonable, good faith discretion that Employee has (i) been convicted of, or entered a plea of nolo contendere to, any felony or to any crime or offense that has harmed, or likely will harm, the Company or that involves theft, fraud, embezzlement, moral turpitude, or similar conduct; (ii) willfully and continually failed to substantially perform his/her duties for the Company (other than a failure resulting from Employee’s incapacity due to physical or mental disability); or (iii) engaged in any act or omission that is contrary to the best interests of the Company and has harmed, or likely will harm, the Company, including without limitation any violation of the Company’s policies, rules, or practices in the Company’s Employee Handbook and/or Code of Business Conduct and Ethics or otherwise that has harmed, or likely will harm, the Company.  Employee shall not be considered to have acted or failed to act “willfully” unless the Company has determined in its reasonable, good faith discretion that Employee has intentionally or deliberately acted or failed to act with knowledge that such action or failure to act was likely to harm the Company.  Notwithstanding anything to the contrary in this Agreement, no failure to perform by Employee after a notice of termination is given shall constitute Cause.  If the Company determines in its reasonable, good faith discretion that a cure is possible and appropriate, the Company will give Employee written notice of the acts or omissions constituting Cause and no termination of his/her services as an officer or employee for purposes of this Agreement shall be for Cause unless and until Employee fails to cure such acts or omissions within 15 days following receipt of such written notice.  If the Company determines in its reasonable, good faith discretion that a cure is not possible and appropriate, Employee shall have no notice or cure rights before his/her services as an officer or employee are terminated by the Company for Cause for purposes of this Agreement.

 

(f)            Notwithstanding anything to the contrary in this Agreement, the Company shall not be obligated to make Severance Payments under this Agreement.  If the events contemplated in Section 4(c)(ii) above occur, and if the Company elects not to make

 

6

 

any Severance Payments, there shall be no Post Termination Non-Compete Term under  Section 4(c)(ii), and the Company shall have no further obligation to Employee under this Agreement.  If the Company does elect to make Severance Payments under Section 4(c)(ii), it must notify Employee of such decision no later than five business days after the Termination Date.  Thereafter, the Company shall be entitled at its sole discretion to cease making Severance Payments at any time and for any reason, but only upon at least 15 days advance written notice to Employee.  In such event, the Company Parties shall have no further obligation to Employee under this Agreement, and the Post-Termination Non-Compete Term shall cease on the effective termination date set forth in such written notice.  Employee acknowledges that any concurrent or future grant of Restricted Units, as well as the Company’s agreement to provide Confidential Information to Employee, the Company’s other promises and undertakings contained in this Agreement, and, as and when applicable, any payment of Severance Payments to Employee under Section 4(c)(ii) above, shall constitute adequate consideration for Employee’s promises and covenants set forth in this Agreement, including those set forth in this Section 4.

 

(g)           Employee shall not, during Employment Term and the 18-month period following the Termination Date, solicit, entice, persuade, or induce, directly or indirectly, any employee (or person who within the preceding 90 days was an employee) of the Company or any other person who is under contract with or rendering services to the Company, to (i) terminate his/her or her employment by, or contractual relationship with, the Company, (ii) refrain from extending or renewing the same (upon the same or new terms), (iii) refrain from rendering services to or for the Company, (iv) become employed by or enter into contractual relations with any person other than the Company, or (v) enter into a relationship with a competitor of the Company.

 

(h)           Employee shall not, during Employment Term and the 12-month period following the Termination Date (i) solicit, encourage, facilitate, or induce any client or customer, person or entity that was a client or customer at any time in the 90 days preceding the solicitation, encouragement, facilitation, or inducement, or any prospects, vendors, suppliers, manufacturers, advertisers, agents, sales representatives, employees, contractors, consultants, service providers, or licensees of the Company, to breach any agreement or contract with, or discontinue or curtail his, her, or its business relationships with, the Company; or (ii) hire or otherwise engage as an employee, independent contractor, or otherwise, any person who is an employee or service provider of the Company, or was an employee or service provider of the Company, at any time in the 90 days preceding the hiring or engagement.

 

(i)            For purposes of this Agreement, (i) “customer” and “client” shall mean any person or entity (A) (1) to whom Employee personally rendered services or sold products or services to on behalf of the Company or was assigned by the Company to render services to or sell products or services to on behalf of the Company, (2) to whom Employee personally provided customer-relationship services, customer-oversight, customer-management, or similar functions on behalf of the Company, or (3) with whom Employee otherwise interacted with, dealt with, or developed a relationship with, related to the Business during the Employment Term; (B) to whom an individual employed by the Company and supervised by Employee rendered services or sold products or services to on behalf of the Company during the Employment Term; or (C) who received services or products from the Company during the Employment Term and about which Employee has received Confidential Information; and (ii) “prospect” shall mean

 

7

 

any prospective customer or client to whom Employee, or anyone supervised by Employee during the Employment Term, has pitched products or services, or made a verbal or written proposal for products or services, on behalf of the Company.

