Noncompetition Agreement - NetScreen Technologies Inc.
FORM OF
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made by and between
NetScreen Technologies, Inc., a Delaware corporation ("Acquirer"), and
___________ ("Stockholder") on the Effective Date (as defined below) and binds
the parties to the terms and provisions hereof as of such date.
Recitals
This Agreement is contingent upon and is entered into in connection
with an Agreement and Plan of Merger, dated as of August 22, 2002 (the "Merger
Agreement"), by and among Acquirer, Tango Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of Acquirer ("Merger Sub"), and
OneSecure, Inc., a Delaware corporation (the "Company"), pursuant to which
Merger Sub is to merge with the Company (the "Merger"). This Agreement shall
become effective only upon, the Effective Time, as set forth in the Merger
Agreement (the "Effective Date"). Capitalized terms used herein and not defined
herein shall have the meanings set forth in the Merger Agreement. This Agreement
shall be null and void if the Merger Agreement is terminated in accordance with
its terms.
Stockholder has been one of a very select group of key and senior
management Stockholders of the Company and is a founder and significant owner of
outstanding capital stock and/or an option to purchase shares of capital stock
of the Company. The parties hereto recognize that Stockholder has unique
knowledge and experience regarding the Company's business, and Acquirer and the
Company desire to be assured that confidential information pertaining to the
Company's business and the goodwill of the Company will be preserved and
protected and will inure to the benefit of Acquirer. Stockholder acknowledges
that the promises and restrictive covenants that Stockholder is providing in
this Agreement are reasonable and necessary to the protection of Acquirer's and
the Company's business and Acquirer's legitimate interests in acquiring the
Company pursuant to the Merger Agreement. Stockholder acknowledges that, in
connection with the acquisition of the Company and the employment of Stockholder
by Acquirer or the Company, he is receiving substantial capital stock equity and
other benefits for the consummation of the Merger, which benefits constitute
adequate consideration for the covenants in this Agreement.
Stockholder understands and acknowledges that as an inducement for, and
a material condition to, the Merger, Stockholder is entering into this Agreement
and agrees and approves to the terms and conditions set forth herein.
Now, Therefore, in consideration of the foregoing recitals and the
mutual agreements hereinafter set forth, the parties hereto agree as follows:
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1. Noncompetition.
(a) Except as provided below, during the period commencing on the
Effective Date and ending on the later to occur of: (i) two years from the
Effective Date and (ii) one year from the date that Stockholder's employment
with Acquirer terminates (the "Restrictive Period"), Stockholder shall nor, in
any county, state, country or other jurisdiction in which Acquirer or the
Company do business as of the Effective Date:
(i) directly or indirectly, alone or with others, engage in
the business of providing services which are, at the Effective Date, Directly
Competitive (as defined below);
(ii) be or become an officer, director, stockholder, owner,
corporate affiliate, salesperson, co-owner, partner, trustee, promoter, founder,
technician, engineer, analyst, Stockholder, agent, representative, supplier,
investor or lender, compensated consultant, advisor or manager of or to, or
otherwise acquire or hold any interest in or otherwise engage in the providing
of services to, any person or entity that engages in a business that is Directly
Competitive; or
(iii) permit Stockholder's name to be used in connection with
a business that is Directly Competitive;
provided, however, that nothing in this Section 1 shall prevent Stockholder from
owning as a passive investment less than 1% of the outstanding shares of the
capital stock of a publicly-held corporation if Stockholder is not otherwise
associated directly or indirectly with such corporation or any affiliate of such
corporation or from owning less than a 1% interest in a venture capital fund.
For purposes of this Agreement, "Directly Competitive" means
engaging in providing (i) products, services or technology that compete with the
Company's products, services or technology as described in any price list,
business plan, or product development plan or proposal of the Company in
existence as of the Effective Date; and (ii) products, services or technology
that compete with Acquirer's products, services or technology as described in
any price list, business plan, or product development plan or proposal of
Acquirer in existence at any time during Stockholder's employment with Acquirer
that incorporates in whole or in material part any products, services or
technology of the Company.
