EXECUTION COPY
GENTA INCORPORATED
Two Connell Drive
Berkeley Heights, NJ 07922
Dated as of January 1, 2006
Dr. Raymond P. Warrell, Jr.
Two Connell Drive
Berkeley Heights, NJ 07922
Dear Dr. Warrell:
We are pleased that you are willing
to continue to serve as Chief Executive Officer, and Chairman of
the Board of Directors (the “ Board ”), of Genta
Incorporated, a Delaware corporation (together with its successors
and assigns, the “ Company ”). Accordingly, we
would like to offer you continued employment on the terms set forth
in this letter agreement (this “ Agreement ”),
which upon countersignature by you shall become a binding agreement
between you and the Company (each, a “ Party
”).
1.
Employment; Duties.
(a) As of January 1, 2006 (the
“ Effective Date ”), the Company hereby engages
and employs you, and you hereby accept engagement and employment,
as an employee of the Company for the duration of the
“Term” (as defined in Section 2 below).
(b) During the Term, you shall serve
as Chief Executive Officer of the Company and (subject to
re-election to the Board by the shareholders of the Company) as a
member of, and Chairman of, the Board; shall have all authorities,
duties and responsibilities customarily exercised by an individual
serving in those positions at an entity of the size and nature of
the Company; shall be assigned no duties or responsibilities that
are materially inconsistent with, or that materially impair your
ability to discharge, the foregoing duties and responsibilities;
and shall, in your capacity as Chief Executive Officer of the
Company, report solely and directly to the Board. During the Term,
your principal office, and principal place of employment, shall be
at the Company’s principal executive offices, but you shall
perform your duties hereunder at such places as shall be necessary
according to the needs, business and opportunities of the Company;
provided that you acknowledge and agree that the performance of
your duties hereunder may require significant domestic and
international travel by you.
(c) During the Term, you shall
devote substantially all of your business time and efforts to the
proper discharge of your duties hereunder. You shall not, directly
or indirectly, on a full-time, part-time, temporary, consulting or
any other basis, work for, or provide services to, any other
person, firm, corporation, partnership, joint venture or other
business entity that would
conflict, either directly or
indirectly, with your duties hereunder, without the prior written
consent of a representative of the Company specifically authorized
by the Board or by the Compensation Committee of the Board (the
“ Committee ”) to give such consent,
provided , however , that nothing shall preclude you
from (i) serving on the boards of a reasonable number of
trade associations and/or charitable organizations, on the boards
of any for-profit enterprises on which you are serving as of the
Effective Date, and on the boards of such additional for-profit
enterprises as the Board may specifically approve (which approval
shall not be unreasonably withheld or delayed), (ii)
engaging in charitable activities and community affairs, and
(iii) managing your personal investments and affairs; so
long as such activities do not, either individually or in the
aggregate, interfere with your ability to perform, or otherwise
conflict with, your duties hereunder.
2.
Term. The Company hereby employs you under this
Agreement, and you hereby accept such employment, for the Term. The
Term shall commence as of the Effective Date and shall end on
December 31, 2008; provided , however , that the
Term shall thereafter be automatically and indefinitely extended
for additional one-year periods unless, (i) at least six months
prior to the then-scheduled date of expiration of the
Term (the “ Scheduled Expiration Date ”),
the Company gives notice to you that it is electing not to so
extend the Term or you give notice to the Company that you are
electing not to so extend the Term, provided that the
Company shall be deemed to have timely given you notice of
non-extension if it gives you such notice within 45 days after
receiving notice from you that the Scheduled Expiration Date is to
occur (such notice to be provided by you no earlier than eight
months prior to the Scheduled Expiration Date), or (ii) you fail to
notify the Company of the Scheduled Expiration Date at least 90
days prior to the Scheduled Expiration Date, in which event the
Term shall end on the Scheduled Expiration Date, and shall be
deemed for all purposes to have ended pursuant to timely notice of
non-extension from you to the Company pursuant to clause (i),
unless the Parties agree otherwise in writing. Notwithstanding the
foregoing, the Term may be earlier terminated in strict accordance
with the provisions of Section 9.
3.
Compensation and Benefits .