 

5.             Business Records.

 

(a)           Employee agrees to promptly deliver to the Company, upon termination of Employee’s employment with the Company, regardless of the reason for such termination, or at any other time when the Company so requests, all documents and property owned by the Company in his/her possession or under his/her control relating to the Business of the Company, including, without limitation:  (i) all data such as maps, charts and other reports and related data, calculations, summaries, memoranda and opinions relating to the foregoing, production records, lease files, well files and records, land files, abstracts, title opinions, title or curative matters, contract files, notes, records, drawings, manuals, correspondence, financial and accounting information, customer lists, customer information, statistical data and compilations, patents, copyrights, trademarks, trade names, inventions, formulae, methods, processes, agreements, contracts, or manuals, (ii) all electronic or other files, records, documents, programs, communications, and similar items relating to gathering, processing, storing, compressing, treating, fractionating, producing, scheduling, performing logistics for, marketing, trading, or transporting commodities such as crude oil, condensate, natural gas, natural gas liquids, or liquefied natural gas, or (iii) any other electronic or other documents constituting Confidential Information whether they are prepared by Employee and whether or not they contain or constitute trade secrets owned by the Company (collectively, the “Company’s Business Records”), and all copies, reproductions, or summaries thereof and excerpts therefrom.

 

(b)           Employee confirms that all of the Company’s Business Records (and all copies thereof and therefrom) that are required to be delivered to the Company pursuant to this Section 5 constitute the exclusive property of the Company.

 

(c)           The obligation of confidentiality set forth in Section 3 shall continue notwithstanding Employee’s delivery of any such documents to the Company.

 

(d)           The provisions of this Section 5 shall continue in effect notwithstanding termination of Employee’s employment for any reason.

 

8

 

6.             Third-Party Beneficiaries; Definition of Affiliate.  The Company’s Affiliates shall be included within the definition of “Company” for purposes of this Agreement and are intended to be third-party beneficiaries of this Agreement.  For purposes of this Agreement, “Affiliate” shall mean any individual, corporation, partnership, trust, unincorporated organization, association, business entity, or other project that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Company, including without limitation the Partnership.

 

7.             Miscellaneous.

 

(a)           The invalidity or non-enforceability of any provision of this Agreement in any respect shall not affect the validity or enforceability of this Agreement in any other respect or of any other provision of this Agreement.  In the event that any provision of this Agreement shall be held invalid or unenforceable by a court of competent jurisdiction by reason of the geographic or business scope or the duration thereof, such invalidity or unenforceability shall attach only to the scope or duration of such provision and shall not affect or render invalid or unenforceable any other provision of this Agreement, and, to the fullest extent permitted by law, this Agreement shall be construed as if the geographic or business scope or the duration of such provision had been more narrowly and reasonably drafted so as not to be invalid or unenforceable.

 

(b)           Employee acknowledges and agrees that any breach of the provisions of this Agreement by him/her shall (i) result in damages to the Company in amounts difficult to ascertain, and (ii) otherwise give rise to irreparable injury to the Company.  Accordingly, Employee agrees that the Company’s remedy at law for any breach of the provisions of this Agreement is and will be insufficient and inadequate and that the Company therefore shall be entitled to equitable relief, including by way of temporary restraining order and temporary and permanent injunction without the necessity of proof of actual damage or posting a bond, in addition to any other remedies the Company may have at law.

 

(c)           The representations and covenants contained in this Agreement on the part of Employee will be construed as ancillary to and independent of any other agreement between the Company and Employee, and the existence of any claim or cause of action of Employee against the Company or any officer, director, manager, partner, member, or shareholder of the Company, whether predicated on Employee’s employment or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants of Employee contained in this Agreement.  In addition, the provisions of this Agreement shall continue to be binding upon Employee in accordance with their terms, notwithstanding the termination of Employee’s employment for any reason.

 

(d)           The parties to this Agreement agree that the limitations contained in Section 4 with respect to time, geographical area, and scope of activity are reasonable, and do not impose a greater restraint than is necessary to protect the Company’s Confidential Information, goodwill,  Restricted Units, and other legitimate business interests.  However, if any court shall determine that the time, geographical area, or scope of activity of any restriction contained in Section 4 is unenforceable, such restrictive covenant shall not thereby be terminated but shall be deemed amended to the extent required to render it valid and enforceable.

