EXHIBIT 10
iVILLAGE INC.
EMPLOYMENT
AGREEMENT
This Employment Agreement (this
“Agreement” ) is entered into by and between
iVillage Inc., a Delaware corporation (the
“Company” ), and Douglas McCormick (
“Employee” ) effective as of May 31, 2005
(the “Effective Date” ).
In consideration of the mutual
covenants and agreements hereinafter set forth, the Company and
Employee hereby agree as follows:
AGREEMENT
1.
EMPLOYMENT.
The Company hereby employs Employee
to serve as Chief Executive Officer and Chairman of the Board of
Directors of the Company with such duties and responsibilities as
are usually vested in the office of chief executive officer of a
corporation and as otherwise set forth in the Company’s
By-Laws, and in such other executive and managerial capacities
consistent with his status and title as are determined by the Board
of Directors of the Company.
Unless earlier terminated or renewed
as set forth herein, this Agreement shall terminate on May 31,
2008 (the “Term” ).
2.
COMPENSATION
.
2.1
Base Salary
. During the Term, Employee shall be
paid a base salary at the annual rate of six hundred thousand
dollars ($600,000) (the “Base Salary”). The Base Salary
shall be payable in installments consistent with the
Company’s payroll practices and may be increased at the
discretion of the Board of Directors of the Company.
2.2
Bonus . Employee shall be eligible to participate in
the Company’s bonus plan. During the Term, Employee’s
bonus will be targeted at ninety percent (90%) of Employee’s
Base Salary or five hundred forty thousand dollars ($540,000).
Payment of a Bonus will be based on satisfactory performance of
Company, departmental and individual goals and objectives, as
determined by the Compensation Committee of the Board of
Directors. However, for fiscal year 2005, Employee’s
Bonus will be based on criteria set forth in Exhibit A to this
Agreement. Bonus criteria for fiscal years 2006 and 2007 will
be set by the Compensation Committee of the Board of Directors no
later than the first quarter of each respective fiscal
year.
2.3
Long Term Incentives
.
(a) Stock Options
: Employee shall receive a grant of an unvested nonstatutory
stock option to purchase 567,000 shares of the Company’s
common stock pursuant to a Company stock option plan (the
“Initial Grant”). Subject to Employee’s
continued employment and subject to Section 6.1, the Initial
Grant will vest in three equal installments of 189,000 option
shares on each of the first, second and third anniversaries of the
Effective Date. The per share exercise price
of the Initial Grant shall be the
closing sales price of a share of Company common stock on the date
of grant which is $6.20. The Initial Grant will be evidenced
by the Company’s standard form of stock option agreement
which shall executed by and between the Company and the
Employee. The Company will file and use its best efforts to
cause to become effective a reoffer prospectus (as defined in
Instruction C to Form S-8) with the Securities and Exchange
Commission prior to March 1, 2006.
(b) Restricted Stock
Units : Employee shall
also be entitled to a grant of 50,000 unvested restricted stock
units (“RSUs”) on or about each of January 1,
2006, June 30, 2006 and June 30, 2007 (each of the three
discrete grants of 50,000 RSUs will be referred to herein as the
“First RSUs”, “Second RSUs” and
“Third RSUs”, respectively). Each grant of RSUs
will be subject to Employee’s continued employment as Chief
Executive Officer and also subject to the terms and conditions of a
RSU Agreement approved by the Compensation Committee. Such
RSU Agreement will be substantially similar (i.e., no material
changes to the terms thereof) to the agreement attached as
Exhibit D hereto. In the event the Compensation Committee does
not approve such RSU Agreement, Employee shall be paid equivalent
compensation in an amount equal to what Employee would have
received if it had been approved. If Employee remains employed as
Chief Executive Officer through the Term then all 150,000 RSUs
shall vest on May 31, 2008. If a Change in Control (as
defined herein) occurs during Employee’s employment and prior
to the end of the Term, any RSUs not as yet granted shall be
granted as of the effective date of the Change in Control and all
150,000 RSUs shall also then be fully vested. Any vested RSUs
shall entitle Employee to a lump sum cash payment as soon as
practicable (but not more than 45 days) after the vesting date with
such cash amount equal to the number of vested RSUs multiplied by
the fair market value of a share of the Company’s common
stock (as defined in the RSU Agreement) as of the vesting
date. Subject to Section 6.1, all unvested RSUs will be
canceled without consideration upon Employee’s termination of
employment and all vested RSUs (including but not limited to any
RSUs that vest as a result of Section 6.1) shall also be
canceled upon payment of the requisite cash amount to
Employee. The numbers of RSUs referenced above shall be
subject to appropriate adjustments by the Company in the event of a
Company stock split, reverse stock split, recapitalization, stock
dividend, combination or exchange of shares, or similar transaction
affecting the Company’s capital structure.