(a) Base Salary .
Commencing as of the Effective Date, you shall receive a base
salary (“ Base Salary ”) of $460,000 per
annum during the Term, payable in accordance with the
Company’s standard payroll practices but no less frequently
than monthly. Your Base Salary shall be reviewed no less frequently
than annually during the Term (after calendar year 2006) for
discretionary increase, effective January 1 of the year of
increase, and shall in any event be increased as of January 1, 2007
and as of each subsequent January 1 during the Term by a percentage
equal to at least the percentage increase in the CPI (All Urban
Consumers) for the calendar year preceding the year of increase.
Your Base Salary shall not be decreased at any time, or for any
purpose, during the Term (including, without limitation, for the
purpose of determining benefits under Section 10) without your
prior written consent.
(b) Annual Bonus . You
shall receive a cash bonus (a “ Bonus ”) with
respect to each calendar year that ends during the Term, ranging
from 0% to 60% of you Base Salary, to the extent that the Company
attains goals and objectives for such year that have been
mutually
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agreed upon by you and the
Committee, in accordance with this Section 3(b). You and the
Committee shall use your best reasonable efforts to ensure that
such goals and objectives are agreed upon prior to March 30 of the
calendar year to which a Bonus relates. Except to the extent
otherwise agreed by you and the Committee, your potential Bonus
shall range from 0% of your annualized Base Salary to 60% of your
annualized Base Salary, with a “target” Bonus of 40% of
your annualized Base Salary if agreed-upon goals and objectives are
achieved for the calendar year. Except to the extent otherwise
agreed by you and the Committee, all goals and objectives will
represent significant value creation activities for the Company and
“stretch target” goals and objectives will represent
extraordinary performance and achievement. “Stretch
target” performance against the agreed-upon goals and
objectives for such year shall entitle you to a Bonus for such year
equal to at least 60% of your annualized Base Salary for such year.
Lesser amounts may be awarded for performance below
“target”, and intermediate amounts may be awarded for
performance between “target” and “stretch
target”. The extent to which the agreed-upon goals and
objectives are attained shall be determined by the Committee
reasonably and in good faith, in consultation with you, as soon as
reasonably practicable after the end of the calendar year to which
the Bonus at issue relates. The Bonus earned by you for a calendar
year shall be paid to you promptly after its amount has been
determined, and in no event later than the earlier of (x) the date
that other senior executives of the Company receive their annual
bonuses for such year and (y) March 15 of the year following such
year.
(c) Withholding . The
Company shall withhold all applicable Federal, state and local
taxes, social security and workers’ compensation
contributions and other amounts as may be required by law or agreed
upon by the Parties with respect to compensation payable to you
pursuant to this Agreement.
(d) Initial Option
Grant . As of the date you execute this Agreement, the
Company shall grant you an option to acquire 1,000,000 shares of
its Common Stock, at an exercise price per share equal to the Fair
Market Value of a share of such Common Stock on such date, and
otherwise on the terms and conditions set forth in the Stock Option
Agreement that is attached hereto as Exhibit A, which Stock Option
Agreement shall be fully executed by the Parties promptly upon full
execution of this Agreement. For purposes of this Agreement,
“ Fair Market Value ” shall be determined as
provided in the Company’s 1998 Stock Incentive Plan, as
amended through the Effective Date (the “ 1998 Plan
”).