 

9

 

(e)           All notices or other communications required or permitted to be given under this Agreement shall be in writing and shall be duly given on the day of personal delivery if personally delivered or on the third day after being sent if sent postage pre-paid by certified or registered mail, return receipt requested or by telecopy as follows: (a) if addressed to Employee, at the address or telecopy number furnished to the Company by Employee, or (b) if addressed to the Company, at its principal place of business or at its telecopy number at such address, to the attention of the Company’s Senior Vice President and General Counsel.  Either party may change its address or telecopy number by giving the other party notice of such change in accordance with the provisions of this Section 7(e).  A notice shall be deemed given, if by personal delivery or expedited delivery service, on the date of such delivery to such address, if by certified mail, on the date of receipt, refusal or first attempted date of delivery if unclaimed, or if by telecopy, on the date of receipt of the transmission of such notice at such telecopy number.

 

(f)            This Agreement may not be altered or amended except by a writing, duly executed by the party against whom such alteration or amendment is sought to be enforced.

 

(g)           EMPLOYEE ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, EMPLOYEE HAS HAD THE OPPORTUNITY TO READ AND UNDERSTAND ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT AND SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL.  EMPLOYEE HEREBY REPRESENTS THAT EMPLOYEE EITHER HAS SOUGHT INDEPENDENT LEGAL COUNSEL OR HAS ELECTED FREELY NOT TO DO SO. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

(h)           THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO RULES OR PRINCIPLES OF CONFLICTS OF LAW REQUIRING THE APPLICATION OF THE LAW OF ANOTHER STATE), AND THAT THE COURTS IN HARRIS COUNTY, TEXAS SHALL BE THE EXCLUSIVE COURTS OF JURISDICTION AND VENUE FOR ANY LITIGATION, SPECIAL PROCEEDING, DISPUTE, CLAIM, OR OTHER PROCEEDING AS BETWEEN THE PARTIES THAT MAY BE BROUGHT OR ARISE OUT OF, IN CONNECTION WITH, OR BY REASON OF THIS AGREEMENT.

 

(i)            NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, EMPLOYEE AGREES TO IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE, CONTROVERSY, CLAIM, OR CAUSE OF ACTION (INDIVIDUALLY, A “CLAIM”) AGAINST THE COMPANY, INCLUDING WITHOUT LIMIT ANY CLAIM ARISING UNDER OR RELATED TO THIS AGREEMENT (EITHER ALLEGED BREACH OR ENFORCEMENT) OR HIS/HER EMPLOYMENT WITH THE COMPANY.

 

(j)            This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.  Employee acknowledges that, in entering this Agreement, he/she is not relying on any statement, 

 

10

 

representation, or promise by the Company outside of this Agreement.

 

(k)           This Agreement may be executed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.

 

(l)            Employee acknowledges that, notwithstanding any other provision of this Agreement, his/her employment with the Company is for an unspecified duration and constitutes at-will employment.  Accordingly, Employee understands and acknowledges that his/her employment relationship with the Company may be terminated at any time, with or without cause, at the option of either party, with or without notice.  Any representation contrary to the previous two sentences shall be invalid unless obtained in writing and signed by the Chief Executive Officer of the Company.

 

(m)          This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, legal representatives, successors, and permitted assigns. The Company shall be permitted to assign or otherwise transfer this Agreement to an affiliate or successor without Employee’s prior consent.

 

(n)           No breach by the Company of this Agreement or failure to enforce or insist on its rights under this Agreement shall constitute a waiver or abandonment of any such rights or defense to enforcement of such rights. No waiver of any provision of this Agreement or any breach of this Agreement shall be effective unless such waiver is in writing and signed by the waiving party and any such waiver shall not be deemed a waiver of any other provision of this Agreement or any other or subsequent breach of this Agreement. The rights and remedies granted to the Company pursuant to this Agreement are in addition to any other rights and remedies otherwise available to the Company under applicable law or in equity.

 

[Remainder of Page Intentionally Left Blank.  Signature Page to Follow.]

 

11

 

AGREED as of the Effective Date:

 

 

	
 
    	
EAGLE ROCK ENERGY G&P, LLC:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EMPLOYEE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[      ]
    

 

12

 

EXHIBIT A

Disclosure Schedule

 

	
EXCLUDED
   INTERESTS/
   INFORMATION
    	
 
    	
DATE
    	
 
    	
BRIEF DESCRIPTION
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

       No Excluded Interests or Information as of the Effective Date

       Additional Sheets Attached

 

	
Signature   of Employee:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Print   Name of Employee:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date   Signed:Exhibit 10.1

 

 

March 22, 2012

 

Andrew Hurd

 

Re: Offer of Employment

 

Dear Andrew

 

On behalf of Epocrates, Inc. (“Epocrates” or the “Company”), I am pleased to offer you the full-time position of President and Chief Executive Officer.  The terms and conditions of your new position and employment relationship with the Company are as set forth below:

 

1.             Position and Work Schedule.

 

a.            You will become the President and Chief Executive Officer for the Company.  You will report directly to the Company’s Board of Directors (the “Board”).  This is a full-time position.  You will also become a member of the Board and you agree to resign as a member of the Board, if requested by the Company, effective on the date on which your employment with the Company terminates or at such earlier date as specified by the Board.