(c) Performance Units:
Employee shall be entitled to a one time grant of 100,000
performance units (“PUs”) on or about January 1,
2006. The grant of PUs will be subject Employee’s continued
employment as Chief Executive Officer and also subject to the terms
and conditions of a PU Agreement approved by the Compensation
Committee. Such PU Agreement will be substantially similar
(i.e., no material changes to the terms thereof) to the agreement
attached as Exhibit E hereto. In the event the Compensation
Committee does not approve such PU Agreement, Employee shall be
paid equivalent compensation in an amount equal to what Employee
would have received if it had been approved. If
Employee
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remains employed as Chief Executive
Officer through the Term then all 100,000 PUs shall vest on
May 31, 2008. If a Change in Control (as defined herein)
occurs during Employee’s employment and prior to the end of
the Term, any PUs not as yet granted shall be granted as of the
effective date of the Change in Control and all PUs shall also then
be fully vested. Any vested PUs shall entitle Employee to a
lump sum cash payment as soon as practicable (but not more than 45
days) after the vesting date in an amount equal to the number of
vested PUs multiplied by the fair market value of a share of the
Company’s common stock (as defined in the PU Agreement) as of
the vesting date multiplied by the “Applicable
Percentage” (as defined in this subsection). Subject to
Section 6.1, all unvested PUs will be canceled without
consideration upon Employee’s termination of employment and
all vested PUs (including but not limited to any PUs that vest as a
result of Section 6.1) shall also be canceled upon payment of
the requisite cash amount to Employee. For purposes of this
Agreement, “Applicable Percentage” shall mean, on the
PU vesting date, either: (i) 0% if the fair market value
of one share of Company common stock is less than $8.00,
(ii) 50% if the fair market value of one share of Company
common stock is equal to or greater than $8.00 and less than $9.00,
(iii) 100% if the fair market value of one share of Company
common stock is equal to or greater than $9.00 and less than
$10.00, or (iv) 150% if the fair market value of one share of
Company common stock is equal to or greater than $10.00. The
threshold dollar values referenced in the preceding sentence and
the numbers of PUs referenced above shall be subject to appropriate
adjustments by the Company in the event of a Company stock split,
reverse stock split, recapitalization, stock dividend, combination
or exchange of shares, or similar transaction affecting the
Company’s capital structure. For purposes of
determining the Applicable Percentage, the fair market value of a
Company common share shall be as defined in the PU
Agreement.
2.4
Payment . Payment of all compensation to Employee
hereunder (including any payment under Section 6.1) shall be
subject to all applicable employment and withholding taxes and
other customary deductions.
3.
OTHER EMPLOYMENT
BENEFITS.
3.1
Business Expenses
. Upon submission of itemized
expense statements in the manner and form regularly specified by
the Company, Employee shall be entitled to reimbursement for
reasonable travel (generally first class or business class air fare
if first class is unavailable) and other reasonable business
expenses incurred by Employee in the performance of his duties
under this Agreement in accordance with the Company’s travel
and entertainment policy.