(e) Annual Stock Option
Awards . Each calendar year that commences during the Term,
you shall be granted, no later than the date that your Bonus (if
any) for the prior calendar year is due to be paid pursuant to
Section 3(b) and provided that you remain employed hereunder
on the date of grant, a stock option award for the purchase of a
number of shares of the Company’s Common Stock as computed
pursuant to this Section 3(e)(with the number and type of
securities equitably adjusted for stock splits, reverse stock
splits, stock reclassifications, mergers, recapitalizations, etc.,
that occur between the Effective Date and the date of grant of the
stock option) (“a Section 3(e) Stock Option”). The
“target” number of shares subject to a “Section
3(e) Stock Option” to be awarded each calendar year will be
150,000 shares, and the potential number of of shares subject to
each Section 3(e) Stock Option award for a calendar year shall
range from 0 shares to 225,000 shares. The number of shares subject
to a Section 3(e) Stock Option to be awarded to you within such
range in a calendar year shall be based on your
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achievement of Company goals and
objectives, and will be at the sole discretion of the Board or the
Committee. Each Section 3(e) Stock Option shall have a ten-year
term; shall have an exercise price per share equal to Fair Market
Value on the date of grant; shall fully vest, and become fully
exercisable, upon the occurrence of a “ Trigger Event
” (as such term is defined in Section 2(d) of the Stock
Option Agreement that is attached hereto as Exhibit A); and shall
be evidenced by a stock option agreement that: (x) provides for
treatment as an Incentive Stock Option to the extent you so elect
prior to the date of grant and to the extent possible consistent
with the terms of this Agreement and of your other then-outstanding
stock option grants, (y) otherwise contains terms and provisions no
less favorable to you in any respect than those applying to
corresponding grants to other senior executives of the Company, and
(z) unless the Committee specifically determines otherwise, the
terms and provisions of each annual grant shall be identical to
those applying to corresponding grants to other senior executives
of the Company. All securities delivered on any exercise of any
stock option granted pursuant to this Section 3(e) or Section 3(f)
below shall be fully registered, and publicly tradable, to the
extent that any other securities of the same class are then fully
registered and publicly tradable; provided , however
, that in no event shall the Company be required to prepare and
file a Form S-3 reoffer prospectus with respect to any shares that
you receive in connection with your exercise of any stock option
granted pursuant to this Section 3(e) or Section 3(f).
(f) Trigger Event Stock Option
Award . In addition, if a Trigger Event occurs during the
Term or within 12 months thereafter, you shall be entitled to
receive, as promptly as reasonably practicable following the
occurrence of such Trigger Event, any Section 3(e) Stock
Option that you would have been entitled to receive in respect of
the calendar year in which such Trigger Event occurs (assuming
continued employment hereunder through the end of such calendar
year and attainment of “target” levels of performance
on all annual Bonus goals and objectives for such year). Any such
stock option shall: (i) have an exercise price per share equal to
Fair Market Value on the day immediately prior to the day that such
Trigger Event occurs; (ii) be fully vested, and fully exercisable,
upon grant; (iii) otherwise be on terms and conditions no less
favorable to you than the terms and conditions that would have
applied if the grant had been made under Section 3(e) above; and
(iv) be granted in lieu of the Section 3(e) Stock Option that you
would otherwise have been entitled to receive in respect of the
calendar year in question.
(g) Restrictions on Sale of
Option Stock .
(i) Unless otherwise agreed to in
writing by a representative of the Company expressly authorized to
act by the Board or the Committee, you agree not to sell on any
single day, after the Term, a number of Covered Option Shares that
exceeds 3% of the trading volume of the Common Stock of the Company
on the immediately preceding trading day as reported by the Nasdaq
National Market or on such other exchange or market system which
provides the primary trading market for the Common Stock of the
Company at the applicable time (a “Public Market”). For
purposes of this Agreement, the term “Covered Option
Share” shall mean any share of Common Stock of the Company
acquired on any exercise of the stock option granted pursuant to
Section 3(d) above.
(ii) Except as provided in Section
3(g)(i) above or as otherwise agreed to in writing by a
representative of the Company expressly authorized to act by the
Board or the
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Committee, you agree that you
will not, either during or after the Term: (x) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant
to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any Covered Option Share or any securities convertible
into or exercisable or exchangeable for any Covered Option Share or
(y) enter into any swap or other arrangement that transfers to
another Person (as defined in Section 3(q) below), in whole or in
part, any of the economic consequences of ownership of any Covered
Option Share, whether any such transaction described in clause (x)
or (y) above is to be settled by delivery of Covered Option Shares
or such other securities, in cash or otherwise; provided
that this Section 3(g)(ii) shall not apply to any pledge of Covered
Option Shares in connection with payment of the purchase price of
Covered Option Shares pursuant to any exercise of the stock option
granted pursuant to Sections 3(d) above, so long as the pledgee
agrees that no sale of Covered Option Shares by such pledgee on any
day, when added to sales of Covered Option Shares by you on such
day, may exceed the aggregate numerical limit imposed by Section
3(g)(i) above.