 

b.            You agree to the best of your ability and experience that you will at all times conscientiously perform all of the duties and obligations required of you to the satisfaction of the Board.  During the term of your employment, you further agree that you will devote your full business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, you will not render commercial or professional services of any nature to any person or organization, or engage in self-employment, whether or not for compensation, without the prior written consent of the Board, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company.  Nothing in this letter agreement will prevent you from (i) serving on the board of directors of ABILITY Network Inc., (ii) accepting speaking or presentation engagements in exchange for honoraria or from serving on boards of charitable organizations, (iii) serving on boards of for-profit entities with the prior approval of the Board, or (iv) owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange.

 

c.             While you will continue to retain your residence in the San Francisco area, you agree to travel frequently to the Company’s Ewing, New Jersey office.

 

d.            Of course, the Board may change your position, duties, reporting relationship and office location from time to time in its discretion.  Further, you shall provide immediate notice to the Board if, for any reason, your ability to meet your obligations under this Agreement is, or reasonably could be, impaired in any significant way (including, without limitation, any personal or family issues).

 

2.             Start Date.  Subject to fulfillment of any conditions imposed by this letter agreement, you will commence this new position with the Company on March 26, 2012 (the “Start Date”).

 

3.             Proof of Right to Work.  For purposes of federal immigration law, you will be required to provide to the Company documentary proof of your identity and eligibility for employment in the United States.  This offer of employment is contingent upon such satisfactory proof.

 

1100 PARK PLACE · SUITE 300 · SAN MATEO · CALIFORNIA 94403 · PHONE: 650.227.1700 · FAX: 650.227.2770 · WWW.EPOCRATES.COM

 

 

4.             Compensation.

 

a.             Base Salary.  Your initial base salary will be payable in semi monthly installments of $16,250 pursuant to the Company’s regular payroll policy, which equates to an annual base salary of $390,000. Your base salary may be reviewed annually as part of the Board’s normal salary review process.  Any changes to your base salary are at the Board’s sole discretion.

 

b.             Bonus Compensation.  You will be eligible to participate in the 2012 Executive Bonus Plan (the “Bonus Plan”), pursuant to the terms and conditions of the Bonus Plan (except as such terms are expressly modified in this Section 4(b)).  Your target bonus under the Bonus Plan will be 70% of your 2012 base salary paid by the Company, and the actual bonus paid will be based upon the Company’s performance (as determined by the Board against the Bonus Plan).  You must remain employed through the end of the calendar year in order to earn and be eligible to receive a bonus; provided, however, if your employment ceases as a result of your death or disability, you will be entitled to receive your bonus payment for the calendar year in which such event occurred, prorated based on the duration of your service during such year.  Any bonus for 2012 will be prorated based on your Start Date.  Whether a bonus has been earned under the Bonus Plan, and the amount of any bonus earned, will be determined by the Board within its sole discretion. Any bonus earned will be paid as soon as practicable following the approval of the Bonus Plan payouts by the Board, as provided under the Bonus Plan.

 

5.             Stock Option.  In connection with the commencement of your employment, it will be recommended to the Board that they grant you an option to purchase eight hundred thousand (800,000) shares of the Company’s Common Stock (the “Shares”) under the Company’s 2010 Equity Incentive Plan (the “Plan”) with an exercise price equal to the fair market value on the date of the grant (the “Option”).  The Option will be governed by the terms of the Plan and your individual Stock Option Agreement with the Company and shall vest twenty percent (20%) on the first anniversary of your employment and monthly over 48 months thereafter, provided that any unvested shares subject to the Option may become vested pursuant to Sections 11 and 12 herein.  Vesting will, of course, depend on your continued service with the Company, as defined by the Plan.  The Option will be an incentive stock option to the maximum extent allowed by the tax code.

 

6.             Benefits.  Subject to the terms, conditions and limitations of the benefit plans, you will be eligible to participate in the Company’s standard employee benefits currently consisting of short/long term disability, medical, dental, and vision insurance benefits.  Eligibility for participation in these group benefits will become effective the first of the month following your Start Date.  Employees do not accrue vacation, sick leave, or other paid time off, and there is no set guideline on how much time off employees will be permitted to take.  Instead, under the terms of the Company’s paid time off policy for regular employees, you will be permitted to take a reasonable amount of time off with pay, as permitted by your duties and responsibilities, and, if such time off is not reasonable and customary, as approved in advance by the Board.  Further details about benefits are available for your review.  Epocrates may modify compensation and benefits from time to time at its discretion.