3.2
Fringe Benefits
. The Company shall make
Employee the beneficiary of and Employee shall receive the standard
package of fringe benefits as the Company generally provides to its
other senior executive officers. Fringe benefits to be
included in this standard benefit package include, but are not
limited to, medical and dental insurance coverage, disability
insurance, four (4) weeks of paid vacation per year, holidays
and sick leave. Participation in such
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fringe benefit programs will be subject to
certain employee contributions that may from time to time regularly
be applicable to such programs.
3.3
Administrative
Assistant. During
the term of this Agreement, the Company shall employ
Employee’s current administrative assistant (or in
Employee’s sole discretion, a substitute administrative
assistant) on terms at least as favorable as her existing
compensation package, subject to changes in Company-wide benefit
programs.
3.4
No Other Benefits
. Employee understands and
acknowledges that the compensation specified in Sections 2 and 3 of
this Agreement shall be in lieu of any and all other compensation,
benefits and plans.
4.
EMPLOYEE’S BUSINESS
ACTIVITIES.
Employee shall devote substantially all of his professional time,
attention and energy exclusively to the business and affairs of the
Company and its affiliates, as its business and affairs now exist
and as they hereafter may be changed. In addition, Employee will
not engage in any consulting activity except with the prior written
approval of the Company (which shall not be unreasonably withheld),
or at the direction of the Company, except for consultancies for
companies listed on Exhibit B hereto, provided that such
consultancies do not materially detract from Employee’s
ability to perform his obligations hereunder. The foregoing
shall not be construed as preventing Employee from investing his
assets in such form or manner as will not require any significant
services on his part in the operation of the affairs of the
businesses or entities in which such investments are made. In
addition, the foregoing shall not be construed as preventing
Employee from engaging in activities involving charitable,
educational, religious and other similar types of organizations and
activities, or from serving as a director of other companies, so
long as such activities do not interfere with the performance of
his duties hereunder or otherwise violate the terms
hereof.
5.
OBLIGATION NOT TO
COMPETE . Employee
acknowledges the highly confidential nature of information
regarding the Company’s businesses, customers, suppliers,
employees, agents, independent contractors and consultants.
Employee hereby agrees that (a) while he is employed by the
Company and (b) during the one (1) year period following
his termination of employment with the Company pursuant to
Section 6.1 (the “Restricted Period”
), Employee shall not engage in, assist others in engaging in or
provide services to any organization, proprietorship or entity that
engages in any business in which the Company or its affiliates is
actively engaged or is actively considering engagement at the time
of termination of Employee’s employment (“Competitive
Business”). Employee also agrees that, during the
Restricted Period, he shall not in any manner directly or
indirectly, solicit, or encourage any customer, distributor,
supplier, employee, agent, independent contractor, consultant or
any other person or company to terminate or alter its relationship
with the Company or its affiliates. Each of the
following activities shall, without limitation, be deemed to
violate the provisions of this Section 5: to engage in, work
with, have an interest or concern in, advise, lend money to,
guarantee the debts or obligations of, or permit one’s name
or any part thereof to be used in connection with, an enterprise or
endeavor, either individually, in partnership, or in conjunction
with any person or persons, firms, associations, companies, or
corporations, whether as a principal, agent, shareholder, employee,
officer, director, partner, consultant or in any other manner
whatsoever, which engages in a Competitive Business; provided,
however, that (i) Employee and/or his affiliates shall retain
the right to invest in or have an interest in entities provided
that said interest
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does not exceed five percent (5%) of the voting
control of said entity and (ii) the Company and Employee
acknowledge that the Employee and/or his affiliates currently have
investments in, consultancies with and/or serve on the Board of
Directors of (and may retain such positions), the entities listed
on Exhibit B attached hereto.
6.
TERMINATION OF EMPLOYMENT AND
EFFECTS OF TERMINATION .