(iii) All sales of Covered Option
Shares by you, and by any pledgee referred to in the proviso to
Section 3(g)(ii), shall be executed through Merrill Lynch or such
other broker as the Company may from time to time reasonably
designate on written notice to you.
(iv) The restrictions contained in
Sections 3(g)(i), 3(g)(ii) and 3(g)(iii) shall expire on the
earlier of the second anniversary of the “Termination
Date” (as defined in Section 10(a)(i) below) and ten
trading days prior to the date that Common Stock of the Company
ceases to be traded on any Public Market.
(h) Additional Awards
. In addition to the minimum cash and equity awards required under
Sections 3(b) through 3(f) above, the Company may from time to time
grant you additional cash, stock option, equity and/or other
long-term incentive awards, in the sole discretion of the Board or
the Committee.
(i) Business Expenses
. The Company shall reimburse you for all travel, business
entertainment and other business expenses reasonably incurred by
you in connection with the performance of your duties under this
Agreement. Such reimbursement shall be made by the Company promptly
upon submission by you of appropriate documentation in accordance
with the Company’s standard procedures.
(j) Vacation . You
shall be entitled during the Term to four weeks’ vacation per
calendar year. You may “carry over” up to four weeks of
accrued but unused vacation from year-to-year.
(k) Supplemental Life
Insurance . During the Term and in addition to any life
insurance coverage provided under Section 3(m) below, the Company
shall pay the premiums on a term life insurance policy in your name
and on your behalf in a principal amount of not less than
$3,250,000 and with the proceeds payable as you direct;
provided that such premiums do not exceed $10,000 annually,
in which event the Company shall purchase as much coverage for you
as it can acquire for $10,000 annually.
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(l) Supplemental Disability
Insurance . During the Term and in addition to any
disability insurance coverage provided under Section 3(m) below,
the Company shall provide you with as much disability insurance
coverage, acceptable to you, as it can obtain at a cost to the
Company (beyond costs incurred by the Company under Section 3(m)
below) of $15,000 annually.
(m) Employee Benefits
. During the Term, you shall be entitled to participate in any and
all medical insurance, dental insurance, group health, disability
insurance, life insurance, retirement, pension, savings, income
deferral, fringe benefit, and other benefit and perquisite plans,
programs and arrangements that are made generally available to
senior executives of the Company, in each case on terms and
conditions no less favorable to you than those applying to other
senior executives of the Company generally. For avoidance of doubt,
the Company, in its sole discretion, may at any time amend or
terminate any such plan, program or arrangement.
(n) D&O Insurance
. A directors' and officers' liability insurance policy (or
policies) shall be kept in place, during the Term and for six years
thereafter, providing coverage that is no less favorable to you in
any respect (including, without limitation, with respect to scope,
exclusions, amounts and deductibles) than the coverage then being
provided to any other present or former officer or director of the
Company.
(o) Automobile .
During the Term, the Company shall provide you with a car or car
allowance in an amount not to exceed $500 per month, which
allowance shall be paid in appropriate pro rata amounts at the same
time Base Salary is paid unless the Company pays all related
expenses directly.
(p) Medical Malpractice
Insurance . During the Term, the Company shall pay the
premiums on a medical malpractice insurance policy in your name and
on your behalf in the principal amount of not less than $1,000,000;
provided that such premiums do not exceed $25,000 annually,
in which event the Company shall provide you with as much medical
malpractice insurance coverage, acceptable to you, as it can obtain
at a cost to the Company of $25,000 annually.
(q) Indemnification .