 

7.             Employee 401(k) Plan.  You will be eligible to participate in Epocrates’ 401(K) plan beginning on the first of the month following your Start Date.  Employees who choose to participate will have pre-tax dollars deposited into their 401(K) account and the money will be directed to specified investment options.  Epocrates does not match funds or make contributions.

 

 

8.             Confidential Information and Invention Assignment Agreement.  Your acceptance of this offer and commencement of employment with the Company is contingent upon the execution, and delivery to an officer of the Company, of the Company’s Confidential Information and Invention Assignment Agreement (the “Confidentiality Agreement”), a copy of which is enclosed for your review and execution, prior to or on your Start Date.  You are also required to abide by the Confidentiality Agreement as a condition of your employment.  In your work for the Company, you will be expected not to use or disclose any confidential information, including trade secrets or any information protected by privilege, of any former employer, client, or other person to whom you have an obligation of confidentiality.  Rather, you will be expected to use only that information which is generally known and used by persons with training and experience comparable to your own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company.  You agree that you will not bring onto Company premises, or load onto the Company’s systems, any unpublished documents, information or property belonging to any former employer or other person to whom you have an obligation of confidentiality. You hereby represent that you have disclosed to the Company any contract you have signed that may restrict your activities on behalf of the Company and further represent and warrant that your employment by the Company does not and will not breach any agreement you have with any former employer or client, including any Noncompete agreement or any agreement to keep in confidence or refrain from using information acquired by you prior to your employment by Company.

 

9.             Company Policies.  As a condition of your employment, you will be expected to abide by the Company’s policies and procedures, and acknowledge in writing that you have read and will comply with the Company’s Employee Handbook.

 

10.          At-Will Employment.  Your employment with the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time, with or without Cause, and with or without advance notice.  Your employment at-will status can only be modified in a written agreement approved by the Board and signed by you and by a duly authorized officer of the Company.

 

11.          Severance Benefits Not In Connection With A Change of Control.

 

(a)           If, at any time other than during the twelve (12) months following the consummation of a Change of Control (as defined herein): (A) the Company or any successor entity terminates your employment without Cause (as defined herein) and other than due to your death or disability, or you terminate your employment for Good Reason (as defined in Section 12 below), (B) such termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)) (a “Separation from Service”), and (C) on or within thirty (30) days after the termination date, you sign, date, and deliver to the Company a release in the form attached hereto as Exhibit A (the “Release”) and you do not subsequently revoke the Release; then you will receive the following as your sole severance benefits (the “Severance Benefits”):

 

(i)            Severance pay equal to twelve (12) months of your base salary in effect as of the termination date, less required deductions and withholdings, paid in the form of salary continuation on the Company’s standard payroll dates beginning with the first payroll date following the thirtieth day after the termination date (provided that the Release has become effective by such payroll date, the initial severance payment will be a “catch-up” payment that provides the full amount of severance pay that you would have received if the severance payments had begun as of the first payroll date following the termination date).  Any such payments shall not be reduced or offset for any compensation or benefits you may receive from employment or consulting services performed by you for any other person or entity after the termination date.

 

 

(ii)           Provided that you timely elect continued group health insurance coverage through federal COBRA law or comparable state law (collectively, “COBRA”), the Company will pay your COBRA premiums sufficient to continue your group health insurance coverage at the same level in effect as of your termination date for twelve (12) months after your termination or until you become eligible for group health insurance coverage through a new employer, whichever occurs first (provided that you remain eligible for COBRA coverage). Notwithstanding the preceding sentence, if the Company determines in its sole discretion that it cannot provide the foregoing COBRA payment benefit without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall in lieu thereof provide to you a taxable monthly payment in an amount equal to the monthly COBRA premium that you would be required to pay to continue your group medical insurance coverage in effect on the date of your termination (which amount shall be based on the premium for the first month of COBRA coverage), which COBRA payments shall be made regardless of whether you elect COBRA continuation coverage and shall end on the earlier of (x) the date upon which you obtain other employment or (y) the last day of the twelfth calendar month following the Separation from Service date.  You are required to provide prompt written notice to the Company of other employment you obtain during the twelve-month period following the termination date, including notice of whether you are eligible for group medical insurance coverage through your new employer.

 

(iii)         The Company will accelerate vesting of twelve (12) months of the then-unvested shares subject to the Option such that these shares shall be deemed exercisable as of the date that the Release set forth in Exhibit A becomes effective.

 

(iv)          The Company will extend the exercise period of any vested shares subject to the Option for a period of twelve (12) months after the termination date of your employment.  You understand and agree that changing the exercise period for such shares may change the tax treatment afforded to them and that the Company is making no representations as to such tax treatment.

