This Confidentiality Agreement involves
Title: MASIMO CORPORATION EQUITY-HOLDER NON-COMPETITION AND CONFIDENTIALITY AGREEMENT
Industry: Medical Equipment and Supplies Sector: Healthcare
EQUITY-HOLDER NON-COMPETITION AND CONFIDENTIALITY AGREEMENT
This Equity-Holder Non-Competition and Confidentiality Agreement (this “ Agreement ”), dated November 4, 2015, is made by and between the undersigned equity-holder (“ Holder ”), on the one hand, and Masimo Corporation, a Delaware corporation (“ Masimo ”), on the other hand.
A . Holder acknowledges that Holder is a substantial holder of an equity interest in Masimo, is the founder of Masimo and has been its Chairman of the Board and Chief Executive Officer since its inception, and that Holder will receive substantial consideration as a result of any transaction in which Holder sells his entire equity interest in Masimo, together with the goodwill of Masimo (an “ Equity Sale ”). Therefore, Holder is willing to enter into this Agreement as an inducement for any acquirer to enter into agreements to effectuate an Equity Sale and to protect such acquirer’s legitimate interests as a buyer of the stock, goodwill and assets (including confidential, proprietary and/or trade secret information) of Masimo.
B . Masimo and Holder acknowledge and agree that Masimo has conducted and engaged in the “Business” (as defined below) and that Masimo has undertaken to continue to conduct and engage in the Business and to seek to make its products and services available to customers throughout each of the fifty (50) states of the United States and throughout the world (the “ Restricted Territory ”).
NOW, THEREFORE , in exchange for good and valuable consideration, receipt of which is hereby acknowledged, Holder, intending to be legally bound, hereby agrees as follows:
1. During (i) Holder’s employment with Masimo (other than in accordance with Holder’s position at and duties to Masimo and position at and duties to Cercacor Laboratories, Inc. (“Cercacor”) a Delaware corporation (f/k/a Masimo Laboratories, Inc.) or as otherwise set forth in the Employment Agreement (as defined below)) and (ii) subject to the payment of the “Non-Competition Payment” (as defined in the Employment Agreement) to Holder pursuant to the terms of the Employment Agreement, the “Restricted Period” (as defined below) in the Restricted Territory, Holder agrees that Holder will not, as an employee, agent, consultant, advisor, independent contractor, general partner, officer, director, investor, lender, guarantor of any person, or in any other capacity, for Holder or on behalf of any other person, directly or indirectly participate or engage in the Business or acquire or hold any interest in any person engaged in the Business. Notwithstanding the foregoing, Holder may (i) participate and engage in the Business as an investor, employee, consultant, officer and/or director of, and provide services to, Cercacor or Masimo, (ii) serve on the board of directors of any company or entity that is not engaged in the Business, (iii) own, directly or indirectly, solely as an investment, (A) up to one percent (1%) of any class of “publicly traded securities” of any person or entity that engages in the Business or (B) up to five percent (5%) of the securities that are not “publicly traded securities” of any person or entity that engages in the Business, provided in each case that Holder does not also actively manage or serve as an advisor to such person or entity, and
provided further that the ownership restrictions in this clause (iii) shall not apply to Holder’s director or indirect ownership of securities of Masimo or Cercacor and (iv) work for a division, entity or subgroup of any person or entity that engages in the Business so long as such division, entity or subgroup does not also engage in the Business. For purposes of this Agreement, (a) “publicly traded securities” shall mean securities that are traded on a national securities exchange, (b) “ Business ” means the design, research, development, use, marketing, sale or distribution of any products or services in the field of non-invasive blood constituent monitoring, and (c) the “ Restricted Period ” means the period commencing on the date of Holder’s Qualifying Termination (as defined in the Amended and Restated Employment Agreement dated as of the date hereof by and between Masimo and Holder (the “ Employment Agreement ”) following an Equity Sale and ending on the fifth (5th) anniversary of the date of such Qualifying Termination.
2. Masimo has and will develop, compile and own certain proprietary and confidential information that has great value in its business (“ Confidential Information ”). Confidential Information includes information and physical material not generally known or available outside Masimo and information and physical material entrusted to Masimo in confidence by third parties. Confidential Information includes, without limitation: (i) company “Inventions” (as defined below); and (ii) technical data, trade secrets, know-how, research, product or service ideas or plans, software codes and designs, developments, laboratory notebooks, processes, formulas, techniques, mask works, engineering designs and drawings, hardware configuration information, lists of, or information relating to, employees and consultants of Masimo (including, but not limited to, the names, contact information, jobs, compensation, and expertise of such employees and consultants), lists of, or information relating to, suppliers and customers (including, but not limited to, customers of Masimo on whom Holder called or with whom Holder became acquainted during employment with Masimo), price lists, pricing methodologies, cost data, market share data, marketing plans, licenses, contract information, business plans, financial forecasts, historical financial data, budgets or other business information disclosed to Holder by Masimo either directly or indirectly, whether in writing, electronically, orally, or by observation. Holder acknowledges that such information is secret, valuable and owned by Masimo.
3. During and after Holder’s employment by Masimo, Holder agrees to keep confidential, and not disclose or make use of any Confidential Information except with Cercacor or as otherwise authorized by Masimo or as necessary for the performance of Holder’s duties as a Masimo employee or director.
4. During Holder’s employment with Masimo, Holder will not disclose to Masimo or make use of any confidential, proprietary or trade secret information or material belonging to a former employer or other third party.
5. Prior to Holder’s employment with Masimo, Holder did not create any inventions, works of authorship, or trade secrets that relate to the Business as conducted and engaged in by Masimo, except for those identified on the list attached to this Agreement as Exhibit A hereto.