If you are made a party, are threatened to be made a party, or
reasonably anticipate being made a party, to any Proceeding by
reason of the fact that you are or were a director, officer,
member, employee, agent, manager, trustee, consultant or
representative of the Company or any of its Affiliates or are or
were serving at the request of the Company or any of its
Affiliates, or in connection with your service hereunder, as a
director, officer, member, employee, agent, manager, trustee,
consultant or representative of another Person, or if any Claim is
made, is threatened to be made, or is reasonably anticipated to be
made, that arises out of or relates to your service in any of the
foregoing capacities, then you shall promptly be indemnified and
held harmless to the fullest extent permitted or authorized by the
Certificate of Incorporation or Bylaws of the Company, or if
greater, by applicable law, against any and all costs, expenses,
liabilities and losses (including, without limitation, attorneys'
and other professional fees and charges, judgments, interest,
expenses of investigation, penalties, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) incurred or
suffered by you in connection therewith or in connection with
seeking to enforce your rights
6
under this Section 3(q), and
such indemnification shall continue even if you have ceased to be a
director, officer, member, employee, agent, manager, trustee,
consultant or representative of the Company or other Person and
shall inure to the benefit of your heirs, executors and
administrators. You shall be entitled to prompt advancement of any
and all costs and expenses (including, without limitation,
attorneys’ and other professional fees and charges) incurred
by you in connection with any such Proceeding or Claim, or in
connection with seeking to enforce your rights under this Section
3(q), any such advancement to be made within 15 days after you give
written notice, supported by reasonable documentation, requesting
such advancement. Such notice shall include, to the extent required
by applicable law, an undertaking by you to repay the amount
advanced if you are ultimately determined not to be entitled to
indemnification against such costs and expenses. Nothing in this
Agreement shall operate to limit or extinguish any right to
indemnification, advancement of expenses, or contribution that you
would otherwise have (including, without limitation, by agreement
or under applicable law or under the Company’s Certificate of
Incorporation). For purposes of this Agreement, the following terms
shall have the following meanings: “ Affiliate ”
of a Person shall mean any Person that directly or indirectly
controls, is controlled by, or is under common control with, such
Person; “ Claim ” shall mean any claim, demand,
request, investigation, dispute, controversy, threat, discovery
request, or request for testimony or information; “
Person ” shall mean any individual, corporation,
partnership, limited liability company, joint venture, trust,
estate, board, committee, agency, body, employee benefit plan, or
other person or entity; and “ Proceeding ” shall
mean any threatened or actual action, suit or proceeding, whether
civil, criminal, administrative, investigative, appellate, formal,
informal or other. Notwithstanding the above, this Section 3(q)
shall not be effective unless and until approved by the Board,
which approval the Committee has agreed to promptly
seek.
(r) Golden Parachute
Tax .
(i) If the aggregate of all amounts
and benefits due to you, under this Agreement or any other plan,
program, agreement or arrangement of the Company or any of its
Affiliates, which, if received by you in full, would constitute
“parachute payments” as such term is defined in and
under Section 280G of the Code (collectively, “ Change in
Control Benefits ”), reduced by all Federal, state and
local taxes applicable thereto, including the excise tax imposed
pursuant to Section 4999 of the Code, is less than the amount you
would receive, after taxes, if you received aggregate Change in
Control Benefits equal to only three times your “base
amount”, as defined in and determined under Section 280G of
the Code, less $1.00, then such cash Change in Control Benefits as
you shall select shall be reduced or eliminated to the extent
necessary so that the Change in Control Benefits received by you
will not constitute parachute payments (provided that reduction in
such cash Change in Control Benefits can achieve this objective).
The determinations with respect to this Section 3(r)(i) shall be
made by an independent auditor (the “Auditor”) paid by
the Company. The Auditor shall be the Company’s regular
independent auditor unless you reasonably object to the use of that
firm, in which event the Auditor shall be a nationally-recognized
United States public accounting firm chosen by the Company and
approved by you (which approval shall not be unreasonably withheld
or delayed). For purposes of this Agreement, the term
“Code” shall mean the Internal Revenue Code of 1986, as
amended, and any reference to a particular section of the Code
shall include any provision that modifies, replaces or supersedes
such section.