The Restrictive Period will not be terminated as a result of
Stockholder's termination of employment hereunder for any reason, including a
termination without cause.
(b) Stockholder agrees to, and agrees that Acquirer may, inform
any person or entity for whom Stockholder performs services during the
Restricted Period of Stockholder's obligations under Sections 1 and 2.
2. Nonsolicitation.
Stockholder further agrees that during the Restricted Period:
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(a) Stockholder will not directly or indirectly solicit or
attempt to solicit away employees or consultants of Acquirer or the Company for
Stockholder's own benefit or for the benefit of any other person or entity; and
(b) Stockholder will not directly or indirectly interfere with or
take away or attempt to take away suppliers or customers of Acquirer or the
Company.
3. Miscellaneous.
(a) Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and shall be either hand
delivered in person, sent by facsimile, sent by certified or registered
first-class mail, postage pre-paid, or sent by nationally recognized express
courier service. Such notices and other communications shall be effective upon
receipt if hand delivered or sent by facsimile, five days after mailing if sent
by mail, and one day after dispatch if sent by express courier, to the following
addresses, or such other addresses as any party may notify the other parties in
accordance with this Section 3(a):
If to Acquirer NetScreen Technologies, Inc.
350 Oakmead Parkway
Sunnyvale, CA 94085
Attn: President
Fax Number: (408) 730-6760
with a copy to: Fenwick & West LLP
275 Battery Street, Suite 1500
San Francisco, CA 94111
Attention: Douglas N. Cogen
Fax Number: 415-875-2300
If to Stockholder:
with a copy to
Stockholder's counsel: _________________
_________________
(b) Amendments. This Agreement may not be changed or modified in
whole or in part except by a writing signed by the party against whom
enforcement of the change or modification is sought.
(c) Successors and Assigns. This Agreement will not be assignable
by either Stockholder or Acquirer, except that the rights and obligations of
Acquirer under this Agreement may be assigned to a corporation which becomes the
successor to Acquirer as the result of a merger or other corporate
reorganization and which continues the business of Acquirer, or any other parent
or subsidiary of Acquirer, provided that Acquirer guarantees the performance by
such assignee of Acquirer's obligations hereunder.
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(d) Governing Law. This Agreement will be governed by and interpreted
according to the substantive laws of the California without regard to such
state's conflicts laws.
(e) No Waiver. No failure on the part of Acquirer of Stockholder to
exercise any power, right, privilege or remedy under this Agreement, and no
delay on the part of Acquirer or Stockholder in exercising any power, right,
privilege or remedy under this Agreement, shall operate as a waiver of such
power, right, privilege or remedy; and no single or partial exercise of any such
power, right, privilege or remedy shall preclude any other or further exercise
thereof or of any other power, right, privilege or remedy. Neither Acquirer nor
Stockholder shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of such
party; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.
(f) Severability. Stockholder and Acquirer recognize that the
limitations contained herein are reasonably and properly required for the
adequate protection of the interests of Acquirer. If for any reason a court of
competent jurisdiction or binding arbitration proceeding finds any provision of
this Agreement, or the application thereof, to be unenforceable, the remaining
provisions of this Agreement will be interpreted so as best to reasonably effect
the intent of the parties. The parties further agree that a court of competent
jurisdiction is authorized to replace any such invalid or unenforceable
provisions with valid and enforceable provisions designed to achieve, to the
maximum extent possible, the business purposes and intent of such unenforceable
provisions.
(g) Counterparts. This Agreement may be executed in counterparts
which when taken together will constitute one instrument. Any copy of this
Agreement with the original signatures of all parties appended will constitute
an original.