6.1
Events of Termination
. Employee’s employment
with the Company shall terminate upon any one of the following
(such last day of Employee’s employment is referred to herein
as the “Termination Date”):
(a)
The Company provides Employee with
written notice of the Company’s intent to terminate
Employee’s employment with the Company without cause, in
which case termination shall be effective on the date specified in
such written notice, which shall be a date no earlier than thirty
(30) days after the date of the Notice unless Employee consents to
an earlier date. In the event of termination under this
subparagraph (a), the Company shall pay or provide to Employee the
items referenced below in subparagraphs (i) through
(viii):
(i)
the accrued compensation and
benefits otherwise payable to Employee under Sections 2 and 3
through the Termination Date (including pay for accrued but unused
vacation and any then outstanding expense
reimbursements);
(ii)
an amount equivalent to the Base
Salary that Employee would have earned had he remained employed
through the end of the Term;
(iii)
an amount equivalent to any bonus
which would have been earned by Employee had he remained employed
through the end of the Term (at the bonus target specified in
Section 2.2 above); provided that, in the event Employee is
terminated in fiscal year 2008, Employee’s bonus for fiscal
year 2008 shall be pro-rated to reflect the percentage of fiscal
year 2008 in which Employee was employed; and provided further that
Employee shall not be entitled to receive severance equal to such
bonus compensation for prior completed fiscal years for which he
(A) already received a bonus or (B) did not satisfy the
applicable bonus criteria;
(iv)
continued insurance coverage on
Employee for the remainder of the Term (subject to applicable law
and applicable employee contributions);
(v)
immediate acceleration of the
vesting period for any outstanding unvested stock options, RSUs and
PUs then held by Employee;
(vi)
the following alternative number of
fully vested RSUs will be granted to Employee as of the Termination
Date (assuming that such following RSUs had not been previously
granted to Employee pursuant to Section 2.3(b)): If the
Termination Date is prior to January 1, 2006, then the number
of vested RSUs to be granted is equal to the sum of (x) the First
RSUs, plus (y) the Second RSUs multiplied by the number of days
Employee was employed as Chief Executive Officer between
July 1, 2005 and June 30, 2006 divided by 365; If
the Termination Date is on or after January 1, 2006 and prior
to July 1, 2006, then the number of vested RSUs to be granted
is equal to the Second RSUs multiplied by the number of days
Employee was employed as Chief Executive Officer between
July 1, 2005 and June 30, 2006
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divided by 365; If the Termination Date is
on or after July 1, 2006 and before July 1, 2007, then
the number of vested RSUs to be granted is equal to the Third RSUs
multiplied by the number of days Employee was employed as Chief
Executive Officer between July 1, 2006 and June 30, 2007
divided by 365 ;
(vii)
if the Termination Date is prior to
January 1, 2006 and the PUs have not yet been granted pursuant
to Section 2.3(c), then such PUs shall be granted to Employee
as of the Termination Date and shall also be fully vested;
and
(viii)
all outstanding stock options then
held by Employee will remain exercisable for the earlier of a
period of three (3) years after the Termination Date or the
scheduled termination date of such stock option.
Notwithstanding the foregoing, in no
event shall the sum of subparagraphs (ii) and (iii) be
less than the greater of $870,000 or an amount equal to
Employee’s base pay and highest paid bonus for any completed
year of the term of this Agreement (“Minimum Severance
Payment”). Employee’s rights under the
Company’s benefit plans of general application shall be
determined under the provisions of those plans. All pay and
benefits described in subparagraphs (ii) through
(viii) of this section are conditioned upon execution
(and non-revocation by Employee) of appropriate and customary
termination and release agreements to be negotiated in good faith
by the parties. Cash severance shall be paid in a lump sum as
soon as practicable following the execution (and passage of any
applicable revocation period without Employee’s revocation)
of the termination and release agreement to the extent permitted by
applicable law. Employee shall continue to comply with
Section 5 after termination pursuant to this subparagraph
(a).