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(ii) It is possible that after the
determinations and selections made pursuant to Section 3(r)(i) you
will receive Change in Control Benefits that are, in the aggregate,
either more or less than the limitations provided in Section
3(r)(i) above (hereafter referred to as an “Excess
Payment” or “Underpayment”, respectively). If it
is established, pursuant to a final determination of a court or an
Internal Revenue Service proceeding that has been finally and
conclusively resolved, that an Excess Payment has been made, then
you shall refund the Excess Payment to the Company promptly on
demand, together with an additional payment in an amount equal to
the product obtained by multiplying the Excess Payment times the
applicable annual federal rate (as determined in and under Section
1274(d) of the Code) times a fraction whose numerator is the number
of days elapsed from the date of your receipt of such Excess
Payment through the date of such refund and whose denominator is
365. In the event that it is determined (x) by arbitration under
Section 12 below, (y) by a court of competent jurisdiction, or (z)
by the Auditor upon request by you or the Company, that an
Underpayment has occurred, the Company shall pay an amount equal to
the Underpayment to you within 10 days of such determination
together with an additional payment in an amount equal to the
product obtained by multiplying the Underpayment
times the applicable annual federal rate (as determined in
and under Section 1274(d) of the Code) times a fraction
whose numerator is the number of days elapsed from the date of the
Underpayment through the date of such payment and whose denominator
is 365.
(s) Attorneys’
Fees . The Company shall pay attorney’s fees
reasonably incurred by you in connection with negotiating,
documenting and implementing the arrangements set forth in this
Agreement in an amount not to exceed $20,000 and will treat such
payments as a “working condition fringe” as defined in
Section 132(d) of the Code.
4.
Representations .
(a) The Company’s
Representations . The Company represents and warrants that:
(i) it is fully authorized by action of the Board and the Committee
(and of any other Person whose action is required) to enter into
this Agreement and to perform its obligations under it; (ii) the
execution, delivery and performance of this Agreement by it does
not violate any applicable law, regulation, order, judgment or
decree or any agreement, arrangement, plan or corporate governance
document to which it is a party or by which it is bound; and (iii)
upon the execution and delivery of this Agreement by the Parties,
this Agreement shall be a valid and binding obligation of the
Company, enforceable against it in accordance with its terms,
except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally.
(b) Your
Representations . You represent and warrant that:
(i) delivery and performance of this Agreement by you does
not violate any applicable law, regulation, order, judgment or
decree or any agreement to which you are a party or by which you
are bound; and (ii) upon the execution and delivery of this
Agreement by the Parties, this Agreement shall be a valid and
binding obligation of you, enforceable against you in accordance
with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights
generally.
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5.
Non-competition and Non-solicitation .
(a) You understand and recognize
that your services to the Company are special and unique and you
agree that, during the Term, and, except as provided below, for two
years thereafter, you shall not, other than in connection with
performing services for the Company (or any of its Affiliates) or
with the prior written consent of a representative of the Company
specifically authorized by the Board or the Committee to give such
consent, directly or indirectly on behalf of yourself or any
Person, enter into, or engage in, any business that competes, or is
actively planning to compete, directly and materially with the
Company with respect to any technology or service of, or any
product manufactured or distributed by, the Company or in which the
Company has intellectual property rights (except as provided below,
a “ Conflicting Field ”), either as an
individual for your own account, or as a partner, joint venturer,
executive, agent, consultant, salesperson, officer, director or
shareholder of such a Person (a “ Competitor ”);
provided , however , that: (i) following any
termination of your employment hereunder, “Conflicting
Field” shall refer only to the field of using antisense
technology as therapy for cancer as its primary business;
(ii) subject to the provisions of Section 1(c) above,
nothing in this Agreement shall preclude you from accepting
employment with, or providing services for, any Person that
competes, or is actively planning to compete, with the Company in a
Conflicting Field so long as (x) you work solely in a subsidiary,
division, or other distinct unit of such Person that carries on a
bona fide business that does not compete, and is not
actively planning to compete, with the Company in a Conflicting
Field or (y) you serve as a member of a board of directors (and not
as an employee) and your activities otherwise do not involve
competition with the Company in a Conflicting Field, either
directly or indirectly; and (iii) nothing in this Agreement
shall preclude you from holding five percent (5%) or less of the
equity interests of any publicly-traded entity, calculated on a
fully diluted basis. For purposes of this Section 5 (
other than Section 5(c)), the term “
Company ” shall be deemed to include, where
appropriate, all direct and indirect subsidiaries of the
Company.