 

(b)           For purposes of this letter agreement, “Cause” means any of the following conduct by you: (i) embezzlement, misappropriation of corporate funds, or other material acts of dishonesty; (ii) the conviction, plea of guilty, or nolo contendere to any felony (not involving the operation of a motor vehicle), or of any misdemeanor involving moral turpitude; (iii) engagement in any activity that you know or should know would likely materially harm the business or reputation of the Company, provided that this subsection (iii) shall not apply to any activity done in a good faith belief by you that the action taken or omission was in the best interest of the Company; (iv) material violation of any statutory, contractual, or common law duty or obligation owed by you to the Company (including, without limitation, the duty of loyalty) which causes material injury to the Company; (v) material breach of the Confidentiality Agreement which is not in good faith; or (vi) repeated refusal to substantially perform your assigned duties or responsibilities after written notice from the Board describing the refusal(s) in reasonable detail and your failure to cure such refusal(s) within thirty (30) days of receiving such written notice, provided that written notice only must be provided if the refusal(s) are capable of cure.

 

12.          Change of Control Severance Benefits.

 

(a)           If the Company consummates a Change of Control (as defined in Section 12(c) below), then the Company will accelerate vesting of fifty percent (50%) of the shares subject to the Option such that these shares shall be deemed exercisable as of date upon which the Change of Control is consummated. For example, if the Company consummates a Change of Control on the one year anniversary of the Option vesting commencement date then five hundred sixty thousand shares (560,000) [(20% x 800,000) + (50% x 800,000) shall be vested and immediately exerciseable on such date.  The remaining shares subject to the Option shall continue to vest ratably in equal monthly installments over forty-eight (48) months.

 

 

(b)           In the event that: (A) the Company consummates a Change of Control (as defined in the paragraph below); (B) within twelve (12) months after the consummation of such Change of Control, your employment with the Company is (a) either terminated by the Company or successor entity without Cause and other than due to your death or disability, or terminated by you for Good Reason (as defined in and in accordance with the paragraph below), and (b) such termination constitutes a Separation from Service; and (C) if, on or within thirty (30) days after the termination date, you sign, date, and deliver to the Company the Release and you do not subsequently revoke the Release; then you will receive the following as your sole severance benefits (the “Change of Control Severance Benefits”):

 

(i)            Severance pay equal to eighteen (18) months of your base salary in effect as of the termination date, less required deductions and withholdings, paid in the form of salary continuation on the Company’s standard payroll dates beginning with the first payroll date following the thirtieth day after the termination date (provided that the Release has become effective by such payroll date, the initial severance payment will be a “catch-up” payment that provides the full amount of severance pay that you would have received if the severance payments had begun as of the first payroll date following the termination date).  Any such payments shall not be reduced or offset for any compensation or benefits you may receive from employment or consulting services performed by you for any other person or entity after the termination date.

 

(ii)           Provided that you timely elect continued group health insurance coverage through COBRA, the Company will pay your COBRA premiums sufficient to continue your group health insurance coverage at the same level in effect as of your termination date for twelve (12) months after your termination or until you become eligible for group health insurance coverage through a new employer, whichever occurs first (provided that you remain eligible for COBRA coverage).  Notwithstanding the preceding sentence, if the Company determines in its sole discretion that it cannot provide the foregoing COBRA payment benefit without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall in lieu thereof provide to you a taxable monthly payment in an amount equal to the monthly COBRA premium that you would be required to pay to continue your group medical insurance coverage in effect on the date of your termination (which amount shall be based on the premium for the first month of COBRA coverage), which payments shall be made regardless of whether you elect COBRA continuation coverage and shall end on the earlier of (x) the date upon which you obtain other employment or (y) the last day of the twelfth calendar month following the Separation from Service date.  You are required to provide prompt written notice to the Company of other employment you obtain during the twelve-month period following the termination date, including notice of whether you are eligible for group medical insurance coverage through your new employer.

 

(iii)          The Company will accelerate vesting of the remaining unvested shares subject to the Option such that all the shares shall be deemed exercisable as of the date that the Release set forth in Exhibit A becomes effective.

 

(iv)          The Company will extend the exercise period of any vested shares subject to the Option for a period of twelve (12) months after the termination date of your employment.  You understand and agree that changing the exercise period for such shares may change the tax treatment afforded to them and that the Company is making no representations as to such tax treatment.

 

(c)           For purposes of this letter agreement, “Change of Control” means the consummation of any of the following transactions effecting a change in ownership or control of the Company:  (i) a merger, consolidation or reorganization, unless securities representing more than fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly, and in substantially the same proportion, by the persons who

 

 

beneficially owned the Company’s outstanding voting securities immediately prior to such transaction; (ii) any transfer, sale or other disposition of all or substantially all of the Company’s assets; or (iii) the acquisition, directly or indirectly, by any person or related group of persons (other than the Company or a person that directly or indirectly, controls, is controlled by, or is under common control with, the Company), of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended, of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s stockholders.