(h) Specific Performance; Remedies. Stockholder agrees that in the
event of any breach or threatened breach by Stockholder of any covenant,
obligation or other provision contained in this agreement, Acquirer shall be
entitled (in addition to any other remedy that may be available), to the extent
permitted by applicable law, to seek (a) a decree or order of specific
performance to enforce the observance and performance of such covenant,
obligation or other provision and (b) an injunction restraining such breach or
threatened breach. The rights and remedies of Acquirer hereunder are not
exclusive of a limited by any other rights or remedies which Acquirer may have,
whether at law, in equity, by contract or otherwise, all of which shall be
cumulative (and not alternative). Without limiting the generality of the
foregoing, the rights and remedies of Acquirer hereunder, and the obligations
and liabilities of Stockholder hereunder, are in addition to their respective
rights, remedies, obligations and liabilities under the law of unfair
competition, misappropriation of trade secrets and the like. This Agreement does
not limit Stockholder's obligations or the rights of Acquirer (or any affiliate
of Acquirer) under the terms of (a) the Confidential Information and Inventions
Agreement between Stockholder and Acquirer; or (b) the terms of any other
agreement between Stockholder and Acquirer or between Stockholder and the
Company. If any legal action or other legal proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought
against any party to
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this Agreement, 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).
(i) Arbitration. (i) At the option of either party, any and all
disputes or controversies, whether of law or in equity, and of any nature
whatsoever arising from or respecting this Agreement, unless otherwise expressly
provided herein, shall be decided by binding arbitration before a single
arbitrator in accordance with the Voluntary Labor Arbitration Rules of the
American Arbitration Association ("AAA") or its successor.
(ii) The arbitrator shall be selected as follows: In the event
Acquirer and Stockholder agree on one arbitrator, the arbitration shall be
conducted by such arbitrator. In the event Acquirer and Stockholder do not agree
on one arbitrator, Acquirer and Stockholder shall each select one independent,
qualified arbitrator and these two arbitrators shall select the arbitrator who
shall decide such dispute. Acquirer reserves the right to reject any individual
arbitrator who shall be employed by or affiliated with a competing organization.
(iii) Arbitration shall take place at the AAA office in San
Jose, California, or any other location mutually agreeable to the parties. At
the request of either party, arbitration proceedings will be conducted in
secrecy. In such case, all documents, testimony and records shall be received,
heard and maintained by the arbitrator in secrecy under seal, available for
inspection only by Acquirer and Stockholder and their respective attorneys and
experts who shall agree in advance and in writing to receive all such
information confidentially and to maintain such information in secrecy until
such information shall become generally known. The arbitrator shall be able to
decree any and all relief of any equitable nature, including, but not limited
to, such relief as a temporary restraining order, a temporary or a permanent
injunction, or both, and shall also be able to award damages (with or without an
accounting), costs and reasonable attorney's fees. The decree or judgment of an
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
(iv) Reasonable notice of the time and place of arbitration
shall be give to all persons, other than the parties, as shall be required by
law, in which case such persons or their authorized representatives shall have
the right to attend and participate in all the arbitration hearings to the
extent and in such manner as the law shall require.
(j) Captions. The captions contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
(k) Entire Agreement. This Agreement, the exhibits attached hereto,
relevant option agreements and the Merger Agreement constitute the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance or usage of trade
inconsistent with any of the terms hereof. This Agreement will be binding upon
Stockholder and Stockholder's representatives, executors, administrators,
estate, heirs, successors and assigns, and will inure to the benefit of Acquirer
and its successors and assigns. The parties agree that this Agreement
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shall nor be interpreted against either party solely because this Agreement was
drafted by attorneys for Acquirer.
(l) Employment Not Inconsistent with Other Duties. Stockholder
represents that his/her employment is not in violation of or inconsistent with
any agreement or duties to any person or entity, including any previous employer
or other person or entity with whom Stockholder has or has had a business,
consulting or other service relationship.
(m) Further Assurances. Stockholder, at the reasonable request of
Acquirer, shall execute and/or cause to be delivered to Acquirer such other
assignments, transfers, conveyances, and other instruments and documents and
shall take such other actions as may be reasonably necessary or desirable to
effectuate the intent and purposes of this Agreement.
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In Witness Whereof, the parties hereto have executed this Agreement as of
the date first above written.
NETSCREEN TECHNOLOGIES, INC.
By: ____________________________
Name: ___________________________
Title: __________________________
STOCKHOLDER
By: ____________________________
Name: ___________________________
Title: __________________________
[Signature Page to Noncompetition Agreement]