NONCOMPETITION AGREEMENTNonCompetition Agreement |
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ADOBE SYSTEMS INCORPORATED | MACROMEDIA, INC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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QuickLinks -- Click here to rapidly navigate through this document THIS NONCOMPETITION AGREEMENT (" Noncompetition Agreement ") is being executed and delivered as of April 17, 2005, by DAVID MENDELS (" Stockholder "), in favor of, and for the benefit of: ADOBE SYSTEMS INCORPORATED , a Delaware corporation (" Parent "); MACROMEDIA, INC. (the " Company "); and the other Beneficiaries (as defined in Section 19). Certain capitalized terms used but not otherwise defined in this Noncompetition Agreement have the meanings set forth in Section 19. RECITALS A. Stockholder is a key employee, stockholder, optionholder and/or other security holder of the Company and has obtained extensive and valuable knowledge and confidential information concerning the business of the Company and its Affiliates. B. Concurrently with the execution and delivery of this Noncompetition Agreement, Parent, Avner Acquisition Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Parent (" Merger Sub "), and the Company are entering into an Agreement and Plan of Merger and Reorganization (the " Merger Agreement "), pursuant to which Merger Sub is merging with and into the Company and the Company is becoming a wholly-owned subsidiary of the Parent (the " Merger "). C. Parent wishes to protect its investment in the Company, including the business and goodwill of the Company and its Affiliates and the confidential and proprietary information possessed by Stockholder, by restricting the activities of Stockholder which might compete with or harm the Company or its Affiliates. D. Stockholder will be offered employment with Parent or an Affiliate of Parent following the Effective Date as a result of which Stockholder will receive substantial benefits in addition to those currently enjoyed by Stockholder as an employee of the Company (Stockholder's employment with Parent or an Affiliate of Parent following the Effective Date is referred herein as " Stockholder's Employment "). After the Effective Date, Stockholder will obtain extensive and valuable knowledge, trade secrets and other confidential information concerning the business of Parent and its Affiliates. E. In connection with, and as a condition to, Parent entering into the Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement, and to enable Parent to secure more fully the benefits of such transactions, Parent has required that Stockholder enter into this Noncompetition Agreement; and Stockholder is entering into this Noncompetition Agreement in order to induce Parent to enter into the Merger Agreement and to consummate the transactions contemplated by the Merger Agreement. AGREEMENT 1. Acknowledgements by Stockholder. Stockholder acknowledges that:
2. Restriction on Competition. Stockholder agrees that, during the Restricted Period, Stockholder shall not, and Stockholder shall ensure that his Affiliates do not:
provided, however , that Stockholder may, without violating this Section 2: (i) own, as a passive investment, shares of capital stock of a publicly-held corporation that engages in Competition if: (A) such shares are actively traded on an established national securities market in the United States; (B) the number of shares of such corporation's capital stock that are owned beneficially by Stockholder and the number of shares of such corporation's capital stock that are owned beneficially by Affiliates of Stockholder collectively represent less than one percent (1%) of the total number of shares of such corporation's capital stock outstanding; and (C) neither Stockholder nor any Affiliate of Stockholder is otherwise associated directly or indirectly with such corporation or with any Affiliate of such corporation; and (ii) work for a division, entity or subgroup of a company that engages in Competition, provided that: (A) such division, entity or subgroup does not itself engage in Competition; and (B) Stockholder does not engage in Competition in the performance of services for such division, entity or subgroup or for such company generally. 3. Non-Interference .
4. Representations and Warranties. Stockholder represents and warrants, to and for the benefit of the Beneficiaries, that: (a) Stockholder has full power and capacity to execute and deliver, and to perform all of Stockholder's obligations under, this Noncompetition Agreement; and (b) neither the execution and delivery of this Noncompetition Agreement nor the performance of this Noncompetition Agreement will result directly or indirectly in a violation or breach of: (i) any agreement or obligation 2
by which Stockholder or any Affiliate of Stockholder is or may be bound; or (ii) any law, rule or regulation. 5. Independence of Obligations. The covenants of Stockholder set forth in this Noncompetition Agreement shall be construed as independent of any other agreement or arrangement between Stockholder, on the one hand, and the Company or Parent or any of their respective Affiliates, on the other hand, and the existence of any claim or cause of action by Stockholder against the Company or Parent or any of their respective Affiliates shall not constitute a defense to the enforcement of such covenants against Stockholder. Nothing in this Noncompetition Agreement shall limit any of the rights or remedies of Parent under the Merger Agreement, or any of the rights, remedies or obligations of Parent or any of the rights, remedies or obligations of Stockholder under any agreement between Stockholder and Parent or any certificate or instrument executed by Stockholder in favor of Parent; and nothing in the Merger Agreement or in any other such agreement, certificate or instrument, shall limit any of the rights or remedies of Parent or any of the obligations of Stockholder under this Noncompetition Agreement. 6. Specific Performance. Stockholder agrees that, in the event of any breach or threatened breach by Stockholder of any covenant, obligation or other provision set forth in this Noncompetition Agreement: (a) Parent and each of the other Beneficiaries will suffer irreparable harm which cannot adequately be compensated for with monetary damages; and (b) Parent and each of the other Beneficiaries shall be entitled (in addition to any other remedy that may be available to it, including monetary damages) to: (i) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision; and (ii) an injunction restraining such breach or threatened breach. Stockholder further agrees that no Beneficiary shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 6, and Stockholder irrevocably waives any right it may have to require any Beneficiary to obtain, furnish or post any such bond or similar instrument. 7. Attorneys' Fees. If any legal action or other legal proceeding relating to this Noncompetition Agreement or the enforcement of any provision of this Noncompetition Agreement is brought against Stockholder, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs and disbursements (in addition to any other relief to which the prevailing party may be entitled). 8. Non-Exclusive. The rights and remedies of Parent and |
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