(b)
The Company determines, in good
faith, that Employee should be terminated for “cause”
as defined in Section 6.2 below, in which case termination
shall be effective on the date that written notice of termination
is hand-delivered to Employee by the Company (or, if the Company is
unable to hand-deliver such notice to Employee, the date that such
notice is mailed or faxed to Employee pursuant to
Section 10.9). In the event of termination under this
subparagraph (b), the Company shall pay Employee the compensation
and benefits otherwise payable to Employee under Section 2.1
through the Termination Date (including pay for accrued but unused
vacation and any then outstanding expense reimbursements), and the
Company will have no obligation to pay Employee the Base Salary or
any bonus or other compensation for the remainder of the Term.
Employee’s rights under the Company’s benefit plans of
general application shall be determined under the provisions of
those plans. Employee shall continue to comply with Section 5
after termination pursuant to this subparagraph (b).
(c)
The resignation by Employee for
“good reason” as defined in Section 6.3 below, in
which case resignation shall be effective on the date that written
notice of Employee’s resignation is delivered to the Company
pursuant to Section 10.9. In the event of resignation
under this subparagraph (c), the Company shall pay Employee the
compensation and benefits described in subparagraph (a) of
this section under the same terms and conditions described in
subparagraph (a).
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(d)
The effective date of any voluntary
termination by Employee other than for “good reason”.
In the event of termination under this subparagraph (d), the
Company shall pay Employee the compensation and benefits described
in subparagraph (b) of this section under the same terms
and conditions described in subparagraph (b).
(e)
The date of Employee’s death
or permanent disability. Permanent disability may be deemed to
occur, at the Company’s discretion communicated by written
notice to Employee, if Employee is incapacitated or disabled by
accident or sickness or otherwise so as to render him mentally or
physically incapable of performing the services required to be
performed by him under this Agreement for a period of 120
consecutive days. In the event of termination under this
subparagraph (e), the Company shall pay Employee or his estate the
compensation and benefits otherwise payable to Employee under
Section 2.1 through the Termination Date (including pay for
accrued but unused vacation and any then outstanding expense
reimbursements), and the Company will have no obligation to pay
Employee or his estate the Base Salary, any bonus or other
compensation for the remainder of the Term. Employee’s rights
under the Company’s benefit plans of general application
shall be determined under the provisions of those plans or the
provision of any agreement executed pursuant to those plans.
Employee shall continue to comply with Section 5 after
termination as a result of permanent disability pursuant to this
subparagraph (e).
(f)
The date of Employee’s
Retirement. In the event Employee retires during the term of
this Agreement, or if this Agreement is not renewed and no new
Agreement is entered into as a result of Employee’s
retirement (defined as Employee’s voluntary agreement to
cease working for a Competitive Business or in the capacity of a
senior executive for any business), Employee will be entitled to
the benefits described in subparagraph (d) hereto and in
addition any outstanding vested stock options then held by Employee
will remain exercisable for the earlier of a period of five
(5) years after the Termination Date or the scheduled
termination date of such stock options, provided Employee’s
retirement status remains unchanged.
(g)
In the event of a termination of
Employee’s employment pursuant to this Section 6.1, the
Company and Employee agree to work together in good faith to issue
a joint press release discussing such termination with such
language as shall be mutually agreed by the parties. Under no
circumstances shall Employee be required to obtain suitable
employment elsewhere upon termination of this Agreement or
otherwise mitigate any post-termination payments required to be
made to Employee by the Company.