 

(d)           For purpose of this letter agreement, “Good Reason” shall mean one or more of the following conditions without your written consent: (i) a relocation of your assigned office which results in an increase in your one-way commuting distance by more than thirty-five (35) miles; (ii) a material decrease in your base salary or target percentage bonus; (iii) a material breach by the Company of this letter; or (iv) a material reduction in the scope of your duties or responsibilities, which shall include without limitation your no longer serving as the Chief Executive Officer of the Company.  Notwithstanding the foregoing, you shall not be deemed to have terminated your employment for “Good Reason” unless (i) such termination occurs within ninety (90) days following the initial existence of one or more of the conditions that constitute Good Reason (as defined herein), (ii) you provide written notice to the Company (or any successor entity) of the existence of the Good Reason condition within thirty (30) days following the initial existence of the condition, and (iii) the Company (or its successor entity) fails to cure such condition within a period of thirty (30) days following such written notice.

 

13.          Parachute Payments.  In the event that the benefits provided for in this letter agreement or otherwise payable to you (“Payment”) would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and, but for this sentence, would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced Amount.  The “Reduced Amount” shall be either (i) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (ii) the largest portion, up to and including the total, of the Payment, whichever of the foregoing amounts, after taking into account all applicable federal, state and local employment taxes, income taxes and the Excise Tax (all computed at the highest applicable marginal rate), results in the receipt by you, on an after-tax basis, of the greater amount of the Payment, notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  Unless the Company and you otherwise agree in writing, the determination of your Excise Tax liability shall be made in writing by the accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change of Control (the “Accountants”).  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder.  For purposes of making the calculations required by this Section 12, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  Any good faith determinations of the Accountants made hereunder shall be final, binding, and conclusive upon the Company and you.  The Company and you shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 13.  To the extent that any elimination in or reduction of payments or benefits is made under this Section 13, the order in which payments and benefits shall be reduced shall be made by the Accountants in a manner that shall provide you with the greatest economic benefit.

 

14.          Deferred Compensation.  Severance payments made pursuant to Section 11 or Section 12, to the extent of payments made from the date of your termination through March 15 of the calendar year following your termination, are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the

 

 

Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations.  To the extent such payments are made following said March 15, they are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary termination from service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by such provision, with any excess amount being regarded as subject to the distribution requirements of Section 409A(a)(2)(A) of the Code, including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payment be delayed until six (6) months after separation from service if you are a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code at the time of such separation from service.  Notwithstanding anything to the contrary set forth herein, if any payments and benefits provided under this Agreement constitute “deferred compensation” within the meaning of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) (i) such payments and benefits shall not commence in connection with your termination of employment unless and until you also have incurred a Separation from Service, unless the Company reasonably determines that such amounts may be provided to you without causing you to incur the adverse personal tax consequences under Section 409A, and (ii) the Release required by Sections 11 and 12 above shall be considered effective only as of the latest permitted effective date for such Release if such Release could become effective in the calendar year following the calendar year in which your employment termination occurs.

 

15.          Indemnity Agreement.  The Company will sign and deliver to you its standard form of Indemnity Agreement for directors and officers (the “Indemnity Agreement”).

 

16.          Arbitration.  Any unresolved controversy or claim arising from or relating to this letter (or any breach hereof) or your employment with the Company (or any of its subsidiaries) shall be settled by arbitration administered by the Judicial Arbitration and Mediation Services (“JAMS”) in accordance with its Employment Arbitration Rules, then in effect (or by any other arbitration service or arbitrator that is mutually agreed upon in writing by you and the Company in accordance with the rules of such arbitration service or arbitrator).  The arbitrator shall apply California law in the resolution of all such controversies or claims.  The arbitrator shall issue a decision setting forth his or her findings and conclusions of law, together with his or her decision on the merits of the case, within thirty (30) calendar days after the later of (i) the conclusion of the hearing or (ii) the submission of post-hearing briefs. The decision of arbitration shall be final, conclusive and binding upon the parties, and review shall be limited to those grounds set forth in the Federal Arbitration Act.  Judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction.  The arbitration proceedings shall be held in San Mateo, California and the arbitration proceedings shall be conducted before one (1) neutral arbitrator who shall be an active member of the California Bar.  The Company shall bear the costs of the arbitrator’s fees and any administrative charges of the arbitration service in any action brought under this Section 16.  The parties hereto acknowledge and agree that this Section 16 is enforceable pursuant to the Federal Arbitration Act, 9 U.S.C. § 2.  Notwithstanding the foregoing, claims for workers’ compensation and unemployment compensation benefits and any other claims where arbitration is prohibited by law shall not be subject to arbitration under this letter.