(b) In further consideration of the
payments and benefits to be provided to you pursuant to this
Agreement (including, without limitation, pursuant to Sections 3
and 10 hereof), you agree that, during the Term and for two years
thereafter, but subject to Sections 5(e) and 5(f) below, you shall
not, other than in connection with performing services for the
Company or any of its Affiliates or with the prior written consent
of a representative of the Company specifically authorized by the
Board or the Committee to give such consent:
(i) directly or indirectly take any
action, or attempt to take any action, which is intended to, or
should reasonably be foreseen by you to, induce a material breach
of any material contract or agreement known to you between the
Company and any of its licensors, licensees, clients, customers,
vendors, suppliers, agents, consultants, employees (whether or not
such employees are “at will” employees) or any other
Person with whom the Company has an agreement (each, a
“Covered Party”);
(ii) directly or indirectly solicit
or attempt to solicit any Covered Party to terminate his, her or
its relationship with the Company in breach of any material
contract or agreement with the Company known to you;
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(iii) directly or indirectly solicit
or attempt to solicit any individual known by you to be an employee
or consultant of the Company to instead become an employee, agent,
consultant, representative or advisor of any other Person;
or
(iv) directly or indirectly
persuade, or seek to persuade, any customer of or supplier to the
Company to cease to do business with the Company or to reduce the
amount of business which such customer or supplier has done or
contemplates doing with the Company, whether or not the
relationship between the Company and such customer or supplier was
originally established in whole or in part through your
efforts.
(c) During the Term and for two
years thereafter, you agree that (i) upon becoming employed by a
Competitor, or by a subsidiary, division or other business unit of
a Competitor, you will promptly provide notice to the Company of
such employment; and (ii) upon the earlier of your (x) negotiating
with any Competitor concerning the possible employment of you by
such Competitor, (y) receiving an offer of employment from any
Competitor, and (z) becoming employed by any Competitor, you will
promptly provide copies of Sections 5, 6, 7 and 8 of this Agreement
to such Competitor. You further agree that the Company may, during
such period, provide notice to any Competitor by which you have
become employed, or with which you are negotiating to become
employed, of your obligations under this Agreement, including
(without limitation) your obligations under Sections 5, 6 and 7
hereof.
(d) You understand that the
provisions of this Section 5 may limit your ability to earn a
livelihood in a business similar to the business of the Company but
nevertheless agree and hereby acknowledge that the consideration
provided under this Agreement, including any compensation or
benefits provided under Sections 3 and 10 hereof, is sufficient to
justify the restrictions contained in the provisions of this
Section 5. In consideration thereof and in light of your education,
skills and abilities, you agree that you will not assert in any
forum that such provisions prevent you from earning a living or
otherwise are void or unenforceable or should be held void or
unenforceable.
(e) Nothing in Section 5(b) above
shall preclude any Person with whom you become associated from
accepting offers from individuals employed by the Company to be
employed by such Person; provided that such offers were not
solicited, or otherwise encouraged, by you, either directly or
indirectly.
(f) The provisions of this Section 5
shall be null and void in the event that, after the Term, the
Company or any of its Affiliates materially breaches any of their
material obligations to you, under Section 10 or otherwise, which
breach is not fully cured on fifteen days’ notice from you to
the Company requesting cure.
6.
Ownership of Proprietary Information .
(a) You confirm and agree that all
proprietary information relating to the Company’s business
that has been created by, discovered by, developed by, learned by,
or made known to, the Company, or assigned, licensed or otherwise
conveyed to the Company, from the beginning of time through the end
of the Term (including, without limitation, proprietary information
relating to the Company’s business created by, discovered by,
developed by, learned
10
by, reduced to practice by or
made known to the Company, or to you, either alone or jointly with
others, during your employment with the Company, and proprietary
information relating to the Company’s customers, clients,
suppliers, vendors, consultants, licensors and licensees) has been,
is and shall be the sole property of the Company, and the Company
has been, is and shall be the sole owner of all proprietary
designs, ideas, patents, patent applications, copyrights, copyright
applications and other rights in connection with such
proprietary