6.2
Termination For
“Cause” Defined. For purposes of Sections 6.1(a) and
6.1(b) above, “cause” for Employee’s
termination shall exist at any time after the happening of one or
more of the following events:
(a)
Employee has breached any material
provision of this Agreement or any other agreement between the
Company and the Employee, which breach is not cured within thirty
(30) days following the delivery to Employee of written notice
reasonably describing the alleged breach;
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(b)
Employee has engaged in habitual
neglect of his duties as an employee of the Company which remains
uncured following delivery to Employee of written notice reasonably
describing the offending conduct and a reasonable opportunity to
cure;
(c)
Employee has committed a material
act of dishonesty including, without limitation, Employee’s
theft, misuse or unauthorized disclosure of proprietary
information;
(d)
Employee is convicted of a felony or
a crime involving moral turpitude not involving a conviction for
operating a motor vehicle under the influence of alcohol or any
other motor vehicle violation; or
(e)
Any chemical dependency or substance
abuse resulting in a continuous and material impairment of the
Employee’s ability to perform his duties as an employee of
the Company.
6.3
Resignation For “Good
Reason” Defined. Employee may regard his employment as being
constructively terminated and may, therefore, resign within thirty
(30) days of the Employee’s discovery of the occurrence of
one or more of the following events, any of which shall constitute
“good reason” for such resignation:
(a)
Without the Employee’s prior
written consent, the assignment to the Employee of any duties
materially inconsistent with the Employee’s position, duties,
responsibilities and status with the Company as set forth in this
Agreement, whether after a Change in Control (as defined in
Exhibit C hereto) or otherwise;
(b)
Without Employee’s consent in
each instance, a reduction by the Company of the Employee’s
base salary or of any bonus compensation formula applicable to
Employee, or the Company’s failure to pay Employee the
applicable bonus pursuant to Section 2.2 in any fiscal year
despite satisfaction of the corresponding applicable bonus criteria
for such fiscal year as set forth in Exhibit A hereto for
fiscal year 2005 or by the Compensation Committee of the
Company’s Board of Directors for subsequent fiscal years
during the Term;
(c)
The Company or any affiliate(s)
requiring the Employee to be based anywhere other than within
twenty-five (25) miles of the area in which he resides, except for
required travel on the Company’s or an affiliate’s
business to an extent substantially consistent with the
Employee’s present business travel obligations;
(d)
A breach by the Company of any
material provision of this Agreement or any other agreement between
the Company and the Employee, which breach is not cured within
thirty (30) days following the delivery to the Company of written
notice reasonably describing the alleged breach;
(E)
THE COMPANY’S NOMINATING
COMMITTEE OF THE BOARD OF DIRECTORS FAILS TO NOMINATE EMPLOYEE AS A
NOMINEE FOR ELECTION TO THE COMPANY’S BOARD OF DIRECTORS UPON
EXPIRATION OF EMPLOYEE’S TERM AS A DIRECTOR OR EMPLOYEE IS
REMOVED AS CHAIRMAN OR FROM THE COMPANY’S BOARD OF DIRECTORS
DURING HIS TERM WITHOUT CAUSE. NOTWITHSTANDING THE FOREGOING,
REMOVAL OF EMPLOYEE AS CHAIRMAN OF THE BOARD OF DIRECTORS SHALL NOT
BE CONSIDERED “GOOD
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REASON” UNDER THIS AGREEMENT IF SUCH
REMOVAL IS REQUIRED IN ORDER TO COMPLY WITH CHANGES IN LEGAL OR
REGULATORY REQUIREMENTS APPLICABLE TO THE COMPANY.
(F)
THE OCCURRENCE OF A CHANGE IN
CONTROL OF THE COMPANY (AS DEFINED IN EXHIBIT C) IN WHICH CASE
EMPLOYEE SHALL BE ENTITLED TO THE SEVERANCE COMPENSATION DESCRIBED
IN SECTION 6.1(A) OF THIS AGREEMENT.
NOTWITHSTANDING THE FOREGOING, EMPLOYEE WILL NOT BE ENTITLED TO THE
SEVERANCE COMPENSATION DESCRIBED IN SECTIONS 6.1(A) OR
6.1(C) OF THIS AGREEMENT UPON A CHANGE IN CONTROL IN THE EVENT
THAT EMPLOYEE IS OFFERED AND ACCEPTS A POSITION AS CHIEF EXECUTIVE
OFFICER OR ITS EQUIVALENT FOR THE SUCCESSOR ENTITY AFTER THE CHANGE
IN CONTROL.