 

17.          Attorneys’ Fees Reimbursement.  The Company will reimburse you for your reasonable attorneys’ fees incurred in connection with the preparation and negotiation of this letter agreement, up to a maximum of $10,000.

 

18.          Complete Agreement.  This letter (including the attached exhibit), together with your Confidentiality Agreement, your Option Agreement and your Indemnity Agreement, forms the complete and exclusive statement of your employment agreement with the Company.  The terms in this letter supersede any other agreements or promises made to you by anyone, whether oral or written.  Other than those changes expressly

 

 

reserved to the Company’s discretion in this letter, this letter agreement cannot be changed except in a written agreement approved by the Board and signed by you and a duly authorized officer of the Company.

 

This offer and your employment are subject to a satisfactory background check, and you agree to cooperate fully with the Company in completing any requested authorizations for the background check.

 

 

We are all delighted to be able to extend you this offer and look forward to working with you.  To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below and return it to me, along with a signed and dated copy of the Confidentiality Agreement.

 

 

	
Very   truly yours,
    	
 
    
	
Epocrates, Inc.
    	
 
    
	
 
    	
 
    
	
/s/ Thomas L. Harrison
    	
 
    
	
Thomas   L. Harrison
    	
 
    
	
Chairman   of the Compensation Committee
    	
 
    
	
of   the Board of Directors
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
UNDERSTOOD, ACCEPTED AND AGREED:
    	
 
    
	
Andrew Hurd
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/a/   Andrew Hurd
    	
 
    
	
Signature
    	
 
    
	
March 22,   2012
    	
 
    
	
Date
    	
 
    
	
March 26,   2012
    	
 
    
	
Start   Date
    	
 
    

 

Enclosure:             Employee Proprietary Information and Inventions Agreement

 

 

EXHIBIT A

 

RELEASE

 

In exchange for the Severance Benefits or Change in Control Severance Benefits, as applicable, provided to me by my offer letter agreement with Epocrates, Inc. (the “Company”), and in fulfillment of my obligations to receive such benefits, I hereby generally and completely release the Company and its current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Release.

 

This general release includes, but is not limited to: (1) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), the federal Americans with Disabilities Act of 1990, and the California Fair Employment and Housing Act (as amended).

 

Notwithstanding the foregoing, I understand that I am not releasing (1) any claim that cannot be waived under applicable state or federal law, (2) any claims as to any benefits to which I may be entitled under an employee welfare benefit plan, (3) any claim to accrued salary, (4) any claim to bonuses earned in accordance with Section 4(b), of the Offer Letter dated March 15, 2012 (the “Offer Letter”), (5) any claim to stock or vested stock options that have been issued or granted to me prior to my termination, (6) any claim to the severance benefits set forth in Section 11 and 12 of my offer letter, (7) any claim to expense reimbursements for expenses incurred prior to my termination in accordance with Company policy, or (8) any rights that I have to be indemnified (including any right to reimbursement of expenses) arising under applicable law, the certificate of incorporation or by-laws (or similar constituent documents of the Company), any indemnification agreement between me and the Company, or any directors’ and officers’ liability insurance policy of the Company.  I understand that nothing in this Agreement shall prevent me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, the California Department of Fair Employment and Housing, or any other government agency, except that I acknowledge and agree that I shall not recover any monetary benefits in connection with any such claim, charge or proceeding with regard to any claim released herein.  I understand that nothing in this Agreement shall prevent me from challenging the validity of the release in a legal or administrative proceeding.

 

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I have under the ADEA (“ADEA Waiver”).  I acknowledge that the consideration given for the ADEA Waiver is in addition to anything of value to which I am already entitled.  I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) my ADEA Waiver does not apply to any rights or claims that arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release; (c) I have twenty-one (21) days to consider this Release (although I may choose voluntarily to sign it sooner); (d) I have seven (7) days following the date I sign this Release to revoke it; and (e) this Release will not be effective until the date upon which the revocation period has expired, which will be the eighth day after I sign this Release (the “Effective Date”).

 

 

I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.  In giving the release herein, which includes claims which may be unknown to me at present, I acknowledge that I have read and understand Section 1542 of the California Civil Code, which reads as follows:

 

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

 

I hereby expressly waive and relinquish all rights and benefits under that section and any law of any other jurisdiction of similar effect with respect to my release of any unknown or unsuspected claims herein.

 

I hereby represent that, except for the Severance Benefits or Change in Control Severance Benefits, as applicable, which shall be provided to me in exchange for this Release, I have been paid all compensation owed and for all hours worked, have received all the leave and leave benefits and protections for which I am eligible, pursuant to the Family and Medical Leave Act, the California Family Rights Act or otherwise, and have not suffered any on-the-job injury for which I have not already filed a claim.

 

 

	
AGREED:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Andrew   Hurd
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}]]