(G)
AS OF A DATE AT LEAST THREE
(3) MONTHS PRIOR TO THE EXPIRATION OF THE TERM, THE COMPANY
SHALL HAVE FAILED EITHER TO PROVIDE EMPLOYEE WITH NOTICE OF THE
COMPANY’S INTENTION TO RENEW THIS AGREEMENT ON THE SAME TERMS
OR ENTER INTO A NEW AGREEMENT WITH EMPLOYEE ON SUBSTANTIALLY
SIMILAR OR BETTER TERMS THAN THIS AGREEMENT.
6.4
Effect of Termination
Payments . Employee
agrees and acknowledges that upon Employee’s termination of
employment with the Company pursuant to Section 6 of this
Agreement, Employee shall only be entitled to the severance
payments and benefits (including stock option vesting), if any,
specified in Section 6 or in the applicable stock option
agreements and such severance payments and benefits shall be in
lieu of all other severance payments and benefits which might
otherwise be payable to Employee by the Company.
7.
CONFIDENTIALITY; WORKS FOR
HIRE.
7.1
Confidentiality.
As used herein, the term
“Confidential Information” means all trade secrets or
confidential information concerning the business, products,
practices or techniques of the Company and/or its affiliates and
any third parties with whom they deal, including, but not limited
to, price lists, pricing information, product information systems,
designs, research, membership lists, members and users personal
information, negotiations with regard to corporate transactions,
sponsorship and advertising arrangements, contracts and licenses,
processes, inventions, developments, proposals, plans, advertiser
lists, technical, accounting and financial information of the
Company and/or its affiliates, their customers or suppliers
(whether or not copyrighted or copyrightable or patented or
patentable). At all times, both during Employee’s
employment by the Company and after Employee’s termination,
Employee will keep in strict confidence and will not disclose any
Confidential Information including, but not limited to,
Confidential Information concerning any client, customer, or
business partner of the Company, to any person or entity, or make
use of any such Confidential Information for Employee’s own
purposes or for the benefit of any person or entity, except as may
be necessary in the ordinary course of performing Employee’s
duties as an employee of the Company. The term
“Confidential Information” does not include information
which (i) is or becomes generally available to the public
other than as a result of a disclosure by the Employee,
(ii) was within the Employee’s possession prior to being
furnished to the Employee by or on behalf of the Company pursuant
hereto or (iii) becomes available to the Employee on a
non-confidential basis from a source other than the Company or any
of its present of prospective directors, officers, employees,
agents or advisors; provided that with respect to clauses
(ii) and
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(iii) above, the source of such information
was not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to
the Company or any other party with respect to such
information.
7.2
Works for Hire.
Employee acknowledges that
all right, title and interest he obtains in all works of
authorship, designs, computer programs, copyrights and copyright
applications, inventions, discoveries, developments, know-how,
systems, processes, formulae, patent and patent applications, trade
secrets, new products, internal reports and memoranda, strategies,
and marketing plans conceived, devised, developed, written, reduced
to practice, or otherwise created or obtained by Employee in
connection with his employment by the Company (the
“Intellectual Property”) are regarded as “works
for hire”. Employee hereby transfers and assigns to the
Company all right, title, and interest to the Intellectual
Property. Promptly after Employee obtains knowledge of any
Intellectual Property, he will disclose it to the Company.
Upon request of the Company, he will execute and deliver all
documents or instruments and take all other action as the Company
may deem reasonably necessary to transfer all right, title, and
interest in any Intellectual Property to the Company; to vest in
the Company good, valid and marketable title to such Intellectual
Property; to perfect, by registration or otherwise, trademark,
copyright and patent protection of the Company with respect to such
Intellectual Property; and otherwise to protect the Company’s
trade secrets and proprietary interest in such Intellectual
Property.
IN THE E
